*155 Respondent issued a joint notice of deficiency to John H. Baron and Ruby A. Baron after an involuntary petition in bankruptcy had been filed against John but while the bankruptcy proceeding was still pending. John and Ruby filed a joint petition in this Court and subsequently filed a motion to dismiss for lack of jurisdiction. Held: The Tax Court lacks jurisdiction as to John H. Baron but has jurisdiction with respect to Ruby A. Baron. Petitioners' motion to dismiss for lack of jurisdiction granted as to John H. Baron and denied with respect to Ruby A. Baron.
*1029 OPINION
This matter is before the Court on petitioners' motion to dismiss for lack of jurisdiction. Respondent objected to the motion and, after a hearing, the parties submitted stipulations of fact and briefs stating their positions.
Petitioners' motion and respondent's objection raise two issues: (1) Whether this Court lacks jurisdiction under
All of the facts have been stipulated by the parties. The stipulations of fact and attached exhibits are incorporated herein by this reference.
Petitioners' joint Federal income tax return for the taxable year 1970 was filed with the Internal Revenue Service after May 14, 1971, but prior to June 18, 1971. The address on the return was 1820 Shadywood Road, Wayzata, Minn. Petitioners did not sign a consent extending the period of limitations within which the Internal Revenue Service could assess any tax due with*159 respect to 1970.
On July 26, 1972, the District Director of Internal Revenue Service at Saint Paul, Minn., mailed a letter to petitioners notifying them that an examination of their 1970 return showed no change was required in the tax reported and that the return was accepted as filed.
*1030 An involuntary petition in bankruptcy was filed against petitioner John H. Baron (hereinafter John) on August 18, 1972. He was adjudicated a bankrupt on December 5, 1972. James H. Levy was appointed by the bankruptcy court as trustee for the estate of John H. Baron. Petitioner Ruby A. Baron (hereinafter Ruby) was not involved in the bankruptcy proceedings.
Respondent has not made an assessment against John for the year 1970 under
Sometime on or before April 14, 1977, the internal revenue agent who reexamined the petitioners' return for the *160 taxable year ended December 31, 1970, was aware of the bankruptcy proceedings instituted against John H. Baron, and he noted this information in his report dated April 14, 1977.
The statutory notice of deficiency on which this case is based was mailed to petitioners on May 4, 1977. It was addressed to both John and Ruby at the address given on the return for 1970. It determined that there was unreported income for the year 1970 in the amount of $ 62,260; and that there was a deficiency in income tax in the amount of $ 25,677.63 and an addition to tax under section 6653(a) in the amount of $ 1,283.88. Respondent did not mail a separate notice of deficiency for 1970 to Ruby. Respondent did not mail a notice of deficiency to the trustee in bankruptcy.
John and Ruby Baron filed a timely joint petition for redetermination of the deficiency set forth in the notice of deficiency on July 27, 1977. Respondent filed an answer, affirmatively alleging grounds for defense against petitioners' statute of limitations plea, and petitioners filed a reply.
When the case was called for trial on September 19, 1978, petitioners filed a motion to dismiss for lack of jurisdiction, 2 stating as grounds*161 therefor: (1) Respondent failed to issue a *1031 notice of deficiency pursuant to
On brief, petitioners emphasize two points: (1) That since John filed a petition in bankruptcy before he filed a petition in this Court,
The jurisdiction of this Court is governed by statute. Sec. 7442. In general, the jurisdiction of the Court depends upon the issuance by the Secretary of the Treasury or his delegate of a notice of deficiency and timely filing of a petition. Secs. 6212 and 6213.
Where a taxpayer has been adjudicated a bankrupt, however,
(b) Claim Filed Despite Pendency of Tax Court Proceedings. -- In the case of a tax imposed by subtitle A or B claims for the deficiency and such interest, additional amounts, and additions to the tax may be presented, for adjudication in accordance with law, to the court before which the bankruptcy or receivership proceeding is pending, despite the pendency of proceedings for the redetermination of the deficiency in pursuance of a petition to the Tax Court; but no petition for any such redetermination shall be filed with the Tax Court after the adjudication of bankruptcy, the filing or (where approval is required by the Bankruptcy Act) the approval of a petition of, or the approval of a petition against, any taxpayer in any other bankruptcy proceeding, or the appointment of the receiver. [Emphasis added.]
*1032 Petitoners' position is that
We have previously considered
In Sharpe, we explained the Court's interpretation of
It is our present view that by establishing a different method for assessment and collection of taxes where bankruptcy intervenes, Congress intended that "tax" matters in their entirety be settled by the bankruptcy court under bankruptcy procedures instead of by the Tax Court under the procedures set forth in sections 6212(a) and 6213(a), except where the Tax Court petition antedates the petition in bankruptcy. See
By its terms section 2a(2A) of the Bankruptcy Act does not limit the jurisdiction of the bankruptcy court to debts claimable from the bankrupt's estate. *1033 See and compare
In accord with Sharpe is
Respondent would distinguish Sharpe and Tatum because there the Commissioner had filed a proof of claim in the bankruptcy proceedings for the deficiencies. Also, the Commissioner had made assessments of those taxes under
The reasoning in Sharpe and Tatum, however, permits no such distinction. As discussed in Sharpe and Tatum, present bankruptcy law provides the bankrupt taxpayer the right to have his tax liability adjudicated in the bankruptcy proceeding even though the Commissioner has filed no proof of claim for the tax. For a recent*168 illustration, see
The second issue is whether we also lack jurisdiction as to *1034 Ruby A. Baron, the bankrupt petitioner's wife, who did not participate in the bankruptcy proceedings. We conclude we have jurisdiction with respect to Ruby.
John and Ruby*169 were husband and wife during the taxable year 1970 and their joint and several liability for the tax deficiencies determined by respondent is involved herein. In
Petitioners' principal argument with reference to our lack of jurisdiction over Ruby is that since the notice of deficiency was a joint notice served on both John and Ruby, because of the application of
Section 6212(a) provides that if the Secretary determines that there is a deficiency in tax he is authorized to send notice of such deficiency to the taxpayer. Section 6213(a) provides that the taxpayer shall have 90 days after the mailing of the notice of deficiency in which to file a petition for redetermination of the deficiency with the Tax Court. It also provides that no assessment of the deficiency may be made, with certain exceptions, until such notice has been mailed to the taxpayer, nor until the expiration of such 90-day period, nor, if a petition is filed with the Tax Court, until the decision of the Tax Court has become final. A valid notice of deficiency is therefore both the necessary "ticket to the Tax Court," i.e., it permits the taxpayer to file a petition which is necessary for the Court to obtain jurisdiction, and it is a prerequisite to the assessment of the deficiency, with certain exceptions.
There is no statutory form for a notice of deficiency. A notice advising taxpayer that respondent has determined a deficiency *1035 in his tax is sufficient.
Petitioners rely on statements made in the dissenting opinions in
Because petitioners' motion to dismiss for lack of jurisdiction *1036 does not raise the issue of whether the statute of limitations bars assessment of tax for 1970 against Ruby A. Baron, it would be premature for us to discuss that issue at this point.
An appropriate order will be entered.
Footnotes
1. All section references are to the Internal Revenue Code of 1954, as amended and in effect in the year in issue, unless otherwise indicated.↩
2. It is somewhat unusual for petitioners to move to dismiss for lack of jurisdiction. We assume that petitioners have done so here on the theory that if we conclude that the Court does not have jurisdiction over John because of the bankruptcy proceeding, he still has a prepayment forum to litigate the deficiency in the bankruptcy court; and if the notice of deficiency is found to be invalid as to Ruby, respondent cannot assess the deficiency against her until a valid notice of deficiency is issued to her.↩
3. See
Lee v. Commissioner, T.C. Memo. 1977-423↩ .4. Although the facts in
Dolan v. Commissioner, 420">44 T.C. 420 (1965), are somewhat different than the facts here, our conclusion and reasoning in that case clearly support the conclusion reached here. See alsoGurley v. Commissioner, T.C. Memo. 1966-52↩ , which is in accord with our conclusion here on similar facts.5. We realize this conclusion could permit two different courts to redetermine the amount of the same tax -- the joint tax due from John and Ruby. However, a similar situation occurs when a joint return is filed and one of the spouses dies and no fiduciary is appointed to sign a petition in behalf of his or her estate, or when one spouse files a waiver. See
Dolan v. Commissioner, supra↩. It gives rise to no problems that cannot be worked out between the courts.