Opinion
2975-18
10-22-2021
Jacquie Carroll, Petitioner v. Commissioner of Internal Revenue, Respondent
ORDER
JOSEPH H. GALE JUDGE
By notice of deficiency dated November 20, 2017, respondent (the IRS) determined a deficiency of $51,422 in petitioner Jacquie Carroll's Federal income tax for 2015 and additions to tax under sections 6651(a)(1) and (2) and 6654 in the amounts of $11,570, $4,628, and $926, respectively. On February 9, 2018, attorney James R. Monroe, purporting to act on Mrs. Carroll's behalf, timely filed a petition contesting the foregoing deficiency and additions to tax. However, in the petition, Mr. Monroe states, among other things, that Mrs. Carroll "suffers from a number of medical conditions, including dementia", and "became disabled in 2015".
Section references are to the Internal Revenue Code in effect at all relevant times, and Rule references are to the Tax Court Rules of Practice and Procedure, which are available at www.ustaxcourt.gov/rules.html.
After filing the petition, Mr. Monroe made repeated assertions to the Court regarding his difficulty in obtaining information from Mrs. Carroll due to her dementia, raising serious concerns for the Court regarding her capacity to litigate this case. Moreover, Mr. Monroe also made assertions that he had been in communication with Mrs. Carroll's husband, Arthur P. Carroll, in the context of litigating this case--which, in view of the fact that on this record the status of Mr. Carroll's Federal income tax liability for 2015 was at that time unclear--raised serious concerns for the Court as to whether Mr. Carroll may have a potential conflict of interest that should preclude him from continuing to serve in any such role. Accordingly, the Court thereafter directed the parties to file a joint report addressing, among other things, (1) whether Mrs. Carroll has the capacity to engage in litigation in this Court, (2) whether she has a duly appointed representative, or an individual who may serve as her next friend, to act on her behalf in this case, and (3) the status of Mr. Carroll's Federal income tax liability for 2015.
As discussed infra p. 2, the Court has since determined that Mr. Carroll does in fact have a conflict of interest that precludes him from litigating this case on Mrs. Carroll's behalf.
See Order (Aug. 21, 2020).
On August 26, 2021, Mr. Monroe and IRS counsel filed a joint status report, advising (1) that Mrs. Carroll suffers from dementia and possibly Alzheimer's disease, and that she lacks the capacity to litigate in this Court, (2) that Mrs. Carroll has no court-appointed representative to act on her behalf in this case, (3) that Mr. Carroll wishes to act as a next friend and litigate this case on Mrs. Carroll's behalf, (4) that Mr. Carroll has not filed a Federal income tax return for 2015 but received sufficient income during such year to require him to do so, and (5) that Mr. and Mrs. Carroll jointly owned numerous rental properties during 2015 and also were jointly liable on certain debts that were forgiven during such year.
Based on the foregoing, the Court has determined that Mrs. Carroll lacks the capacity to litigate in this Court, and that Mr. Carroll has a conflict of interest that precludes him from litigating on her behalf as a next friend. At the Court's direction, on October 20, 2021, Mr. Monroe and IRS counsel filed a status report, wherein they advise that no guardian, conservator, or other like fiduciary has since been appointed to represent the interests of Mrs. Carroll in this proceeding, and provide the names and mailing addresses of Mrs. Carroll's daughter from a previous marriage, Lise Lasalle Veland, and Mrs. Carroll's brother, William H. Lasalle.
Even if the Court had not determined that Mr. Carroll has such a conflict of interest, during a conference call with the Court and IRS counsel on September 17, 2021, Mr. Monroe advised that Mr. Carroll is suffering from medical complications of his own and would no longer be able to participate in this case. In any event, given the unresolved state of Mr. Carroll's Federal income tax liability for 2015, Mr. and Mrs. Carroll's joint ownership of properties during 2015 and joint liability for unforgiven debts for such year, and any potential sec. 6015 innocent spouse claim by Mrs. Carroll for 2015, we cannot allow Mr. Carroll to represent Mrs. Carroll's interests in this proceeding.
See Order (Sep. 21, 2021).
Rule 60(a) requires that a case be brought by and in the name of the person against whom the Commissioner determined the deficiency, or by a fiduciary entitled to institute a case on behalf of such person. See Fehrs v. Commissioner, 65 T.C. 346, 348-349 (1975). In the case of an incompetent person, as here, a representative such as a guardian, conservator, or like fiduciary may bring a case in this Court on behalf of such incompetent person. Rule 60(d). However, an incompetent person who does not have a duly appointed legal representative may act by a next friend. Id.
In view of the foregoing, we will provide an opportunity for Mr. Lasalle and Ms. Lasalle Veland to file an appropriate motion to be recognized as next friend. Any such motion should set forth (1) that Mrs. Carroll is incompetent and cannot litigate this case without assistance, (2) that the person seeking to be recognized as next friend for Mrs. Carroll has a significant relationship with her and will represent her best interests, and (3) that there is no other person better suited to serve as next friend. The motion must list the names and addresses of persons who may have an interest in the matter and state whether anyone is known to have an objection to the Court's recognition of the person as Mrs. Carroll's next friend. The motion must also list the case name and docket number appearing above.
We advise Mr. Lasalle and Ms. Lasalle Veland that if they wish to act as next friend for Mrs. Carroll in this matter, they may do so without assistance from Mr. Monroe or any other attorney. We further advise Mr. Lasalle and Ms. Lasalle Veland that, if the Court does not receive a response to this Order within the 60-day period set forth below, the Court may dismiss this case for failure to properly prosecute and enter a decision in favor of the IRS for the full amount of the deficiency and additions to tax determined in the notice of deficiency, as described above.
Alternatively, this case may be dismissed for lack of jurisdiction, as it is not clear on this record whether Mr. Monroe was lawfully authorized to act on Mrs. Carroll's behalf in filing the petition in this case, and it is well established that, unless a petition is filed by the taxpayer, or someone lawfully authorized to act on his behalf, this Court does not have jurisdiction. See Fehrs v. Commissioner, 65 T.C. at 348-349. However, we need not resolve the question of jurisdiction at this time. If Mr. Lasalle or Ms. Lasalle Veland is subsequently recognized by the Court as next friend, either may ratify the petition timely filed by Mr. Monroe and thereby resolve the question as to the Court's jurisdiction over this matter. See Rule 60(a).
Upon due consideration and for cause, it is
ORDERED that, in addition to regular service, the Clerk of the Court shall serve a copy of this Order upon Mr. William H. Lasalle and Ms. Lise Lasalle Veland at the mailing address listed for each of them in the status report filed by Mr. Monroe and IRS counsel on October 20, 2021. It is further
ORDERED that, if Mr. Lasalle or Ms. Lasalle Veland wishes to prosecute this case as next friend on Mrs. Carroll's behalf, he or she shall file, on or before December 21, 2021, a motion to be recognized as next friend, in accordance with the terms set forth above, or otherwise make his or her intentions known by written notice to the Court.