IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
_____________________
No. 95-20059
Summary Calendar
_____________________
SAM PENA and JO NELL PENA,
Plaintiffs-Appellants,
versus
THE UNITED STATES OF AMERICA,
Defendant-Appellee.
_______________________________________________________
Appeal from the United States District Court for
the Southern District of Texas
_______________________________________________________
July 27, 1995
Before REAVLEY, DAVIS and DeMOSS, Circuit Judges.
PER CURIAM:*
Sam Pena and Jo Nell Pena sued the United States in district
court challenging their income tax liability for 1971, seeking a
refund of funds seized from them by the Internal Revenue Service
("IRS") to satisfy that liability. The district court dismissed
the complaint concluding that the court lacked subject matter
jurisdiction under 26 U.S.C. §6512(a), which precludes
*
Local Rule 47.5 provides: "The publication of opinions
that have no precedential value and merely decide particular
cases on the basis of well-settled principles of law imposes
needless expense on the public and burdens on the legal
profession." Pursuant to that Rule, the Court has determined
that this opinion should not be published.
jurisdiction over claims which have previously been filed in the
United States Tax Court. The court also concluded that even if
§6512 did not bar the Pena's claim the Government was entitled to
summary judgment in its favor based on the doctrine of res
judicata. We affirm.
After an audit of the Penas' income tax return for 1971, the
IRS found a deficiency and mailed a Notice of Deficiency to the
Penas in December of 1975. The Penas filed a petition in the
United States Tax Court in March of 1976. The Tax Court
dismissed the suit six years later for lack of prosecution. The
Penas did not appeal the Tax Court decision. In 1989 the IRS
seized proceeds from a bankruptcy distribution to which the Penas
were entitled. The Penas filed this suit in March of 1994.
As the district court stated, §6512(a) provides that after a
taxpayer files a petition with the United States Tax Court, "no
suit by the taxpayer for the recovery of any part of the tax
shall be instituted in any court." 26 U.S.C. §6512(a). The
district court concluded that since the Penas had already filed
suit in the Tax Court they could not institute an action in
district court based on the same taxable income. See Solitron
Devices, Inc. v. United States, 862 F.2d 846, 848 (11th Cir.
1989).
The Penas contend that their claim should still be heard in
district court because an exception to the jurisdictional bar is
provided for under the "mitigation provisions" of the Tax Code,
26 U.S.C. §§1311-14. These provisions allow for the correction
2
of the effect of certain types of errors made by a Tax Court
determination when the correction of the error would normally be
prevented by the operation of any law or rule of law, such as a
statute of limitations, if certain conditions are present. 26
U.S.C. §1311. One type of error allowed to be corrected under
the mitigation provisions is the double inclusion of an item of
gross income. This can mean the erroneous inclusion of the same
income to the same taxpayer for two taxable years or the
erroneous inclusion of the same income to two related taxpayers.
26 U.S.C. §1312(1). The Penas claim that this type of error was
made in their case.
In determining the Penas' 1971 tax liability, the IRS
attributed income to Mr. Pena based on his receipt of real
property as compensation. They claim that, in a subsequent
bankruptcy proceeding, any claim or legal right that Pena had in
this property was avoided and set aside by the trustee. The
property was attributed to Champions Racquet Club Estates, Inc.
Pena was a shareholder in this company, and therefore he alleges
that he was again subjected to taxation on the property's value
based on his receipt of the proceeds from the sale of the
property in the form of a distribution.
Even if the IRS took an inconsistent position resulting in
the double inclusion of an item of gross income by attributing
the property in question to the corporation as constructive
income once the bankruptcy court entered its judgment, after it
had previously attributed the same property to Pena as his
3
personal constructive income, this type of double inclusion is
not correctable under section 1312. Section 1312 applies to the
same income being included as items of gross income for two
related taxpayers. Section 1313(c)(1)-(7) defines the term
related taxpayers and a corporation and its shareholders are not
included in this list. See also Hindes v. United States, 371
F.2d 650, 654 (5th Cir.), cert. denied, 87 S.Ct. 1307 (1967).
The mitigation provisions do not apply.
The Penas also argue that the inconsistent treatment of the
property, income to Pena versus income to the corporation,
constituted double inclusion to the Penas under the mitigation
statute. However, the property was included as an item of income
to Penas only once. Pena's distribution from the corporation may
have been affected by the inclusion of the property in the
corporation's income, but that is not the double inclusion to
which the statute applies.
AFFIRMED.
4