Roach v. United States

McKINLEY, District Judge,

dissenting.

I respectfully dissent from the majority’s decision to remand to the district court for determination, consistent with its opinion, of whether the Brocks, Neumans and Roaches are entitled to additional depreciation if they executed their closing agreements with the government before they renegotiated their leases. I dissent from this part of the opinion because I believe that this Court’s decision in Rink v. Comm’r, 47 F.3d 168 (6th Cir.1995), is not controlling given the facts of this case.

In Rink, the parties disputed whether the taxpayer could adjust depreciation based on renegotiation of a sham lease negotiated in 1986. Both courts necessarily looked to the plain meaning of the Closing Agreements to resolve this issue.

In the present case, as the majority opinion recognizes, the government and the taxpayers initially agreed that the plain meaning of the Closing Agreements allowed taxpayers to adjust depreciation based on their renegotiated leases. The only dispute between the parties was whether depreciation was allowable prospectively or retrospectively. Instead of resolving the parties’ only dispute, the district court created another dispute involving Rink,, and resolved it without first allowing, the parties to address it. Of course, after the district court’s opinion, the government began to dispute whether renegotiation of the Chemlawn leases in 1988 entitled the taxpayers to claim even prospective depreciation.

Whether the taxpayers were entitled to additional depreciation was never an issue between these parties until the district court made it an issue. The fact that it was not an issue between the parties indicates clearly that the parties intended for the taxpayers to be entitled to additional depreciation based on their renegotiated leases. 'The reliance upon Rink by the district court and the majority ignores the true intent of the parties in this case.

Based on the foregoing, I would remand with directions to the district court to ascertain the parties’ intent on this issue, without suggesting that an application of Rink is necessarily dispositive of the matter. I do not think this Court should contravene what the parties heretofore agreed was their clear intent by applying its holding in Rink.