Cir

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

JT USA, LP; JTR-LLC; TAX No. 12-70037

MATTERS PARTNER,

Petitioners-Appellees, Tax Ct. No. 5282-05 v.

COMMISSIONER OF INTERNAL OPINION

REVENUE,

Respondent-Appellant.

Appeal from a Decision of the United States Tax Court

Argued and Submitted June 2, 2014—Pasadena, California

Filed November 14, 2014

Before: Stephen S. Trott and Consuelo M. Callahan, Circuit Judges, and Mark W. Bennett, District Judge.*

Opinion by Judge Trott; Dissent by Judge Callahan

* The Honorable Mark W. Bennett, District Judge for the U.S. District Court for the Northern District of Iowa, sitting by designation. SUMMARY**

Tax

The panel remanded an appeal by the Commissioner of Internal Revenue and held that the tax court erred in concluding that taxpayers could opt out of a partnership administrative proceeding under the Tax Equity and Fiscal Responsibility Act.

The panel held that the meaning of 26 U.S.C. § 6223(e)(3)(B) is clear and unambiguous that unless a partner elects to have all of his or her partnership items treated as…