Opinion
12916-20
04-28-2022
MICHAL A. BEAN, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER AND ORDER OF DISMISSAL FOR LACK OF JURISDICTION
ELIZABETH A. COPELAND JUDGE
Pending before the Court are Petitioner's Motion for Partial Summary Judgment, First Supplement to Motion for Partial Summary judgment and Second Supplement to Motion for Partial Summary Judgment, all filed December 14, 2021, and Respondent's Motion to Dismiss for Lack of Jurisdiction, filed December 29, 2021. Respondent's motion was set for hearing on February 14, 2022, at the Court's remote trial session in which Cincinnati, Ohio was listed as the place of trial. Petitioner's motion, as supplemented, was taken under advisement pending the outcome of Respondent's jurisdictional motion.
Background
On November 5, 2020, Petitioner filed the petition to commence this case. On the petition form Petitioner checked the boxes indicating that, in connection with tax years 2010, 2011, 2012, and 2013, she seeks review of: (1) notice(s) of deficiency, (2) notice(s) of determination concerning collection action, (3) notice of final determination for disallowance of interest abatement claim, and (4) notice(s) of determination of worker classification. Petitioner did not attach to the petition copies of any of the above-referenced notices. On the petition form, Petitioner did not check the box indicating she seeks review with respect to a notice of certification of [her] seriously delinquent debt to the State Department.
Thereafter, Petitioner filed the aforementioned motion for partial summary judgment as supplemented twice.
Shortly thereafter, Respondent filed his motion putting into question whether this court has jurisdiction to determine any of the claims set forth in the petition that is the basis for this case. Respondent seeks dismissal of this case on the following grounds: (1) as it pertains to the taxable years 2010 through and including 2012, no statutory notice of deficiency (notice of deficiency), notice of determination under
I.R.C. § 6320 or § 6330 (notice of determination), notice of final determination for disallowance of interest abatement claim (notice of disallowance of abatement), or notice of determination of worker classification (notice of worker classification) has been issued to petitioner with respect to said taxable years, nor has respondent made any other determination with respect to those years that would confer jurisdiction on this Court; (2) as it pertains to the taxable year 2013, a notice of deficiency was apparently issued; however a petition was not filed within the time prescribed by I.R.C. § 6213(a) or § 7502 to confer jurisdiction on this Court. In addition, as to the taxable year 2013, no notice of determination, no notice of disallowance of abatement, or notice of worker classification was issued to Petitioner for said taxable year, and Respondent has not made any other determinations with respect to that year that would confer jurisdiction on this Court.
Unless otherwise indicated, all statutory references are to the Internal Revenue Code ("I.R.C." or "Code"), Title 26 U.S.C., in effect at all relevant times, all regulation references are to the Code of Federal Regulations, Title 26 ("Treas. Reg."), in effect at all relevant times, and all Rule references are to the Tax Court Rules of Practice and Procedure.
On January 4, 2022, the Court issued an order in which it ordered Petitioner to file a response to Respondent's motion on or before January 25, 2022, and ordered Respondent to file a response to Petitioner's motion, as supplemented, on or before February 6, 2022. On January 27, 2022, Petitioner filed an opposition to Respondent's motion to dismiss for lack of jurisdiction. On February 2, 2022, Respondent filed a response to motion for partial summary judgment as supplemented. This case was called from the calendar for the Trial Session of the Court at Cincinnati, Ohio, on February 14, 2022, but Petitioner did not appear due to illness.
Discussion
The Tax Court is a court of limited jurisdiction, and we may exercise that jurisdiction only to the extent authorized by Congress. I.R.C. § 7442; Naftel v. Commissioner, 85 T.C. 527, 529 (1985); Breman v. Commissioner, 66 T.C. 61, 66 (1976). Where this Court's jurisdiction in a case is duly challenged, the jurisdiction must be affirmatively shown by the party seeking to invoke that jurisdiction. See David Dung Le, M.D., Inc. v. Commissioner, 114 T.C. 268, 270 (2000), aff'd, 22 Fed.Appx. 837 (9th Cir. 2001); Romann v. Commissioner, 111 T.C. 273, 280 (1998); Wheeler's Peachtree Pharmacy, Inc. v. Commissioner, 35 T.C. 177, 180 (1960). To meet this burden, the party "must establish affirmatively all facts giving rise to our jurisdiction." David Dung Le, M.D., Inc., 114 T.C. at 270.
I. Statutory Notice of Deficiency
The Court has jurisdiction to redetermine a deficiency if a valid notice of deficiency is issued. See Rule 13(a), (c); Monge v. Commissioner, 93 T.C. 22, 27 (1989); Normac, Inc. v. Commissioner, 90 T.C. 142, 147 (1988). The notice of deficiency has been described as "the taxpayer's ticket to the Tax Court" because without it, there can be no prepayment judicial review by this Court of the deficiency determined by the Commissioner. Mulvania v. Commissioner, 81 T.C. 65, 67 (1983). A petition disputing a notice of deficiency must be filed with the Court within 90 days (or 150 days if the notice is addressed to a person outside the United States), after the notice of deficiency is mailed (not counting Saturday, Sunday, or a legal holiday in the District of Columbia as the last day). I.R.C. § 6212, 6213(a).
Petitioner did not attach a notice of deficiency to her petition sufficient to establish a basis for contesting such notice of deficiency. Respondent did locate a notice of deficiency for Petitioner's 2017 tax year, however, that year is not at issue in this case. The facts suggest Respondent likely issued a notice of deficiency for the 2013 tax year to Petitioner on or about January 2, 2017. Petitioner filed the current petition 1, 404 days after January 2, 2017. The 90-day period for timely filing a petition with this Court from the notice of deficiency involving the 2013 tax year expired on or about April 3, 2017, which date was not a Saturday, Sunday, or a legal holiday in the District of Columbia. Accordingly, the 2013 petition was not filed within the time prescribed by I.R.C. § 6213(a) or 7502, and is untimely. The Court does not have jurisdiction in this case to redetermine a proposed deficiency for tax years 2010 through 2013.
II. Notice of Determination on Collection Action
The IRS Notices CP504, Notice of Intent to Seize (Levy), that were issued to Petitioner and attached to her petition to commence this case are precursors to the types of notices that would permit Petitioner to invoke this Court's jurisdiction.
The Court's jurisdiction under I.R.C. sections 6320 and 6330 to review certain collection actions depends upon the issuance of a valid notice of determination concerning collection action and the filing of a petition. See I.R.C. § 6320(c), 6330(d)(1); Rule 330(b); Orum v. Commissioner, 123 T.C. 1, 8 (2004), aff'd, 412 F.3d 819 (7th Cir. 2005); Offiler v. Commissioner, 114 T.C. 492, 498 (2000).
A petition disputing a notice of determination concerning collection action may be filed within 30 days of the determination. I.R.C. § 6330(d)(1). A condition precedent to the issuance of a notice of determination concerning collection action is the requirement that a taxpayer has requested a hearing before the IRS Office of Appeals within the 30-day period specified in section 6320(a) or 6330(a), and referencing an underlying Notice of Federal Tax Lien Filing and Your Right to a Hearing Under 6320 and/or Final Notice of Intent to Levy and Notice of Your Right to a Hearing. See Andre v. Commissioner, 127 T.C. 68, 69-70 (2006).
On July 1, 2019, Congress renamed the IRS Office of Appeals the IRS Independent Office of Appeals. See Taxpayer First Act, Pub. L. No. 116-25, sec. 1001(a), 133 Stat. at 983 (2019). The events in this case largely predate that change, so we use the name in effect at the times relevant to this case, i.e., the Office of Appeals.
The petition here indicates Petitioner seeks review of purported notices of determination concerning collection action issued with respect to her 2010 through 2013 tax years. However, no notices of determination were attached to her petition and the record contains no notices sufficient to confer jurisdiction upon this Court with respect to such tax years. Rather, Petitioner attached to the petition multiple Notice CP 504, Notices of Intent to Seize (Levy) dating back to June 20, 2016. Those intent to levy notices involved trust fund recovery penalties for the tax periods ended March 31, 2010 through September 30, 2013, with three exceptions.
This case is distinguishable from Boechler, P.C. v. Commissioner, No. 20-1472 (U.S. April 21, 2022). In Boechler, the U.S. Supreme Court held that the 30-day period to petition for our review is a non-jurisdictional deadline subject to equitable tolling. That is not at issue in this case because, unlike Boechler, Petitioner was never issued a 30-day notice of determination and thus never had a "ticket to Tax Court."
Petitioner did not attach intent to levy notices for the tax periods ended December 31, 2010, March 31, 2011, and September 30, 2013, and there is no indication in the record that such notices were issued for those three tax periods.
According to IRS transcripts provided, Petitioner apparently requested an hearing with IRS Office of Appeals on each of the indicated tax periods. However, a November 29, 2017, entry on the civil penalty transcripts related to that proposed levy, said the following "Resolved Claim." Thus, the levy dispute was apparently terminated prior to the issuance of a final notice of determination. Petitioner did not deny this sequence of events in her response to Respondent's motion.
Next, according to the transcripts, on January 16, 2018, Petitioner was issued notices of lien filing and rights to collection due process (CDP) hearings. On January 25, 2018, a CDP request was timely received. According to the transcripts, on August 24, 2018, the CDP hearing was resolved with Petitioner either waiving judicial review or withdrawing the hearing request. On that date, the transcripts state as follows:
"Collection due process (hearing) resolved by Appeals - Notice of Determination letter issued, you waived judicial review or withdrew the hearing request."
The IRS transcript account records make this statement for the tax periods ended March 31, 2010 through September 30, 2010 and June 30, 2011 through September 30, 2013. There are two tax periods not included, those ended December 31, 2010 and March 31, 2011. Despite the above statement in the transcripts, Respondent asserts that IRS records contain no evidence that any such notices of determination having been issued or mailed to Petitioner and Petitioner's response to Respondent's motion does not assert that any such the Notices were in fact received. The Court notes that even if there were notices of determination issued on August 24, 2018, as the IRS transcripts purport, the petition for determination would nevertheless be filed outside of the 30 days of determination limitation of section 6330(d)(1), and untimely. To the extent Petitioner seeks to challenge any collection activity by Respondent for the 2010 through 2013 tax years, Petitioner has failed to demonstrate that Respondent has issued any notices of determination concerning collection activity for such years or tax periods within those years. Petitioner did not attach any Notices of Determination on Collection Action to her petition, nor to Petitioner's Response to the Motion to Dismiss. As Petitioner has failed to introduce any notices of determination for the tax years at issue, there is no determination for this Court to review and no basis for our jurisdiction under Sec. 6330(d) for the tax years at issue.
III. Notice of Determination on Interest Abatements and Forms 843, Claim for Refund and Request for Abatement
In a case based upon a failure of the IRS to abate interest, jurisdiction of the Court depends on a taxpayer filing Forms 843, Claim for Refund and Request for Abatement with the IRS; and thereafter the taxpayer timely filing of a petition with this Court. I.R.C. § 6404(h); Rule 280(b). As relevant here, jurisdiction under I.R.C. § 6404(h) is likewise predicated on the issuance of a determination by the IRS under that section or the failure by the IRS to issue such a determination within 180 days of filing a claim for interest abatement.
Petitioner did not attach, and Respondent has no record of receiving any Forms 843, Claim for Refund and Request for Abatement that would confer jurisdiction to this Court to determine interest abatements. Accordingly, we have no jurisdiction to do so.
IV. Notice of Worker Determination
This Court has jurisdiction to redetermine the correctness of a determination by the Commissioner of employment status and the proper amount of employment tax under such a determination. I.R.C. § 7436(a); Charlotte's Office Boutique v. Commissioner, 121 T.C. 89, 102-103 (2003). No proceeding under section 7436 may be initiated with respect to such determination unless the petition is filed before the 91st day after the mailing of the notice of determination concerning worker classification. See I.R.C. § 7436(b)(2); Rule 290(c).
Here again, Petitioner did not attach and Repsondent has no record of issuing any notices of worker classification to Petitioner. In fact, if any such notices were issued it appears such notices would have been addressed to Petitioner's employer, Counting Beans Corp., an entity wholly owned by Petitioner. Thus, the wrong taxpayer is before the Court for such a determination. Section 7436(b) provides that a pleading seeking Tax Court review of the Service's determinations may be filed only by "the person for whom the services are performed." Counting Bean's Corp. was the taxpayer subject to examination for backup withholdings and was thereafter the taxpayer to which an employment classification determination was made. The respective determination letter by the IRS conferring jurisdiction on this Court would have been issued to Counting Bean's Corp. not Petitioner. Again, the Court lacks jurisdiction on this type of redetermination as it relates to Petitioner.
V. Passport Certifications
On the petition form, Petitioner did not check the box indicating she seeks review with respect to a notice of certification of your serious delinquent debt to the State Department, nor did Petitioner attach a copy of such a notice to her petition. Petitioner did not plead it as an issue, or otherwise assign error in her petition for passport certification. In her First Supplement to Motion for Partial Summary Judgment, Petitioner raises the issue of serious delinquent debt certification, but did not attach the relevant notice of certification to her supplement. It seems Petitioner seeks to argue the merits of her claims. However, Petitioner has not requested an amendment to her petition to add this issue, and it would be prejudicial to allow Petitioner argue that point this late in the case.
On February 24, 2022, after the scheduled hearing on this matter, Petitioner filed with the Court, a new petition requesting review of the notice of certification of her seriously delinquent debt, which petition was served on March 31, 2022, and subsequently assigned as Docket No. 6748-22. The delay in service was caused by Petitioner listing the docket number for this case on her new petition. On March 25, 2022, Petitioner also filed another Petition with this Court (Docket No. 6238-22) related to the passport certification issue, but omitted to pay the Court's filing fee or submit an Application for Waiver of Filing Fee. That second case has since been dismissed as duplicative of the case at Docket No. 6748-22.
Furthermore, even if this Court had jurisdiction, we could not reach the merits of Petitioner's claims. Section 7345(e) limits our jurisdiction to determining whether the Commissioner erred in certifying (or in failing to reverse a certification) that a taxpayer owes a "serious delinquent tax debt" as defined in § 7345(b). The Tax Court is not authorized to redetermine Petitioner's underlying liability for the penalties the IRS has assessed. Here, Petitioner is apparently belatedly requesting that we redetermine the underlying trust fund penalty liability.
Accordingly, because Petitioner did not attach a notice of certification and did not plead it was at issue, and Petitioner did not otherwise assign error in her petition for passport certification, there is no basis for the Court to exercise jurisdiction over the civil penalties in question in this case filing. Respondent's Motion to Dismiss for Lack of Jurisdiction will be granted.
VI. Other Avenues of Relief
While we cannot provide Petitioner the relief she is requesting because we lack jurisdiction, Petitioner is not foreclosed from contesting the trust fund recovery penalties in District Court or the Court of Federal Claims by paying one tax quarter for one employee, filing a claim for refund and litigating the claim if the Commissioner does not grant it within a specified time period. As the Court has previously stated, "the section 6672 penalty is divisible, so that a taxpayer may litigate the penalty after having paid an amount corresponding to the tax withheld from a single employee". See Weber v. Commissioner, 138 T.C. 348, 363 n.12 (2012) (citing Davis v. United States, 961 F.2d 867, 870 n.2 (9th Cir. 1992), and Bland v. Commissioner, T.C. Memo. 2012-84, 103 T.C.M. (CCH) 1459, 1464 n.13).
VII. Conclusion
Overall, Petitioner has not produced or otherwise demonstrated that, at the time of the petition in this case was filed, she had been issued any notice (or that Respondent failed to act within certain time periods relating to claims for interest abatement filed with the IRS) that would permit Petitioner to invoke the jurisdiction of this Court. With regards to the notice of deficiency involving the 2013 tax year, a petition was not timely filed within the time prescribed by I.R.C. § 6213(a) or 7502. In addition, Petitioner did not properly plead review with respect to a notice of certification of seriously delinquent debt to the State Department in such a way as to invoke the jurisdiction of this Court in this case and she is pursuing that claim at Docket No. 6748-22 instead. Petitioner has failed to affirmatively establish that this Court has jurisdiction in this case. Romann v. Commissioner, 111 T.C. at 280; Wheeler's Peachtree Pharmacy, Inc. v. Commissioner, 35 T.C. at 180 . Accordingly, we are obliged to dismiss this case for lack of jurisdiction, which in turn makes moot any ruling on Petitioner's Motion for Partial Summary Judgment, as supplemented.
To reflect the foregoing, it is
ORDERED that Petitioner's December 14, 2021, Motion for Partial Summary Judgment, as supplemented is denied as moot. It is further
ORDERED that Respondent's December 29, 2021, Motion to Dismiss for Lack of Jurisdiction is granted, and this case is dismissed for lack of jurisdiction.