John M. O'Neill Mary C. O'Neill v. United States

John and Mary O’Neill (“taxpayers”), investors in a tax shelter partnership, Interser-vice Group Limited (“IGL”), filed an action in district court seeking a refund of the taxes they paid as a result of adjustments made by the Internal Revenue Service (“IRS”) to IGL’s partnership return. The district court entered summary judgment for the Government on the ground that under 26 U.S.C. § 7422 (h) it lacked jurisdiction to entertain actions “brought for a refund attributable to partnership items.” The O’Neills contend that they brought the refund action not for a refund attributable to partnership items, but rather only, to litigate whether the statute of limitation had run before the assessment was made. We have jurisdiction under 28 U.S.C. § 1291 , and we affirm.

I.

Taxpayers argue that section 7422(h) does not apply to a refund claim based on the expiration of the statute of limitation. We need not reach that issue because we conclude that, in any event, the tax assessment was not barred by the statute of limitation. We may affirm on any independently sufficient ground. Miles v. Department of Army, 881 F.2d 777 , 780 n. 1 (9th Cir.1989).

Taxpayers’ primary argument on the…