Jade Trading, LLC v. United States

ORDER AND OPINION DENYING DEFENDANT’S INVOCATION OF EXECUTIVE PRIVILEGE AND REJECTING PLAINTIFFS’ CLAIM OF “AT ISSUE” WAIVER OF PRIVILEGES

WILLIAMS, Judge.

Plaintiffs bring this action under Section 6226 of the Internal Revenue Code ehalleng-*488ing the Internal Revenue Service’s (IRS) adjustment of their tax liability and assessment of penalties for 1999. In the Final Partnership Administrative Adjustment (FPAA) at issue, the IRS disallowed capital losses approximating $40,000,000 and assessed penalties of some $4,000,000, on the Ervin brothers, the real parties in interest.1

Defendant contends…