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Case number 21-1260, John M. Crimm, the balance, versus Commissioner of Internal Revenue.

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Mr. DiRusso for the balance.

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Mr. John Schlaue for the appellee.

[00:00:12] Speaker 01:
Good morning, Mr. DiRusso.

[00:00:14] Speaker 01:
Good morning, Your Honor.

[00:00:15] Speaker 01:
May I please support Joseph DiRusso on the happy appellate?

[00:00:19] Speaker 01:
John Michael Crimm.

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I'd like to reserve four minutes for a vote.

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In this case, the task force committed two errors.

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of law, either which entitles the appellant to relief.

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First, is the task force air to concluding that for the amendments to 7441 at 7443 subsection F doesn't implicate separation of powers doctrine.

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And the second issue is that the 6700 penalties that as you hear are not subject to any such limitation, either under code section 6501A or the catch off provision of 28 USC

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Section 2462.

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Turning to the first issue.

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In 2016, 7441 was statutorily amended to include the language that, quote, the tax court is not an agency of and shall be independent of the executive branch of government.

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This statutory language was added by Congress in direct response to this court's decision for Kertetsky

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And Congress clarified, as detailed in the Senate report, that, quote, the tax court is not part of the executive branch, close quote.

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Therefore, 7041 makes clear that the tax court is now an Article I court and that, through the Supreme Court's decision of Freytag, exercises judicial power and not executive, legislative, or administrative power.

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Consequently, because the tax court is an Article 1 court exercising judicial power, the president's removal power under subsection F violates the separation of powers doctrine.

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And the tax force's decision to the contrary was there... Wasn't all of this ground covered in our prior opinion in Koretsky?

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It was, and Congress...

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read the decision, put issue with the decision, statutorily amended section 7441, take that into consideration, and state in addition to the statutory language that to clarify that the tax part, not part of the executive branch,

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It says, didn't say that, it says it's not an agency of the executive grants.

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That's the first part, right?

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What part of Koretsky was dependent upon, of the decision, our decision, was dependent upon considering the tax court to be an agency of the executive grants?

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I don't believe the decision,

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I believe that the decision spoke in terms of export being under the executive branch.

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And I think we all can agree that the tax board, not a department, it's not the Treasury Department, the Department of Defense, the Department of Commerce.

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And also, but now the statutory language of 7441 calls it is not an agency independent or dependent or otherwise.

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What part of our opinion in Koretsky changes or should I say what part of that prior opinion

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relied upon the fact that the tax court was not independent of the executive branch.

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Was there any part of that analysis that said, well, because the tax court isn't really independent of the executive branch, we find the scheme to be constitutional?

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I don't believe the opinion spoken in that manner.

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I believe the opinion spoke to

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that the tax court does not exercise legislative powers and is not an Article III court.

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A year ago, it's in the executive branch.

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Because the president is the head of the executive branch, there is no inter-branch separation of powers problem.

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But I don't think the decision that this court had spoke to

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or had an outcome determined in principle that whether the tax court is an independent agency or dependent agency or an agency at all, you know, had any bearing on this court's analysis in Kertetsky.

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We'll see.

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Then how are we to, I guess what I'm saying is we're bound by a prior opinion of our court, you know, going on and say that a prior opinion shouldn't be followed.

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But we're bound by it.

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We have this intervening statute.

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But if this statute doesn't change or impact the analysis of the prior opinion, then how is it that we should come out with a different conclusion today or feel like we're not bound by that

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prior opinion today?

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Well, various circuits have different articulations of this principle of the prior panel precedent, but I'm pretty sure that this circuit applies to the general concept that if subsequent events take place, that calling to question the prior decision, then a subsequent panel is not bound.

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Well, Congress can't overrule our interpretation of the Constitution,

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That is true, but Congress can change the statutory scheme on which this court's statutory review is based.

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So that's why I was asking the questions.

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The Congress, according to this language, changed the scheme potentially two ways.

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By saying, by clarifying, if it wasn't clear before that the tax court isn't an agency,

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of the executive branch.

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But you said that nothing in Koretsky turned on whether the tax court was an agency.

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And then the Congress made clear that the tax court shall be independent of the executive branch.

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And nothing in the prior opinion turned on whether it was not independent of the executive.

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And I understand that, Your Honor, but I would submit that

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When Congress identifies a case that is problematic and subsequently mends the statutory language in response to a perceived problematic case, Congress is setting the status quo.

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Well, what work is this language doing?

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Maybe that's a better question.

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What is the effect of that as far as the structure of the tax board?

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I was going to bring to the Senate report, and I'm quoting here.

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The Tax Board would be enhanced by greater autonomy in its administration of fees it collects, as well as the clarification that is not part of the executive branch.

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those both of my view of the legislative history and combined to the statutory language in response to this course decision is that the taxpayer is an article one court.

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It's not a part of the executive branch.

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It exercises judicial power, albeit not a not article three judicial power.

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And as a result, the fundamental statutory underpinning for Chesky has been changed

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And therefore, this court is not bound, in the prior panel rule, to a buy-buy test.

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Didn't Koretsky acknowledge that the tax court exercises judicial power?

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Yes, I do believe it did in citing to the Supreme Court's by-tax decision, which makes clear that it operates and uses judicial power, not in the Article III sense.

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I don't want to dominate the questioning here, so I'll stop there.

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I want to ask the statute of limitations question.

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Number one is sort of a fact question.

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Do you know of any of Prim's clients, any clients of the tax shelter filed a tax return?

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I don't know.

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And I was not trial counsel at the... The Third Circuit said in the United States v. CRIM, based on instructions provided by CRIM's firm, many of its clients did not file federal tax returns.

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Should I take that to mean that his clients did not file tax returns?

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I'm not going to dispute that, and I was also counseled and recorded for the Third Circuit.

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So I don't have reason to believe that is actually incorrect statement by the Third Circuit.

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And then can you give me an example of a tax shelter promotion case, hypothetical case, in which statute of limitations would be triggered?

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Sure.

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I'm promoting the shelter.

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You're the taxpayer.

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I claim interest income is not subject to taxation.

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Therefore, you don't have to report it.

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You file your 1040, you report your income, leave off the interest income.

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Service comes by, audits you, you have a 1099 interest from your bank or your brokerage house,

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a stat notice based upon the deficiency, based upon the interest that is not reported.

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That would be a typical example of a portion of your tax return that would be improper, that would be the shelter, but you still file a tax return.

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Another hypothetical which is going on to the state are the tax shelters regarding conservation easements.

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In those conservation easements, we have inflated valuations of the charitable contribution that the land is being donated.

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Then you have an inflated

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terrible contribution and inflated deduction.

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Again, those are tax returns that have been filed with the service that precipitate or demonstrate the promoter activity.

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Okay.

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And I hope the IRS counsel was listening because my question, if we adopt your interpretation of the statute, is that are those factual hypotheticals?

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correct when would they actually trigger a statute of limitations in terms of assessment.

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And I would point your honor to 6700 a to cap a and talks about a statement.

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A statement could be a tax return, a statement made to the IRS, or a statement could be a non-tax return reported.

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For example, quarterly statement, a 941, or like Benfuda.

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There could be numerous statements, a 1099 is not a tax return, but is an informational statement that then precipitates or allows taxpayers to compute a tax.

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There are a lot of tax returns or statements

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that I believe 6700A2 Cafe would include.

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I'm over my time, but my textual argument for 6700 is simple.

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6671A provides that the penalty shall be assessed in a manner that's same as, assessed and collected as same as of taxes, except it's otherwise provided by,

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6700 itself does not have an express limitation provision.

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In 6703, Congress provided some additional exceptions or differences, in particular, for example, the exception to the deficiency procedures.

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So as a result, we can take 6671, 6700, 6703,

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You get to the default 10-year statute of limitations on collection under 6502, and you get to the three-year statute of limitations on assessment under 6501A.

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Now, again, 6501A, there could be no return, there could be a fraudulent return, there could be a substantial omission of income.

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There are numerous clearly delineated exceptions to the statute of limitations.

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But when you read the statutory scheme in its whole, to my view, that those contemplated exceptions to 6501 did there.

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And as a result, this court concluded the decision below was erroneous.

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However, this 6700 isn't subject to any limitation provision in the code itself on assessment.

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Then this court's decision in 3M regarding

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24 to come to bear.

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And that court's or that panel's decision, I believe, supports our reading that

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An assessment is the prerequisite, and the assessment is the beginning of the enforcement proceedings.

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And the 3M decision from this court cited favorably Judge Boggs' dissent in the Sixth Circuit opinion in Mulligan, which held to the contrary, at least as far as 6,700 penalties in respect to the Title 28 sketch implementation.

[00:14:15] Speaker 00:
So with that being said, I want to clarify something you had in your brief, the issues presented for review.

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The fourth issue, the last issue was related to tax court failing to properly apply to summary judgment standard of review.

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Is that issue now basically of no moment?

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It seems like the government

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respond to that in their their brief and you didn't say anything about it in your reply brief.

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I don't think it's it's kind of neither here nor there now.

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Correct.

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I believe the IRS will will concede that starting on page 24 27 of its brief.

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They agreed that statute of limitations is a verification issue under 6330C1, or in the alternative, that my client was not given a prior opportunity under 6330C2-B.

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And then as a result, the issue of statute of limitations now is appropriate.

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So that's my view of the government's concession.

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Okay, so you were raising that kind of as a prophylactic measure to make sure that you would be able to present this issue.

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And since the government is agreeing that it's

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it's going to be it's been properly before the court.

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We don't need to worry about that issue yet.

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Yes, because my my take on the statute of limitations was Judge labors in his decision that that I couldn't raise the statute of limitations and then and proceeded to address it.

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Arguendo is an alternative.

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So I had to address that

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first proposition that it was properly before the tax court and that there was a material issue of fact, even assuming that it was not a verification under C one as to fire opportunity, which I mean, much to do well, whether there's this registered number or what happened, what was available in the administrative record.

[00:16:16] Speaker 00:
So thank you, judge Rogers.

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Any questions?

[00:16:20] Speaker 04:
No, thank you, judge.

[00:16:23] Speaker 00:
All right.

[00:16:23] Speaker 00:
Thank you.

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We'll give you a couple of minutes on rebuttal.

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And now we'll hear from Mr. John Choi.

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May it please the court.

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My name is Matthew John Choi.

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I represent the aptly the commissioner of Internal Revenue.

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Prim must pay.

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He owes tax penalties as a result of his tax shelter promotion activities.

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There's no dispute as to those liabilities or as to the amounts of penalty.

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Because he has not voluntarily paid those penalties, the commissioner now seeks to collect involuntarily through an administrative order.

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He has raised multiple arguments as to why the commissioner's levy should be, in effect, fully stopped or further delayed.

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But those arguments lack merit.

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This court should have firm the tax court.

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to find there's no reason to stop collection because there is no statute of limitations violation.

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And this court should find there's no reason to further delay collection because there's no constitutional problem.

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I agree with him on 6501 and 6670.

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In other words, if I think, OK, 6671 says the word tax includes tax penalty, and 6501 refers to a statute of limitations

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I know you disagree with all that.

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Let's assume that I'm with Crim, that there's a possibility that that leads to a result where the statute of limitations will still never run in a tax shelter case, because statute of limitations doesn't apply when a return is fraudulent.

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That's going to be a large category of tax shelter cases, I think.

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And then,

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It also doesn't run until a return is fine.

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So my question to opposing counsel was, well, when would a return trigger this statute of limitations if his interpretation of the statute is correct?

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I think maybe the answer is never.

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But maybe it's possible that a return, if he's right about the statute,

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could in some hypothetical trigger statute of limitations in a shelter case.

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So my first question to you is, if he's right about how to read 6501A, will the statute of limitations for a tax shelter case ever be triggered in the real world?

[00:19:09] Speaker 03:
I think that's, I apologize, that's a difficult question to answer, because you also have to then, I think, add one more piece.

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And CREMA argues that the promoter penalty would then relate to the tax return of the taxpayer.

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But we disagree with that.

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You can look at the Ninth Circuit's case in the state preservation services.

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The Ninth Circuit held that the penalty is all about the misrepresentation made by the promoter.

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Once they've made that misrepresentation, the offense is over.

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Taxpayer reliance isn't an element of the offense.

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But if it did relate to the tax return of the taxpayer, then under your hypothetical, Your Honor, then yes, the time limit would start.

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We, of course, argue that 6501's limitation is for the filing of a return, which there is no return that relates to the promoter penalty.

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No return will ever be filed for the promoter penalty.

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What about 6501A apply?

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Does it ever apply to a tax penalty?

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Yes.

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Yes, Your Honor.

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There are other penalties that do relate to returns.

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So how do we tell which tax penalties are covered by 6501 and which are not?

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Well, one way, Your Honor, some of the other penalties that would be covered have special rules that

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show that they relate to the returns.

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For instance, the penalty for preparing returns, false returns specifically relate.

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But for other penalties, because they don't relate to any particular period of time, there simply would never be a return file.

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It's just for making or furnishing a false statement while marketing a tax shell.

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You think that the possibility that even if

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Krim's interpretation of 6501A is correct.

[00:21:06] Speaker 02:
Given the possibility that it will not lead to the statute of limitations ever being triggered, this would have to take in your theory that a filer's return or the client of attack shelter's return does not trigger the statute of limitations.

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Do you think that that possibility should inform our interpretation of 6501A, or do you think

[00:21:32] Speaker 02:
Well, we should just figure out what 6501A means and not test the limits of our imagination as non-tax expert judges in terms of figuring out, well, is it ever going to actually be true?

[00:21:48] Speaker 03:
As I understand the question, you mean what emphasis to put on the fact of a possibly unlimited time to assess?

[00:21:55] Speaker 03:
I think Crimm's argument in that regard is fundamentally flawed.

[00:21:59] Speaker 03:
He argues, essentially, that there must be some time limit to assess.

[00:22:02] Speaker 03:
But as to the government, the default is actually the opposite.

[00:22:05] Speaker 03:
As to the government, a time limitation is not applied by default.

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Congress must explicitly mandate a time limitation.

[00:22:12] Speaker 03:
Here, they've chosen to only limit the time to collect post-assessment, but not to similarly limit the time to collect assessment.

[00:22:19] Speaker 03:
So I think that the possibly unlimited time wouldn't add credence to those arguments.

[00:22:29] Speaker 03:
I actually wanted to start with the statute of limitations argument.

[00:22:33] Speaker 03:
And before diving deeper into those arguments, I think it could be helpful to discuss some relevant background principles of tax law that have come up in the briefing.

[00:22:42] Speaker 03:
IRS assessments may be relatively unique in that the IRS doesn't impose a civil penalty when it assesses a civil penalty, just as it doesn't impose a tax when it assesses a tax.

[00:22:53] Speaker 03:
Under the tax code, liabilities arise under the statute and are imposed by the statute as a matter of law once the prerequisites have occurred.

[00:23:01] Speaker 03:
IRS assessments are just bookkeeping notations, essentially a recording of a preexisting liability in the IRS's record.

[00:23:08] Speaker 03:
The reason assessments may be important, though, is for triggering administrative collection remedy.

[00:23:13] Speaker 03:
The IRS could not collect by levy in this case had it not first assessed.

[00:23:18] Speaker 03:
But that brings me to the second point.

[00:23:20] Speaker 03:
The government doesn't need to assess in order to collect.

[00:23:24] Speaker 03:
Prim is mistaken when he argues that assessment is required for collection.

[00:23:28] Speaker 03:
Taxes and penalties may be in fact collected without assessment, judicially.

[00:23:32] Speaker 03:
In practice, that rarely happens because it's far more efficient

[00:23:35] Speaker 03:
to collect administratively, but it's important to understand that it can occur.

[00:23:40] Speaker 03:
In fact, if we look at 6501A, and I'm paraphrasing slightly, it says that when there is a tax imposed by the title, it shall be assessed within three years after the return is filed, and no proceeding in court without assessment shall be begun after the expiration of the period.

[00:23:57] Speaker 03:
So in addition to setting a general three-year time limit for assessing where a return is filed, it also makes clear that you can proceed in court without assessment.

[00:24:07] Speaker 02:
And I take what you said earlier to mean when it says the return, it's referring to the return of the tax.

[00:24:16] Speaker 02:
It is not, it cannot be returned.

[00:24:20] Speaker 02:
When it refers to the return, it cannot be referring to the return of the client of a tax shelter scheme.

[00:24:27] Speaker 02:
Do I understand you right about that?

[00:24:29] Speaker 02:
Yeah, it's not the Ninth Circuit case saying that, right?

[00:24:34] Speaker 03:
Well, the Ninth Circuit is saying reliance is not an element of the offense.

[00:24:37] Speaker 03:
And I think that implies that, that you wouldn't need to have a tax return that relied on it.

[00:24:41] Speaker 03:
A taxpayer could walk up to the ledge, buy the shelter, you know, whatever from you, and then, you know, get wise, and never rely on the commission.

[00:24:50] Speaker 03:
And you still would have made the false representation as to how broad is this principle that you're asserted?

[00:24:58] Speaker 02:
the return referred to in 6501A does not refer to the return of the non-promoter of an illegal tax.

[00:25:14] Speaker 02:
Does that principle apply across the whole tax code?

[00:25:20] Speaker 03:
Well, I would answer by returning to 6671.

[00:25:23] Speaker 03:
6671 is what says you shall assess and collect in the same manner as taxes, and any reference to tax shall be deemed to refer to this penalty.

[00:25:32] Speaker 03:
So it's this penalty that you're weighing against 6501A.

[00:25:36] Speaker 03:
For this penalty, when is the return for this penalty filed?

[00:25:39] Speaker 03:
There is no return for this penalty.

[00:25:41] Speaker 03:
It's not the sort of thing that requires a return.

[00:25:43] Speaker 03:
No return will ever be filed.

[00:25:45] Speaker 03:
And it may be that no taxpayer ever relied on the furnishing of that.

[00:25:49] Speaker 03:
It may be that they did rely on the furnishing of that advice, but it may be that they didn't.

[00:26:07] Speaker 03:
So there really is no case law support for the 6501A argument.

[00:26:13] Speaker 03:
Circuits that have

[00:26:15] Speaker 03:
Seeing the issue, I've rejected it.

[00:26:17] Speaker 03:
At least two circuits have also held that there's no statute of limitations that applies to accessible penalties, such as the 6700 penalty, or else the very similar 6701 penalty.

[00:26:27] Speaker 03:
CRIM also raised an alternative argument about 28 USC 2462.

[00:26:31] Speaker 03:
This court should also find that that does not apply to limit the penalty.

[00:26:34] Speaker 03:
Again, there is no case law support for that position.

[00:26:37] Speaker 03:
And of its own terms, 2462 only applies where Congress has not otherwise provided.

[00:26:44] Speaker 03:
Congress has provided a very comprehensive series of timing limitations in the tax code.

[00:26:49] Speaker 03:
It specifically shows to only limit the time to collect after assessment, but not to limit the time to assess, or even to limit the time to collect without assessment.

[00:26:59] Speaker 03:
So I don't think it's fair to say that Congress was intending to limit, you know, to use a statute of limitations, Title 28, to limit the collection of penalties.

[00:27:08] Speaker 00:
your time is up, but I'll give you a couple minutes if you want to say anything at all about the constitutional issue.

[00:27:18] Speaker 03:
As the constitutional issue, we think that there's no separation of powers problem with presidential removal.

[00:27:24] Speaker 03:
This court's opinion in Karetsky held that in 2015 that the tax court is in the executive branch and that presents no inter-branch or inter-branch removal problem.

[00:27:34] Speaker 03:
We don't think the amendment changed that.

[00:27:37] Speaker 03:
The actual text that was enacted doesn't change the branch in which the tax court is located.

[00:27:42] Speaker 03:
And because of that, there is no new question.

[00:27:44] Speaker 03:
And a statutory amendment wouldn't change all of the underlying constitutional reasoning.

[00:27:49] Speaker 03:
This court pretty thoroughly explained that the tax court was not in the legislative branch because it didn't exercise legislative power.

[00:27:56] Speaker 03:
And it was not in the judicial branch because it wasn't an Article III court that exercised the judicial power under Article III.

[00:28:02] Speaker 03:
That meant the only place the tax court could be was the executive branch, and that's where this court found that it was, and that's where it remains.

[00:28:11] Speaker 00:
impact or effect or work do you think that the amended language in 7441 does?

[00:28:20] Speaker 03:
I don't think it has a big substantive effect.

[00:28:22] Speaker 03:
I think it clarifies it makes sure that tax court is not being treated as an agency.

[00:28:27] Speaker 03:
This court already had said it was not an agency and then sort of left open the question of well what does that mean if it's not an agency for instance perhaps FOIA doesn't apply.

[00:28:36] Speaker 03:
I think adding that to the statute that it's not an agency makes clear that that's true.

[00:28:40] Speaker 03:
What about the independent of the executive branch language?

[00:28:43] Speaker 03:
I think that may just add clarity and comfort that it's independent, but I think it was already independent.

[00:28:50] Speaker 00:
Independent of?

[00:28:52] Speaker 00:
The forecause provision, removal provision says that

[00:29:04] Speaker 00:
judges of the tax court may be removed by the president after notice and opportunity for public hearing or inefficiency, neglect of duty or malfeasance in office, but for no other cause.

[00:29:17] Speaker 00:
Um, could it be that the work that this amended language is doing is to clarify that, um, inefficiency, neglect of duty, uh, or malfeasance should have

[00:29:32] Speaker 00:
very narrow and circumscribed meetings such that the president can't say, I'm removing you from malfeasance because, you know, you took a sick day without a doctor's note and I'm construing that to be malfeasance when that might be a pretext for removing someone because the president didn't like their decision.

[00:29:57] Speaker 03:
I think emphasizing independence could lead to a more narrow construction of the removal power.

[00:30:04] Speaker 02:
All right.

[00:30:04] Speaker 02:
Any other questions?

[00:30:05] Speaker 02:
Well, I would have thought the answer to what could we give to Congress's phrase, independent of the executive branch, is none because it's just wrong.

[00:30:23] Speaker 02:
Reske had said that it's

[00:30:27] Speaker 02:
part of the can't be independent of the executive branch while being in executive.

[00:30:37] Speaker 03:
I think one way to answer that question, your honor, is to point out that Koresky holds that it's in the executive branch for constitutional purposes and the independence may be granting statutory independence.

[00:30:49] Speaker 03:
I don't know exactly all the statutory regimes that exist out there, but certainly some of them might, you know,

[00:30:54] Speaker 03:
independence might emphasize that those wouldn't apply.

[00:30:58] Speaker 02:
So maybe Congress didn't mean to change whether the tax court is in the executive branch or constitutional.

[00:31:06] Speaker 03:
Right.

[00:31:06] Speaker 03:
And it certainly didn't say it's not in the executive branch or say it's in any other branch.

[00:31:10] Speaker 02:
I don't think it came really close to saying it's not in the executive branch.

[00:31:13] Speaker 02:
It said it's independent of the executive branch.

[00:31:17] Speaker 02:
In 1776, it would have been hard to say that

[00:31:21] Speaker 02:
we, post July 4th, were independent of the United Kingdom, and yet still in the United Kingdom, right?

[00:31:28] Speaker 03:
I agree, Your Honor, that it may have come close, but I don't think that's what it said, and I don't think that's what it intended.

[00:31:35] Speaker 03:
I think if Your Honor is inclined to think that way, I think you could, though, adopt a constitutional interpretation of the statute that does not move it from the executive branch of the Constitution.

[00:31:51] Speaker 00:
There is such a thing from my prior life.

[00:31:54] Speaker 00:
I studied a lot of the museums and their statutory organizations.

[00:32:02] Speaker 00:
And so, for instance, the Holocaust Museum was defined by Congress to be an independent entity of the federal government.

[00:32:16] Speaker 00:
It's not within the Smithsonian.

[00:32:18] Speaker 00:
It's not within the Park Service.

[00:32:21] Speaker 00:
any other agency, it's just its own entity.

[00:32:31] Speaker 00:
Could that be what the, you know, something akin to that?

[00:32:37] Speaker 00:
Could that, what Congress is saying here?

[00:32:40] Speaker 00:
I mean, I think to Judge Walker's point.

[00:32:46] Speaker 03:
Possibly, Your Honor.

[00:32:46] Speaker 03:
I think they're certainly emphasizing independence.

[00:32:49] Speaker 03:
You know, before the 1960s,

[00:32:51] Speaker 03:
nine amendment.

[00:32:52] Speaker 03:
They were an independent agency in the executive branch.

[00:32:55] Speaker 03:
They were then made a court.

[00:32:56] Speaker 03:
That language was dropped.

[00:32:57] Speaker 03:
Now they've brought back explicit language to say they're not an agency, but again to say they're independent of the executive branch.

[00:33:03] Speaker 03:
I think that Congress doesn't want anyone calling them to influence their decisions, but as a corollary to being in the executive branch, they must be subject to some sort of presidential removal.

[00:33:14] Speaker 03:
They're subject to the same sort of limited presidential removal authority that would be applied to any other multi-member expert body.

[00:33:25] Speaker 00:
All right.

[00:33:25] Speaker 00:
Any other questions?

[00:33:26] Speaker 00:
Judge Rogers.

[00:33:27] Speaker 04:
Oh, thank you.

[00:33:29] Speaker 00:
All right.

[00:33:30] Speaker 00:
Thank you, counsel.

[00:33:31] Speaker 00:
Um, Mr. So we'll you have two minutes for rebuttal.

[00:33:41] Speaker 01:
I would submit your honors that regarding the statute of limitations that if this were to include that is no statute of limitations under the code,

[00:33:51] Speaker 01:
the fallback provision in Title 28 applies.

[00:33:58] Speaker 01:
The pair of penalties under 60 and 700 were enacted long after the Title 28 catch-all provision to the extent, and so we all presume that the Congress legislates with knowledge of the existing law.

[00:34:11] Speaker 01:
And that's why this court in the 3M decision, in contrast to my opposing counsel's supposition that

[00:34:21] Speaker 01:
The default is no statute of limitations against the government.

[00:34:27] Speaker 01:
This court rejected that generic statute or kind of construction when it talked about in citing Chief Justice Marshall's and Justice Story's decisions

[00:34:41] Speaker 01:
that there are competing canons of construction as well.

[00:34:44] Speaker 01:
That's in addition to the rule of lenity and construction doctrine, which has the proposition that the Internal Revenue Code is interpreted in favor of taxpayers and against the government.

[00:34:56] Speaker 01:
So I don't believe the general proposition that cash limitations are construed strictly against or in favor of the federal government controls this case.

[00:35:05] Speaker 01:
And I would submit that the 3M decision from this court puts that issue to rest.

[00:35:10] Speaker 02:
As to the 3M, I think was an environmental enforcement, some kind of regulatory enforcement that different than a tax enforcement.

[00:35:24] Speaker 01:
That is true.

[00:35:24] Speaker 01:
But the language that talks about assessment as being a prerequisite to enforcement, specifically reference Judge Boggs' dissenting opinion in Mulligan, that 600 opinion was a 6,700 case.

[00:35:39] Speaker 01:
So, and then again, in contrast to what my closing counsel has stated, he is correct that no circuit court has determined that 6,700 penalties

[00:35:50] Speaker 01:
or subject to statute of limitations.

[00:35:52] Speaker 01:
However, the District Court in Sage found it was subject to 6501.

[00:35:57] Speaker 01:
The District Court in Lamb found it was subject to 2462.

[00:36:00] Speaker 01:
District Court in Mulliken found it was subject to 2462.

[00:36:04] Speaker 01:
And Judge Boggs, if there's any opinion, Mulliken again found it subject to 2462.

[00:36:09] Speaker 01:
So there are numerous jurors out there who found that, yes, the statute of limitations either in the internal revenue code or the catch-off provision does apply.

[00:36:18] Speaker 01:
And finally, Your Honors, I would submit that when Congress got a hold of this presidency opinion, it made changes to the statutory language because it was unhappy with the status quo and tried to change the status quo.

[00:36:37] Speaker 01:
And perhaps the language could have been better.

[00:36:40] Speaker 01:
Perhaps the language could have been clearer.

[00:36:42] Speaker 01:
But the Senate report was clear that the tax court is not part of the executive branch.

[00:36:48] Speaker 01:
So if the tax court is not part of the executive branch,

[00:36:51] Speaker 01:
here goes it's an article one court, then I submit then the underpinning for the pressing decision has been eroded and presidential removal power of from article two to an article one legislative court exercise you just have the United States violates the separation of powers.

[00:37:09] Speaker 01:
I want to ask that given the arguments in the briefing, I contain in the briefing this court reversed the decision flow in remand.

[00:37:17] Speaker 00:
Thank you.

[00:37:18] Speaker 00:
Thank you, counsel.

[00:37:18] Speaker 00:
We'll take the case under advisement.