T.C. Memo. 2004-243
UNITED STATES TAX COURT
THOMAS F. NOONS, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 15052-02. Filed October 26, 2004.
James A. Cerks, for petitioner.
Susan M. Pinner, for respondent.
MEMORANDUM OPINION
DAWSON, Judge: This case was assigned to Special Trial
Judge Robert N. Armen, Jr., pursuant to the provisions of section
7443A(b)(5) and Rules 180, 181, and 183.1 The Court agrees with
and adopts the opinion of the Special Trial Judge, which is set
forth below.
1
Unless otherwise indicated, all section references are to
the Internal Revenue Code of 1986, as amended, and all Rule
references are to the Tax Court Rules of Practice and Procedure.
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OPINION OF THE SPECIAL TRIAL JUDGE
ARMEN, Special Trial Judge: This matter is before the Court
on respondent’s motion for summary judgment filed pursuant to
Rule 121. The parties agree that there is no dispute as to any
material fact. Respondent contends that his determination
denying petitioner’s request for relief from joint and several
liability should be sustained as a matter of law.
Summary judgment is intended to expedite litigation and
avoid unnecessary and expensive trials. Fla. Peach Corp. v.
Commissioner, 90 T.C. 678, 681 (1988). Summary judgment may be
granted with respect to all or any part of the legal issues in
controversy “if the pleadings, answers to interrogatories,
depositions, admissions, and any other acceptable materials,
together with the affidavits, if any, show that there is no
genuine issue as to any material fact and that a decision may be
rendered as a matter of law.” Rule 121(a) and (b); see
Sundstrand Corp. v. Commissioner, 98 T.C. 518, 520 (1992), affd.
17 F.3d 965 (7th Cir. 1994); Zaentz v. Commissioner, 90 T.C. 753,
754 (1988); Naftel v. Commissioner, 85 T.C. 527, 529 (1985).
As explained in detail below, there is no genuine issue as
to any material fact, and a decision may be rendered as a matter
of law. Accordingly, we shall grant respondent’s motion for
summary judgment.
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Background
The record establishes and/or the parties do not dispute the
following facts:
Petitioner filed a joint Federal income tax return with his
former wife, Toyia A. Pena (formerly known as Toyia A. Noons)
(Ms. Pena), for the taxable year 1993.
On March 19, 1998, respondent issued a notice of deficiency
to petitioner and Ms. Pena for the taxable year 1993.2 In the
notice of deficiency, respondent determined a deficiency in
Federal income tax and an addition to tax for the taxable year
1993 in the amounts of $35,080 and $2,490, respectively.
On June 22, 1998, petitioner and Ms. Pena commenced a case
in this Court at docket No. 11163-98 challenging respondent’s
deficiency determinations, which case was tried to the Court on
May 17, 1999, in Houston, Texas (prior proceeding). Petitioner
and Ms. Pena were represented at trial in the prior proceeding by
James A. Cerks.3 At that trial, petitioner testified as the only
witness. In Noons v. Commissioner, T.C. Memo. 2000-106, the
Court sustained respondent’s deficiency determinations, and we
entered decision on March 29, 2000. Petitioner and Ms. Pena did
not appeal, and our decision became final on June 27, 2000.
2
When respondent issued the notice, petitioner and Ms. Pena
were already divorced.
3
Mr. Cerks is also representing petitioner in the instant
case.
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Secs. 7481(a)(1), 7483. At no time during the prior proceeding
did petitioner assert a claim for relief from joint and several
liability.
On January 6, 2001, petitioner filed with respondent Form
8857, Request for Innocent Spouse Relief (And Separation of
Liability and Equitable Relief), with respect to the taxable year
1993. Petitioner attached to Form 8857 a copy of his and Ms.
Pena’s divorce decree upon which decree he claims that he is
entitled to relief from liability under section 6015.
On June 19, 2002, respondent issued to petitioner a final
notice of determination denying petitioner’s claim for relief
under section 6015(b), (c), and (f).
Petitioner timely filed with the Court a petition for
determination of relief from joint and several liability for the
taxable year 1993.4
Respondent filed a motion for summary judgment on the ground
that section 6015(g)(2) bars petitioner from relief under section
6015. Petitioner filed an objection to respondent’s motion
alleging, inter alia, that section 6015(g)(2) does not apply in
the instant case to preclude him from claiming relief under
4
At the time that the petition was filed, petitioner resided
in Houston, Texas.
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section 6015(f).5 Pursuant to notice, this matter was called for
hearing at the Court’s trial session in Houston, Texas. Counsel
for respondent appeared at the hearing and offered argument in
support of the motion for summary judgment. Mr. Cerks entered an
appearance on behalf of petitioner at the hearing and argued
against respondent’s motion.6
Discussion
Generally, spouses filing a joint Federal income tax return
are jointly and severally liable for all taxes due. Sec.
6013(d)(3). Section 6015 provides, however, that a spouse may
seek relief from joint and several liability on a joint return
under certain circumstances.7 Section 6015 encompasses three
types of relief: (1) Subsection (b) provides full or apportioned
relief from joint and several liability; (2) subsection (c)
provides proportionate tax relief to divorced or separated
taxpayers; and (3) subsection (f) provides equitable relief from
5
Petitioner concedes that he is not eligible for relief
under either sec. 6015(b) or (c).
6
Petitioner was also present at the hearing.
7
The Internal Revenue Service Restructuring and Reform Act
of 1998 (RRA 1998), Pub. L. 105-206, sec. 3201(a), 112 Stat. 734,
repealed sec. 6013(e) and replaced it with sec. 6015, which
provides spouses with a broader access to relief from joint and
several liability on a joint return. See H. Conf. Rept. 105-599,
at 249 (1998), 1998-3 C.B. 747, 1003. Sec. 6015 applies to any
liability for tax arising after July 22, 1998, and to any
liability for tax arising on or before July 22, 1998, and unpaid
as of that date. RRA 1998 sec. 3201(g), 112 Stat. 740. Sec.
6015, therefore, applies in the instant case.
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joint and several liability in certain circumstances if neither
section 6015(b) nor (c) is available.
The doctrine of res judicata, however, may preclude a
taxpayer from obtaining relief under section 6015. The judicial
doctrine of res judicata provides that when a court of competent
jurisdiction enters a final judgment on the merits of a cause of
action, the parties to the action are bound “not only to every
matter which was offered and received * * * but as to any other
admissible matter which might have been offered for that
purpose.” Commissioner v. Sunnen, 333 U.S. 591, 597 (1948); see
Wooten v. Commissioner, T.C. Memo. 2003-113. Because Federal
income taxes are determined on an annual basis, each year is a
separate cause of action, and res judicata is applied to bar
subsequent proceedings involving the same tax year. Commissioner
v. Sunnen, supra at 597-598; Calcutt v. Commissioner, 91 T.C. 14,
21 (1988).
With regard to claims for relief from joint and several
liability, section 6015(g)(2) provides in pertinent part:
Res Judicata.--In the case of any election under
subsection (b) or (c), if a decision of a court in any
prior proceeding for the same taxable year has become
final, such decision shall be conclusive except with
respect to the qualification of the individual for
relief which was not an issue in such proceeding. The
exception contained in the preceding sentence shall not
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apply if the court determines that the individual
participated meaningfully in such prior proceeding.[8]
As previously indicated, respondent contends that respondent
is entitled to judgment as a matter of law. Respondent argues
that section 6015(g)(2) bars petitioner from claiming relief from
joint and several liability under section 6015. Specifically,
respondent maintains that petitioner participated meaningfully in
the prior proceeding, and that petitioner failed to raise a claim
for relief under section 6015 in the prior proceeding.
Consequently, respondent contends that section 6015(g)(2)
precludes petitioner from claiming relief from joint and several
liability in the instant proceeding.9
Petitioner objects to respondent’s motion on the ground that
section 6015(g)(2) does not apply in the instant case.
Specifically, petitioner contends that the statutory language of
section 6015(g)(2) “expressly refers only to elections under
subsection (b) or (c) of IRC Section 6015 and expressly omits
subsection (f) EQUITABLE RELIEF OF IRC Section 6015 from being
barred by the doctrine of Res Judicata”. Petitioner thus
8
Petitioner does not dispute that he participated
meaningfully in the prior proceeding.
9
We note that in support of his contention, respondent
relies on regulations issued under sec. 6015. The regulations
issued under sec. 6015 apply to claims for relief filed on or
after July 18, 2002. Sec. 1.6015-9, Income Tax Regs. The
regulations issued under sec. 6015 are inapplicable in the
instant case because petitioner filed his claim on Jan. 6, 2001.
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contends that the doctrine of res judicata does not preclude him
from claiming equitable relief under section 6015(f). We
disagree.
This Court has already rejected petitioner’s precise
contention in a previous case. In Thurner v. Commissioner, 121
T.C. 43, 51-52 (2003), the Court concluded that a claim for
equitable relief under section 6015(f) is subordinate and
ancillary to a claim for relief under section 6015(b) or (c),
and, therefore, that section 6015(f) is subject to the same
standards for the application of the doctrine of res judicata
imposed under section 6015(g)(2). See Fernandez v. Commissioner,
114 T.C. 324, 330-331 (2000). In Thurner v. Commissioner, supra,
the Court thus held that the doctrine of res judicata as
delineated in section 6015(g)(2) with respect to claims for
relief from joint and several liability applies equally to claims
for relief under section 6015(b), (c), and (f). Accordingly, we
also reject petitioner’s same contention in the instant case.
Petitioner litigated the merits of respondent’s notice of
deficiency at trial on May 17, 1999, in Houston, Texas.
Thereafter, a decision was entered that petitioner and Ms. Pena
were liable for income tax of $35,080 and an addition to tax of
$2,490. Petitioner and Ms. Pena did not appeal that decision,
which became final. See secs. 7481(a)(1), 7483. The causes of
action that form the basis for this case and the prior proceeding
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are identical; i.e., petitioner’s tax liability for 1993.
Petitioner was represented by counsel in the prior proceeding,
and petitioner testified as the only witness in the case. In
light of these undisputed facts, petitioner meaningfully
participated in the prior proceeding. Moreover, petitioner did
not, at any time during the prior proceeding, claim relief under
section 6015.10 At the beginning of the trial, the Court
questioned the parties whether Ms. Pena was seeking relief from
joint and several liability. Thus, petitioner was made aware
that he could have raised a claim for relief from joint and
several liability, but he failed to do so.
Nevertheless, petitioner contends that his case presents
special circumstances that overcome the bar of res judicata.
Petitioner argues that there was uncertainty regarding the law
during the pendency of the prior proceeding. Petitioner asserts
that between the date that he filed the petition in the prior
proceeding (June 22, 1998) and the date of trial (May 17, 1999),
respondent had failed to publish specific guidance (and had
failed to inform petitioner) that the res judicata effect of
section 6015(g)(2) might have a serious adverse effect on
petitioner’s right to claim relief from joint and several
10
In a petition for redetermination of a deficiency under
sec. 6213(a), a taxpayer may seek relief from joint and several
liability on a joint return by raising the matter as an
affirmative defense. Butler v. Commissioner, 114 T.C. 276, 287-
289 (2000).
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liability in the future. In support of his position, petitioner
relies on Trent v. Commissioner, T.C. Memo. 2002-285. We
disagree with petitioner’s contention.
In Trent v. Commissioner, supra, the taxpayer filed a
petition for redetermination of a deficiency with the Court and
then met with an Appeals officer to settle the case, which
meeting occurred 10 days before the effective date of section
6015. In that meeting, the taxpayer raised an innocent spouse
defense, but the Appeals officer informed the taxpayer that then
was not the time to raise the defense. At the time of the
meeting, the taxpayer and the Appeals officer were unaware of the
res judicata effect of closing a deficiency case in light of the
uncertainty of the law. The taxpayer signed a stipulated
decision, which was entered in December 1998, and subsequently
submitted a Form 8857 in May 1999, which respondent denied. The
Court concluded that special circumstances existed to overcome
the bar of res judicata in that petitioner was misled by an
apparent misunderstanding on her part and on the part of the
Appeals officer from raising a claim for joint and several
liability in the prior proceeding.
The special circumstances in Trent v. Commissioner, supra,
are distinguishable from the facts of this case. In the instant
case, the petition in the prior proceeding was filed before the
effective date of section 6015, but, more significantly, the
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trial was held on May 17, 1999, well after the effective date of
section 6015.11 We find it remarkable that petitioner argues
that he was not aware that he had to claim relief from joint and
several liability at trial because under the prior law, in
petitioner’s belief, such claim was typically submitted after
trial, which belief is clearly erroneous. Indeed, the matter was
called to the parties’ attention in the prior proceeding when the
Court inquired whether Ms. Pena would be claiming relief from
joint and several liability (which she did not). Petitioner was
on notice that he also could raise a claim for joint and several
liability, but he did not. As such, it follows that section
6015(g)(2) precludes petitioner from claiming relief from joint
and several liability under section 6015(f).
For the reasons stated, we shall grant respondent’s motion
for summary judgment.
We have considered all of the other arguments made by
petitioner, and, to the extent that we have not specifically
addressed them, we conclude that they are without merit.
To reflect the foregoing,
An appropriate order and
decision will be entered.
11
It might also be mentioned that although Ms. Trent
appeared pro se in her deficiency action, petitioner was
represented by counsel in his deficiency action.