Opinion
7360-19
01-14-2022
JC LAND, LLC, BIG ESCAMBIA VENTURES, LLC, TAX MATTERS PARTNER, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER
Albert G. Lauber Judge
This case involves a charitable contribution deduction claimed by JC Land, LLC (JC Land), for a conservation easement. JC Land is subject to the TEFRA unified audit and litigation procedures, and petitioner Big Escambia Ventures, LLC, is its tax matters partner (TMP). The TMP is also the petitioner in Long Branch Land, LLC v. Commissioner, T.C. Dkt. No. 7288-19, which involves certain common issues of law and fact.
JC Land timely filed Form 1065, U.S. Return of Partnership Income, for its 2014 tax year. On that return it claimed charitable contribution deductions for its donation of a conservation easement and a fee simple interest. In February 2019 the Internal Revenue Service (IRS or respondent) issued JC Land a notice of final partnership administrative adjustment (FPAA) reducing the deductions and determining penalties under section 6662A and section 6662(a), (b)(1), (2), and (3), (d), (e), and (h).
All statutory references are to the Internal Revenue Code, Title 26, U.S.C., in effect at all relevant times.
In May 2019 petitioner timely petitioned this Court for readjustment of the partnership items. Petitioner alleged (among other things) that the IRS did not comply with section 6751(b)(1) with respect to the penalties. That statute provides that "[n]o penalty under this title shall be assessed unless the initial determination of such assessment is personally approved (in writing) by the immediate supervisor of the individual making such determination."
On November 24, 2021, respondent filed a Motion for Partial Summary Judgment contending that the IRS complied with the requirements of section 6751(b)(1). The "initial determination" of the penalties was communicated to JC Land in the FPAA, which was mailed on February 14, 2019. Because the examining agent (Revenue Agent Guy Lorient) had secured approval from his immediate supervisor (Supervisory Revenue Agent Rachel Moore) before that date, respondent urges that approval was timely.
Petitioner filed a response conceding that Ms. Moore timely approved Mr. Lorient's penalty determination. However, petitioner asserts that Ms. Moore lacked authority to supply approval. Petitioner advanced this same argument in Long Branch Land, LLC, supra.
On January 13, 2022, the Court issued its opinion in Long Branch Land, LLC v. Commissioner, T.C. Memo. 2022-2. In that opinion we rejected the TMP's argument that Ms. Moore lacked authority to supply approval and granted the IRS' motion for partial summary judgment. Because the facts of the two cases are identical insofar as they relate to the penalty approval question, the same result necessarily follows here. Accordingly, it is
ORDERED that respondent's Motion for Partial Summary Judgment, filed November 24, 2021, is granted.