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[DO NOT PUBLISH]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
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No. 17-15282
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D.C. No. CIR-1:018882-13
THOMAS E. WATTS,
MARY E. WATTS, et al.,
Petitioners-Appellants,
versus
COMMISSIONER OF IRS,
Respondent-Appellee.
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Appeal from the Tax Court of the United States
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(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.
3
