T.C. Memo. 2005-10
UNITED STATES TAX COURT
ROBERT T. BREWER, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 10661-02. Filed January 25, 2005.
Robert T. Brewer, pro se.
Thomas A. Friday, for respondent.
MEMORANDUM OPINION
GOEKE, Judge: This case is before the Court on petitioner’s
motion to vacate a stipulated decision entered on September 13,
2004 (motion to vacate). Petitioner’s motion to vacate was
timely filed under Rule 1621 on October 12, 2004. Respondent
1
Unless otherwise indicated, all section references are to
the Internal Revenue Code as amended, and all Rule references are
to the Tax Court Rules of Practice and Procedure.
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filed a response to petitioner’s motion to vacate. Because
petitioner has not shown that the circumstances of the settlement
warrant our vacating the decision, we shall deny petitioner’s
motion to vacate.
Background
On April 1, 2002, respondent issued a notice of deficiency
to petitioner determining a deficiency of $58,812 in petitioner’s
1999 Federal income tax. The notice of deficiency also
determined additions to tax for 1999 under sections 6651(a)(1)
and (2) and 6654(a) of $12,382.65, $4,677.89, and $2,622.75,
respectively. Respondent issued the notice of deficiency as a
result of petitioner’s failure to timely file his 1999 Federal
income tax return. On June 24, 2002, petitioner timely filed a
petition challenging respondent’s determination. In November
2002, petitioner filed his 1999 return. As a result, petitioner
and respondent were thereafter able to resolve many of the issues
raised in the notice of deficiency.
This case was calendared for the Court’s trial session in
Mobile, Alabama, beginning on September 7, 2004. On the morning
of the Court’s calendar call, petitioner and counsel for
respondent, Mr. Friday, met and executed a stipulated decision.
Petitioner and Mr. Friday then appeared before the Court and
informed the Court that a settlement had been reached. The
stipulated decision was submitted to the Court on September 7,
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2004, signed by petitioner and Mr. Friday. On September 13,
2004, the Court entered the stipulated decision.
The first page of the decision reflects that there is a
deficiency of $4,878 in petitioner’s 1999 Federal income tax and
that petitioner is not liable for any additions to tax. Page 2
of the decision states:
It is hereby stipulated that the Court may enter
the foregoing decision in this case.
It is further stipulated that interest will be assessed
as provided by law on the deficiency due from petitioner.
The above deficiency does not take into account
withholding credits of $3,778.00 made for the taxable year
1999 by the petitioner.
It is further stipulated that, effective upon the entry
of this decision by the Court, petitioner waives the
restrictions contained in I.R.C. § 6213(a) prohibiting
assessment and collection of the deficiency (plus
statutory interest) until the decision of the Tax Court
becomes final.
The decision bears the signatures of petitioner and Mr. Friday on
page 2.
Discussion
Rule 162 allows a party to file a motion to vacate or revise
a decision within 30 days after the decision has been entered,
unless the Court “shall otherwise permit” that 30-day period to
be extended, but Rule 162 does not provide a standard by which
this Court should evaluate a motion to vacate a decision. Rule
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1(a), however, provides that we may give weight to the Federal
Rules of Civil Procedure “to the extent that they are suitably
adaptable to govern the matter at hand”.
Rule 60 of the Federal Rules of Civil Procedure provides
certain circumstances in which a Federal court may vacate or
alter a judgment, order, or other part of the record. We have
often looked to rule 60 of the Federal Rules of Civil Procedure
to assist us in resolving issues raised in motions to vacate
decisions under Rule 162. See, e.g., Brannon’s of Shawnee, Inc.
v. Commissioner, 69 T.C. 999, 1001 (1978); Kun v. Commissioner,
T.C. Memo. 2004-273; Estate of Miller v. Commissioner, T.C. Memo.
1994-25.
Rule 60(a) of the Federal Rules of Civil Procedure provides
that the court may correct clerical mistakes and errors arising
from oversight or omission at any time of its own initiative or
on the motion of a party. As relevant here, rule 60(b) provides
that, on motion and upon such terms as are just, the court may
relieve a party of a final judgment for
(1) mistake, inadvertence, surprise, or excusable
neglect; (2) newly discovered evidence which by due
diligence could not have been discovered in time to
move for a new trial under Rule 59(b); (3) fraud * * *,
misrepresentation, or other misconduct of an adverse
party; * * * (6) any other reason justifying relief
from the operation of the judgment. * * *
In addition, this Court has applied a more stringent
standard in evaluating motions to enter decisions or vacate
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settlement agreements where, shortly before trial, the parties
agreed to a settlement and caused the vacation of the trial date.
In such cases, we have held the settlements to be enforceable
unless the moving party can show a lack of formal consent,
mistake, fraud, or some similar ground. See Dorchester Indus.,
Inc. v. Commissioner, 108 T.C. 320, 335 (1997), affd. 208 F.3d
205 (3d Cir. 2000); Stamm Intl. Corp. v. Commissioner, 90 T.C.
315, 321-322 (1988). We believe that petitioner should be held
to this more stringent standard, rather than that stated in rule
60 of the Federal Rules of Civil Procedure for vacation of
decisions. Here, the parties reached a settlement shortly before
trial, and the trial date was vacated as a result of that
settlement. Our subsequent entering of the decision should not
lessen the standard to which petitioner, as the moving party,
must be held.
Petitioner argues that the decision should be vacated for
various reasons. First, petitioner objects to the decision
because it does not show that his net tax due is $1,100. The
$1,100 appears to reflect the difference between petitioner’s
deficiency for 1999 ($4,878), and the amount of petitioner’s
withholding credits for 1999 ($3,778), both of which are shown in
the decision. Respondent agrees that petitioner’s net tax due
for 1999 is $1,100, excluding interest. Because petitioner and
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respondent agree that petitioner’s net tax due is $1,100, this
argument does not require any further discussion.
Next, petitioner claims that he did not see the first page
of the decision when he signed the decision at the calendar call
because the document he signed was not a stapled 2-page document.
Petitioner asserts that he did not see the first page of the
decision, on which the deficiency amount was shown, until he
received the decision by mail after it had been entered by the
Court. Even if we accepted this implausible assertion as true,
it would not warrant our vacating the decision. Even if
petitioner did not see the first page of the decision when he
signed the decision, it was petitioner’s responsibility to know
and understand what he was signing. The second page of the
decision has a number “2” at the top, and the first words
appearing on that page refer to “the above deficiency”. Clearly,
this is the second page of a document, and petitioner was free to
refuse to sign it if he was not presented with both pages.
Petitioner next asserts that his signature on the decision
was “coerced, a product of threats and harassment” by Mr. Friday.
Petitioner’s assertions of threats and harassment are unsupported
even by his own version of the facts surrounding the settlement.
Lastly, petitioner raises concerns that the interest he will
owe will not be computed correctly, and he objects to his owing
interest for the period between the date he filed his 1999 income
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tax return and the date of settlement. This Court has
jurisdiction over matters involving interest only in limited
circumstances. Med James, Inc. v. Commissioner, 121 T.C. 147,
152 (2003). We may determine whether a taxpayer has made an
overpayment of interest or the Secretary has made an underpayment
of interest under section 7481(c)(1) and (2)(A) when: (1) A
motion to redetermine interest has been filed within 1 year after
the date the decision of the Tax Court becomes final under
section 7481(a); (2) the Secretary has made an assessment under
section 6215 that includes interest; and (3) the taxpayer has
paid the entire amount of the deficiency plus the entire amount
claimed by the Secretary as interest on the deficiency. Rule
261; sec. 7481(c)(1) and (2)(A); Med James, Inc. v. Commissioner,
supra at 152. We shall address these requirements in turn.
First, petitioner has not filed a timely motion for
redetermination under Rule 261; the Tax Court decision in this
case is not yet final. Secs. 7481(a), 7483; Kenner v.
Commissioner, 387 F.2d 689, 690 (7th Cir. 1968). Second, section
6601(g) allows respondent to assess interest at any time during
the period within which the tax to which the interest relates may
be collected. Nothing in the record indicates that the interest
in this case has been assessed for 1999. Lastly, petitioner has
not demonstrated that he paid any interest. Therefore, we do not
have jurisdiction to redetermine the interest on petitioner’s
1999 deficiency under section 7481(c).
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In addition, we do not have jurisdiction to abate the
interest on petitioner’s 1999 deficiency. Under section
6404(h)(1), the Tax Court may review the Secretary’s failure to
abate interest only after the Secretary makes a final
determination not to abate interest. See also Rule 280(b).
Petitioner has not demonstrated that respondent has made a final
determination with respect to abatement of the interest on
petitioner’s 1999 deficiency.
To reflect the foregoing,
An order will be issued
denying petitioner’s motion to
vacate the stipulated decision
entered September 13, 2004.