Ben Abatti and Margaret Abatti v. Commissioner of the Internal Revenue Service

This case presents a difficult question of Tax Court jurisdiction. The Tax Court entered decisions against appellants pursuant to their agreement to be bound by the opinion in five representative lead cases. After the lead cases were reversed on appeal, appellants filed a motion to vacate the decisions in their cases. The Tax Court declined to hear the motion, based in part on its lack of jurisdiction to vacate final decisions, and in part on its conclusion that the decisions were proper even though the lead cases had been overturned. We affirm.

FACTS AND PROCEEDING BELOW

The fourteen appellants were among a large group of taxpayers who claimed deductions in connection with their investment in five related limited partnerships. The Commissioner disallowed the deductions, and the taxpayers petitioned the Tax Court for redetermination of their resulting deficiencies. Five representative cases were consolidated for trial, and a group of taxpayers, including the fourteen appellants, agreed to be bound by the Tax Court’s opinion in the lead case. The “Agreement to Be Bound” (agreement), which was attached to the Commissioner’s motion to calendar and consolidate the five lead cases,…