Daily Tax Report ®

Pushback on Partnership Tax Bill Came Too Late: Ninth Circuit

Oct. 8, 2019, 8:22 PM

The Ninth Circuit Oct. 8 affirmed dismissal of a petition challenging the timing of partnership adjustments because the objection was raised too late.

The three-judge panel held that taxpayers can only challenge a partnership adjustment during the partnership proceeding itself—not after. John and Judith Bedrosian contested the IRS’s rejection of deductions claimed on their 1999 and 2000 tax returns.

The married couple participated in a tax-shelter scheme in 1999 that used a partnership entity to generate artificial losses, which they reported as deductions on their 1999 and 2000 tax returns, according to court documents. The IRS started a...

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