Davison v. CIR — Waiver of Appellate Review for Inadequate Briefing and Appendix in Tax Court CDP Appeals

1. Introduction

In Davison v. CIR (10th Cir. Mar. 17, 2025), Allen R. Davison and Sharon L. Davison appealed from a United States Tax Court decision granting summary judgment to the Commissioner of Internal Revenue and sustaining IRS collection actions for tax years 2004 and 2005. The collection actions followed stipulated Tax Court deficiency decisions entered in 2011 and the Davisons’ continued nonpayment (with liabilities, interest, and penalties exceeding $950,000 across the two years before abatements).

The core dispute in the administrative process was whether the Davisons could reduce the stipulated liabilities through net operating loss (NOL) carrybacks/carryovers from other years based on partnership losses. After the IRS allowed only a limited NOL carryback (from 2010 to 2005) and issued notices of determination, the Tax Court upheld the collection determinations and granted summary judgment for the Commissioner.

On appeal, however, the Tenth Circuit resolved the case on a threshold procedural ground: the appellants’ opening brief and appendix were so deficient under the Federal Rules of Appellate Procedure and Tenth Circuit local rules that they waived appellate review. The court therefore affirmed without reaching the merits.

2. Summary of the Opinion

The Tenth Circuit affirmed the Tax Court’s judgment sustaining the IRS’s proposed lien and levy collection actions for 2004 and 2005. Although the record contained extensive merits rulings below (e.g., failure to substantiate NOLs; inability to challenge stipulated liabilities in CDP except within narrow bounds; exclusion of issues not raised in CDP), the appellate panel held the appeal failed primarily because:

  • The appellants provided an inadequate appendix (omitting key materials required for review).
  • The opening brief contained no record citations supporting factual assertions.
  • The brief failed to identify where issues were raised and ruled upon in the Tax Court.
  • The brief offered perfunctory and undeveloped arguments and did not explain why the Tax Court’s reasoning was wrong.

Given these deficiencies, the court concluded that the appellants had waived appellate review, and it declined to exercise discretionary review “insofar as the record permits.”

3. Analysis

3.1. Precedents Cited

The opinion’s reasoning is an application and synthesis of briefing-waiver jurisprudence and CDP/tax-administration limits. The cited cases fall into several functional groups:

A. Waiver and inadequate briefing/record on appeal

  • Birch v. Polaris Indus., Inc. — Cited for the rule that an appellant must support contentions with record citations. This case reinforces that appellate courts will not accept unsupported factual assertions.
  • Phillips v. James — Used to emphasize that the court will not independently search the record to find support for an argument. This anchors the panel’s refusal to “do the work” of record assembly and citation for the appellants.
  • Harolds Stores, Inc. v. Dillard Dep't Stores, Inc. — Supports declining to consider arguments when the brief fails to cite where issues were raised and ruled on, aligning with 10th Cir. R. 28.1(A).
  • United States v. Banks — Invoked for the requirement that arguments be supported with legal authority, not mere assertion.
  • Nixon v. City & Cnty. of Denver — Central to the court’s critique: the “first task” is explaining why the lower court’s decision was wrong; failing to engage the lower court’s reasoning is grounds to decline review.
  • Kelley v. City of Albuquerque and Adler v. Wal- Mart Stores, Inc. — These cases supply the rule that perfunctory, undeveloped allegations do not frame an issue for appellate review and are waived.
  • Perry v. Woodward — Cited to underscore that the court will not craft legal arguments for litigants.
  • Stump v. Gates — Reinforces that deficiencies in the opening brief cannot be cured in a reply brief.
  • N.M. Farm & Livestock Bur. v. U.S. Dep't of Interior — Recognizes the court’s discretion to scrutinize merits where the record permits, but the panel explicitly declined to exercise that discretion here.
  • Bronson v. Swensen — Although arising in a different context, it is used for the proposition that issues not raised in the opening brief are not considered on appeal; here, it supported declining to revisit the Tax Court’s burden-shifting discussion under 26 U.S.C. § 7491(a).

B. CDP limits and the scope of issues in Tax Court review

  • Keller Tank Servs. II, Inc. v. Comm'r — Cited for the rule that challenges to “underlying liability” in a CDP context are limited by 26 U.S.C. § 6330(c)(2)(B) (generally, no relitigation if there was prior notice/opportunity).
  • Amanda Iris Gluck Irrevocable Tr. v. Comm'r — Cited for the narrower proposition that an NOL-related challenge to underlying liability can be permissible in CDP when there was no prior opportunity to dispute that issue.
  • Giamelli v. Comm'r — Supplies the additional CDP procedural bar: issues not raised during the CDP hearing cannot be raised later in Tax Court. This was applied by the Tax Court to exclude (among other things) a “flock contract deduction” argument and a collection-statute-of-limitations argument.

C. Substantiation and burden for NOL claims

  • Benavides & Co., P.C. v. Comm'r — Cited by the Tax Court (and noted by the Tenth Circuit) for the principle that tax returns are not substantiation; they are merely a taxpayer’s statements of position. This supports rejecting NOL substantiation based only on filed returns.
  • Keith v. Comm'r — Cited by the Tenth Circuit to confirm that where 26 U.S.C. § 7491(a) burden-shifting does not apply, the taxpayer bears the burden to establish the existence and amount of an NOL carryover/carryback.

D. Administrative authority / “major questions” framing

  • West Virginia v. E.P.A. — The Davisons invoked it to argue the IRS acted beyond statutory authority in denying NOL claims. The Tax Court rejected the argument as untimely and meritless, noting Congress expressly authorized IRS collection under chapter 64 (26 U.S.C. §§ 6301-6344). The Tenth Circuit noted the Tax Court’s treatment but did not reach the merits because the appeal was waived by defective briefing.

3.2. Legal Reasoning

The opinion’s legal reasoning is procedural and disciplined: it treats appellate litigation as rule-governed review rather than a free-form reconsideration of the case. The panel proceeds in three steps.

  1. Define the appellant’s obligations. The court recites controlling requirements from the Federal Rules of Appellate Procedure and Tenth Circuit rules: provide an adequate appendix and record, cite the record for factual claims, identify where issues were raised and ruled upon, and provide legal authority and reasoned argument (not conclusory assertions).
  2. Diagnose the deficiencies. The court identifies multiple failures: an appendix consisting only of the Tax Court decision and an irrelevant post-judgment motion; a brief with no record citations; failure to point to where issues were preserved; and failure to engage the Tax Court’s rationales (e.g., why returns/promissory notes were inadequate, why lack of cooperation findings were undisputed, why certain issues were precluded).
  3. Apply waiver doctrine and decline discretionary merits review. Given the cumulative defects, the panel concludes the appellants “altogether waived appellate review.” While acknowledging discretion to review the merits “insofar as the record permits,” it declines to do so—implicitly emphasizing that discretion is not a substitute for a properly litigated appeal.

Practically, this reasoning reflects an institutional choice: the court enforces briefing rules to preserve fairness to the opposing party, conserve judicial resources, and maintain the appellate court’s role as a reviewer of argued issues rather than a fact-finder or advocate.

3.3. Impact

Although designated “not binding precedent” (except under law of the case, res judicata, and collateral estoppel), the order has persuasive significance in at least three ways:

  • For Tax Court appeals generally: It underscores that appellate courts will enforce strict compliance with record/briefing rules even in complex tax controversies. Substantive tax arguments (NOLs, partnership basis, CDP scope) will not be reached if the appeal is not properly presented.
  • For CDP litigation strategy: The case reinforces (through its discussion of the Tax Court’s rulings) that taxpayers must develop issues and documentation during CDP proceedings and preserve issues for review; otherwise, issues may be precluded under principles reflected in Giamelli v. Comm'r.
  • For “major questions” style challenges in tax administration: The opinion shows courts’ willingness to treat broad statutory-authority challenges as meritless where Congress has clearly authorized IRS collection mechanisms—while also illustrating that procedural missteps can prevent meaningful appellate consideration of such theories.

4. Complex Concepts Simplified

  • Collection Due Process (CDP) hearing: A taxpayer’s opportunity to challenge certain IRS collection steps (like liens and levies). CDP is not automatically a second chance to relitigate the amount of tax owed; its scope is limited by statute.
  • Underlying tax liability: The amount of tax (and sometimes penalties) assessed. In CDP, a taxpayer generally cannot challenge this if they already had notice and an opportunity to dispute it (26 U.S.C. § 6330(c)(2)(B)).
  • Net Operating Loss (NOL): When deductions exceed income in a year, creating a “loss” that can sometimes offset taxable income in other years via carrybacks or carryforwards—subject to detailed rules and substantiation.
  • Substantiation: Proof supporting a tax position. The opinion (via the Tax Court’s discussion) reflects the principle that a filed tax return is not, by itself, proof of the facts it asserts; taxpayers typically need underlying records (e.g., partnership K-1s, basis documentation, payment evidence).
  • Partnership “basis” and promissory notes: To claim certain partnership losses, a partner must often show they had sufficient economic investment or at-risk amount. A promissory note may be insufficient if the taxpayer cannot show actual payment or other required economic effect.
  • Summary judgment: A decision without trial when there is no genuine dispute of material fact and the moving party is entitled to judgment as a matter of law.
  • Waiver of appellate review: If an appellant does not properly present issues—through adequate record, citations, legal authority, and developed argument—the appellate court can treat the issues as waived and affirm without addressing the merits.
  • “Major questions” doctrine reference: The taxpayers cited West Virginia v. E.P.A. to suggest the IRS lacked authority. The Tax Court’s response (not reached on the merits by the Tenth Circuit) was essentially: IRS collection authority is explicitly granted by Congress in the Internal Revenue Code, so the statutory-authorization premise fails.

5. Conclusion

Davison v. CIR is principally a procedural decision: the Tenth Circuit affirmed because the appellants’ inadequate appendix, lack of record citations, failure to show preservation, and undeveloped legal argument amounted to a waiver of appellate review. The opinion reinforces a practical rule with high stakes in tax collection cases: even potentially complex disputes over NOLs and CDP scope will not be considered on appeal unless the appellant supplies a reviewable record and directly engages the lower court’s reasoning with properly supported argument.