T.C. Memo. 2009-73
UNITED STATES TAX COURT
STEVEN J. STANWYCK, Petitioner,
AND JOAN STANWYCK, Intervenor v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 533-07L. Filed March 31, 2009.
Steven J. Stanwyck, pro se.
John O. Kent, for intervenor.
Michael W. Tan, for respondent.
MEMORANDUM OPINION
VASQUEZ, Judge: Petitioner seeks review of respondent’s
denial of section 60151 relief and review of respondent’s
1
Unless otherwise indicated, all section references are to
the Internal Revenue Code, and all Rule references are to the Tax
(continued...)
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rejection of other claims petitioner raised with respect to a
notice of intent to levy and a notice of the filing of a lien.
At the time he filed his petition, petitioner resided in
California.
Joan Stanwyck (intervenor) intervened on April 12, 2007,
after receiving a notice of filing of petition and right to
intervene from respondent filed February 27, 2007. Petitioner
and intervenor were married and filed joint income tax returns
for 1991, 1997, and 1998; petitioner requested section 6015
relief from joint and several liability for those years.
Petitioner and intervenor are now divorced.
On October 12, 2007, petitioner filed a petition pursuant to
chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy
Court for the Central District of California. Pursuant to 11
U.S.C. section 362(a)(8) (2006), this proceeding has been stayed
as to petitioner. In the Court’s order to show cause dated
October 29, 2007, we directed the parties to show why the
proceedings should not be stayed as to intervenor.
Both intervenor and respondent argue that there is only one
proceeding before this Court, the proceeding of petitioner.
Further, intervenor is allowed by statute to intervene in this
proceeding. Because this proceeding is stayed, intervenor’s
1
(...continued)
Court Rules of Practice and Procedure.
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rights to intervene are stayed. On the other hand, petitioner
argues that a bankruptcy stay “applies to a person and not to an
entire proceeding.”
OPINION
I. Section 6015 Relief and Intervention by NonRequesting Spouse
Spouses who file joint returns are jointly and severally
liable for the entire tax liability, which may be collected from
either spouse. See sec. 6013(d)(3). However, section 6015
provides that, notwithstanding section 6013(d)(3), a joint filer
may elect to seek relief from joint and several tax liability.
Congress vested this Court with jurisdiction to review a
taxpayer’s claim for relief from joint and several liability
under specified circumstances. Maier v. Commissioner, 119 T.C.
267, 270 (2002), affd. 360 F.3d 361 (2d. Cir. 2004); see also
King v. Commissioner, 115 T.C. 118, 121-122 (2000); Corson v.
Commissioner, 114 T.C. 354, 363-364 (2000). Claims for spousal
relief can be raised in several different types of proceedings
including petitions filed under section 6015(e), 6320, 6330, or
6213. Drake v. Commissioner, 123 T.C. 320 (2004); King v.
Commissioner, supra at 121-122.
Petitioner requested such relief after receiving a Final
Notice--Notice of Intent to Levy and Notice of Your Right to a
Hearing and Notice of Federal Tax Lien Filing and Your Right to a
Hearing. Petitioner was denied relief pursuant to section 6015
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on December 8, 2006, and petitioned this Court on January 5,
2007.
For cases involving requests for spousal relief, section
6015(e)(4)2 directs this Court to establish rules to provide
notice to the nonrequesting spouse and an opportunity to become a
party to the proceeding. Pursuant to Rule 325 and King,
intervenor was notified of petitioner’s petition seeking relief
from joint and several liability and of her right to intervene in
petitioner’s case. By intervening, intervenor became a party.
See Tipton v. Commissioner, 127 T.C. 214, 217 (2006). An
intervening party is not granted rights or immunities superior to
those of the other parties, may not enlarge the issues or alter
the nature of the proceeding, and must abide by the Court’s
Rules. Id. This proceeding concerns issues petitioner raised
including whether petitioner is entitled to relief from his joint
tax liability. Intervenor’s liability is not at issue. See
Kovitch v. Commissioner, 128 T.C. 108, 111 (2007).
2
Sec. 6015(e)(4) provides as follows:
SEC. 6015(e). Petition for Review by Tax Court.--
(4) Notice to other spouse.–-The Tax Court shall
establish rules which provide the individual filing a joint
return but not making the election under subsection (b) or
(c) or the request for equitable relief under subsection (f)
with adequate notice and an opportunity to become a party to
a proceeding under either subsection.
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II. The Automatic Stay in Bankruptcy Cases
A bankruptcy filing generally triggers an automatic stay of
Tax Court proceedings concerning the debtor. Id.3 At the time
petitioner filed for bankruptcy (October 12, 2007), 11 U.S.C.
section 362(a) provided in relevant part:
§ 362. Automatic stay
(a) Except as provided in subsection (b) of this
section, a petition filed under section 301, 302, or
303 of this title, or an application filed under
section 5(a)(3) of the Securities Investor Protection
Act of 1970, operates as a stay, applicable to all
entities, of--
* * * * * * *
(8) the commencement or continuation of a
proceeding before the United States Tax Court
concerning a corporate debtor’s tax liability for a
taxable period the bankruptcy court may determine or
concerning the tax liability of a debtor who is an
individual for a taxable period ending before the date
of the order for relief under this title.
The automatic stay generally operates to temporarily bar actions
against or concerning the debtor or bankruptcy estate.
3
As applicable in Kovitch v. Commissioner, 128 T.C. 108
(2007), 11 U.S.C. sec. 362(a)(8) read: “(8) the commencement or
continuation of a proceeding before the United States Tax Court
concerning the debtor.” The Bankruptcy Abuse Prevention and
Consumer Protection Act of 2005, Pub. L. 109-8, sec. 709, 119
Stat. 127, amended 11 U.S.C. sec. 362(a)(8) to its current
version, effective in cases commenced on or after Oct. 17, 2005,
id. sec. 1501, 119 Stat. 216. The amended version removed the
phrase “the debtor” and replaced it with the phrase “a corporate
debtor’s tax liability for a taxable period the bankruptcy court
may determine or concerning the tax liability of a debtor who is
an individual for a taxable period ending before the date of the
order for relief under this title”.
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Allison v. Commissioner, 97 T.C. 544, 545 (1991). In a chapter
11 bankruptcy an automatic stay is generally lifted at the
earliest of the closing of the case, the dismissal of the case,
or the grant or denial of a discharge. 11 U.S.C. sec. 362(c)(2).
This Court has jurisdiction to determine whether the
automatic stay under 11 U.S.C. section 362(a)(8) prevents us from
proceeding. See Moody v. Commissioner, 95 T.C. 655, 658 (1990).
This Court has previously construed the phrase “concerning the
debtor” that appeared in the prior version of 11 U.S.C. section
362(a)(8).4 We have not yet construed the phrase “concerning the
tax liability of a debtor who is an individual” that appears in
the current version of 11 U.S.C. section 362(a)(8). However the
current version of 11 U.S.C. section 362(a)(8) and the prior
version construed in Kovitch are very similar insofar as relevant
here. Both focus on the tax liability of the debtor in
bankruptcy. Our prior cases construing the previous version of
4
In Kovitch v. Commissioner, supra at 112, we stated as
follows:
We have construed the phrase ‘concerning the debtor’ in
11 U.S.C. section 362(a)(8) narrowly to mean that the
automatic stay should not apply unless the Tax Court
proceeding possibly would affect the tax liability of the
debtor in bankruptcy. People Place Auto Hand Carwash, LLC
v. Commissioner, 126 T.C. 359, 363 (2006); 1983 W. Reserve
Oil & Gas Co. v. Commissioner, 95 T.C. 51 (1990), affd.
without published opinion 995 F.2d 235 (9th Cir. 1993).
Thus, we must decide whether the current proceeding
involving petitioner’s request for section 6015 spousal
relief affects Mr. Kovitch’s tax liability for purposes of
applying the automatic stay. [Fn. ref. omitted.]
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11 U.S.C. section 362(a)(8) are relevant to our determination in
this case. In Kovitch we had to decide whether the taxpayer’s
case involving her request for section 6015 relief affected the
tax liability of her ex-husband who had filed a notice of
intervention and shortly thereafter filed for bankruptcy. Here,
rather than intervenor being a debtor in bankruptcy, petitioner
is a debtor in bankruptcy. Petitioner’s tax liability is in
issue.
The plain language of section 6015(e)(4) supports
respondent’s and intervenor’s argument that there is only one
proceeding. See id. (“an opportunity to become a party to a
proceeding under either such subsection.”). A new proceeding is
not created when there is an intervention; rather, the intervenor
simply becomes a party to the existing proceeding. Id.
Whether petitioner should be relieved of liability for the
tax liabilities at issue and whether petitioner’s other claims
have merit are the concerns of this proceeding. Intervenor seeks
to participate in the proceeding and offer information related to
whether petitioner should be awarded relief pursuant to section
6015.
The automatic stay of 11 U.S.C. section 362(a)(8) must stay
this proceeding also as to intervenor. As we stated in Tipton v.
Commissioner, supra, at 217: “The intervening party is
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not granted rights or immunities superior to those of the other
parties”.
Accordingly, the automatic stay of 11 U.S.C. section
362(a)(8) applies to intervenor.
To reflect the foregoing,
An appropriate order will
be issued.