T.C. Memo. 2008-256
UNITED STATES TAX COURT
RONALD D. FISHER, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 24062-07. Filed November 17, 2008.
Phillip H. Hamilton and Ebony R. Huddleston, for petitioner.
James A. Kutten, for respondent.
MEMORANDUM FINDINGS OF FACT AND OPINION
KROUPA, Judge: This matter is before the Court on
respondent’s Motion to Dismiss for Lack of Jurisdiction and to
Strike as to the Taxable Year 2000. We decide whether we have
jurisdiction over an overpayment, properly before the Court under
section 6512(b),1 after respondent has conceded the fraud penalty
1
All section references are to the Internal Revenue Code in
(continued...)
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that justified the unlimited limitation period under section
6501(c) and the regular 3-year limitations period has expired.2
We conclude that we have jurisdiction to decide the case on the
merits, including a determination concerning the amount of any
overpayment for 2000.
FINDINGS OF FACT
Petitioner resided in Illinois at the time he filed the
petition. Petitioner submitted a Form 1040, U.S. Individual
Income Tax Return, for 2000 on August 10, 2001, before the
extended due date and then timely filed a Form 1040X, Amended
U.S. Individual Income Tax Return, claiming a $2,223 refund for
2000.
Respondent issued petitioner a deficiency notice for 2000,
2003, and 2004 on September 24, 2007. Respondent determined an
$11,994 deficiency in petitioner’s Federal income tax for 2000, a
$25,020 deficiency for 2003, and an $82,099 deficiency for 2004.
Respondent also determined an $8,130 fraud penalty under section
6663 for 2000, an $18,765 fraud penalty for 2003, and a
$61,574.25 fraud penalty for 2004. In determining the fraud
penalty for 2000, respondent relied on the extended limitations
period under section 6501(c) for false and fraudulent returns.
1
(...continued)
effect for the years at issue, and all Rule references are to the
Tax Court Rules of Practice and Procedure, unless otherwise
indicated.
2
Tax may be assessed at any time in the case of a false and
fraudulent return filed with the intent to evade tax. Sec.
6501(c).
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Further, respondent denied petitioner’s timely refund claim for
2000 stating that, if petitioner contested the determinations in
the deficiency notice with this Court, he should include his
refund claim in the petition.
Petitioner timely filed a petition for redetermination.
Petitioner asserted that respondent erred in determining
deficiencies and fraud penalties for 2000, 2003, and 2004 and in
disallowing his refund claim for 2000.
Respondent conceded the fraud penalties and asserted in his
answer that the limitations period for 2000 expired before the
deficiency notice was issued. He then brought the motion to
dismiss for lack of jurisdiction and to strike as to taxable year
2000, stating that this Court does not have jurisdiction over
2000 because the deficiency notice was issued after the
limitations period expired. Respondent failed to provide any
legal authority supporting his motion, and petitioner objected,
asking the Court to deny respondent’s motion and find that we
have jurisdiction to determine the amount of overpayment for
2000.
OPINION
The parties agree that the regular 3-year limitations period
under section 6501(a) for assessing a deficiency for 2000 expired
before respondent issued the deficiency notice. The parties
disagree, however, whether this Court has jurisdiction to decide
the merits of petitioner’s claim for an overpayment. We hold
that we have jurisdiction in this case under section 6512(b) and
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that we do not lose jurisdiction simply because respondent
conceded the fraud penalty that justified the unlimited
limitations period.
We shall begin by describing the general principles of our
jurisdiction. This Court is a court of limited jurisdiction and
may exercise jurisdiction only to the extent authorized by
Congress. Naftel v. Commissioner, 85 T.C. 527, 529 (1985). We
have jurisdiction to redetermine a taxpayer’s Federal tax
liabilities in a deficiency proceeding where the Commissioner has
issued a valid deficiency notice and the taxpayer has timely
filed a petition. Secs. 6212 and 6213; Rule 13(a), (c);
Gustafson v. Commissioner, 97 T.C. 85, 89 (1991); Monge v.
Commissioner, 93 T.C. 22, 27 (1989). We must dismiss a case in
which there is no valid deficiency notice. Monge v.
Commissioner, supra at 27. Respondent does not dispute that the
deficiency notice is valid.3 Accordingly, petitioner properly
invoked our jurisdiction by timely filing a petition for
redetermination of a deficiency under section 6213(a).
Once we acquire jurisdiction to redetermine a deficiency, we
also have jurisdiction to determine the amount of any overpayment
of the same tax for the same taxable period.4 Sec.
3
The expiration of the sec. 6501(a) limitations period
before the mailing of the deficiency notice does not go to the
jurisdiction of this Court. United Bus. Corp. of Am. v.
Commissioner, 19 B.T.A. 809, 831-832 (1930), affd. 62 F.2d 754
(2d Cir. 1933).
4
There are certain exceptions, not relevant here, to our
jurisdiction under sec. 6512(b). See sec. 6512(b)(3) and (4).
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6512(b); Russell v. United States, 592 F.2d 1069, 1071 (9th Cir.
1979); Naftel v. Commissioner, supra at 531. This jurisdiction
is limited to the same taxable year or years represented in the
deficiency notice and for which the taxpayer has timely filed a
petition for redetermination. Sec. 6512(b)(1),(3). These
provisions generally ensure that, where the taxpayer has timely
filed a tax return and a deficiency notice has been issued, the
taxpayer can obtain a refund of any overpayment of tax.
Commissioner v. Lundy, 516 U.S. 235, 244 (1996). Petitioner met
the section 6512(b) jurisdictional requirements when he timely
filed the petition with this Court.5 Accordingly, we conclude
that this Court had jurisdiction, at the time petitioner filed
the petition, to determine whether there was a deficiency for
2000 and whether there was an overpayment for 2000.
We now consider whether subsequent acts cause us to lose
jurisdiction over a claim for an overpayment. Generally, our
jurisdiction, once invoked, remains unimpaired until the
controversy is decided. Freytag v. Commissioner, 110 T.C. 35, 39
(1998); Coninck v. Commissioner, 100 T.C. 495, 498 (1993); Naftel
v. Commissioner, supra at 529-530. Respondent contends, however,
that even though we originally had jurisdiction to determine the
amount of any deficiency or overpayment for 2000, we lost
jurisdiction when he conceded the fraud penalty that justified
5
The look-back rules of sec. 6512(b)(3) do not pose a
jurisdictional hurdle as petitioner timely filed a return and
refund claim and respondent did not disallow the refund claim
before issuing the deficiency notice.
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the extended limitations period for the assessment of a
deficiency under section 6501(c). We disagree.
Our jurisdiction is based on the snapshot in time when
petitioner timely filed the petition. We have determined that,
at that time, petitioner met all the jurisdictional requirements
of section 6512(b). Respondent’s subsequent concession of the
fraud penalty, which resulted in a bar to assessment for 2000,
does not cause us to lose jurisdiction because our jurisdiction
does not depend on respondent’s ability to assess a deficiency.
See United Bus. Corp. of Am. v. Commissioner, 19 B.T.A. 809
(1930), affd. 62 F.2d 754 (2d Cir. 1933); Worden v. Commissioner,
T.C. Memo. 1994-193. The statute of limitations is an
affirmative defense, and its application does not pose a
jurisdictional question when an overpayment claim is properly
before the Court. Mackey v. Commissioner, T.C. Memo. 1991-149.
We conclude that when we have jurisdiction under section
6512(b) over a claim for an overpayment, we do not lose that
jurisdiction when the Commissioner subsequently concedes the
fraud penalty and argues that the normal 3-year limitation period
bars assessment of a deficiency. Accordingly, we will deny
respondent’s motion to dismiss for lack of jurisdiction and to
strike as to 2000.
To reflect the foregoing,
An appropriate order will
be issued.