Opinion
8843-23R
05-28-2024
SOLID GROUND TRANSPORTATION, INC. & SOLID GROUND TRANSPORTATION, INC. EMPLOYEE STOCK OWNERSHIP AND PROFIT-SHARING PLAN, Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER
Jennifer E. Siegel, Special Trial Judge
This case arises from a challenge to the Commissioner's determination as to the qualification of a retirement plan and is now before the Court on (1) petitioners' Motion for Certification of an Interlocutory Order to Permit Immediate Appeal and (2) petitioners' Motion to Supplement the Record. After due consideration and for the reasons discussed more fully below, we will deny both motions.
I. Background
Petitioners filed two petitions and opened two cases, the instant case and the now-closed case at Docket No. 19604-22R. Both cases concerned petitioners' disagreement with respondent's conclusion that the retirement plan at issue is disqualified beginning with plan year ended December 31, 2018.
We granted petitioners' motion to stay the proceedings in this case to allow for the disposition of a motion to dismiss for lack of jurisdiction filed in the other. Because the Court determined that both cases related to the same plan and period and were therefore duplicates, we issued an Order at Docket No. 19604-22R denying the Commissioner's motion to dismiss and closing that case on grounds of duplication with this case. We then lifted the stay in this case to permit petitioners' claims to move forward.
Petitioners appealed the closure of Docket No. 19604-22R to the United States Court of Appeals for the Seventh Circuit; that appeal remains pending. Petitioners did not ask the Court to stay the instant case pending resolution of the appeal. Instead, petitioners have asked the Court to certify the lifting of the stay for immediate interlocutory appeal.
II. Motion for Interlocutory Appeal
Motions for interlocutory appeals "should be granted only in exceptional cases." Kovens v. Commissioner, 91 T.C. 74, 78 (1988), aff'd without published opinion, 933 F.2d 1021 (11th Cir. 1991). The Court may certify an order for interlocutory appeal where it (1) involves a controlling question of law (2) about which there is a substantial ground for difference of opinion and (3) an immediate appeal from the order may materially advance the ultimate termination of the litigation. Rule 193; § 7482(a)(2)(A); see New York Football Giants, Inc. v. Commissioner, T.C. Memo. 2003-28.
Unless otherwise indicated, statutory references are to the Internal Revenue Code, Title 26 U.S.C. (I.R.C.), in effect at all relevant times and Rule references are to the Tax Court Rules of Practice and Procedure.
Petitioners fail to satisfy any of these requirements. First, our Order lifting the stay in this case does not concern a controlling question of law, which is "'more than a question which if decided erroneously would lead to a reversal on appeal but entails a question of law which is serious to the conduct of the litigation.'" New York Football Giants (quoting Kovens, 91 T.C. at 79). Matters within the discretion of a trial court generally are not certifiable as controlling questions of law. Id. (Internal citation omitted).
Petitioners argue that their appeal of the closing of the other case and the lifting of the stay in this one are so closely intertwined that the interdependence amounts to a controlling question of law; therefore, the lifting of the stay should be appealed to the Seventh Circuit immediately. A preference to have the proceedings in this case stayed does not establish an unsettled legal issue. See, e.g., E. States Cas. Agency, Inc. v. Commissioner, T.C. Memo. 1991-559; Estate of Halder v. Commissioner, T.C. Memo. 2003-284.
Petitioners likewise fail to establish that there is a substantial ground for difference of opinion. For example, their assertion that the Tax Court's "arriv[al] at a legal conclusion" in the other case establishes the existence of substantial grounds for difference of opinion in this case only demonstrates petitioners' misunderstanding. Generally, the "substantial ground for difference of opinion" test is interpreted to involve questions that present serious and unsettled legal issues. Kovens v. Commissioner, 91 T.C. at 80 (citing Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 547 (1949)). There are no unsettled legal issues pertaining to the Order lifting the stay in this case. Petitioners suggest that the parties' disagreement about jurisdiction in the other case satisfies this test. This suggestion, aside from being related to the wrong case, is incorrect.
We note, too, that, under the circumstances presented, an interlocutory appeal of the Court's January 29, 2024, Order lifting the stay would not materially advance the litigation. It would instead cause further delay: petitioners indicated in their most recent Status Report that they were unwilling to stipulate the certified administrative record while the appellate case is pending.
We have considered all of petitioners' arguments and conclude that they are moot, irrelevant, or without merit. There is nothing in the record to suggest that allowing this case to move forward warrants an order certifying immediate interlocutory appeal to prevent it.
III. Motion to Supplement the Record
Petitioners also filed a Motion to Supplement the Record. Despite its title, the motion actually requests two things: to allow petitioners to conduct discovery and to "stay the April 1, 2024 deadline to certify the administrative file."
To the extent the "record" petitioners wish to supplement refers to the administrative record, there is no administrative record on file with the Court. Until the administrative record is either stipulated to by both parties or the Commissioner submits a certified copy, it cannot be supplemented.
Joinder of motions is improper under the Tax Court Rules of Practice and Procedure. See Rule 54(b).
Rule 217(a) states that the disposition of an action for declaratory judgment involving the qualification of a retirement plan will ordinarily be made on the basis of the administrative record. See also Rule 210(b)(12) (defining the administrative record). Rule 217(a) further provides that good cause needs to be shown to allow any party to introduce evidence outside the administrative record. Petitioners have not made such a showing and we will deny their request for discovery.
Similarly, petitioners' request for more time is now moot. The Court granted respondent's motion to extend the deadline for filing the administrative record to November 1, 2024.
Accordingly, it is
ORDRED that petitioners' Motion for Certification of an Interlocutory Order to Permit Immediate Appeal of the Court's Order served January 29, 2024, is denied. It is further
ORDERED that so much of petitioners' Motion to Supplement the Record that seeks permission to conduct discovery outside the scope applicable to declaratory judgment cases is denied. It is further
ORDERED that so much of petitioners' Motion to Supplement the Record that seeks an extension of time beyond April 1, 2024, for the parties to file the administrative record is denied as moot.