           Case: 17-15282    Date Filed: 01/10/2019   Page: 1 of 3




                                                          [DO NOT PUBLISH]

             IN THE UNITED STATES COURT OF APPEALS

                     FOR THE ELEVENTH CIRCUIT
                       ________________________

                               No. 17-15282
                         ________________________

                          D.C. No. CIR-1:018882-13

THOMAS E. WATTS,
MARY E. WATTS, et al.,

                                                         Petitioners-Appellants,

                                   versus

COMMISSIONER OF IRS,

                                                          Respondent-Appellee.

                         ________________________

               Appeal from the Tax Court of the United States
                       ________________________

                             (January 10, 2019)

Before WILSON, BRANCH and ANDERSON, Circuit Judges.

PER CURIAM:
                Case: 17-15282       Date Filed: 01/10/2019       Page: 2 of 3


       On appeal, both parties agree that the Tax Court erred in assuming that

Wellspring made an election pursuant to Section 3.4(c) of the Partnership

Agreement, which would result in Wellspring being entitled to receive preferred

consideration based on the formula set forth in Section 10.9 of the Partnership

Agreement that in turn referred to Section 11. Both parties agree that this was

error because no such election was in fact made.

       Rather than address the remaining issues in the case, we prefer to remand to

the Tax Court for it to rule on the remaining issues in the first instance. Without

limiting the remaining issues for the Tax Court, we suggest it address whether the

Danielson rule as adopted by this Circuit properly applies in this case, see Spector

v. C.I.R., 641 F.2d 376 (5th Cir. Unit A April 3, 1981),1 and its progeny; and

whether the taxpayers proved that the Watts family and Wellspring actually had a

separate, enforceable oral agreement that predated the purchase by Sun Capital

and, if so, whether the Watts family’s incentive payments to Wellspring constituted

amortizable capital expenditures.

       Accordingly, the judgment of the Tax Court is vacated, and the case is

remanded to the Tax Court for further proceedings not inconsistent with this

opinion.


       1
        In Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc), the
Eleventh Circuit adopted as binding precedent all the decisions of the former Fifth Circuit
handed down prior to the close of business on September 30, 1981.


                                               2
     Case: 17-15282   Date Filed: 01/10/2019   Page: 3 of 3


VACATED and REMANDED.




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