T.C. Memo. 2005-260
UNITED STATES TAX COURT
CLYDE D. AND YOLANDA M. ADKINS, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 9388-04. Filed November 3, 2005.
Thomas J. Utaski, for petitioners.
Robert D. Kaiser, for respondent.
MEMORANDUM OPINION
LARO, Judge: Respondent moves the Court for leave
(respondent’s motion for leave) to file a motion under Rule 162
to vacate the stipulated decision entered in this case on
March 30, 2005, and now “final” under section 7481(a)(1).1
1
Unless otherwise noted, section references are to the
(continued...)
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Respondent’s motion for leave asserts that the stipulated
decision is void because it was entered in violation of the
automatic stay (automatic stay) of 11 U.S.C. section 362(a)
(2000). Respondent has lodged with the Court his related motion
to vacate the stipulated decision (respondent’s motion to
vacate).
We decide first whether we have jurisdiction to decide
respondent’s motion for leave. We hold we do. We decide second
whether we should grant respondent’s motion for leave. We hold
we shall. We decide third whether we should grant respondent’s
motion to vacate. We hold we shall. We decide fourth, sua
sponte, whether we should dismiss this case for lack of
jurisdiction in that petitioners’ petition to this Court was
filed in violation of the automatic stay. We hold we shall.
Background
On April 9, 2004, respondent issued to petitioners a notice
of deficiency determining a $2,107 deficiency in their 2001
Federal income tax. On the same day, respondent issued to
petitioners a second notice of deficiency determining a $2,557
deficiency in their 2002 Federal income tax. On May 20, 2004,
petitioners filed a petition for relief under chapter 13 of the
Bankruptcy Code with the U.S. Bankruptcy Court for the Southern
1
(...continued)
applicable versions of the Internal Revenue Code, and Rule
references are to the Tax Court Rules of Practice and Procedure.
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District of Ohio. On June 7, 2004, petitioners petitioned this
Court to redetermine the deficiencies determined in the notices
of deficiency.2
This case was called for trial on March 14, 2005. At that
time, the parties, through their respective counsel, informed the
Court that the case had been settled. On March 30, 2005, the
Court entered a stipulated decision reflecting the parties’
settlement. On August 19, 2005, respondent learned that
petitioners had filed for bankruptcy on May 20, 2004, and that
the bankruptcy proceeding had been continuously ongoing ever
since. Respondent notified the Court of this matter by filing
respondent’s motion for leave and by lodging respondent’s motion
to vacate.
Discussion
Respondent desires to file a motion to vacate the parties’
stipulated decision that was entered on March 30, 2005. Because
neither party filed a notice of appeal or a timely motion to
vacate or revise that decision, the decision became final on
June 28, 2005, 90 days after it was entered. See secs. 7459(c),
7481(a)(1).
Rule 162 provides that a party seeking to vacate a decision
must file an appropriate motion within 30 days after the decision
2
When the petition was filed, petitioners resided in
Lebanon, Ohio.
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is entered, unless the Court allows otherwise. Because
respondent did not file respondent’s motion to vacate within this
30-day period, respondent has requested leave from the Court to
file that motion at this time. Whether the Court allows the
filing of a motion to vacate a decision after the referenced
30-day period is generally within the sound discretion of the
Court. See Estate of Egger v. Commissioner, 92 T.C. 1079, 1083
(1989); see also Heim v. Commissioner, 872 F.2d 245, 246 (8th
Cir. 1989), affg. T.C. Memo. 1987-1. Where a party legitimately
attacks the jurisdiction of this Court, however, the Court must
freely exercise that discretion notwithstanding the time of the
attack. See Brannon’s of Shawnee, Inc. v. Commissioner, 69 T.C.
999, 1002 (1978); see also Jordon v. Gilligan, 500 F.2d 701, 704
(6th Cir. 1974). Such is so even if the decision under attack is
final under the statutory scheme applicable to decisions of this
Court. See Brannon’s of Shawnee, Inc. v. Commissioner, supra at
1002; see also Jordon v. Gilligan, supra at 704. The Court has
jurisdiction to vacate a decision of ours that is void, see
Roberts v. Commissioner, 175 F.3d 889, 892 n.3 (11th Cir. 1999);
Abeles v. Commissioner, 90 T.C. 103, 105-106 (1988); Brannon’s of
Shawnee, Inc. v. Commissioner, supra at 1002; see also Jordon v.
Gilligan, supra at 704, which naturally means that the Court also
has jurisdiction to grant a motion for leave to file a motion to
vacate a void decision. Under the setting at hand, we shall
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grant respondent’s request for leave to file respondent’s motion
to vacate.
We turn to consider respondent’s motion to vacate. The
Court’s jurisdiction to vacate a final decision is more limited
than the Court’s jurisdiction to vacate a decision that is not
final. See Cinema ‘84 v. Commissioner, 122 T.C. 264, 270 (2004);
see also Harbold v. Commissioner, 51 F.3d 618 (6th Cir. 1995).
Notwithstanding whether a decision is final, however, the Court
always has jurisdiction to vacate a decision that is void; e.g.,
because the Court lacked jurisdiction to enter the decision in
the first place. See Roberts v. Commissioner, supra at 892 n.3;
Billingsley v. Commissioner, 868 F.2d 1081 (9th Cir. 1989);
Abeles v. Commissioner, supra at 105-106; Brannon’s of Shawnee,
Inc. v. Commissioner, supra at 1001-1002; see also Jordon v.
Gilligan, supra at 704. Respondent asserts that the stipulated
decision is void in that it was entered in violation of the
automatic stay. We agree. Actions taken in this Court in
violation of the automatic stay are void, see Roberts v.
Commissioner, supra at 892 n.3; Brannon’s of Shawnee, Inc. v.
Commissioner, supra at 1000-1002; see also Prevo v. Commissioner,
123 T.C. 326 (2004); Drake v. Commissioner, 123 T.C. 320 (2004);
Halpern v. Commissioner, 96 T.C. 895 (1991), and one of those
actions is “the commencement or continuation of a proceeding
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before the United States Tax Court concerning the debtor”,
11 U.S.C. sec. 362(a)(8) (2000).
The automatic stay arises by operation of law upon the
filing of a bankruptcy petition and, absent an order of the
bankruptcy court to the contrary, see 11 U.S.C. sec. 362(d)
(2000), continues unimpaired until the earliest of the closing of
the case, the dismissal of the case, or the grant or denial of a
discharge, see 11 U.S.C. sec. 362(c)(2) (2000); see also Smith v.
Commissioner, 96 T.C. 10, 14 (1991). Petitioners’ bankruptcy
case has been continuously ongoing since before the start of this
proceeding, and we do not find that the bankruptcy court ever
issued an order allowing petitioners to file their petition in
this Court. Because the automatic stay has been in place
throughout this proceeding, and our entering of the parties’
stipulated decision also occurred during that time, our entering
of that decision violated the automatic stay and, hence, the
decision is void. Given that the stipulated decision is void, we
shall vacate it.
We turn to consider the effect of petitioners’ filing of
their petition in this Court given that this filing also occurred
during, and was in violation of, the automatic stay. Although
neither party has asked the Court to decide this issue, the Court
can (and should) sua sponte decide the Court’s jurisdiction
whenever it is in question. See Halpern v. Commissioner, supra;
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Smith v. Commissioner, supra at 13-14; see also Neely v.
Commissioner, 115 T.C. 287, 290 (2000); cf. Ruhrgas AG v.
Marathon Oil Co., 526 U.S. 574, 583 (1999). Because a petition
that is filed in violation of the automatic stay is invalid and
of no consequence, see Halpern v. Commissioner, supra; Wahlstrom
v. Commissioner, 92 T.C. 703 (1989); McClamma v. Commissioner,
76 T.C. 754 (1981); see also Jordon v. Gilligan, supra at 704, we
shall dismiss this case for lack of jurisdiction after we vacate
the decision that was entered on March 30, 2005.
To reflect the foregoing,
An appropriate order and order of
dismissal will be entered.