               FOR PUBLICATION

  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT


TWENTY-TWO STRATEGIC                      No. 15-15551
INVESTMENT FUNDS,
                           Petitioner,       D.C. No.
                                          3:05-cv-02835-
               and                              RS

BIRCH VENTURES, LLC; TOM
GONZALES,                                   OPINION
           Intervenors-Appellants,

                v.

UNITED STATES OF AMERICA,
             Respondent-Appellee.


     Appeal from the United States District Court
        for the Northern District of California
      Richard Seeborg, District Judge, Presiding

         Argued and Submitted May 18, 2017
              San Francisco, California

                     Filed June 7, 2017
2             BIRCH VENTURES V. UNITED STATES

    Before: Sidney R. Thomas, Chief Judge, Kim McLane
    Wardlaw, Circuit Judge, and Cathy Ann Bencivengo,*
                       District Judge.

                 Opinion by Chief Judge Thomas


                            SUMMARY**


                                  Tax

    The panel affirmed the district court’s judgment in an
action raising a statute of limitations challenge to the Internal
Revenue Service’s determination of tax liabilities in a
partnership level proceeding under the Tax Equity and Fiscal
Responsibility Act.

    In 2002, the IRS began investigating what it later
determined to be a tax sheltering scheme and issued Final
Partnership Administration Adjustments (FPAAs) to many of
the limited liability companies (LLCs) that participated in
that scheme. The adjustments effectively disallowed tax
losses sustained through involvement in the scheme, and
resulted in substantial tax liability for the LLCs. The tax
matters partner for the funds that constituted the tax shelters
challenged the disallowance of losses.



    *
      The Honorable Cathy Ann Bencivengo, United States District Judge
for the Southern District of California, sitting by designation.
    **
       This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
            BIRCH VENTURES V. UNITED STATES                   3

    Taxpayers, an individual investor (Tom Gonzales) and his
single-member LLC (Birch Ventures), intervened in the
action. The partnership tax return at issue was filed on April
16, 2001. Absent an extension on the statute of limitations,
the IRS had until April 16, 2004, to assess taxes with respect
to that return. Gonzales personally signed two consents to
extend the limitations period, and the IRS issued a FPAA
after the initial limitations period expired but within the
extension granted by the consents.

    The panel held that the statute of limitations extensions
signed by Gonzales were valid. The panel reasoned that an
alleged third-party conflict of interest, without more, does not
vitiate the individual consent personally executed by a
taxpayer and that, even crediting Gonzales’s allegations in
this case, the alleged actions by the IRS do not constitute
legal duress warranting relief.


                         COUNSEL

Mark Wray (argued), Law Offices of Mark Wray, Reno,
Nevada, for Intervenors-Appellants.

Andrew M. Weiner (argued) and Thomas J. Clark, Attorneys;
Tax Division, United States Department of Justice,
Washington, D.C.; for Respondent-Appellee.
4           BIRCH VENTURES V. UNITED STATES

                          OPINION

THOMAS, Chief Judge:

    We consider in this case whether consents to extend the
statute of limitations for the assessment of tax attributable to
a partnership item, signed by the taxpayer-partner, are invalid
because of a third party’s alleged conflict of interest or
duress. Under the circumstances presented by this case, we
conclude that they are not invalid, and we affirm the
judgment of the district court.

                               I

    This case arises out of an elaborate tax sheltering scheme
that resulted in a massive Internal Revenue Service (“IRS”)
investigation, multiple criminal indictments and convictions,
and a U.S. Senate investigation and hearing. The accounting
firm KPMG developed and marketed an “investment
product” called a “Bond Linked Issue Premium Structure,” or
“BLIPS.” BLIPS was a means of investing in foreign
currencies that were pegged to the U.S. dollar, but its ultimate
purpose was to generate tax losses for investors who sought
to offset substantial taxable gains in a given year. In 1997,
several KPMG employees left the firm to form an investment
advisory firm, Presidio Growth, LLC (“Presidio”). Presidio
participated in the BLIPS investment strategy and offered this
program to its clients.

    In order to participate in the BLIPS program, a client
would establish a single-member limited liability company
(“LLC”), which would take out a specific loan with a
participating lender and contribute all of the loan funds to a
strategic investment fund, an LLC managed by Presidio,
            BIRCH VENTURES V. UNITED STATES                      5

which would then purchase foreign currency assets. After a
brief period, usually about sixty days, the client would exit
the BLIPS program, the assets would be sold, and the loan
would be repaid with interest and pre-payment penalties. The
result of this series of transactions was a tax loss for the client
approximately equal to the amount of the offset he or she was
seeking.

    In 2002, the IRS launched an investigation into BLIPS
investments promoted by KPMG, Presidio, and their
principals. Ultimately, several KPMG partners were indicted
for conspiracy and tax evasion. See United States v. Stein,
495 F. Supp. 2d 390 (S.D.N.Y. 2007). The IRS also began
auditing personal tax returns from 1999 and 2000 that
claimed BLIPS losses. When it became clear that BLIPS was
a tax sheltering scheme and not a true investment vehicle, the
IRS issued Final Partnership Administration Adjustments to
many of the LLCs that participated in the BLIPS program.
The adjustments effectively disallowed the tax losses
sustained through BLIPS involvement and resulted in
substantial tax liability for the single-member LLCs.

    Presidio, as the tax matters partner for the strategic
investment funds, brought the underlying action to challenge
the IRS determination disallowing BLIPS-related losses on
the partners’ tax returns. The government moved for
summary judgment, arguing that the BLIPS transactions
lacked economic substance and should be excluded from
affected tax returns. The district court concluded that the
strategic investment funds constituted tax shelters, and
granted summary judgment to the government.

  An individual investor, Tom Gonzales, and his single-
member LLC, Birch Ventures (collectively “Gonzales”),
6             BIRCH VENTURES V. UNITED STATES

intervened in the action. Gonzales participated in BLIPS by
forming Birch Ventures LLC, which obtained a loan and
invested the proceeds in the Logan Strategic Investment Fund
(“Logan”).1 Presidio was Logan’s tax matters partner.2
Logan filed its 2000 partnership tax return on April 16, 2001,
so absent an extension of the statute of limitations, the IRS
had until April 16, 2004, to assess any taxes with respect to
that return. See 26 U.S.C. § 6229. Gonzales personally
signed consents on December 2, 2003, and October 20, 2004,
that together extended the limitations period to June 30, 2005.
The IRS issued a Final Partnership Administration
Adjustment to Presidio for Logan on April 28, 2005, after the
initial limitations period expired but within the extension
granted by the consents.

    Separately from Presidio, Gonzales moved for summary
judgment, arguing that the IRS failed to obtain valid
extensions of the statute of limitations and that the Final
Partnership Administration Adjustment issued to Logan was




    1
      The tax code defines a partner as “a partner in the partnership” or
“any other person whose income tax liability under subtitle A is
determined in whole or in part by taking into account directly or indirectly
partnership items of the partnership.” 26 U.S.C. § 6231(a)(2). Thus, both
Gonzales and Birch Ventures are “partners” in Logan.
    2
       A tax matters partner is the partner designated to act as a liaison
between the partnership and the IRS in administrative proceedings, and as
a representative of the partnership in judicial proceedings. 26 U.S.C.
§§ 6229(b)(1)(B), 6231(a)(7). “The tax matters partner is the central
figure of partnership proceedings. During both administrative proceedings
and litigation, the tax matters partner serves as the focal point for service
of all notices, documents and orders on the partnership.” Comput.
Programs Lambda, Ltd. v. Comm’r, 89 T.C. 198, 205 (1987).
              BIRCH VENTURES V. UNITED STATES                             7

therefore untimely. The district court granted summary
judgment to the government, and Gonzales appealed.3

    We have jurisdiction under 28 U.S.C. § 1291. We review
de novo a district court’s grant of a motion for summary
judgment. Candyce Martin 1999 Irrevocable Tr. v. United
States, 739 F.3d 1204, 1210 (9th Cir. 2014).

                                     II

    The central issue in this case is the validity of the statute
of limitation extensions signed by Gonzales, the taxpayer-
partner.4 Gonzales contends that the consents to extend the



    3
      Gonzales challenged the IRS’s Final Partnership Administration
Adjustments before the district court. The district court concluded that the
transactions at issue lacked economic substance and entered judgment for
the United States. Gonzales does not appeal this determination.
     4
       A partnership as an entity is not subject to federal income tax.
26 U.S.C. § 701. Rather, the partners of a partnership pay income tax
attributable to the partnership on their individual tax returns. Id. In
determining his income tax, each partner takes into account his share of
the partnership’s gains and losses. Id. § 702. Although partnerships do
not file income tax returns, they are required to file a report of the
partners’ shares of gains and losses. Id. § 6031. If the IRS disagrees with
something reported by the partnership, it opens an administrative
proceeding and notifies each partner of the Final Partnership
Administrative Adjustment that results from the proceeding. Id.
§ 6223(a). Partners then have an opportunity to seek judicial review of the
adjustment. Id. § 6226. As a general rule, the IRS must assess federal
income tax related to partnership items within three years of the date on
which the partnership return was filed. Id. § 6229(a). However, a
taxpayer-partner may agree to an extension or extensions of the limitations
period. Id. § 6229(b)(1)(A). Such consents are routinely signed by
taxpayers “in order to avoid immediate assessment by the IRS.” Phillips
8            BIRCH VENTURES V. UNITED STATES

limitations period that he signed are invalid because his tax
advisor had a conflict of interest and he signed the extensions
under duress.

                                 A

    Gonzales first argues that the consents to extend the
limitations period that he personally signed are invalid
because of the conflict of interest of his tax accountant and
advisor, Steve Smith, because Smith was “instrumental in
selling the [tax] shelter to Gonzales,” received a commission
for involving Gonzales in BLIPS, and signed the 2000 tax
return that the IRS was auditing. According to Gonzales, the
IRS was aware of these facts, but did not seek a waiver of the
conflict.

    Other than this vague implication of wrongdoing,
Gonzales offers no evidence that Smith’s involvement in
promoting BLIPS and his involvement in preparing
Gonzales’s 2000 tax return combined to create a conflict of
interest three years later when the IRS approached Gonzales
himself about extending the limitations period. There is no
evidence in the record that the IRS contacted Smith during
the time he was advising Gonzales to request that Gonzales
agree to extend his limitations period. Nor is there evidence
that Smith ever provided any advice to Gonzales regarding
extending his limitations period. Furthermore, as the district
court observed, “[a]lthough Steve Smith represented
Gonzales during the audit that flowed from his 2000 tax
return, Gonzales had designated different representation
before signing the consents. Gonzales offers no evidence that


v. Comm’r, 272 F.3d 1172, 1175 (9th Cir. 2001), as amended (Jan. 14,
2002).
            BIRCH VENTURES V. UNITED STATES                  9

his decision to consent to extend time was influenced by
Steve Smith notwithstanding this latter designation.” It was
Gonzales’s burden to point to evidence in the record showing
a genuine dispute of fact on this point, Fed. R. Civ. P.
56(c)(1), and he has not done so.

    Although he does not explain precisely how Smith’s
involvement with BLIPS and preparation of Gonzales’s 2000
tax return taints the consents Gonzales personally signed
three and four years later, Gonzales cites two cases in
support of his argument that such a situation presents a
disabling conflict of interest, Transpac Drilling Venture
1982-12 v. Comm’r, 147 F.3d 221 (2d Cir. 1998), and
Phillips. These cases are easily distinguishable.

     In Transpac, the Second Circuit addressed a single
question: “whether, as a result of being placed under criminal
investigation by the IRS (and hence becoming subject to
pressure by the IRS), the tax matters partners (TMPs) of
various partnerships labored under a conflict of interest and
thereby were disqualified from binding the partnerships.”
Transpac, 147 F.3d at 222. In contrast, we are concerned
with whether the taxpayer may bind himself. Moreover, the
conflict in Transpac was egregious and evident. The IRS in
that case was conducting civil audits of Transpac partnerships
at the same time it was conducting criminal investigations of
some Transpac tax matters partners. Id. at 227. The IRS first
sought extensions of the limitations period for issuing FPAAs
from the individual partners, who declined to sign such
extensions. Id. at 224. The IRS then sought consents from
the tax matters partners, who were under criminal
investigation and therefore had “a powerful incentive to
ingratiate themselves to the government” and “ignore their
fiduciary duties to the limited partners.” Id. at 227. The case
10          BIRCH VENTURES V. UNITED STATES

involved an “unrefuted allegation that the Service also misled
those limited partners who had inquired as to the status of the
civil audits by telling them to consult their [tax matters
partners] (who, in turn, had been expressly ordered not to
disclose the existence of criminal proceedings against them).”
 Id. In these circumstances, the Second Circuit found that a
“severe conflict cannot be doubted,” and refused to allow the
tax matters partners to bind the partnerships. Id.

    Absent from the case at bar is any evidence that the
government failed to obtain consent from Gonzales himself,
that it sought consent from the tax matters partner after
Gonzales expressly declined, or that it thwarted Gonzales’s
attempts to inform himself about the status of the audit by
directing him to the tax matters partner, who was under
criminal investigation but forbidden from revealing that fact.
Transpac simply does not support Gonzales’s argument that
his tax advisor’s role in promoting BLIPS in 2000 created a
conflict sufficient to invalidate Gonzales’s own consent to
extend the limitations period in 2003 and again in 2004.

    Phillips is similarly unhelpful for Gonzales. In Phillips,
we were asked to decide “whether criminal tax investigation
of a statutory [TMP] does, or must, end the TMP’s power to
act for a partnership.” Phillips, 272 F.3d at 1173. Our
answer was “no.” Id. The individual partner in that case
relied on Transpac in arguing that his tax matters partner had
a disabling conflict of interest because the tax matters partner
was under criminal investigation for his involvement in other
partnerships. Id. at 1174–75. We cited Transpac with
approval, noting that “[t]rust law, generally, invalidates the
transaction of a trustee who is breaching his trust in a
transaction in which the other party is aware of the breach.
Transpac is a salutary application of this rule to the particular
            BIRCH VENTURES V. UNITED STATES                  11

case of a TMP who should have been seen by the IRS as
laboring under an incapacitating conflict of interest.” Id. at
1175 (citation omitted). However, we found that two
circumstances differentiated Phillips from Transpac. First,
in Phillips, “[t]he IRS made no attempt to get waivers from
limited partners.” Id. Second, “[i]t is not intuitively obvious
that [the tax matters partner] did what is a routine
accommodation—signing a waiver in order to avoid
immediate assessment by the IRS—in order to ingratiate
himself in the investigation of his partnerships. Phillips . . .
speculated that [the tax matters partner] so acted; he [did] not
prove[] it.” Id. Such is the case here. In fact, the IRS
obtained consents from Gonzales personally, and Gonzales
has not pointed to any evidence proving that Smith was under
criminal investigation at the time he was advising Gonzales,
that Smith had a desire to ingratiate himself with the IRS, that
such a desire tainted Gonzales’s own consents to extend the
limitations period, or that Smith had any involvement in
Gonzales’s decision to sign the consents.

    In short, these cases do not stand for the proposition that
a third party’s alleged conflict of interest—especially absent
evidence of government misconduct, or a breach of the third
party’s fiduciary duty to the taxpayer—invalidates a consent
to an extension signed by the taxpayer himself. As a result,
the district court did not err in concluding that the consents
Gonzales signed to extend the limitations period were not
invalidated by Steve Smith’s alleged conflict of interest.

                               B

    Gonzales next argues that his consent to extend the
limitations period was obtained under duress inflicted by IRS
agent Paul Doerr. Duress in the tax context is an “action[] by
12          BIRCH VENTURES V. UNITED STATES

one party which deprive[s] another of his freedom of will to
do or not to do a specific act.” Price v. Comm’r, 43 T.C.M.
18 (T.C. 1981), aff’d, 742 F.2d 1460 (7th Cir. 1984). The
Tax Court also has held that “[i]f a taxpayer signs a waiver
under duress or coercion, the waiver is invalid. However,
where [the IRS] threatens to take legally authorized actions
if a taxpayer does not sign a waiver, neither duress nor
coercion exist, and the waiver is valid.” Shireman v.
Comm’r, T.C.M. (RIA) 2004-155 (T.C. 2004) (citation
omitted).

     Here, Gonzales first alleges that IRS agent Doerr met with
Gonzales two times without legal representation present. The
government disputes that any such meeting occurred.
However, we are bound to construe the facts in the light most
favorable to the non-movant in reviewing summary judgment
orders. Construing the facts in the light most favorable to
Gonzales and assuming the meeting did take place, the facts
still do not justify an inference of duress. Gonzales can recall
no details of the meeting other than its location. He cannot
remember any questions agent Doerr asked him or any
particular things agent Doerr said that were intimidating or
coercive. His testimony was that he was worried that he
might be in legal trouble and that the IRS could ruin his life.
His conclusion was founded on inference. However, the fact
that the agent declined to assure Gonzales that the IRS would
not be pursuing lawful action against him does not justify an
inference that Gonzales was deprived of his freedom of will
to such a degree that he signed the consents to the extensions
under duress. Price, 43 T.C.M. 18. Furthermore, the IRS
was legally authorized to investigate and take action against
Gonzales, so even if he feared legal trouble, he has not shown
that this fear sufficed to support a finding of duress under
Shireman.
            BIRCH VENTURES V. UNITED STATES                  13

    Second, Gonzales contends that the fact that the agent
served a summons on him constitutes duress. The parties
agree that agent Doerr drove to Gonzales’s home. Gonzales
stated in his deposition that he was not home when agent
Doerr visited his residence. Agent Doerr stated in his
deposition that he drove to Gonzales’s residence to serve a
summons, and that he left the summons in the mailbox
without encountering anyone. IRS agents are authorized by
statute to issue summonses, and a summons regarding a tax
return is required to be “delivered in hand to the person to
whom it is directed, or left at his last and usual place of
abode.” 26 U.S.C. §§ 7602(a), 7603(a). There is simply no
evidence that agent Doerr acted improperly or illegally in
serving a summons at Gonzales’s home, and there is no
evidence to support Gonzales’s assertion that his consent to
extend the limitations period was obtained under duress.

    There is nothing in the record indicating that Gonzales
was deprived of his free will in executing the consents to an
extension. Therefore, his duress argument fails.

                              III

    In sum, an alleged third-party conflict of interest, without
more, does not vitiate the individual consent personally
executed by the taxpayer. Even crediting Gonzales’s
allegations, the alleged actions by the IRS agent do not
constitute legal duress warranting relief.

   AFFIRMED.
