T.C. Memo. 1998-396
UNITED STATES TAX COURT
MICHAEL ALAN JABLONSKI, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 24874-97R. Filed November 10, 1998.
Michael Alan Jablonski, pro se.
David W. Sorensen, for respondent.
MEMORANDUM OPINION
POWELL, Special Trial Judge: This case is before the Court
on respondent's motion to dismiss for lack of jurisdiction.
Petitioner filed a petition for declaratory judgment to review a
favorable determination by respondent with respect to amendments
to a retirement plan.
The facts may be summarized as follows. Petitioner was
employed by Design Analysis Associates, Inc. from September 1,
1982, until November 1, 1989. During part of his employment
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petitioner participated in a retirement plan (the plan).
Originally petitioner had the right to withdraw the entire amount
of his accrued benefits in one lump sum distribution. The plan
was amended in 1994, retroactive to 1989. The amendment, inter
alia, barred lump sum distributions. The administrators of the
plan sought a determination from respondent that the plan was
qualified under section 401.1 Petitioner opposed the amendment
and the continuing qualification of the plan. By letter dated
September 19, 1997, respondent issued a favorable determination
to the plan, as amended. Petitioner then filed a petition for
declaratory judgment with this Court under section 7476.
Discussion
The Tax Court's jurisdiction is limited to the extent
expressly permitted by statute. See sec. 7442; Trost v.
Commissioner, 95 T.C. 560, 565 (1990). Section 7476(a)
authorizes this Court to determine the outcome of a controversy
involving the qualification or continuing qualification of a
retirement plan upon the filing of an appropriate pleading. A
petition may be filed only by an employer, the plan
administrator, or an employee who qualifies as "an interested
party". Sec. 7476(b)(1); Rule 211(c)(4)(A).
1
Unless otherwise indicated, all section references are to
the Internal Revenue Code, and all Rule references are to the Tax
Court Rules of Practice and Procedure.
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Section 7476(b)(1) limits the persons who may file a
petition under section 7476 to, inter alia, "an employee who has
qualified under regulations prescribed by the Secretary as an
interested party". For purposes here, the definition of an
interested party is generally limited to "present employees of
the employer who are eligible to participate in the plan" and
"other present employees of the employer" who share the same
place of business. Sec. 1.7476-1(b)(1), Income Tax Regs.;
emphasis added. With regard to certain plan amendments, section
1.7476-1(b)(3), Income Tax Regs., provides:
In the case of an application for an advance determination
as to whether a plan amendment affects the continuing
qualification of a plan, if
(i) there is outstanding a favorable determination
letter for a plan year to which section 410 applies, and
(ii) the amendment does not alter the participation
provisions of the plan,
then [paragraph] (b)(1) * * * shall not apply, and all
present employees of the employer who are eligible to
participate in the plan * * * shall be interested parties.
* * * [Emphasis added.]
The only circumstance in which a former employee qualifies as an
interested party is in the event of a plan termination. Sec.
1.7476-1(b)(5), Income Tax Regs. Petitioner concedes that this
situation does not involve a plan termination. In short, except
in the event of a plan termination, under the regulations former
employees are not interested parties for purposes of section 7476
and are not authorized to file a petition with this Court.
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Dillon v. Commissioner, T.C. Memo. 1993-239, affd. per curiam
without published opinion 12 F.3d 1227 (8th Cir. 1994); Jones v.
Commissioner, T.C. Memo. 1980-512, affd. without published
opinion 676 F.2d 710 (9th Cir. 1982); see also Romann v.
Commissioner, 111 T.C. (1998).
It also should be noted that these are legislative
regulations issued pursuant to a specific congressional
delegation to the Secretary and, as such, are entitled to greater
deference than an interpretive regulation promulgated under the
general rulemaking power vested in the Secretary by section
7805(a). Peterson Marital Trust v. Commissioner, 102 T.C. 790,
797 (1994), affd. 78 F.3d 795 (2d Cir. 1996). We accord such
regulations the highest level of judicial deference; viz, we are
not to invalidate the regulations unless they are arbitrary,
capricious, or manifestly contrary to the statute. Chevron
U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S.
837, 843-844 (1984); see also Ahmetovic v. INS, 62 F.3d 48, 51
(2d Cir. 1995). The regulations need not be the only, or even
the best, construction of section 7476. See Atlantic Mut. Ins.
Co. v. Commissioner, 523 U.S. ___, 118 S. Ct. 1413, 1418 (1998).
The Supreme Court has stated that a reviewing court
need not conclude that the agency construction was the only
one it permissibly could have adopted to uphold the
construction, or even the reading the court would have
reached if the question initially had arisen in a judicial
proceeding. [Chevron U.S.A., Inc. v. Natural Resources
Defense Council, Inc., supra at 843 n.11; citations
omitted.]
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Thus, to the extent that petitioner contends that the regulations
are invalid, we reject that argument.
Petitioner also asserts that during the process leading to
respondent's favorable determination the Internal Revenue Service
treated him as an interested party. Because respondent treated
him as an interested party during the administrative procedure,
petitioner did not pursue alternative resolutions to this matter.
Petitioner contends, therefore, that respondent should be
equitably estopped from challenging his status as an interested
party.
We do not question that petitioner may have been treated as
an interested party during the administrative proceedings. We,
however, are not bound by the actions and the determinations of
the parties. Furthermore, jurisdiction cannot be acquired by
estoppel. Jurisdiction either exists or it does not, and in this
case it does not. Dillon v. Commissioner, supra. Accordingly,
respondent's motion to dismiss is granted.
An appropriate order of dismissal
will be entered.