United States Tax Court

United States Tax Court

T.C. Memo. 2026-90

TOSCANO HOLDINGS, LLC, TOSCANO INVESTMENTS, LLC,

TAX MATTERS PARTNER,

Petitioner

v.

COMMISSIONER OF INTERNAL REVENUE,

Respondent

__________

Docket No. 12214-20.

Filed September 22, 2026.

__________

Ronald A. Levitt, Gregory P. Rhodes, Michelle A. Levin, and Emily C.

Ellis, for petitioner.

Edwin B. Cleverdon, Eric M. Heller, Zachary T. King, Sarah C. Nadel,

and Monica D. Polo, for respondent.

MEMORANDUM OPINION

PARIS, Judge: This case involves a charitable contribution

deduction that Toscano Holdings, LLC (Toscano), claimed for a 2016

donation of a conservation easement under section 170. 1

Presently before the Court is petitioner’s Renewed Motion to

Invalidate the Final Partnership Administrative Adjustment (Renewed

Motion), filed December 5, 2024, and a Declaration of Michelle Levin in

Support of the Renewed Motion. Respondent filed a Response to the

Renewed Motion and Incorporated Memorandum of Law on March 3,

1 Unless otherwise indicated, statutory references are to the Internal Revenue

Code, Title 26 U.S.C., in effect at all relevant times.

Served 09/22/26

2

[*2] 2025. On April 16, 2025, petitioner filed a Reply to Response to the

Renewed Motion and Incorporated Memorandum of Law.

In the Renewed Motion, Toscano Investments, LLC, Toscano’s tax

matters partner and petitioner in this case, argues that the Court should

set aside and hold invalid the Notice of Final Partnership

Administrative Adjustment (FPAA) issued to Toscano for the tax year

ending December 30, 2016. For the reasons set forth below, the Court

will deny the Renewed Motion.

Background

The following facts are derived from the parties’ pleadings,

Stipulation of Facts, motion papers, and Exhibits attached thereto.

They are stated solely for the purpose of deciding the Renewed Motion

and not as findings of fact in this case. See Sundstrand Corp. v.

Commissioner, 98 T.C. 518, 520 (1992), aff’d, 17 F.3d 965 (7th Cir. 1994).

Toscano is a Tennessee limited liability company that maintained

its principal place of business in Georgia when the Petition was filed.

Toscano is classified as a partnership for federal income tax purposes

and is subject to proceedings under the Tax Equity and Fiscal

Responsibility Act of 1982. 2

On December 30, 2016, Toscano donated a conservation easement

encumbering approximately 380 acres of real property in Roane County,

Tennessee, to the Foothills Land Conservancy. On its Form 1065, U.S.

Return of Partnership Income, for the tax year ending December 30,

2016 (2016 Return), Toscano claimed a deduction for a noncash

charitable contribution for its donation of the easement. Relying on an

appraisal by Clay Weibel, Toscano claimed the value of the easement

was $28.1 million and asserted that the highest and best use of the

property immediately before the easement was mixed-use residential

property. The Internal Revenue Service (IRS) received Toscano’s 2016

Return on September 18, 2017.

I.

Examination of Toscano’s 2016 Return

Respondent selected Toscano’s 2016 Return for examination.

Revenue Agent Rick Skinner (RA Skinner) was assigned to perform the

2 Before its repeal, the Tax Equity and Fiscal Responsibility Act of 1982

(TEFRA), Pub. L. No. 97-248, §§ 401–407, 96 Stat. 324, 648–71, governed the tax

treatment and audit procedures for many partnerships, including Toscano.

3

[*3] examination. Among the primary issues during the examination

was the value of the conservation easement. RA Skinner obtained a

Limited Scope Appraisal Review (With an Opinion of Value) from a

fellow IRS employee, Peter S. Crane, a Senior Appraiser. Upon review

of the appraisal attached to Toscano’s 2016 Return, Mr. Crane valued

the conservation easement at $6.7 million. His appraisal review is dated

September 6, 2019.

On July 1, 2019, RA Skinner faxed petitioner’s attorneys, Mr.

Levitt and Mr. Rhodes, explaining that he would be soliciting an

extension of the period of limitations on assessment. He explained that

to preserve Toscano’s opportunity to have the dispute reviewed by the

IRS Independent Office of Appeals (Appeals), there needed to be 13

months remaining in the period of limitations. On July 15, 2019, RA

Skinner sent a period of limitations extension package to petitioner and

its attorney Mr. Rhodes. The package included Form 872–P, Consent to

Extend Time to Assess Tax Attributable to Partnership Items;

Publication 1035, Extending the Tax Assessment Period; and Letter

907, requesting petitioner’s response within 14 days.

On August 6, 2019, having received no response from petitioner

or its attorneys, RA Skinner sent a followup letter explaining that the

IRS had not received a signed period of limitations extension form and

to contact him if there were any questions. On August 26, 2019, Mr.

Levitt sent a letter to RA Skinner, which stated, in relevant part, the

following:

I wanted to reach out and let you know that after careful

consideration, the Taxpayer has made the decision not to

extend the statute of limitations as requested by your

office. I believe this decision means that you will now take

steps to close the case and issue an FPAA. If that is not

correct, please let me know.

Mr. Levitt’s letter also stated that Toscano would not be

responding to the then-pending IDR because of the decision not to

extend the period of limitations. From that point forward, neither

Toscano nor its representatives participated in the exam.

On January 15, 2020, RA Skinner issued a summary report to

petitioner regarding the audit of Toscano’s 2016 Return, proposing

certain adjustments. The summary report offered petitioner the

opportunity to attend a closing conference, which would be scheduled

4

[*4] not less than 30 days from the date of the letter. RA Skinner

requested that petitioner contact him within seven days from the date

of the letter, (that is, by January 22, 2020) to schedule a time and date

for the closing conference.

After 30 days had elapsed from the date of the summary report,

RA Skinner closed the case and sent it to his manager, who in turn

forwarded it to the IRS Technical Services Unit for issuance of an FPAA.

On February 28, 2020, approximately one month after the January 22

deadline, Mr. Levitt contacted RA Skinner and requested a closing

conference. RA Skinner advised him that the case file had been

submitted to the Technical Services Unit and was no longer under his

control.

On March 16, 2020, Mr. Levitt sent RA Skinner a signed Form

872–P and a letter stating that petitioner “is providing this signed

extension because it would like to exercise its appeal rights and file a

written protest.” In response, RA Skinner reminded Mr. Levitt of the

letter dated August 26, 2019, in which Toscano had declined the

opportunity to extend the period of limitations and acknowledged that

an FPAA would be issued. RA Skinner reiterated to Mr. Levitt that the

case had been submitted to the Technical Services Unit and that an

FPAA would be issued. On July 16, 2020, respondent issued the FPAA

to petitioner.

II.

Tax Court Petition and First Referral to Appeals

On October 13, 2020, petitioner filed a Petition for Readjustment

of Partnership Items Under Code Section 6226. Respondent filed his

Answer on January 5, 2021. In March 2021 respondent referred the case

to Appeals for potential settlement. On February 24, 2022, Toscano’s

appraiser, Clay Weibel, was federally indicted. 3

In August 2022 Appeals Officer Marion Tate (AO Tate) informed

petitioner’s counsel that she had been assigned to petitioner’s case. AO

Tate scheduled an Appeals conference for November 17, 2022. Because

of funding issues, the Appeals engineer assigned to determine the value

of the easement was unable to visit the property before the November

17, 2022, conference. On October 27, 2022, petitioner’s counsel sent an

email to AO Tate confirming that the November 17 conference had been

3 Specifically, Mr. Weibel was named as a defendant in the First Superseding

Indictment filed February 24, 2022, in the case United States v. Lewis, No. 21-cr-00231

(N.D. Ga.).

5

[*5] rescheduled to accommodate a site visit. That same day AO Tate

responded: “I am confirming that the conference for Thursday,

November 17 @ 12:00pm EST has been cancelled. We will follow up with

you as soon as possible.”

On February 22, 2023, Alan D. Redstone, the Appeals Team

Manager, sent a letter to petitioner’s counsel, Mr. Rhodes, informing

him that Appeals could not consider the case because of the relationship

or potential impact to an ongoing criminal matter and that the case was

being returned to the Office of Chief Counsel.

III.

First Motion to Invalidate

Administrative Adjustment

Notice

of

Final

Partnership

On April 25, 2023, in response to Mr. Redstone’s letter, petitioner

filed a Motion to Invalidate the Final Partnership Administrative

Adjustment (First Motion). Concurrently with the filing of the First

Motion, petitioner filed a Declaration of Michelle Levin in Support of the

First Motion, which was later supplemented and redacted. On June 15,

2023, respondent filed a Response to the First Motion and a Declaration

of Rick Skinner in Support of Response to the First Motion. On June 23,

2023, respondent filed a Declaration of Marion S. Tate in Support of

Response to the First Motion. The Court heard oral arguments on

petitioner’s First Motion on June 20, 2023. On August 28, 2023,

petitioner filed a Reply to Respondent’s Response to the First Motion,

along with a Declaration of Michelle Levin in Support thereof.

The jury in Mr. Weibel’s criminal case acquitted him on all

charges on September 22, 2023. In view of this development, respondent

returned petitioner’s case to Appeals for consideration. On February 6,

2024, the parties filed a Joint Status Report in which they represented

that respondent had returned petitioner’s case to Appeals on October 5,

2023. During a conference call held on February 21, 2024, the parties

agreed that the First Motion should be denied as moot. On February 23,

2024, the Court denied the First Motion as moot without prejudice.

IV.

Appeals Conference

Following Mr. Weibel’s acquittal, petitioner’s case was reassigned

to AO Tate and a settlement conference was scheduled for March 28,

2024. On February 28, 2024, petitioner’s counsel sent AO Tate a letter

containing eight exhibits. AO Tate viewed the information contained in

the February 28 letter as new information that would need to be sent

back to the Examination Division (Exam) for review and comment before

6

[*6] it could be considered by Appeals, a process that would take

approximately 60 days to complete. Petitioner’s counsel disagreed with

AO Tate’s assertion that the February 28 letter contained “new

information” but acquiesced to sending the case back to Exam to ensure

that Appeals considered all of the information provided. IRS Exam

Appraiser Thomas McCaughey independently reviewed the “new

information” and recommended no change to the IRS’s original

valuation.

On June 26, 2024, the IRS issued I.R.S. News Release IR-2024174, in which it announced that selected taxpayers in IRS Exam who

had donated syndicated conservation easements would be receiving a

settlement offer. 4

The settlement offer was also available to

nondocketed conservation easement cases in Appeals.

On July 24, 2024, petitioner and Appeals held a settlement

conference (July 2024 conference). In attendance were petitioner’s

counsel, and for respondent, AO Tate, AO Dubberke, and Appeals

Appraiser Steven Warshawsky. During the July 2024 conference Mr.

Warshawsky reviewed the valuation issue, and AO Dubberke reviewed

litigation hazards. Mr. Warshawsky expressed his belief that the value

reached by Exam was too high. AO Dubberke determined that Toscano

“had low hazards and the IRS [had] high hazards.” Following the July

2024 conference, Appeals made petitioner a settlement offer.

By letter dated August 7, 2024, petitioner submitted a

counteroffer. Included in the counteroffer was a litany of perceived

irregularities with the July 2024 conference. Chief among them was

that Mr. Warshawsky relied on a valuation that was less than the

amount used by Exam and that Appeals did not properly weigh the

hazards of litigation. Appeals considered but declined petitioner’s

counteroffer. Petitioner filed the Renewed Motion on December 5, 2024.

4 Petitioner, in what appears to be a minor typographical error, cites “IR-2014174.” (Doc. 74). However, the correct News Release is IR-2024-174. That News

Release made clear that “[t]he IRS will notify eligible taxpayers by letter,” and

“[t]axpayers who don’t receive a letter are not eligible” for the settlement offer.

Petitioner has not provided documents showing that the IRS offered this settlement to

Toscano.

7

[*7]

I.

Discussion

Overview

Petitioner’s Renewed Motion requests that the Court invalidate

the FPAA issued to Toscano for the tax year ending December 30, 2016,

because Toscano was denied its statutory right to an Appeals hearing

under section 7803(e). Petitioner contends that respondent denied

Toscano its right to Appeals consideration three times: (1) by not

providing Toscano an Appeals hearing before the FPAA was issued;

(2) by canceling the Appeals hearing after the FPAA was issued because

of Mr. Weibel’s then-ongoing criminal matter; and (3) at the July 2024

conference, which petitioner argues was insufficient. Alternatively,

petitioner argues that by issuing the FPAA without providing Toscano

an Appeals hearing, respondent exceeded his authority under section

7803, and the FPAA is invalid under the Administrative Procedure Act

(APA). See 5 U.S.C. § 706(2)(A), (C).

Respondent argues that the Motion should be denied because:

(1) section 7803(e) does not confer an absolute right to an Appeals

hearing; (2) section 7803(e) does not provide a cause of action for judicial

review of denied Appeals hearings; (3) the APA does not permit judicial

review of agency action that is committed to agency discretion by law;

and (4) petitioner had an Appeals hearing that did not result in

settlement because the parties were too far apart on valuation.

II.

Section 7803(e)

In 2019 Congress passed the Taxpayer First Act (TFA), Pub. L.

No. 116-25, § 1001(a), 133 Stat. 981, 983 (2019). 5 The TFA, among other

things, added section 7803(e), establishing an IRS Independent Office of

Appeals “intended to perform functions similar to those of the current

Appeals.” H.R. Rep. No. 116-39, pt. 1, at 30 (2019), as reprinted in 2020

U.S.C.C.A.N 169, 175. Section 7803(e)(1) and (2) establishes the IRS

Independent Office of Appeals and staffs it with a leader called the Chief

of Appeals. Section 7803(e)(3) describes the purposes and duties of

Appeals, providing that

5 TFA § 1001(e), 133 Stat. at 985, provides that “[e]xcept as provided in

[subsection (e)(2), dealing with taxpayer access to case files], the amendments made

by this section shall take effect on the date of the enactment of this Act.” The TFA was

signed into law on July 1, 2019. Accordingly, the requirements of section 7803(e) were

in effect at all relevant times.

8

[*8]

[i]t shall be the function of the Internal Revenue Service

Independent Office of Appeals to resolve Federal tax

controversies without litigation on a basis which—

(A) is fair and impartial to both the

Government and the taxpayer,

(B) promotes a consistent application and

interpretation of, and voluntary compliance with,

the Federal tax laws, and

(C) enhances public confidence in the

integrity and efficiency of the Internal Revenue

Service.

Section 7803(e)(4) provides: “The resolution process described in

paragraph (3) shall be generally available to all taxpayers,” and section

7803(e)(5) sets forth certain limitations on the designation of certain

cases as not eligible for referral to Appeals.

Section 7803(e)(5), titled “Limitation on designation of cases not

eligible for referral to Independent Office of Appeals,” provides, in

relevant part:

(A) In general.—If any taxpayer which is in receipt

of a notice of deficiency authorized under section 6212

requests referral to the Internal Revenue Service

Independent Office of Appeals and such request is denied,

the Commissioner of Internal Revenue shall provide such

taxpayer a written notice which—

(i) provides a detailed description of the facts

involved, the basis for the decision to deny the

request, and a detailed explanation of how the basis

of such decision applies to such facts, and

(ii) describes the procedures prescribed under

subparagraph (C) for protesting the decision to deny

the request.[6]

6 The Court notes that the accompanying regulations to section 7803 were not

in effect at times relevant to this case. See Treas. Reg. §§ 301.7803-2 and -3. The

regulations were first presented in a Notice of Proposed Rulemaking and Notice of

Public Hearing on Proposed Rulemaking in 2022. 87 Fed. Reg. 55,934 (Sep. 13, 2022).

These regulations did not become final until January 15, 2025, and were effective for

requests for Appeals consideration received on or after February 14, 2025. See T.D.

10030, 2025-11 I.R.B. 1066. Because the proposed regulations were not binding on the

parties, and the final regulations did not apply at the times petitioner requested

9

[*9] III.

Analysis

Petitioner argues that Toscano was denied its right to “proper

Appeals consideration” under section 7803(e) and asks the Court to take

the extraordinary step of invalidating the FPAA. Petitioner divides the

alleged violations into three distinct issues, whether (1) petitioner was

improperly denied an Appeals hearing before the issuance of the FPAA;

(2) after issuance of the FPAA, the July 2024 conference was so deficient

as to constitute an improper denial of an Appeals hearing; and (3) the

FPAA may be set aside under the APA.

A.

Denial of Appeals Hearing During Exam and Before the

FPAA

Petitioner argues that RA Skinner’s refusal to accept Toscano’s

signed Form 872–P in March 2020 was an improper denial of a request

for Appeals consideration under section 7803(e). Petitioner contends

that because section 7803(e)(4) provides that the Appeals process shall

generally be available to all taxpayers, and section 7803(e)(5) instructs

the IRS to provide a detailed explanation when a request for Appeals

consideration is denied, the FPAA issued to Toscano is invalid because

RA Skinner refused to accept Toscano’s Form 872–P and did not provide

a reason in compliance with section 7803(e)(5)(A).

Petitioner essentially asks the Court to rewrite the past; the

Court declines the invitation. For the reasons outlined below, the Court

finds that RA Skinner’s refusal to accept Toscano’s request for Appeals

consideration did not violate section 7803(e)(5).

To begin with, petitioner’s reliance on section 7803(e)(5)(A) is

wholly misplaced. That provision applies “[i]f any taxpayer which is in

receipt of a notice of deficiency authorized under section 6212 requests

referral to the Internal Revenue Service Independent Office of Appeals

and such request is denied.” At the time RA Skinner declined to accept

Toscano’s signed Form 872–P, petitioner had not received any Notice of

Deficiency under section 6212.

Furthermore, a proceeding in this Court for readjustment of

partnership items under section 6226 is a proceeding de novo, and the

Court’s determination is based on the merits and not on any

administrative proceedings before the issuance of the FPAA. See

Appeals consideration, the Court will not consider them in deciding petitioner’s

Renewed Motion.

10

[*10] Greenberg’s Express, Inc. v. Commissioner, 62 T.C. 324, 327–28

(1974). It is a longstanding rule that, absent substantial evidence of

unconstitutional conduct (which petitioner has not alleged, much less

produced evidence of), this Court will not look behind an FPAA or a

deficiency notice to examine the evidence used, the propriety of the

Commissioner’s motives, or the administrative policy or procedure

involved in making his determinations. Greenberg’s Express, Inc., 62

T.C. at 327–28; Genecure, L.L.C. v. Commissioner, T.C. Memo. 2022-52,

at *8 n.23.

RA Skinner offered petitioner the opportunity to extend the

period of limitations on assessment and preserve Toscano’s opportunity

for pre-FPAA Appeals consideration. Petitioner declined that request,

so RA Skinner moved the case forward for issuance of the FPAA. RA

Skinner’s actions took place before respondent issued the FPAA to

Toscano. Using RA Skinner’s pre-FPAA actions to invalidate the FPAA

is exactly the type of remedy Greenberg’s Express foreclosed. The TFA

neither abrogated the rule set forth in Greenberg’s Express, nor amended

section 6224 to require an Appeals hearing as a necessary precondition

to issuing an FPAA, and the Court will not read one into the statute.

Petitioner relies on SN Worthington Holdings LLC v.

Commissioner, 162 T.C. 228 (2024), in an effort to show that RA

Skinner’s actions were per se outside the scope of section 7803(e). But

SN Worthington is inapplicable here. In that case, the taxpayer validly

elected into the procedures set forth in the Bipartisan Budget Act of

2015 (BBA), Pub. L. No. 114-74, 129 Stat. 584, but the Commissioner

continued the examination under the TEFRA process and ultimately

issued an FPAA (TEFRA) rather than a Notice of Final Partnership

Adjustment (BBA). The Court held that the Commissioner’s actions

exceeded the requirements under BBA § 1101(g)(4), 129 Stat. at 638,

noting that “the Commissioner may not add ad hoc additional

requirements” beyond what Congress required. SN Worthington, 162

T.C. at 235.

That is far from what happened here. RA Skinner’s request for a

period of limitations extension was not an “ad hoc additional

requirement.” Id. Neither was his refusal to accept Toscano’s signed

Form 872–P months after he requested it. The fact that the case had

been transferred to IRS Technical Services for issuance of the FPAA is

simply a function of the audit process itself, not a calculated decision by

RA Skinner to preclude Toscano from obtaining Appeals review. If

anything, it appears that petitioner is trying to link the facts that RA

11

[*11] Skinner was the revenue agent in both SN Worthington and

Toscano’s case. That connection is irrelevant to the relief petitioner

seeks.

RA Skinner completed his examination of Toscano’s 2016 Return,

provided petitioner with a summary report, and gave petitioner a

deadline by which to request a closing conference. Petitioner did not

respond. When petitioner finally responded several weeks later, RA

Skinner told petitioner that because the case had moved out of Exam to

Technical Services, the case was no longer under his control. The Court

fails to see how this series of events renders the FPAA invalid.

B.

Post-FPAA Violations

Petitioner argues that respondent’s actions after the FPAA was

issued rise to a level requiring the Court to invalidate that FPAA.

According to petitioner, respondent violated section 7803(e) on two

occasions after the FPAA was issued: once by removing Toscano’s case

from Appeals after it had already been assigned to Appeals because of

Mr. Weibel’s then-ongoing criminal case; and a second time by

improperly conducting the July 2024 conference. Neither argument

convinces the Court to invalidate the FPAA.

1.

Removal from Appeals Because of Mr. Weibel’s

Criminal Case

As the Court has already explained, see Opinion Part III.A above,

section 7803(e)(5) does not apply here and therefore offers petitioner no

aid. Moreover, any defects that may have occurred during that period

were rendered moot when respondent allowed petitioner’s case to return

to Appeals in October 2023, and the Court will not address that matter

further. 7

7 Petitioner also asserts that “[s]ince the First Motion to Invalidate, Petitioner’s

counsel discovered additional evidence of Respondent violating I.R.C. § 7803,” alleging

that Appeals employees were instructed not to work on cases in which Mr. Weibel

prepared the taxpayer’s appraisal, to cancel Appeals conferences for such cases, and to

withhold the reasons for doing so from the taxpayers’ representatives.” Whatever the

truth of petitioner’s allegations, any harm allegedly caused pertains to petitioner’s first

referral to Appeals and was rendered moot when respondent returned the case to

Appeals in October 2023.

12

[*12]

2.

The July 24, 2024, Appeals Conference

Next, petitioner argues that Toscano was not afforded a proper

Appeals hearing at the July 2024 conference. Relying on section

7803(e)(3), petitioner says the conference was not “fair and impartial” to

both parties, it did not “promote[] a consistent application” of Federal

tax law, and it did not “enhance[] public confidence in the integrity and

efficiency” of the IRS.

Specifically, petitioner raises several issues with the conduct of

the July 2024 conference. Petitioner argues that it was not provided a

“fair and impartial” hearing under section 7803(e)(3)(A) because (1) Mr.

Warshawsky relied on improper evidence when reviewing Exam’s

valuation opinion; (2) the offer presented to Toscano was not the same

as that being offered in other conservation easement cases; and (3) taken

together, the overall process from Exam through the July 2024

conference does not enhance public confidence in the IRS.

Petitioner further argues that the July 2024 conference did not

promote a consistent application of, and voluntary compliance with, the

federal tax laws. See § 7803(e)(3)(B). Petitioner takes issue with the

valuation determination, both its analysis and its result, and objects

that Appeals did not offer petitioner the same settlement available to

taxpayers currently under audit, including those in Appeals. 8

Petitioner, essentially, asks the Court to review the sufficiency of

the Appeals hearing it was provided. Section 7803 does not provide that

remedy. Petitioner cites no statute establishing the Court’s authority to

do so, the standard or scope of review if the Court were to undertake

such an analysis, or what the appropriate remedy would be. If petitioner

seeks to have the Court review different comparable properties to reach

a valuation for the underlying easement, trial is the appropriate remedy.

At their core, petitioner’s arguments amount to mere complaints

over not getting a preferred result at the July 2024 conference. To take

the extreme step of invalidating the FPAA, the Court requires more. To

the extent petitioner is dissatisfied with the July 2024 conference, the

appropriate remedy is that which petitioner has already undertaken:

File a petition in this Court for redetermination based on a de novo

8 The Court further notes that the settlement offer in News Release IR-2024174 was made public on June 26, 2024, a date well after Mr. Levitt’s March 16, 2020,

letter expressing a desire to exercise petitioner’s Appeals rights. Even if the request

had been timely, the settlement offer would not have been available to petitioner.

13

[*13] review of the evidence. Petitioner points to no provision that

expands the Court’s review process beyond what existed before the

enactment of the TFA.

C.

Administrative Procedure Act

In a final attempt to invalidate the FPAA, petitioner turns to the

APA. Petitioner contends that “[a]t every avenue, agency action was

taken to either keep Toscano from Appeals or to keep Appeals from

independently and seriously seeking to resolve” this case. Petitioner

invokes the APA’s “arbitrary and capricious” provisions and argues that

the issuance of the FPAA is the final agency action that is subject to the

APA. See 5 U.S.C. § 706(2).

Petitioner says the July 2024 conference “was not a remedy at all”

because respondent had already violated section 7803 on two different

occasions. Presumably petitioner is referring to (1) RA Skinner’s refusal

to accept the signed Form 872–P in March 2020 and (2) Appeals’ decision

to send the case back to the Office of Chief Counsel because of the

relationship with Mr. Weibel’s criminal case. The facts underlying these

arguments have been addressed above, and petitioner’s APA challenge

fares no better.

Under the APA, claims may be brought against an agency for

alleged wrongs, unless “statutes preclude judicial review; or . . . agency

action is committed to agency discretion by law.” 5 U.S.C. § 701(a).

Additionally, the challenged agency action must be “final agency action

for which there is no other adequate remedy in a court.” 5 U.S.C. § 704.

Agency action is generally considered “final” if two conditions are met.

Bennett v. Spear, 520 U.S. 154, 177 (1997). “First, the action must mark

the ‘consummation’ of the agency’s decisionmaking process.” Id. at 177–

78 (quoting Chi. & S. Air Lines, Inc. v. Waterman S.S. Corp., 333 U.S.

103, 113 (1948)). In other words, the action “must not be of a merely

tentative or interlocutory nature.” Id. at 178. “And second, the action

must be one by which ‘rights or obligations have been determined,’ or

from which ‘legal consequences will flow.’” Id. (quoting Port of Bos.

Marine Terminal Ass’n v. Rederiaktiebolaget Transatlantic, 400 U.S. 62,

71 (1970)). The Supreme Court suggests that legal consequences might

flow from agency action if it “alter[s] the legal regime to which the action

agency is subject.” Id.

This Court has long “made clear, back to the earliest days of

TEFRA litigation,” that “[t]he FPAA is to the litigation of partnership

14

[*14] items . . . what the statutory notice of deficiency is to tax

controversies.” Bedrosian v. Commissioner, 143 T.C. 83, 107 (2014)

(quoting Clovis I v. Commissioner, 88 T.C. 980, 982 (1987)), aff’d, 940

F.3d 467 (9th Cir. 2019). Similarly, “following an IRS examination of a

taxpayer’s return, the ‘consummation of the agency’s decisionmaking

process’ is reflected in the notice of deficiency.” Comput. Scis. Corp. v.

Commissioner, 165 T.C. 119, 135 (2025) (quoting Bennett, 520 U.S.

at 178). The Court will accept, without deciding, that, like the Notice of

Deficiency, the FPAA is the “consummation” of the decisionmaking

process under TEFRA procedures. With that assumption in mind, the

Court nonetheless sees no reason to accept petitioner’s APA arguments

in this case.

The refusal to accept Toscano’s Form 872–P does not render the

FPAA invalid under the APA. Given the facts of this case, namely

Toscano’s unambiguous statements in August 2019 refusing to extend

the period of limitations on assessment and its attempt to change its

mind nearly six months later, the Court sees no reason to find the lack

of Appeals consideration before issuance of the FPAA as grounds to

invalidate the FPAA. Doing so would effectively allow petitioner to

move to dismiss this case for lack of jurisdiction because it did not

receive its desired result at the July 2024 conference.

Likewise, the decision by Appeals to return the case to the Office

of Chief Counsel is not enough to invalidate the FPAA. First, under the

assumption just described, this removal occurred after the final agency

action. Second, in any event, whatever harm was caused by that

decision was rendered moot by the July 2024 conference. Once more,

the Court declines to treat respondent’s actions after issuance of the

FPAA (removing the case from Appeals because of Mr. Weibel’s criminal

matter) as grounds to invalidate the FPAA.

IV.

Conclusion

In conclusion, the Court will deny petitioner’s Renewed Motion to

Invalidate the Final Partnership Administrative Adjustment as set

forth herein.

The Court has considered all arguments made by the parties, and

to the extent they are not addressed herein they are considered

unnecessary, moot, irrelevant, or otherwise without merit.

An appropriate order will be issued.