Opinion
20050-18
12-16-2021
DANNY FABRICANT, Petitioner v. Commissioner of Internal Revenue, Respondent
ORDER
Patrick J. Urda Judge
This Court issued an Order and Decision on July 15, 2021, in which we (1) denied a motion for administrative and litigation costs filed by petitioner Danny Fabricant, (2) granted the Commissioner's motion for entry of decision, and (3) decided that there was no deficiency in Mr. Fabricant's 2013 Federal income tax due and that there had been an overpayment of $461. (Doc. 55.) Mr. Fabricant thereafter timely filed a motion to vacate or revise our decision pursuant to Rule 162. (Doc. 58.)
All section references are to the Internal Revenue Code (Code) in effect at all relevant times, all "Doc." references are to the docket record as numbered by the Clerk of Court, and all Rule references are to the Tax Court Rules of Practice and Procedure.
To recap, Mr. Fabricant was a state inmate who claimed an earned income tax credit (EITC) on his Federal income tax return for 2013. This attracted the IRS' attention, as amounts received for work as an inmate do not qualify as earned income for EITC purposes. (Doc. 8, Ex. 1a.) Mr. Fabricant attempted to explain in a letter dated August 22, 2018, that the income on which he relied stemmed from the use of certain of his vehicles by third parties while he was in prison. (Doc. 8, Ex. 1.) The IRS was unconvinced and thereafter issued a notice of deficiency, which Mr. Fabricant challenged in this Court. (Doc. 14, Ex. A.)
During the discovery process, Mr. Fabricant sent a letter explaining in more detail his arrangement regarding the use of his vehicles during his incarceration, as well as the compensation he received. (Doc. 54, Ex. E.) The Commissioner subsequently conceded the case. (Id. at 5.)
The Commissioner thereafter moved for entry of decision consistent with his concession (Doc. 47), while Mr. Fabricant moved for administrative and litigation costs totaling $64.52 (Doc. 52). After permitting the Commissioner to respond to Mr. Fabricant's motion (Doc. 54), on July 15, 2021, we granted the Commissioner's motion and denied that of Mr. Fabricant, explaining that the Commissioner's position was substantially justified based on the information available to him at the time (Doc. 55). Despite not being directed by the Court to file a reply, Mr. Fabricant did so on July 9, 2021 (Doc. 55), although the Court did not docket the reply until after the Order and Decision was entered.
In his motion to vacate, Mr. Fabricant argues that we erred by failing to take into account his reply and by misstating the amount at issue in his motion for costs. (Doc. 58 at 1-2.) The disposition of a Rule 162 motion to vacate or revise a decision rests within the Court's discretion, and such motions will generally be granted only upon a showing of unusual circumstances or substantial error, e.g., mistake, inadvertence, surprise, excusable neglect, newly discovered evidence, fraud, or other reasons justifying relief. See Taylor v. Commissioner, T.C. Memo. 2017-212, at *7-*8, aff'd, 731 Fed.Appx. 239 (4th Cir. 2018); see also Rule 1(b); Fed.R.Civ.P. 60(b); Brewer v. Commissioner, T.C. Memo. 2005-10, 2005 WL 151976, at *1-*2.
Mr. Fabricant fails to show evidence of unusual circumstances or substantial error that would justify vacating our decision. As an initial matter, Mr. Fabricant was not entitled to a reply pleading either by right under our Rules or by specific order in this case. We thus acted well within our discretion in denying his motion and entering the decision prior to the docketing of his unexpected reply. See Rule 50(b).
In any event, the Court's Order and Decision considered and rejected the argument that Mr. Fabricant raised in his reply, viz., that Mr. Fabricant's August 22, 2018, letter precluded a finding that the Commissioner's position in this case was substantially justified. (Doc. 56 at 2-3.) Although we explicitly reviewed the contents of the August letter (Doc. 55 at 2), we were unpersuaded that the letter (lacking any substantiation) sufficed to render the Commissioner's position in his answer untenable (id. at 2-3). To the contrary, we concluded that the Commissioner's position had a reasonable basis in fact and law until Mr. Fabricant provided additional explanation in discovery, at which time the Commissioner conceded the case. (Id. at 3.) In short, we see neither unusual circumstances nor substantial error in this regard.
The incorrect statement of the cost amount sought by Mr. Fabricant in his motion likewise does not rise to the level of substantial error. Although the Order and Decision incorrectly stated that Mr. Fabricant sought $51.01 rather than $64.52, this error has no significance given the denial of Mr. Fabricant's motion.
Upon consideration of the foregoing, it is
ORDERED that petitioner's motion to vacate or revise pursuant to Rule 162, filed August 16, 2021, is denied.