Opinion
2044-19R
02-01-2023
COLIN CRAIG O'KROLEY, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER OF DISMISSAL FOR LACK OF JURISDICTION
Travis A. Greaves, Judge
On January 28, 2019, petitioner filed the petition upon which this case is based and, in accordance with this Court's March 6, 2019 Order, filed an amended petition on May 23, 2019. Respondent filed an Answer on August 2, 2019. From August 28, 2019 through September 16, 2021 respondent, either jointly with or without opposition from petitioner, filed seven Motions for Extension of Time to File the Administrative Record. Because the parties could not agree to a stipulated administrative record, on March 23, 2022, respondent filed the administrative record, which was certified as to its genuineness by an IRS official in accordance with Rule 217(b). On November 30, 2022, respondent filed a Motion for Summary Judgment. In accordance with our December 1, 2022 Order, petitioner filed a response to respondent's motion on December 30, 2022.
At issue is respondent's October 16, 2018, determination that the termination of The Sherman Williams Company Salaried EES Pension Investment Plan 002 (the Pension Plan) did not affect its qualification for federal tax purposes. The Sherman Williams Company (Plan Sponsor) applied for respondent's determination on March 9, 2018. While nothing in the record confirms that the Plan Sponsor notified all interested parties pursuant to Treas. Reg. section 1.7476-1(a)(1), it appears petitioner received notification because on March 18, 2018, he sent an "interested party statement" to the United States Department of Labor (DOL). In this statement, petitioner stated that he "objected to the plan" and made assertions relating to how the "enactment of the plan" would affect another case in Texas state court. The DOL sent a letter to petitioner in response indicating that while petitioner had a right to comment on the tax-qualification determination of the Pension Plan, petitioner's interested party statement did not state the subject matter of the Texas state court case. The DOL was thus unable to determine whether that case would have any bearing on the Pension Plan. The DOL letter further indicated that they would forward petitioner's statement to the IRS. On April 16, 2018, petitioner sent a follow up letter to the DOL and the IRS Employment Plan Determinations Office that reiterated various claims primarily about the effect that the Pension Plan would have on the Texas state case. None of the letters from petitioner to the DOL and IRS included any information pertaining to the tax-qualification or non-qualification of the Pension Plan.
On October 16, 2018, respondent sent a letter to the Plan Sponsor, informing it of the favorable determination. Also on that date, respondent issued an "interested party notice" to petitioner in accordance with Treasury Regulation § 1.7476-1. As a former vested participant in the Pension Plan, petitioner is an interested party under section 7476. Section 7476(a) allows an interested party to petition this Court to challenge respondent's determination as to the initial or continuing tax qualification of a "retirement plan" as defined by section 7476(c). In response to a petition, this Court "may make a declaration with respect to such initial qualification or continuing qualification." I.R.C. § 7476(a).
The interested party notice informed petitioner that he was eligible to petition this Court for a declaratory judgment with respect to the continued qualification of the Pension Plan before the ninety-first day after the letter was mailed to him. Petitioner timely filed a petition wherein he "object[ed] to any 'tinkering' with my pension until after the related civil case (and any subsequent appeals) are decided / exhausted." He included two case numbers but did not provide any other information about the referenced case.
The Tax Court is a court of limited jurisdiction, and we may exercise our jurisdiction only to the extent authorized by Congress. See Naftel v. Commissioner, 85 T.C. 527 (1985). The Court's jurisdiction may be challenged by either party, or by the Court sua sponte, at any stage of the proceedings. See Smith v. Commissioner, 96 T.C. 10, 13-14, (1991), and cases cited therein. Petitioners bear the burden of proving that the jurisdictional requirements of section 7476 have been met. See Rule 217(c)(1)(A); Halliburton Co. v. Commissioner, 98 T.C. 88, 94 (1992).
Section 7476(a)(1) requires an actual controversy regarding the initial or continued tax qualification of a retirement plan for the Tax Court to exercise jurisdiction in a declaratory judgment action. See Loftus v. Commissioner, 90 T.C. 845, 856 (1988) (citing Thompson v. Commissioner, 71 T.C. 32, 38-39 (1978); H. Rept. 93-807 (1974), 1974- 3 C.B. (Supp.) 236, 342; H. Rept. 93-1280 (Conf.) (1974), 1974-3 C.B. 415, 492). In Maryland Casualty Co. v. Pacific Coal and Oil Co., 312 U.S. 270, 273 (1941) the Supreme Court applied the following standard in determining whether a genuine controversy exists:
Basically, the question in each case is whether the facts alleged, under all the circumstances, show that there is a substantial controversy between parties having adverse legal interests, of
sufficient immediacy and reality to warrant the issuance of a declaratory judgment.Maryland Casualty Co. v. Pacific Coal and Oil Co., 312 U.S. 270, 273 (1941).
In his summary judgment motion, respondent asserts that no actual controversy exists in this case as well as other jurisdictional arguments. Because a lack of an actual controversy invokes the issue of our jurisdiction, we will recharacterize respondent's motion as a Motion to Dismiss for Lack of Jurisdiction. We agree with respondent that no controversy is present here. Our review of the record did not disclose any facts or assignments of error that would have any impact on the IRS's determination of the Pension Plan's tax qualified status. Petitioner's focus in this case is not on the tax qualified status of the Pension Plan, but rather appears to be centered on a state court case in Texas and other potential grievances he has with other parties. Contrast with Halliburton Co. v. Commissioner, 98 T.C. at 105 (actual controversy existed where petitioner sought declaratory judgment that there had not been a partial termination of his employer's qualified retirement plan). Because no actual controversy is at issue, we cannot exercise jurisdiction.
Upon due consideration, it is
ORDERED that respondent's Motion for Summary Judgment, filed November 30, 2022, is recharacterized as respondent's Motion to Dismiss for Lack of Jurisdiction. It is further
ORDERED that respondent's Motion to Dismiss for Lack of Jurisdiction is granted, and this case is dismissed for lack of jurisdiction.