The Federal Circuit yesterday dismissed the taxpayer’s appeal in Cadrecha. As noted in our prior post, this was a formality after the parties agreed to settle the case.
We have previously reported on the taxpayers’ appeal in Cadrecha from an application of the statute of limitations that the Court of Federal Claims acknowledged as “harsh,” but found to be required by law. The taxpayers’ brief emphasized the unfairness of the result, and it struck a chord with the Department of Justice, whose appellate lawyers concluded that the taxpayers ought to get a break — either because they deserved one or perhaps because DOJ feared that the facts were so sympathetic that they created a risk of an adverse Federal Circuit decision that would cause mischief down the road.
Either way, the government has now filed a motion to suspend the appeal. The motion recites that, after consultation between DOJ and the IRS, the government has accepted a settlement offer from the taxpayers and agreed to refund “a portion of the amount of the income-tax payment that is at issue in this case.” After the refund check is processed and paid, the parties will submit papers to the court dismissing the appeal.