Kraft v. Commissioner

T.C. Memo. 1997-476

UNITED STATES TAX COURT

JULIAN B. KRAFT, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 6689-97. Filed October 20, 1997.

Julian B. Kraft, pro se.

Leonard T. Provenzale and Pamela S. Wilson, for respondent.

MEMORANDUM OPINION

PANUTHOS, Chief Special Trial Judge: This matter is before

the Court on respondent's Motion to Dismiss for Lack of

Jurisdiction and petitioner's Motion to Restrain Collection.1

1
All section references are to the Internal Revenue Code
as amended. All Rule references are to the Tax Court Rules of
Practice and Procedure.
 - 2 -

The primary issue for decision is whether the Court has

jurisdiction over the petition filed in this case.

Background

Petitioner's 1991 Federal income tax return was the subject

of an examination conducted during 1995. During the course of

the examination, petitioner expressed his disagreement with

several adjustments proposed in the examining agent's report and

indicated that he intended to preserve all rights he might have

including further administrative review and the right to file a

petition with the Tax Court. However, on or about January 9,

1996, petitioner executed Form 4549, containing a summary of the

examining agent's proposed income tax changes, which included an

increase in petitioner's tax liability for 1991 in the amount of

$2,828 as well as statutory interest. The preprinted language on

the Form 4549 states in part as follows:

Consent to Assessment and Collection - I do not wish to
exercise my appeal rights with the Internal Revenue
Service or to contest in United States Tax Court the
findings in this report. Therefore, I give my consent
to the immediate assessment and collection of any
increase in tax and penalties, and accept any decrease
in tax and penalties shown above, plus any additional
interest as provided by law.* * *

In executing the Form 4549, petitioner obliterated the amount

listed for statutory interest and inserted the amount $2,828 in

place of the figure listed as the total amount due.

Shortly after executing and returning the Form 4549 to the

examining agent, petitioner received a tax bill for 1991 listing
 - 3 -

tax and interest due in the amounts of $2,828 and $1,002.54,

respectively. It appears that petitioner paid the tax due in the

amount of $2,828. In any event, respondent subsequently mailed a

Notice of Intent to Levy to petitioner listing an "additional

penalty and interest" due for 1991 in the amount of $1,089.30.

In response to the Notice of Intent to Levy, petitioner

wrote to the Internal Revenue Service Problem Resolution Office

contending that the Form 4549 that he executed constitutes a

binding contract under which respondent agreed that petitioner

would not be liable for statutory interest. The Problem

Resolution Office responded to petitioner's inquiry by letter

indicating the statutory interest must be assessed on all

deficiencies.

Following these developments, petitioner filed a petition

with the Court seeking a redetermination of the interest listed

as due and owing in respondent's Notice of Intent to Levy.2 In

addition, petitioner filed a Motion to Restrain Collection

asserting that respondent is improperly attempting to collect the

interest in dispute in this case.

Respondent filed a Motion to Dismiss for Lack of

Jurisdiction asserting that the Court lacks jurisdiction in this

case on the grounds that: (1) Respondent did not issue a notice

2
At the time the petition was filed, petitioner resided in
West Palm Beach, Florida.
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of deficiency to petitioner; and (2) petitioner did not properly

request an abatement of interest.

This matter was called for hearing at the Court's motions

session in Washington, D.C. Counsel for respondent appeared at

the hearing and presented argument with respect to the pending

motions. Although petitioner did not appear at the hearing, he

did a file a written statement with the Court pursuant to Rule

50(c).

Discussion

The Tax Court is a court of limited jurisdiction, and we may

exercise our jurisdiction only to the extent authorized by

Congress. Naftel v. Commissioner, 85 T.C. 527, 529 (1985). This

Court's jurisdiction to redetermine a deficiency in tax depends

upon the issuance of a valid notice of deficiency and a timely

filed petition. Rule 13(a), (c); Monge v. Commissioner, 93 T.C.

22, 27 (1989); Normac, Inc. v. Commissioner, 90 T.C. 142, 147

(1988).

The Court's jurisdiction to redetermine a tax deficiency

generally does not extend to statutory interest imposed under

section 6601. See LTV Corp. v. Commissioner, 64 T.C. 589, 597

(1975); see also Asciutto v. Commissioner, T.C. Memo. 1992-564,

affd. 26 F.3d 108 (9th Cir. 1994). One exception to the general

rule stated above arises under section 7481(c) which confers

jurisdiction on the Court to resolve disputes over respondent's
 - 5 -

post-decision computation of statutory interest; i.e., to

redetermine interest on deficiencies found by the Court and

assessed under section 6215.3 See note to Rule 261, 93 T.C. 821,

1040-1041 (1989); see also Stauffacher v. Commissioner, 97 T.C.

453 (1991). In addition, the Court is authorized pursuant to

section 6404(g) to review the Commissioner's denial of a

taxpayer's request for abatement of statutory interest.4 See

3
Sec. 7481(c), codified under sec. 6246(a) of the
Technical and Miscellaneous Revenue Act of 1988, Pub. L. 100-647,
102 Stat. 3342, 3751, provides in pertinent part:

(c) Jurisdiction Over Interest Determinations.--
Notwithstanding subsection (a), if--

(1) an assessment has been made by the
Secretary under section 6215 which includes
interest as imposed by this title,

(2) the taxpayer has paid the entire
amount of the deficiency plus interest
claimed by the Secretary, and

(3) within 1 year after the date the
decision of the Tax Court becomes final under
subsection (a), the taxpayer files a petition
in the Tax Court for a determination that the
amount of interest claimed by the Secretary
exceeds the amount of interest imposed by
this title,

then the Tax Court may reopen the case solely to
determine whether the taxpayer has made an overpayment
of such interest and the amount of any such
overpayment. * * *
4
Sec. 6404(g), codified under sec. 302(a) of the
Taxpayer Bill of Rights 2 (TBOR 2), Pub. L. 104-168, 110 Stat.
1452, 1457 (1996), provides in pertinent part as follows:

(continued...)
 - 6 -

Banat v. Commissioner, 109 T.C. 96 (1997); White v. Commissioner,

109 T.C. 92 (1997); Goettee v. Commissioner, T.C. Memo. 1997-454.

Petitioner concedes that respondent did not mail a notice of

deficiency to him for the taxable year 1991. However, petitioner

contends that he was advised by a revenue agent to file a

petition with the Court within 70 days of the date appearing on

the letter that petitioner received from the Problem Resolution

Office. Assuming for the sake of argument that petitioner was

erroneously advised to file the petition herein, such fact does

not provide a basis for the Court to exercise jurisdiction over a

matter not authorized by statute. See, e.g., Schoenfeld v.

Commissioner, T.C. Memo. 1993-303 n.4. Respondent did not issue

a notice of deficiency to petitioner. His petition sought a

redetermination only of statutory interest, not of the underlying

increase in tax which had been assessed and paid pursuant to the

waiver on the Form 4549. It follows that we lack jurisdiction in

4
(...continued)
(g) Review of Denial of Request for Abatement of
Interest.--

(1) In General.--The Tax Court shall
have jurisdiction over any action brought by
a taxpayer who meets the requirements
referred to in section 7430(c)(4)(A)(iii) to
determine whether the Secretary's failure to
abate interest under this section was an
abuse of discretion, and may order an
abatement, if such action is brought within
180 days after the date of the mailing of the
Secretary's final determination not to abate
such interest.
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this case insofar as the petition represents an attempt to invoke

the Court's jurisdiction pursuant to section 6213(a). Similarly,

petitioner may not invoke the Court's jurisdiction pursuant to

section 7481(c), under which the Court's authority to redetermine

interest is limited to interest on a deficiency that has been

redetermined by a decision of the Court and assessed under

section 6215.

The Court is equally satisfied that jurisdiction is lacking

under section 6404(g). Although petitioner admits that he did

not file a formal request for abatement of interest with

respondent, petitioner contends that the Court should consider

the letter that he received from respondent's Problem Resolution

Office as the equivalent of a denial of a request for abatement

of interest. We find petitioner's reliance on the Problem

Resolution Office letter to be misplaced given that the letter

merely addresses petitioner's contention that he is not liable

for interest based upon the Form 4549 that he executed for the

taxable year 1991. The letter does not indicate that any

consideration was given to a request for abatement of interest

pursuant to section 6404. In the absence of a specific request

for abatement of interest and the Commissioner's final

determination denying such request, the Court does not have

jurisdiction to consider this matter pursuant to section 6404(g).
 - 8 -

In sum, we hold that the Court lacks jurisdiction over the

petition filed herein. Accordingly, we shall grant respondent's

Motion to Dismiss for Lack of Jurisdiction.

As a final matter, we turn to petitioner's Motion to

Restrain Collection. Section 6213(a) provides that the Tax Court

may enjoin the Commissioner's collection efforts if the

Commissioner is attempting to collect amounts that have been

placed in dispute in a timely filed petition for redetermination.

Powerstein v. Commissioner, 99 T.C. 466, 471-472 (1992); Powell

v. Commissioner, 96 T.C. 707, 711 (1991). The record reflects

that respondent is attempting to collect interest for the taxable

year 1991. Consistent with our holding that we lack jurisdiction

to consider petitioner's liability for such interest, it follows

that we have no authority to enjoin respondent's collection

efforts. Powell v. Commissioner, supra. Accordingly, we shall

deny petitioner's Motion to Restrain Collection.

To reflect the foregoing,

An order will be entered

granting respondent's Motion

to Dismiss for Lack of

Jurisdiction and denying

petitioner's Motion to

Restrain Collection.