T.C. Memo. 2004-10
UNITED STATES TAX COURT
ROBERT K. AND DAWN E. LOWRY, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent*
Docket No. 11579-00. Filed January 12, 2004.
On a Motion for Reconsideration of Findings or
Opinion and a Motion to Vacate or Revise a Decision,
under, respectively, Rules 161 and 162, Tax Court Rules
of Practice and Procedure, Ps challenge the Court’s
factual and legal conclusions in Lowry v. Commissioner,
T.C. Memo. 2003-225. There, this Court decided that a
conceded gain under sec. 1231, I.R.C., was realized in
1994, and not in 1993, as contended by Ps.
Held: Ps have failed to point to any substantial
errors of fact or law or to present any newly
discovered evidence that could not have been introduced
previously even if Ps had exercised due diligence.
Estate of Quick v. Commissioner, 110 T.C. 440 (1998),
applied. Ps’ Motions will be denied.
*
This opinion supplements our previously filed Memorandum
Opinion in Lowry v. Commissioner, T.C. Memo. 2003-225.
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Daniel C. Ertel, for petitioners.
Lydia A. Branche, for respondent.
SUPPLEMENTAL MEMORANDUM OPINION
NIMS, Judge: This case remains before the Court on
petitioners’ Motion for Reconsideration of Findings or Opinion
under Rule 161, and Motion to Vacate or Revise Decision under
Rule 162 (collectively, the Motions). Since the Motions are
interconnected we deal with them together. The Motions relate to
our Memorandum Opinion, Lowry v. Commissioner, T.C. Memo. 2003-
225, filed July 30, 2003, which we incorporate herein, and the
Decision entered thereunder.
Unless otherwise indicated, all section references are to
sections of the Internal Revenue Code in effect at all relevant
times hereunder, and all Rule references are to those contained
in Tax Court Rules of Practice and Procedure.
In Lowry v. Commissioner, supra, we held, on the issue now
again challenged by petitioners, that petitioners realized a
section 1231 gain in 1994 rather than in 1993, as they contended.
Rules 161 and 162 provide for Motions for Reconsideration of
Findings or Opinion and for Motions to Vacate or Revise a
Decision, respectively. Reconsideration allows the Court to
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correct substantial errors of fact or law, or to allow newly
discovered evidence to be introduced that could not have been
introduced before the filing of an opinion even if the moving
party had exercised due diligence. Estate of Quick v.
Commissioner, 110 T.C. 440 (1998); Estate of Halder v.
Commissioner, T.C. Memo. 2003-284. The granting of a motion for
reconsideration rests within the discretion of the Court, and
petitioners must show unusual circumstances or substantial error
for their motion to be granted. Estate of Quick v. Commissioner,
supra, at 441. Moreover, we have held that reconsideration is
not the appropriate vehicle for rehashing previously rejected
legal arguments or tendering new legal theories to reach the end
result desired by the moving party. Id. at 441-442.
Petitioners allege that the factual conclusions reached by
the Court in its Memorandum Opinion are incomplete, incorrect,
and not supported by the evidence. We disagree. Furthermore,
all but one of the legal issues raised in the Motions have been
raised by petitioners in their original and reply briefs.
Petitioners assert for the first time that section 6201(d)
places the burden on respondent for producing reasonable and
probative information concerning respondent’s assertion of the
incorrectness of the Form 1099-A, Acquisition or Abandonment of
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Secured Property, in which AAL reported that it had acquired the
Fitch Property on December 15, 1993. On motions for
reconsideration we do not, except under extraordinary
circumstances, address any new issue which a party could have
addressed but failed to address prior to the Court’s deciding the
case. See, e.g., Stoody v. Commissioner, 67 T.C. 643, 644
(1977). But in any case, the facts in evidence in this case
abundantly demonstrate, as we found, that the Form 1099-A was
erroneous. Furthermore, as we also pointed out in our Memorandum
Opinion, the amended 1994 partnership return emphasized the
partners’ position that the Form 1099-A was erroneous.
Petitioners contend that the factual statement in our
Memorandum Opinion is erroneous in its basic elements.
Essentially, petitioners disagree with the Court’s conclusions
about the facts. In our Memorandum Opinion, we considered and
addressed petitioners’ arguments and all of the documentary
evidence. Petitioners have not shown any manifest error of fact.
On the basis of the record, petitioners’ version of the
“facts” misconstrues the real facts. In essence, in addition to
the “incorrect” Form 1099-A, petitioners’ case is anchored on two
essential documents; namely, the Grant Deed, which was dated
December 15, 1993, and the Covenant Not to Sue, which was also
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dated December 15, 1993. Petitioners believe that the December
15, 1993, date on these documents establishes that the
forgiveness of indebtedness income was realized in 1993, not
1994.
However, petitioners have declined to address, or have
misconstrued, the most salient fact; namely, that the escrow
instructions, dated December 9, 1993, were issued to the Title
Company on behalf of both AAL, the creditor, and the debtor
Partnership. The escrow instructions are worded in such a way
that the Title Company’s “acceptance” of the instructions would
be completed only when various exceptions to closing title had
been satisfied. These, in fact, were not completed until May 27,
1994, when title closed with the filing for recordation of the
aforementioned Grant Deed and the issuance of an owner’s title
policy, the exceptions having been satisfied. It was on this
date that 1994, and not 1993, was established as the year in
which the forgiveness of indebtedness income was realized.
Petitioners dispute the Court’s holding that the facts do
not bring this case within those of Keith v. Commissioner, 115
T.C. 605 (2000), which case specifically involved a type of
transaction under Georgia law known as a “contract for deed.” As
we pointed out in the Memorandum Opinion, Georgia law normally
construes a contract for deed as a device for passing equitable
ownership, leaving the seller with bare legal title and
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essentially a security interest until all installment payments
have been made. The case before us does not involve a contract
for deed, and petitioners have offered nothing new to support
their continued argument on this point.
For the foregoing reasons, we will deny petitioners’
Motions.
An appropriate Order will
be issued.