       NOTE: This disposition is nonprecedential.

  United States Court of Appeals
      for the Federal Circuit
              __________________________

    ELWOOD J. LEBLANC, JR. and JANICE L.
                 LEBLANC,
              Plaintiff-Appellant,
                           v.
                  UNITED STATES,
                  Defendant-Appellee.
              __________________________

                      2010-5073
              __________________________

    Appeal from the United States Court of Federal
Claims in Case No. 05-CV-743, Judge Francis M. Allegra.
              ___________________________

              Decided: February 7, 2011
             ___________________________

   THOMAS E. REDDING, Redding & Associates, P.C., of
Houston, Texas, argued for plaintiffs-appellants. With
him on the brief were TERESA J. WOMACK and SALLIE W.
GLADNEY.

   DEBORAH K. SNYDER, Attorney, Commercial Litigation
Branch, Tax Division, United States Department of
Justice, of Washington, DC, argued for defendant-
appellee. With her on the brief were JOHN A. DICICCO,
LEBLANC   v. US                                            2


Acting Assistant Attorney General, and BRUCE R.
ELLISEN, Attorney.
              __________________________

 Before RADER, Chief Judge, GAJARSA and PROST, Circuit
                        Judges.
RADER, Chief Judge.
    On summary judgment, the United States Court of
Federal Claims determined that Elwood J. LeBlanc, Jr.
and Janice L. LeBlanc had no entitlement to a refund for
federal income tax paid in connection with their invest-
ments in a partnership. LeBlanc v. United States, 90 Fed.
Cl. 186, 195-96, 203 (Fed. Cl. 2009). The trial court also
refused to dismiss the claim for lack of jurisdiction. Id.
Because the trial court lacked subject matter jurisdiction
over this refund claim, this court reverses the jurisdic-
tional finding and remands the case with instructions to
dismiss.
                              I
    The LeBlancs became limited partners in Agri-Cal
Venture Associates (“ACVA”) in 1986. On its partnership
tax return for tax year 1986, ACVA claimed a net loss of
approximately $34 million. Based on their distributive
share of these losses, the LeBlancs reported a loss deduc-
tion of $69,380 on their 1986 joint federal income tax
return. The Internal Revenue Service (“IRS”) disallowed
approximately $33 million of the claimed losses, in part
because it found that “[t]he partnership’s activities consti-
tuted a series of sham transactions lacking economic
substance.” J.A. 97-101. In response, some of the part-
ners filed a petition in the United States Tax Court seek-
ing readjustment of partnership items.
    In 1999, the LeBlancs abandoned their partnership
3                                             LEBLANC   v. US


interest in ACVA. Then in 2000, while the partnership-
level proceeding before the Tax Court was still pending,
they settled their 1986 income tax liability with the IRS.
Under that partner-specific settlement agreement, the
IRS allowed them to report about half of the previously
disallowed losses.
    The Tax Court issued its decision in the partnership-
level proceeding in 2001, reducing ACVA’s net loss in tax
year 1986 by approximately $16 million based on its
finding that the partnership’s activities “lacked economic
substance.” J.A. 179-80.
     In 2002, the LeBlancs filed a refund claim for their
1999 tax year. They claimed an ordinary loss of $34,084
and sought a refund of $8,789 “[t]o reflect loss on partner-
ship interest abandonment” for ACVA. J.A. 192-93, 199.
The IRS disallowed their refund claim. The LeBlancs
filed this refund suit in the U.S. Court of Federal Claims.
    In their amended complaint, the LeBlancs alleged
that “[a]s an indirect consequence of the settlement, there
was a substantial basis in the partnership interest and a
resulting loss upon the abandonment of the partnership,
which loss is the basis of this claim for refund.” J.A. 242.
The Government moved to dismiss the complaint for lack
of subject matter jurisdiction or, in the alternative, for
summary judgment that the LeBlancs’ basis in their
partnership interest was zero at the time of the alleged
abandonment, precluding the claimed loss. The trial
court found that it had jurisdiction but granted the Gov-
ernment’s motion for summary judgment. This court has
jurisdiction under 28 U.S.C. § 1295(a)(3).
                             II
    This court reviews without deference the trial court’s
determination that it had subject matter jurisdiction.
LEBLANC   v. US                                          4


Wilson v. United States, 405 F.3d 1002, 1008 (Fed. Cir.
2005).
    In Schell v. United States, 589 F.3d 1378 (Fed. Cir.
2009), a decision that issued after the trial court had
already decided the instant case, this court was presented
with a nearly identical set of facts and concluded that the
trial court lacked jurisdiction. Like the LeBlancs, the
Schell taxpayers invested in partnerships that reported
losses and then reported their pro rata share of the loss
on their tax returns. Id. at 1380. The IRS found that the
partnerships’ activities were sham transactions, lacking
economic substance, and disallowed the claimed losses.
Id. While partnership-level proceedings challenging these
findings were pending in the Tax Court, the taxpayers in
Schell entered into partner-specific settlement agree-
ments with the IRS, allowing them to report approxi-
mately half of the previously disallowed losses. Id. The
Tax Court later found that the partnerships’ transactions
“lacked economic substance.” Id.
    After the partnerships at issue terminated, the Schell
taxpayers filed a refund claim, contending that “as a
direct consequence of the settlement . . . there was a
substantial basis in the partnership interest and a result-
ing loss upon the dissolution and termination of the
partnership, which loss is the basis of this claim for
refund.” Id. The IRS rejected their refund claim, and the
taxpayers in Schell filed a complaint at the Court of
Federal Claims. Id. The Court of Federal Claims dis-
missed the complaint for lack of jurisdiction, and this
court affirmed on appeal. Id. at 1380-81, 1384.
    As this court explained in Schell, “a sham transaction,
devoid of economic substance, cannot be the basis for a
deductible loss.” Id. at 1382. Consequently, the refund
claim was necessarily based on the assertion that the
5                                           LEBLANC   v. US


partnerships’ transactions were not shams. Because the
question as to whether a partnership transaction was a
sham is a partnership item, Keener v. United States, 551
F.3d 1358, 1365 (Fed. Cir. 2009), such refund claims are
attributable to a partnership item. Under the Tax Equity
and Fiscal Responsibility Act of 1982 (“TEFRA”), the
Court of Federal Claims lacks jurisdiction to hear partner
refund claims where the refund is “attributable to part-
nership items.” I.R.C. § 7422(h). Accordingly, the Court
of Federal Claims correctly found that it lacked jurisdic-
tion over the refund claim in Schell. Id.
    The same reasoning applies to the LeBlancs. Their
refund claim rests on the assertion that ACVA’s transac-
tions were not shams and thus is attributable to a part-
nership item.     Because the facts in this case are
indistinguishable from the facts in Schell, this court
reverses the trial court’s jurisdictional finding and re-
mands with instructions to dismiss for lack of subject
matter jurisdiction.
            REVERSED AND REMANDED
