That didn’t take long. Less than two weeks after learning that the parties would not be mediating their dispute (see our previous report here), the Ninth Circuit issued a brief five-page unpublished opinion affirming the Bergmann case in favor of the government. The court held that the time for filing a qualified amended return for an undisclosed listed transaction terminates when the promoter (here, KPMG) is first contacted by the IRS about examining the transaction, not when the IRS later determines the transaction is a tax shelter.
A court can lead the parties to mediation, but can’t make them drink. We reported last month that, after oral argument, the Ninth Circuit had suspended its consideration of the Bergmann case so that the parties could pursue court-sponsored mediation. Apparently, that effort never got off the ground. Yesterday, the Ninth Circuit entered a new order: “We previously withdrew submission pending an opportunity for mediation. Because mediation has not resolved this appeal, the case is ordered resubmitted as of the date of this order.” The Court will now proceed to write an opinion and issue its decision in due course. … Read More
In a somewhat unusual move, the Ninth Circuit issued an order last week suggesting that the parties pursue mediation in the Bergmann case. The order came two days after the court heard oral argument. The order states that “the court believes this case may be appropriate for mediation” and therefore it is being referred to the Ninth Circuit’s Mediation Office. A mediator will then contact the parties to determine their interest, but the parties are not required to elect mediation. The Circuit Mediator is directed to report back to the panel by January 4. In the meantime, the court will … Read More
We have previously reported on the Ninth Circuit’s consideration of the qualified amended return regulation in the Bergmann case. Several months after the close of the briefing, the court has now scheduled the case for oral argument on December 3 in San Francisco. The identity of the three-judge panel will be announced at a future date.… Read More
The Bergmanns participated in a listed transaction promoted by KPMG, known as the Short Option Strategy. When the Bergmanns filed their amended return in March 2004, the IRS had already served KPMG with summonses targeted at KMPG’s promotion of the Short Option Strategy. As discussed in an earlier post, the Tax Court held that the Bergmanns failed to timely file a qualified amended return and thus were subject to the 20-percent accuracy related penalty. Under the regulations in effect when the taxpayers filed their return, the time for filing a qualified amended return terminated when “any person described in … Read More
Ninth Circuit to Rule on Timing for Filing a Qualified Amended Return for an Undisclosed Listed Transaction
The taxpayers in Bergmann v. Commissioner are appealing an adverse Tax Court decision, 137 T.C. No. 10, holding that they failed to timely file a qualified amended return for 2001 and thus are liable for the 20-percent accuracy related penalty. The taxpayers participated in a listed transaction promoted by KPMG, known as the Short Option Strategy. In 2004, two years after the IRS issued a summons to KPMG specifically identifying the Short Option Strategy transaction, the Bergmanns filed an amended return disclaiming the tax benefits of the transaction. The case concerns the interpretation of Treas. Reg. § 1.6664-2(c)(3)(ii) (2004), which … Read More