Opinion
12660-21
07-10-2024
SILVER RUN HOLDINGS, LLC, SILVER RUN PARTNERS, LLC, A PARTNER OTHER THAN THE TAX MATTERS PARTNER, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER
Elizabeth A. Copeland Judge
Silver Run Partners, LLC (the Participating Partner), is a partner other than the tax matters partner (TMP) of Silver Run Holdings, LLC (the Partnership). On July 2, 2024, Respondent, the Commissioner of Internal Revenue, filed with the Court a Motion for Entry of Decision (Motion) in which he represented that the Participating Partner and Commissioner have reached a basis of settlement for the partnership items of the Partnership for the taxable year ending December 31, 2017. Respondent represents that the Participating Partner agrees to the proposed decision but "does not certify that no nonparticipating party would object to the granting of the Motion." At the moment, no partner other than Silver Run Holdings, LLC, is a participating partner to this action within the meaning of Rule 247(b) because no other partner has filed an election to participate. The time within which to file a notice of election to participate under Rule 245(b) has passed. It is also noted that Fred Denney is the TMP for the Partnership, but he did not file a petition in this case under section 6226(a) or elect to intervene under Rule 245(a), and his views on the settlement are unknown.
Unless otherwise indicated, Rule references are to the Tax Court Rules of Practice and Procedure, and statutory references are to the Internal Revenue Code, Title 26 U.S.C., in effect at all relevant times.
Because all partners are parties to this action (section 6226(c)), a decision in this case will bind all partners. Rule 248 sets forth a variety of procedures to assist the Court in determining whether any partner who might be bound by a settlement objects and would prefer to step in and litigate a case. Rule 248(a) sets forth the rules for an entry of decision executed by the TMP where no party objects. Rule 248(b) sets forth the rules for an entry of decision where all participating partners agree to or consent to the settlement and the TMP agrees. Rule 248(c) sets forth the requirements for the Commissioner to process an executed settlement and/or consistent agreement entered into by some of the parties for settling their dispute outside of the partnership proceeding. None of those rules apply here where we do not have participation by the TMP in the proposed settlement nor do we have an executed settlement or consistent agreement.
As such, to determine whether any partner objects to the proposed settlement agreed to by the Participating Partner and Respondent, we will order that Respondent and the nonparticipating partner parties adhere to and do the following:
(A) Respondent must within 30 days of this Order serve the following on the TMP and parties to this proceeding other than the Participating Partner:
a. a copy of his Motion for Entry of Decision along with the proposed stipulated decision appended thereto; and
b. a copy of this Order.
(B) The parties other than the Participating Partner and Respondent shall have 60 days from the date of this Order to move to elect to intervene in this proceeding (out of time) and then object to the entry of the proposed decision. If no partner intervenes, then the Court will enter the proposed decision.
In consideration of the foregoing, it is
ORDERED that on or before August 9, 2024, Respondent shall serve on all nonparticipating partner parties to this action a copy of his July 2, 2024, Motion for Entry of Decision and a copy of this Order. It is further
ORDERED that, on or before September 9, 2024, any party who objects to the granting of Respondent's Motion for Entry of Decision shall file (1) a motion for leave to file a notice of election to participate out of time and (2) a notice of election to participate.