A stay was granted pending resolution of the government's appeal of the District Court's decision to the U.S. Court of Appeals for the Ninth Circuit. See Strom v. United States, 641 F.3d 1051, 1055 n.4 (9th Cir. 2011), rev'g and remanding 583 F.Supp.2d 1264 (W.D. Wash. 2008). Following the issuance of the Ninth Circuit's opinion, the parties in each case filed a Stipulation of Settled Issues wherein the Stroms conceded all issues in these cases except whether Dr. Strom is entitled to relief under section 6015(b) or (f) for 2000.
The validity of the underlying tax liability is reviewed de novo.Ruth v. U.S., 823 F.2d 1091 (11th Cir. 1987); Laszloffy v. Commissioner of Internal Revenue, 297 Fed. Appx. 628, 2008 WL 4706626 (9th Cir. 2008).Strom v. United States, 583 F.Supp.2d 1264, 1270 n. 3 (W.D. Wash. 2008). "The Court must make a de novo determination of plaintiffs' right to a refund: the impressions and conclusions of the IRS during the administrative process are not relevant to the accurate assessment of taxes . . ."
In short, had Gudmundsson sold the underlying equity securities- i.e., the Aurora stock-on the date he received them, July 1, 1999, he would not have been subject to suit under § 16(b), because by then over twelve months would have elapsed since the date on which he acquired the derivative securities. See Strom v. United States, 583 F.Supp. 1264, 1269 (W.D.Wash. 2008) (because plaintiffs' acquisition date of stock options in November 1998 constituted the purchase date under § 16(b), they were "free to sell the stock in 1999 and 2000," when they exercised their options; the six-month period of § 16(b) was not triggered by the vesting date, since "[n]o insider information comes into play on the vesting date, making that date a non-even under § 16(b)"). Plaintiffs' contention that a substantial risk of forfeiture also existed under § 10(b) (as opposed to § 16(b)) is based on an argument that has been squarely rejected by the courts.