Tax Court Won’t Reconsider Opinion Holding Notice Invalid

GREEN VALLEY INVESTORS, LLC, ET AL.,¹ BOBBY A. BRANCH, TAX MATTERS PARTNER,
Petitioner
v.
COMMISSIONER OF INTERNAL REVENUE,
Respondent

United States Tax Court

ORDER

This case is before the Court on respondent's Motions for Reconsideration filed on December 9, 2022, in each of these consolidated matters, pursuant to Rule 161.² Respondent's Motions for Reconsideration request that the Court reconsider its November 9, 2022, court reviewed opinion, reported at 159 T.C. No. 5 (Opinion) denying, in part, respondent's third Motions for Partial Summary Judgment. For the reasons discussed below, we will deny respondent's Motions for Reconsideration.

Background

The following facts are drawn from the pleadings and motion papers. The facts stated below are not findings of fact by this Court and are stated herein solely for the purpose of ruling on respondent's Motions for Reconsideration.

Respondent requests that we reconsider our Opinion. In support of this request respondent notes how the Opinion does not specifically mention his Supplement to his Objection to Motion for Partial Summary Judgment (Supplement) lodged on October 19, 2022, and later filed on November 2, 2022.³ Moreover, respondent contends the Opinion does not reflect consideration of the arguments raised for the first time in his Supplement, including the statutory text of the American Jobs Creation Act of 2004 (AJCA). On the basis of these two arguments respondent contends the Opinion suggests the Court may have overlooked the filing of respondent's Supplement. Respondent further contends that justice requires the Court to consider the additional statutory text which was the focus of respondent's Supplement, especially in light of the impact of the Court's Opinion on future docketed cases.

In its Objection to respondent's Motions for Reconsideration filed on January 6, 2023, petitioner contends that respondent has not presented any newly discovered evidence, established substantial error of fact, or cited an intervening change in the law that would warrant reconsideration. Petitioner further contends that respondent's assertion that this case is unusual because the Court did not specifically note respondent's Supplement is not a valid basis for reconsideration. Petitioner opposes the granting of respondent's Motions for Reconsideration.

Discussion

I. Whether Respondent's Motions Meet the Standard for Reconsideration

Under Rule 161 reconsideration is intended to correct substantial error, either of fact or law, and facilitates the introduction of new evidence the moving party could not have previously introduced with due diligence. See, e.g., Estate of Quick v. Commissioner, 110 T.C. 440, 441 (1998). However, reconsideration is not the appropriate forum for rehashing previously rejected legal arguments or for tendering new legal theories to reach the end result desired by the moving party. See id. at 441–42. Deciding whether to grant a motion for reconsideration lies within the discretion of the Court. See CWT Farms, Inc. v. Commissioner, 79 T.C. 1054, 1057 (1982).

We conclude that reconsideration is inappropriate here. Respondent's arguments in his Motions for Reconsideration and Supplement were previously considered by the Court in its Opinion. Furthermore, it is irrelevant whether the Opinion does or does not specifically address respondent's Supplement since we are under no obligation to address each and every argument raised by a party.⁴ Accordingly, we will deny respondent's Motions for Reconsideration.

II. Respondent's Argument That He is Entitled to Partial Summary Adjudication

Notwithstanding our ruling above, we will briefly address some of respondent's arguments found in his Supplement.

In his Supplement, respondent argues that the Sixth Circuit in Mann Construction⁵ erred in failing to consider statutory text evidencing Congress‘s clear intent that I.R.S. Notice 2017-10 (and other similar notices) need not follow notice-and-comment procedures. Respondent also notes that the Sixth Circuit “fail[ed] to appreciate the[ ]existence and implications of the dozens of listed-transaction notices that had already been issued without notice-and-comment when the [AJCA] was enacted.” Citing to legislative history, respondent argues that section 6662A and other AJCA provisions incorporate by reference the terms “reportable transaction” and “listed transaction” which originated from applicable Treasury regulations. Respondent contends — considering the above — that “[i]f those notices were invalid, Congress passed dead letters.”

The Court was aware of respondent's supplemental arguments when reaching its decision. As previously stated, we offer “no opinion on whether identifying a transaction as a listed transaction was substantive rulemaking before the enactment of the AJCA or whether Congress expressed its intent to exempt from the standard notice-and-comment procedures transactions that were already listed as of the enactment of the AJCA.” See Opinion n.8. Furthermore, respondent's arguments raised in his Supplement are also found in Green Rock, LLC v. IRS, No. 2:21-cv-01320 (N.D. Ala. filed October 2, 2021) currently pending before the United States District Court for the Northern District of Alabama. See Opinion n.17 noting the Government's arguments found in Green Rock, LLC v. IRS.⁶

Considering the foregoing, it is

ORDERED that respondent's Motions for Reconsideration, filed on December 9, 2022, in these consolidated matters, are denied.

(Signed) Christian N. Weiler
Judge