Opinion
8467-24SL
11-06-2024
XTREME MACHINES, LLC, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER OF DISMISSAL FOR LACK OF JURISDICTION
Kathleen Kerrigan, Chief Judge
On July 18, 2024, respondent filed a Motion to Dismiss for Lack of Jurisdiction on the ground that no notice of determination concerning collection action was issued to petitioner for tax year 2021, nor has respondent made any other determination with respect to tax year 2021 that would confer jurisdiction on the Court.
On May 24, 2024, petitioner filed the Petition purporting to dispute a notice of determination concerning collection issued to petitioner for tax year 2021. Petitioner did not attach a copy of a notice of deficiency or a notice of determination for tax year 2021 to the Petition.
This Court is a court of limited jurisdiction. It may therefore exercise jurisdiction only to the extent expressly provided by statute. Breman v. Commissioner, 66 T.C. 61, 66 (1976). In a case seeking the redetermination of a deficiency, the jurisdiction of the Court depends, in part, on the issuance by the Commissioner of a valid notice of deficiency to the taxpayer. Frieling v. Commissioner, 81 T.C. 42, 46 (1983). 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).
Similarly, this Court's jurisdiction in a case seeking review of a determination concerning collection action under section 6320 or 6330, generally depends, in part, upon the issuance of a valid notice of determination by the IRS Office of Appeals under section 6320 or 6330. I.R.C. sec. 6320(c) and 6330(d)(1); Rule 330(b), Tax Court Rules of Practice and Procedure; Offiler v. Commissioner, 114 T.C. 492, 498 (2000).
On August 26, 2024, petitioner filed an Opposition to the motion, in which petitioner asserts that the matter arises from a notice of deficiency rather than a collection action. Petitioner further asserted that, by letter dated June 30, 2023, the IRS alleged that petitioner did not comply with its reporting requirements and assessed a penalty. Petitioner asserts that petitioner's accountant notified the IRS of petitioner's desire to appeal. Petitioner asserts that, on March 7, 2024, petitioner's accountant received an email from the IRS that petitioner's position on appeal was not accepted and that petitioner must pay the penalty and seek redress in the U.S. Tax Court. Petitioner asserts that a copy of IRS Publication 5264 was included in the email, which according to petitioner states, "If your position is not accepted you may file a claim for refund in court after you have paid the penalty amount in full." Petitioner did not attach a copy of a notice of deficiency to petitioner's Opposition.
On September 20, 2024, respondent filed a Response to petitioner's Opposition. On October 11, 2024, respondent filed a First Supplemental Response to Opposition to Motion to Dismiss for Lack of Jurisdiction, in which respondent asserts that the advice to petition the Tax Court for a refund was in error. Respondent asserts that the IRS contacted petitioner via phone and made petitioner aware that she mistakenly said Tax Court in her email, when the referenced publication states only "court". Respondent further asserted that a claim for refund must be filed in either the United States Court of Federal Claims or the appropriate United States District Court.
On October 14, 2024, petitioner filed a Reply to respondent's First Supplemental Response. In the Reply, petitioner asserts that petitioner's CPA did not receive a phone call from the IRS regarding IRS's mistake in the email and that petitioner reasonably relied on the email.
A taxpayer cannot rely on erroneous or misleading advice he may have been given by the IRS to confer jurisdiction on this Court. See Estate of Kunze v. Commissioner, 233 F.3d 948, 951-52 (7th Cir. 2000), aff'g T.C. Memo. 1999-344. We also note that even if we assume petitioner had relied on representation of the IRS, the IRS is not estopped from correcting errors of law (as alleged here). See Demirjian v. Commissioner, 54 T.C. 1691, 1701 (1970) (citing Auto. Club of Mich. V. Commissioner, 353 U.S. 180 (1957)), aff'd, 457 F.2d 1 (3d Cir. 1972); see also Forrest v. Commissioner, T.C. Memo. 1978-239 ("The law is clear that a taxpayer's reliance on mistaken legal interpretations given to him by agents of respondent does not estop respondent from making a correct determination of that taxpayer's tax liability." (citing Demirjian v. Commissioner, 54 T.C. at 1701)).
Petitioner has not provided a copy of a notice of deficiency or notice of determination that would confer jurisdiction on this Court. Because no notice of deficiency or notice of determination sufficient to confer jurisdiction on this Court has been sent to petitioner for tax year 2021, this case must be dismissed for lack of jurisdiction.
To the extent that petitioner is seeking a refund of taxes paid, petitioner may file a claim for refund with the Internal Revenue Service and, if the claim is denied, sue for a refund in Federal District Court or the U.S. Court of Federal Claims. See McCormick v. Commissioner, 55 T.C. 138, 142 (1970). Taxpayers generally have two years to file a lawsuit following disallowance of a claim for refund. See §6532(a) (1). However, the Tax Court is not the proper forum in which to do so. A taxpayer may seek judicial remedy for wrongful denial of refund claims - i.e., a refund suit in compliance with I.R.C. section 6532(a)(1) and 7422(a), either in the U.S. Court of Federal Claims pursuant to 28 U.S.C. section 1491(a)(1), or in Federal district court pursuant to 28 U.S.C. section 1346(a)(1). None of those statutes confer refund jurisdiction on this Court.
Upon due consideration, it is
ORDERED that respondent's Motion to Dismiss for Lack of Jurisdiction is granted and this case is dismissed for lack of jurisdiction.