*21 P's wife did not report embezzlement income on their joint 1999
return. After she was caught, P and she filed an amended tax
return that reported the embezzlement income. P then applied for
relief from joint and several liability under
The Commissioner issued a notice of determination denying his
request, and P filed a petition under
Commissioner's determination. P and R stipulated that no relief
is available under
reconsideration, we no longer adhere to our prior holding that
stand-alone petitions.
118 T.C. No. 31 (2002), revd.
followed.
*7 OPINION
HOLMES, Judge: In 1999, Rosalee Billings began embezzling money from her employer. She kept her husband in the dark about her embezzlement and didn't report the ill-gotten*22 income on their joint return. After she was caught in 2000, she confessed her theft to him, and together they signed an amended joint return that reported the stolen income and showed a hefty increase in the tax owed. He asked the Commissioner to be relieved of joint liability for the increased tax, but his request was refused because he knew about the embezzled income when he signed the amended return, and also knew that the increased tax shown on that amended return was not going to be paid.
Billings began his case in our Court by filing a "nondeficiency stand-alone" petition -- "nondeficiency" because the IRS *8 accepted his amended return as filed and asserted no deficiency against him, and "stand-alone" because his claim for innocent spouse relief was made under
Billings's case*24 is one of the large number of nondeficiency stand-alone cases that began accumulating on our docket while Ewing I was on appeal. We now revisit the question of whether we have jurisdiction to review the Commissioner's decisions to deny relief under
Background
David Billings was well into a 30-year career at General Motors when he married Rosalee in 1996. Rosalee herself was a payroll clerk at South Kansas City Electric Company. The Billingses kept two checking accounts, and while both were jointly held, David and Rosalee each kept almost exclusive control over one of them. In 1999, Rosalee began to transfer money from the Electric Company's payroll account into the checking account that she controlled and into which she had her own pay directly deposited.
*9 Rosalee kept her embezzlement secret from her husband and she did not report on their 1999 return the nearly $ 40,000 that she had stolen. The Electric Company discovered the embezzlement in December 2000, fired her, and then notified the authorities. She told her husband what she had done and hired a lawyer, Patrick Wiesner. (Wiesner also represented David in this*25 case and before the IRS.)
In his capacity as Rosalee's lawyer, Wiesner advised her to report the embezzlement income to the IRS on an amended return. He told her that if she did, a sentencing judge would probably be more lenient and might even depart from the U.S. Sentencing Guidelines. But
That return included as taxable income the nearly $ 40,000 that Rosalee had embezzled in 1999. It also showed an increase in tax of over $ 16,000. When David signed the amended return, he knew that neither he nor his wife expected to be*26 able to pay the increased tax. Wiesner, however, suggested that David himself might avoid liability for the extra tax by filing for innocent spouse relief under
As the Billingses feared, Rosalee's embezzlement led to a criminal charge -- one count of wire fraud. Less than a month later, in November 2001, she pleaded guilty. Her sentence apparently reflected a downward departure for acceptance of responsibility, though the probation officer who wrote the *16 sentencing report did not mention that the Billingses had filed an amended return. 3
*27 In 2002, the Billingses filed for bankruptcy and received a discharge, which of course did not affect Rosalee's obligation to repay the money she'd embezzled or her own liability for the unpaid 1999 taxes.
As the IRS had not processed David's original request for relief, he filed another one. In November 2002, the IRS denied his request for relief based on "all the facts and circumstances," but particularly because:
you failed to establish that it was reasonable for you to
believe the tax liability was paid or was going to be paid at
the time you signed the amended return.
David appealed, and the IRS issued its final determination, again denying him relief because he did not believe when he signed the amended return that the tax would be paid.
The Commissioner argues:
Instead of filing an amended return, [Rosalee] could have
contacted respondent and informed*28 him of the unreported
embezzlement income. Once informed, respondent could have
proceeded with examination procedures and [Rosalee] could have
agreed to respondent's determination of additional tax.
Resp. Br. at 30. This would have led to the determination of a deficiency and presumably allowed David to file a petition seeking relief under a different part of
Even under
It is unpersuasive to argue, as does respondent, that
petitioner's voluntary filing of an amended 1996 return and her
attendant payment of the delinquent taxes attributable to the
omission of income from*29 the original 1996 return militate
against equitable relief simply because she had to have known of
the omission before she filed the amended return and made the
payment.
Id.
Before this case was tried, Billings and the Commissioner fully stipulated the facts under
Discussion
A married couple can choose to file their Federal tax return jointly, but if they do, both are then responsible for the return's accuracy and both are jointly and severally liable for the entire tax due.
Billings and the Commissioner stipulated that he did not qualify for relief under either
That left Billings able to look only to subsection (f) for relief, and when the Commissioner denied it to him, left him with the problem of where to seek judicial review. He filed in our Court and, under our decision in Ewing I, he was right to do so because we had held that
Ewing I in turn built on two other cases. The first was Butler, where we had to decide whether we had jurisdiction to review the Commissioner's decision to deny
So unless there had been some change in the law, a taxpayer challenging a notice of deficiency could, after enactment of
Just a short time later, we decided
We first look to the prefatory language contained in section
6015(e)(1) which states: "in the case of an individual who
elects to have subsection (b) or (c) apply." We conclude that
this language does not contain words of limitation that confine
our jurisdiction to review of an election under subsections (b)
and/or (c), as respondent contends. Rather, we understand this
language to encompass the procedural requirement applicable to
all joint filers seeking innocent spouse relief and, therefore,
states the prerequisite to seeking our review of such relief.
*35 We reasoned that
The problem we faced in Ewing I is that Congress amended
(1) In general. -- In the case of an individual against whom
a deficiency has been asserted and who elects to have
subsection (b) or (c) apply --
(A) In general. -- In addition to any other remedy
provided by law, the individual may petition the Tax
Court (and the Tax Court shall have jurisdiction) to
determine the appropriate relief available to the
individual under this section if such petition is filed --
And here our problem began, because it might seem that the inclusion of the first new phrase was the inclusion of a new condition -- that an*36 individual seeking innocent spouse relief must show that the Commissioner is asserting a deficiency against him. We raised the problem sua sponte in Ewing I, but both the Commissioner and Ewing took the position that the amendment did not deprive us of jurisdiction.
Given the difficulty of the issue, we analyzed the question at length, reasoning that
Equitable relief under
available in nondeficiency situations. Under these
circumstances, the amendment to
situations where "a deficiency has been asserted" and the
retention of the language in that same section giving us
jurisdiction over "the appropriate relief available to the
individual under this section" creates an ambiguity.
Having found an ambiguity, we then consulted the legislative history and found nothing
indicating that the amendment of
intended to eliminate our jurisdiction regarding claims for
equitable relief under
had jurisdiction. *37 The stated purpose for inserting the language
"against whom a deficiency has been asserted" into section
6015(e) was to clarify the proper time for a taxpayer to
submit a request to the Commissioner for relief under section
6015 regarding underreported taxes.
On appeal, the Commissioner changed his mind about the proper construction of the new language. The Ninth Circuit agreed with him (and the dissent in Ewing I) that the first *15 step in our reasoning -- finding that the amendment to
*39 The opinions from the Eighth and Ninth Circuits create one of the unique problems that our Court sometimes has to face -- we have always believed that Congress meant us to decide like cases alike, no matter where in the nation they arose, so that our precedents could be relied on by all taxpayers. Appeals from our decisions, though, go to twelve different circuit courts and so we have often had to react to appellate reversal by only one of them. We concluded early on that, when that happens, we should keep deciding cases as we think right.
The opinions in Ewing I and Bartman change the judicial landscape, see
After the opinions*41 in Ewing I and Bartman, however, this reading becomes problematic, particularly when we consider that "deficiency" itself has a defined meaning -- the amount by which the tax imposed by the Internal Revenue Code exceeds the amount reported on a return, including an amended return. We now hold, consistently with those opinions, that the phrase establishes a condition precedent: A petitioner in this Court who seeks judicial review of a denial of relief must show that the Commissioner asserts that he owes more in tax than reported on his return. By amending
We similarly continue to adhere to our reading in Ewing I of the amendment's legislative history*42 as focused on the proper time for a taxpayer to request innocent spouse relief from the IRS. See
*43 We therefore overrule our holding in
*44 Our reading today may also create some confusion -- innocent spouse relief under all
*45 An order will be entered dismissing the case for lack of jurisdiction.
Reviewed by the Court.
HALPERN, THORNTON, and KROUPA, JJ., agree with this majority opinion.
LARO, J., concurring: The Court today appropriately overrules the opinion of the
I agree with the overruling of
*21 FOLEY, HAINES, GOEKE, and WHERRY, JJ., agree with this concurring opinion.
CHIECHI, J., dissenting: With all due respect, I am not persuaded by the United States Court of Appeals for the Ninth Circuit (Ninth Circuit) 1 or the*51 United States Court of Appeals for the Eighth Circuit (Eighth Circuit) 2 that the Court erred in holding in Ewing I that the Court had jurisdiction over the taxpayer's claim in that case for relief under
*52 Neither the Ninth Circuit nor the Eighth Circuit expresses disagreement with, and the Court Opinion reaffirms, see Court op. pp. 9, 12, 13, 17, 19, the Court's conclusion in Ewing I that, prior to the amendment in question of
*54 The question that the Court addressed sua sponte in Ewing I was whether the amendment of
Our interpretation of
"against whom a deficiency has been asserted". However, section
jurisdiction "to determine the appropriate relief available to
the individual under this section " (emphasis added),
which, as previously explained, we have held gives us
jurisdiction over the propriety of equitable relief under
always has been, available in nondeficiency situations. *55 Under
these circumstances, the amendment to
and the retention of the language in that same section giving us
jurisdiction over "the appropriate relief available to the
individual under this section" creates an ambiguity. Therefore,
it is appropriate to consult the legislative history of the
amendment made by the Consolidated Appropriations Act, 2001.
*56 After having consulted the conference report accompanying the amendment of
The conference report indicates that the language "against whom
a deficiency has been asserted" was inserted into section
Commissioner for relief from joint and several liability for tax
that may have been underreported on the return. Congress wanted
to prevent taxpayers from submitting premature requests to the
Commissioner for relief from potential deficiencies before the
Commissioner had asserted that additional taxes were owed.
Congress also wanted to make it clear that a taxpayer does not
have to wait until after an assessment has been made before
submitting a request to the Commissioner for relief under
Congress was concerned with the proper timing of a request for
relief for underreported tax and intended that taxpayers not be
allowed to submit*57 a request to the Commissioner regarding
underreported tax until after the issue was raised by the IRS.
There is nothing in the legislative history indicating that the
amendment of
Act, 2001, was intended to eliminate our jurisdiction regarding
claims for equitable relief under
previously had jurisdiction. The stated purpose for inserting
the language "against whom a deficiency has been asserted" into
submit a request to the Commissioner for relief under section
6015 regarding underreported taxes. * * * [Fn. refs. omitted.]
Based upon the Court's review of the language of
*59 I turn first to the Court Opinion to explain why I am not persuaded by that Opinion that the Court should overrule Ewing I. In deciding to overrule the Court's holding in Ewing I, the Court Opinion concludes that that holding
becomes problematic, particularly when we consider that
"deficiency" itself has a defined meaning -- the amount by which
the tax imposed by the Internal Revenue Code exceeds the amount
reported on a return, including an amended return. We now hold,
consistently with those opinions [Ewing II and
Bartman ], that the phrase ["against whom a deficiency
has been asserted"] establishes a condition precedent: A
petitioner in this Court who seeks judicial review of a denial
of relief must show that the Commissioner asserts that he owes
more in tax than reported on his return. By amending section
6015 the way it did, Congress narrowed the class of individuals
able to invoke our jurisdiction under
those "against whom a deficiency has been asserted." We cannot
fairly read Congress's phrasing of this qualification as other
*60 than a clear, though perhaps inadvertent, deprivation of our
jurisdiction over nondeficiency stand-alone petitions. Placing
that circumscription where it did, the "assertion of a
deficiency" has become the "ticket to Tax Court" that notices of
deficiency are in redetermination cases.
Court op. p. 17.
In asserting "that 'deficiency' itself has a defined meaning -- the amount by which the tax imposed by the Internal Revenue Code exceeds the amount reported on a return, including an amended return", Court op. p. 17, the Court Opinion apparently relies on
*62 I agree with the Court Opinion that in the instant case there would be no "deficiency" extant after petitioner and his spouse filed their joint amended return if the meaning of that term in
Even assuming arguendo that the term "deficiency" that appears in
In pointing out the Eighth Circuit's interchangeable use in Bartman of terms such as "assertion of a deficiency", "determination of a deficiency", "issue of a notice of deficiency", and "assessment of a deficiency" (discussed below), the Court Opinion states:
Future cases may well show that Congress meant to give us
jurisdiction*65 when a deficiency was "asserted" because it wanted
to allow taxpayers to petition for relief well before the IRS
sends out a notice of deficiency or makes an assessment --
perhaps as soon as issuance of a revenue agent's report, or some
other time during an examination, when the IRS first "states
that additional taxes may be owed." H. Conf. Rept. 106-1033, at
1023 (2000) (quoted in
The terms "determination" and "assessment" are not customarily
regarded as synonyms in tax law. A "determination" is the IRS's
final decision, see, e.g.,
"assessment" is the specific procedure by which the IRS
officially records a liability, see
power to collect taxes administratively. (The Code generally
bars the IRS from assessing taxes that are being contested in
our Court. See
We note too that, although notices of deficiency establish
jurisdiction in most of our cases, see
Congress has given us jurisdiction over cases*66 in which
there need be no deficiency -- for example, review of the
Commissioner's determinations after IRS collection due process
hearings.
deficiency lurking in this case at all, 13 we need not
decide whether an "assertion of deficiency" is synonymous with a
"notice of deficiency," much less an "assessment", in defining
the limits of our jurisdiction under
Court op. p. 15 note 7; see also Court op. p. 14.
*67 *27 Despite assertions to the contrary that appear in the Court Opinion, see Court op. pp. 17, 18, 19, the excerpt quoted above leaves no doubt that the Court Opinion concludes that the phrase "against whom a deficiency has been asserted" may have any one of several possible meanings. The Court Opinion thus acknowledges that that phrase is ambiguous. The internal inconsistency in the Court Opinion as to whether the phrase "against whom a deficiency has been asserted" is ambiguous is another material flaw in that Opinion. Having concluded that that phrase is ambiguous, the Court Opinion should have considered the legislative history of the amendment of
*28 Although the Court Opinion concludes that the phrase "against whom a deficiency has been asserted" is ambiguous, see Court op. p. 14 note 7, it also concludes, inconsistently, that that phrase is "clear", "plain", and "not ambiguous", Court op. pp. 17, 18, 19. Having concluded, albeit inconsistently, that the phrase "against whom a deficiency has been asserted" is not ambiguous, the Court Opinion should have interpreted*68 that phrase according to its language. It did not. The Court Opinion holds that the phrase "against whom a deficiency has been asserted" requires that "A petitioner in this Court who seeks judicial review of a denial of relief must show that the Commissioner asserts that he owes more in tax than reported on his return." Court op. p. 17 (emphasis added). The Court Opinion's holding uses the present tense "asserts". In contradistinction,
*70 *29 The only thing about the phrase "against whom a deficiency has been asserted" that is beyond question is that it does not require, as the Court Opinion does, more than that "a deficiency has been asserted" at some point in time. 15 The Court Opinion is wrong to read the words "has been asserted" out of the phrase "against whom a deficiency has been asserted" and to read the word "asserts" into that phrase.
Although the Court Opinion declines to consider the*71 legislative history of the amendment of
The amendment's history shows no indication that Congress was
thinking about nondeficiency relief under subsection (f) at all.
And, whatever the merits of using legislative history to
overcome the plain language of a statute, the merits of using
the absence of legislative history to overcome the plain
language of the statute must necessarily be weaker. Reasoning
that a partial repeal of our jurisdiction would have to be in
the legislative history to be effective is, we think, a
misreckoning after Ewing I and Bartman. [Fn. ref.
omitted.]
Court op. pp. 18-19.
The Court Opinion does not explain why "Reasoning that a partial repeal of our jurisdiction would have to be in the legislative history to be effective is * * * a misreckoning after Ewing I and Bartman." Id. In any event, I disagree with that conclusion, even though I agree with the Court Opinion that*72 the legislative history of the amendment of
I turn now to the Eighth Circuit's opinion in Bartman to explain why I am not persuaded by that opinion that the Court should overrule Ewing I. As discussed above, the Court Opinion points out, Court op. p. 14 note 7, that the Eighth Circuit in Bartman interchangeably used terms such as "determination of a deficiency", "issue of a notice of deficiency", and "assessed deficiency", even though those terms are not synonymous in the Federal tax law. The Eighth Circuit in Bartman also interchangeably used those*74 terms with the phrase "a deficiency has been asserted" in
*76 Although the Eighth Circuit in Bartman interchangeably used terms that are not synonymous in the Federal tax law, after a careful reading of the Eighth Circuit's opinion in Bartman (and its opinion in Sjodin that relied on Bartman), I believe that the Eighth Circuit in Bartman (and in Sjodin) construed the language "a deficiency has been asserted" that appears in the phrase "against whom a deficiency has been asserted" to mean "a deficiency has been determined" by the *32 Commissioner in a notice of deficiency. 19*78 In reaching that conclusion, the Eighth Circuit may have been misled by the position that the Government advanced on appeal in Bartman (and in Sjodin). 20 In the briefs that the Government filed in Bartman (and in Sjodin), 21 the Government argued that the language "a deficiency has been asserted" that appears in the phrase "against whom a deficiency has been asserted" means "a deficiency has been determined" by the Commissioner. As explained above, the Commissioner "determines that there is a deficiency" in a document called a "notice of deficiency" that the Commissioner sends to the taxpayer. The legislative history of the amendment of
In apparently adopting the position advanced to it by the Government, the Eighth Circuit has not interpreted the phrase "against whom a deficiency has been asserted" that it held was "clear and unambiguous" and "plain,"
*79 I turn finally to the Ninth Circuit's opinion in Ewing II to explain why I am not persuaded by that opinion that the Court should overrule Ewing I. According to the Ninth Circuit, the language of the amendment of
With respect to the Ninth Circuit's conclusion in Ewing II that the language "against whom a deficiency has been asserted" is "plain", the Court Opinion in the instant case and the Eighth Circuit's opinions in Bartman and Sjodin belie that conclusion.
With respect to the Ninth Circuit's conclusions in Ewing II that in Ewing I the Court wrote the language "against whom a deficiency has been asserted" out of
*81 I am not persuaded by the Ninth Circuit's opinion in Ewing II, the Eighth Circuit's opinions in Bartman and Sjodin, or the Court Opinion in the instant case that the Court erred in Ewing I. Consequently, I cannot in good conscience conclude that the Court should overrule Ewing I, and I dissent.
COLVIN, COHEN, SWIFT, WELLS, GALE, and MARVEL, JJ., agree with this dissenting opinion.
VASQUEZ, J., dissenting: Respectfully, I do not believe we should reverse our decision in
We have previously considered what we should do when an issue comes before us a second time after a Court of Appeals has reversed a prior Tax Court opinion on the same point.
The*82 Tax Court, being a tribunal with national jurisdiction over
litigation involving the interpretation of Federal taxing
statutes which may come to it from all parts of the country, has
* * * [an] obligation to apply with uniformity its
interpretation of those statutes. That is the way it has always
seen its statutory duty and, with all due respect to the Courts
of Appeals, it cannot conscientiously change unless Congress or
the Supreme Court so directs. [Lawrence v. Commissioner,
*35 This case is not governed by the Golsen doctrine. See Court op. pp. 7, 16. In Ewing I, we interpreted the statute. If Congress disagrees with that interpretation, then Congress can revise the statute to provide otherwise.
I do not believe that the opinions of the U.S. Courts of Appeals for the Eighth and Ninth Circuit "change the judicial landscape". See Court op. p. 16. The reasoning and analysis of the U.S. Courts of Appeals for the Eighth and Ninth Circuit is essentially the reasoning and analysis of the dissent in Ewing I. See
Accordingly, when a Court of Appeals reverses our original decision but neither addresses any new arguments nor provides any new analysis, as is the case herein, I do not believe we should reverse our original decision. Respectfully, I dissent.
SWIFT, J., agrees with this dissenting opinion.
MARVEL, J., dissenting: Relying on what the Court's Opinion asserts is the plain meaning of prefatory language in
Congress enacted
(1) In general. -- In the case of an individual who elects to
have subsection (b) or (c) apply --
(A) In general. -- The individual may petition the Tax
Court (and the Tax Court shall have jurisdiction) to
determine the appropriate relief available to the
individual under this section * * *
In 2001, Congress amended
(1) In general. -- In the case of an individual against whom a
deficiency has been asserted and who elects to have subsection
(b) or (c) apply --
(A) In general. -- In addition to any other remedy provided
by law, the individual may petition the Tax Court (and the
Tax Court shall have jurisdiction) to determine the
appropriate relief available to the individual under this
section * * *
The Court's Opinion concludes that we do not have jurisdiction because petitioner is not an individual against whom a deficiency has been asserted. Court op. p. 17. The Court's Opinion explains that there is no deficiency because petitioner reported the additional tax liability attributable to the embezzlement income on an amended return, and an amount reported on an amended return must be treated as an amount shown by the taxpayer upon his return in calculating the amount of a deficiency under
In reaching its conclusion, the Court relies upon the opinions of the Court of Appeals for the Ninth Circuit and the Court of Appeals for the Eighth Circuit in
The language that Congress chose to add to
Before the Commissioner issues a notice of deficiency, an extensive administrative examination or "audit" often occurs. It begins when the Internal Revenue Service (the Service) selects a taxpayer (in the case of a failure to file) or a taxpayer's return for examination and notifies the taxpayer of the examination. At that point, the Service has usually taken no position regarding the possible existence of a deficiency. The Service typically will*88 take no position regarding the existence of a deficiency until the examination has been completed.
If the Service concludes that there is an understatement of tax on a taxpayer's return, it will usually issue a preliminary report, commonly referred to as the 30-day letter. The 30-day letter advises the taxpayer that the Service believes adjustments *38 are necessary to the taxpayer's return and provides the taxpayer with a listing of the adjustments and a calculation of the taxpayer's correct income tax liability. The 30-day letter will also state the amount of the understatement that the Service contends the taxpayer has made, and it will calculate the deficiency and any additions to tax or penalties for which the Service alleges the taxpayer is liable.
The 30-day letter gives the taxpayer an opportunity to dispute the Service's asserted tax deficiency administratively and to contest the proposed imposition of any addition to tax or penalty. The Commissioner usually will issue a notice of deficiency after the administrative appeal process has been completed and the case is unagreed, or after the time limit for pursuing an administrative appeal has expired without taxpayer action, or*89 if the expiration of the period of limitations for assessment is about to expire. A taxpayer who agrees to the proposed deficiency or who voluntarily files an amended return reflecting the proposed deficiency ordinarily does not receive a notice of deficiency.
With this background in mind, we must turn to the actual language of
Because
This case illustrates why recourse to the legislative history is warranted now and was warranted in Ewing I. Petitioner filed a joint return for 1999 with his wife. On that return, there is an understatement of tax attributable to the erroneous items (unreported embezzlement income) of petitioner's wife. Petitioner discovered the understatement after the joint return was filed. On the advice of counsel, *91 petitioner and his wife filed an amended return for 1999 that reported the previously unreported embezzlement income of petitioner's wife and calculated an additional income tax liability attributable to the previously unreported embezzlement income. That additional tax liability was not paid when petitioner and his wife filed the amended return, nor has it been paid to date.
Although respondent was under no legal obligation to do so, respondent processed the amended return 1 and, without issuing a notice of deficiency, assessed 2*92 the additional tax liability reported on the amended return. Subsequently, petitioner submitted a second Form 8857, Request for Innocent Spouse Relief, which respondent denied. 3 Petitioner then filed a petition in this Court seeking a review of respondent's determination. It is our jurisdiction over this petition that the Court's Opinion concludes is nonexistent.
In order to apply
In order to apply
(a) In General. -- For purposes of this title in the case of
income, estate, and gift taxes imposed by subtitles A and B and
excise taxes imposed by chapters 41, 42, 43, and 44 the term
"deficiency" means the amount by which the tax imposed by
subtitle A or B, or chapter 41, 42, 43, or 44 exceeds the excess
of --
(1) the sum of
(A) the amount shown as the tax by the
taxpayer upon his return, if a return was made by the
taxpayer and an amount was shown as the tax by the
taxpayer thereon, plus
(B) the amounts previously assessed (or collected
without assessment) as a deficiency, over --
(2) the amount of rebates as defined in subsection (b)(2),
made.
Essentially, *94 a deficiency, as defined in
In order to ascertain whether a deficiency within the meaning of
I believe that, if an analysis had been performed, it would have supported a conclusion that the references to "return" in
There is simply no statutory provision authorizing the filing of
amended tax returns, and while the IRS has, as a matter of
internal administration, recognized and accepted such returns
for limited purposes, their treatment has not been elevated
beyond a matter of internal agency discretion. [Fn. ref.
omitted.]
There are many instances in which the Federal courts have examined provisions of the Code and determined that a statutory reference to "return" is to the taxpayer's original return.*96 In
Indeed, as this Court recently has noted, Hillsboro National
the Internal Revenue Code does not explicitly provide either for
a taxpayer's filing, or for the Commissioner's acceptance, of an
amended return; instead, an amended return is a creature of
administrative origin and grace. Thus, when Congress provided
for assessment at any time in the case of a false and fraudulent
"return," it plainly included by this language a false or
fraudulent original return. In this connection, we note
that until the decision of the Tenth Circuit in Dowell v.
1873, courts consistently had held that the operation of
taxpayer's original, and not his amended, return.8
_______________
8 The significance of the original, and not the amended,
return has been stressed in other, *97 but related, contexts. It
thus has been held consistently that the filing of an amended
return in a nonfraudulent situation does not serve to extend the
period within which the Commissioner may assess a deficiency.
See, e.g.,
(1934); National Paper Products Co. v.
that the filing of an amended return does not serve to reduce
the period within which the Commissioner may assess taxes where
the original return omitted enough income to trigger the
operation of the extended limitations period provided by
limitations for filing a refund claim under the predecessor of
the amended, return. Kaltreider Construction, Inc. v. United
*42 The undisputed facts of this case establish that (1) petitioner's original return understated his and his wife's income tax liability for 1999, and (2) there was a deficiency in income tax for 1999 resulting from that understatement. Given the commonly accepted definition of the term "assert", I contend that it is also clear that (1) petitioner and his wife "asserted" the deficiency on their amended 1999 return, and (2) respondent "asserted" the same deficiency when he assessed the additional tax liability reported on petitioner's amended 1999 return. If one concludes, however, that the language of
In Ewing I, we reviewed the legislative history of the 2001 amendment to
The conference report indicates that the language "against whom
*99 a deficiency has been asserted" was inserted into section
Commissioner for relief from joint and several liability for tax
that may have been underreported on the return. Congress wanted
to prevent taxpayers from submitting premature requests to the
Commissioner for relief from potential deficiencies before the
Commissioner had asserted that additional taxes were owed.
Congress also wanted to make it clear that a taxpayer does not
have to wait until after an assessment has been made before
submitting a request to the Commissioner for relief under
.]
*43 I contend that, in Ewing I, we properly relied on the legislative history to interpret whether petitioner was "an individual against whom a deficiency has been asserted" because the language does not support a conclusion that a deficiency must actually have been determined before a taxpayer may seek relief under
*101 Because I believe we properly concluded in Ewing I that
COHEN and SWIFT, JJ., agree with this dissenting opinion.
Footnotes
1. Section references are to the Internal Revenue Code; Rule references are to the Tax Court Rules of Practice and Procedure.↩
2. There is yet another Opinion in this case --
Ewing v. Commissioner, 122 T.C. 32">122 T.C. 32↩ (2004) -- but it dealt with our power to consider evidence outside the administrative record in reviewing the Commissioner's decisions.3. David argues that it was filing the amended return that led Rosalee to be sentenced to less than a year, which qualified her for residence in a halfway house rather than imprisonment. Although filing the amended return may well be one form of accepting responsibility, we found nothing in sentencing guideline precedents that suggests it was the only or most persuasive form. We also note that the Billingses made these decisions in late 2000, long before the Supreme Court held the guidelines to be merely advisory. See
United States v. Booker, 543 U.S. 220">543 U.S. 220 , 125 S. Ct. 738">125 S. Ct. 738, 160 L. Ed. 2d 621">160 L. Ed. 2d 621↩ (2005).4.
Sec. 6015(e) (as before the 2000 amendment):SEC. 6015(e) . Petition for Review by Tax Court. --(1) In general. -- In the case of an individual who elects to
have subsection (b) or (c) apply --
(A) In general. -- The individual may petition the Tax
Court (and the Tax Court shall have jurisdiction) to
determine the appropriate relief available to the
individual under this section if such petition is filed * *
*↩
5. The Commissioner actually had asserted a deficiency against Fernandez, though our opinion in the case wasn't clear on the point. See
Ewing I, 118 T.C. at 500↩ .6. The reference to "the procedural requirement applicable to all joint filers seeking innocent spouse relief" alludes to
section 6015(f)(2) , which establishes failure to win relief undersubsections (b) and(c)↩ as a condition for relief under subsection (f).7. We construe Bartman's holding to be the sentence "We agree with the Ninth Circuit that the tax court lacks jurisdiction under
section 6015(e) unless a deficiency was asserted against the individual petitioning for review,"Bartman, 446 F.3d at 787 . Future cases may well show that Congress meant to give us jurisdiction when a deficiency was "asserted" because it wanted to allow taxpayers to petition for relief well before the IRS sends out a notice of deficiency or makes an assessment -- perhaps as soon as issuance of a revenue agent's report, or some other time during an examination, when the IRS first "states that additional taxes may be owed." H. Conf. Rept. 106-1033, 1023 (2000),3 C.B. 304">2000-3 C.B. 304 , 353 (quoted inEwing I, 118 T.C. at 504 ).The terms "determination" and "assessment" are not customarily regarded as synonyms in tax law. A "determination" is the IRS's final decision, see, e.g.,
secs. 6212(a) ,6230(a)(3)(B) . And an "assessment" is the specific procedure by which the IRS officially records a liability, seesec. 6203 , triggering its power to collect taxes administratively. (The Code generally bars the IRS from assessing taxes that are being contested in our Court. Seesec. 6213(a) .)We note too that, although notices of deficiency establish jurisdiction in most of our cases, see
Bartman, 446 F.3d at 787 , Congress has given us jurisdiction over cases in which there need be no deficiency -- for example, review of the Commissioner's determinations after IRS collection due process hearings.Sec. 6330(d)(1) . However, because there was no deficiency lurking in this case at all, we need not decide whether an "assertion of deficiency" is synonymous with a "notice of deficiency," much less an "assessment", in defining the limits of our jurisdiction undersection 6015(e) . See generallysec. 1.6015-5(b)(5), Income Tax Regs.↩ 8. Camp, "Between a Rock and a Hard Place,"
108 Tax Notes 359">108 Tax Notes 359 , 368↩ (2005).9. The taxpayer in Bartman noted in oral argument that there is a presumption against implied repeals of federal jurisdiction, citing, for example,
United States v. Lahey Clinic Hosp., Inc., 399 F.3d 1">399 F.3d 1 , 9 (1st Cir. 2005). Seehttp://www.ca8.uscourts.gov/oralargs/oaFrame.html (case no. 042771). But that presumption is an application of the more general presumption disfavoring implied repeal of one statute by another -- a presumption irrelevant here because it would amount to using oldsection 6015(e) to rewrite the amendment, and one should not use a "statute that no longer is on the books to defeat the plain language of an effective statute."Am. Bank & Trust Co. v. Dallas County, 463 U.S. 855">463 U.S. 855 , 872-873, 103 S. Ct. 3369">103 S. Ct. 3369, 77 L. Ed. 2d 1072">77 L. Ed. 2d 1072↩ (1983); see also 1A Sutherland Statutes and Statutory Construction, sec. 23:12 (6th ed.)(irreconcilable prior provision must yield to amendment).10. We stress that we are not revisiting our conclusion in Butler that relief under
section 6015(f) is not committed to the Commissioner's unreviewable discretion,Butler, 114 T.C. at 290↩ .11. See generally
5 U.S.C. sec. 703 (2000) (review in absence of special statutory proceeding);Owner-Operators Indep. Drivers Association v. Skinner, 931 F.2d 582">931 F.2d 582 , 585↩ (9th Cir. 1991) (default rule is review in federal district court under general federal question jurisdiction).1. I disagree with the lead opinion in this case in that it sets forth dicta regarding jurisdiction in situations not before the Court in this case.↩
2.
Sec. 6015(e)(1) empowers the Court to review a taxpayer's stand-alone petition challenging the Commissioner's determination as to the taxpayer's administrative claim for relief from joint liability undersec. 6015 . See generallyFernandez v. Commissioner, 114 T.C. 324">114 T.C. 324 , 329 (2000) (coining the phrase "stand-alone petition" to refer to a petition filed to invoke our jurisdiction undersec. 6015(e)(1) ).Sec. 6015(e)(1) provides in relevant part:SEC. 6015(e) .(1) In general. -- In the case of an individual against whom a
deficiency has been asserted and who elects to have subsection
(b) or (c) apply --
(A) In general. -- In addition to any other remedy provided
by law, the individual may petition the Tax Court (and the
Tax Court shall have jurisdiction) to determine the
appropriate relief available to the individual under this
section if such petition is filed * * * [timely.]↩
3. As discussed in
Ewing v. Commissioner, 118 T.C. 494">118 T.C. 494 , 515 n.1, 519 (Laro, J., dissenting) (2002), revd.439 F.3d 1009">439 F.3d 1009 (9th Cir. 2006), Congress used the term "equitable relief" to refer to the relief provided insec. 6015(f) . See also id. (discussing the other two types of relief provided insec. 6015(b) and(c) ). As also discussed, the equitable relief provided insec. 6015(f) was not available under formersec. 6013(e) , but first arose during consideration in the conference underlying the enactment ofsec. 6015 . Seeid. at 515 n.1, 519, 522-526↩ .4. Although the legislative history to a statute may sometimes override the statute's plain meaning interpretation and lead to a different result where the statute's history contains unequivocal evidence of a clear legislative intent, see
Consumer Product Safety Comm'n v. GTE Sylvania, Inc., 447 U.S. 102">447 U.S. 102 , 108, 100 S. Ct. 2051">100 S. Ct. 2051, 64 L. Ed. 2d 766">64 L. Ed. 2d 766 (1980); see alsoAllen v. Commissioner, 118 T.C. 1">118 T.C. 1 , 118 T.C. 1">118 T.C. 1, the legislative history underlyingsec. 6015(e)(1) supports the conclusions set forth in this concurring opinion. SeeEwing v. Commissioner, 118 T.C. at 522-526↩ (Laro, J., dissenting).1. See
Commissioner v. Ewing, 439 F.3d 1009">439 F.3d 1009 (9th Cir. 2006) (Ewing II ), revg.118 T.C. 494">118 T.C. 494 (2002) (Ewing I ). In light of the Ninth Circuit's holding in Ewing II, the Ninth Circuit vacatedEwing v. Commissioner, 122 T.C. 32">122 T.C. 32↩ (2004), which addressed issues unrelated to the jurisdictional issue that the Court considered in Ewing I.2. See
Bartman v. Commissioner, 446 F.3d 785">446 F.3d 785 (8th Cir. 2006) (Bartman), affg. in part and vacating in partT.C. Memo 2004-93">T.C. Memo. 2004-93 ; see alsoSjodin v. Commissioner, 174 Fed. Appx. 359">174 Fed. Appx. 359 , 97 A.F.T.R.2d (RIA) 2622">97 A.F.T.R.2d (RIA) 2622, 2006-1 U.S. Tax Cas. (CCH) P 50357">2006-1 U.S. Tax Cas. (CCH) P50357 (8th Cir. 2006) (Sjodin ), vacating and remanding per curiamT.C. Memo. 2004-205↩ .3. I refer to the "Court Opinion", and not to the "majority opinion", because a majority of the Court's Judges did not join the Opinion of the Court.↩
4. The phrase "against whom a deficiency has been asserted" was added to
sec. 6015(e)(1) , effective on Dec. 21, 2000, by the Consolidated Appropriations Act, 2001 (2001 Consolidated Appropriations Act),Pub. L. 106-554, app. G, sec. 313, 114 Stat. 2763A-641 (2000) . Essentially the same phrase was added tosec. 6015(c)(3)(B) , effective on the same date, by the 2001 Consolidated Appropriations Act. Id. After that amendment,sec. 6015(c)(3)(B) provides:(B) Time for election. -- An election under this
subsection for any taxable year may be made at any time after
a deficiency for such year is asserted but not
later than 2 years after the date on which the Secretary has
begun collection activities with respect to the individual
making the election. [Emphasis added.]↩
5. Relief is available under
sec. 6015(f) if, "taking into account all the facts and circumstances, it is inequitable to hold the individual liable for any unpaid tax or any deficiency (or any portion of either)", and relief is not otherwise available to the taxpayer undersec. 6015(b) or(c)↩ .6. In analyzing
sec. 6015(e)(1) as amended by the 2001 Consolidated Appropriations Act, the Court relied on the following rules of statutory construction:In interpreting
section 6015(e) , our purpose is to give effectto Congress's intent. * * * We begin with the statutory
language, and we interpret that language with reference to the
legislative history primarily to learn the purpose of the
statute and to resolve any ambiguity in the words contained in
the language. * * * Usually, the plain meaning of the statutory
language is conclusive. * * * If the statute is ambiguous or
silent, we may look to the statute's legislative history to
determine Congressional intent. * * * Finally, because the
changes to the relief from joint and several liability rules
"were designed to correct perceived deficiencies and inequities
in the prior version" of the rules, this curative legislation
should be construed liberally to effectuate its remedial
purpose. * * *
Ewing v. Commissioner, 118 T.C. at 503↩ .7. The Eighth Circuit followed
Bartman in Sjodin v. Commissioner, __ Fed. Appx. __, 97 AFTR 2d 2622 (8th Cir. 2006)↩ .8. In overruling Ewing I and holding that the Court does not have jurisdiction over the instant case, the Court Opinion acknowledges that "Billings's position is not a weak one." Court op. p. 7. Nonetheless, having held that the Court does not have jurisdiction over the instant case, the Court Opinion directs that an order be entered dismissing this case for lack of jurisdiction. Court op. p. 20. In doing so, perhaps the Court Opinion finds solace in its suggestion, which I consider to be an inappropriate and questionable suggestion, that "it is quite possible that the district courts will be the proper forum for review of the Commissioner's denials of relief in nondeficiency stand-alone cases." Court op. p. 20.↩
9. Perhaps the Court Opinion believes that the parties implicitly agree that the meaning attributed by the Court Opinion to the term "deficiency" in
sec. 6015 is correct because they "stipulated that * * * [petitioner] did not qualify for relief under eithersection 6015(b) or(c) because no deficiency was ever asserted against him and his wife." Court op. p. 8. Suffice it to say that the Court is not bound by any stipulation of the parties as to the law.Godlewski v. Commissioner, 90 T.C. 200">90 T.C. 200 , 203 n.5 (1988);Sivils v. Commissioner, 86 T.C. 79">86 T.C. 79 , 82↩ (1986).10. In
Badaracco v. Commissioner, 464 U.S. 386">464 U.S. 386 , 393-394, 104 S. Ct. 756">104 S. Ct. 756, 78 L. Ed. 2d 549">78 L. Ed. 2d 549 (1984), the Supreme Court of the United States stated:Indeed, as this Court recently has noted, Hillsboro National
Bank v. Commissioner, 460 U.S. 370">460 U.S. 370 , 378-380, n. 10, 103 S. Ct. 1134">103 S. Ct. 1134, 75 L. Ed. 2d 130">75 L. Ed. 2d 130 (1983),the Internal Revenue Code does not explicitly provide either for
a taxpayer's filing, or for the Commissioner's acceptance, of an
amended return; instead, an amended return is a creature of
administrative origin and grace. Thus, when Congress provided
for assessment at any time in the case of a false or fraudulent
"return," it plainly included by this language a false or
fraudulent original return. In this connection, we note
that until the decision of the Tenth Circuit in
Dowell v. Commissioner, 614 F. 2d 1263 (1980) ,cert. pending, No. 82-1873, courts consistently had
held that the operation of
section 6501 and itspredecessors turned on the nature of the taxpayer's
original, and not his amended, return.8
8 The significance of the original, and not the amended,
return has been stressed in other, but related, contexts. It
thus has been held consistently that the filing of an amended
return in a nonfraudulent situation does not serve to extend the
period within which the Commissioner may access a deficiency.
See, e.g.,
Zellerbach Paper Co. v. Helvering, 293 U.S. 172">293 U.S. 172 , 2 C.B. 341">1934-2 C.B. 341,55 S. Ct. 127, 79 L. Ed. 264 (1934);
National Paper Products Co. v. Helvering, 293 U.S. 183, 55 S. Ct. 132, 79 L. Ed. 274,
1934-2 C.B. 347 (1934);
National Refining Co. v. Commissioner, 1 B.T.A. 236">1 B.T.A. 236 (1924). It also has been held that the filing of an amended
return does not serve to reduce the period within which the
Commissioner may assess taxes where the original return omitted
enough income to trigger the operation of the extended
limitations period provided by
section 6501(e) or itspredecessors. See, e.g.,
Houston v. Commissioner, 38 T. C. 486 (1962);
Goldring v. Commissioner, 20 T. C. 79 (1953) .And the period of limitations for filing a refund
claim under the predecessor of
section 6511(a) begins to run onthe filing of the original, not the amended, return.
Kaltreider Constr., Inc. v. United States, 303 F.2d 366">303 F.2d 366 , 368(CA3), cert. denied,
371 U.S. 877">371 U.S. 877 , 83 S. Ct. 148">83 S. Ct. 148, 9 L. Ed. 2d 114">9 L. Ed. 2d 114↩ (1962).11. That there would be no "deficiency" extant after petitioner and his spouse filed their joint amended return if the definition of that term in
sec. 301.6211-1(a) , Proced. & Admin. Regs., were applicable for purposes ofsec. 6015 does not answer the question whether "a deficiency has been asserted" for purposes ofsec. 6015(e)(1) . See discussion below. Nor does it answer the question whether there is (1) a "deficiency", or an "understatement of tax", for purposes ofsec. 6015(b) or (2) a "deficiency" for purposes ofsec. 6015(c) .Sec. 6015(b)(1)(B) requires that there be an "understatement of tax" in the return in order to obtain relief undersec. 6015(b) .Sec. 6015(b)(1)(D) refers to whether it is inequitable to hold the taxpayer liable "for the deficiency in tax for such taxable year attributable to such understatement".Sec. 6015(b)(3) provides that the term "understatement" is defined bysec. 6662(d)(2)(A) .Sec. 6662(d)(2)(A) generally defines that term as the excess of "the amount of the tax required to be shown on the return" over "the amount of the tax * * * shown on the return". Nothing insec. 6015(b)↩ requires that "a deficiency has been asserted".12. The Court Opinion's ipse dixit that, for all purposes of the Code, the only meaning of the term "deficiency" is that set forth in
sec. 301.6211-1(a) , Proced. & Admin. Regs., not only ignores caselaw holding to the contrary, it also disregards that nothing insec. 6015↩ requires a "deficiency" (or "understatement of tax") to continue to exist at any time after a taxpayer files an original return.13. I disagree that "there was no deficiency lurking in this case at all". There was a "deficiency" with respect to the original return filed by petitioner and his spouse. Nothing in the Court Opinion adequately explains why that "deficiency" with respect to the original return is not the "deficiency" in the phrase "against whom a deficiency has been asserted" in
sec. 6015(e)(1) . Nor does anything in the Court Opinion adequately explain why it apparently assumes that a "deficiency" must continue to exist at the time a claim for relief undersec. 6015(b)↩ is made. See discussion above and below.14. If the Court Opinion intends by its use of the present tense "asserts" to impose a jurisdictional requirement that, at the time a petition is filed and thereafter during the pendency of the
sec. 6015 Court proceeding, the Commissioner must be asserting that the taxpayer "owes more in tax than reported on his [the taxpayer's] return", such a holding would result in the Court's not having jurisdiction over a case in which "a deficiency has been asserted" at some point in time in the administrative process and an ultimate determination has been made while the case is pending in asec. 6015 Court proceeding that there is no "deficiency". I believe that any such result would be wrong, even assuming arguendo that the Court Opinion were correct that the phrase "against whom a deficiency has been asserted" is a jurisdictional requirement.Not only does the Court Opinion's holding read out of
sec. 6015(e)(1) the words "has been asserted" in the phrase "against whom a deficiency has been asserted", it reads into that phrase the requirement that "the Commissioner" be asserting a "deficiency".Sec. 6015(e)(1) is silent, and thus ambiguous, regarding who must have asserted the "deficiency". If the Court Opinion were correct that the phrase "against whom a deficiency had been asserted" is "clear", "plain", and "not ambiguous", Court op. pp. 17, 18, 19, it would be inappropriate to consult the legislative history of the amendment ofsec. 6015(e) in order to determine who must have asserted the "deficiency". However, it would be proper to consult the dictionary definition of the word "assert". The definition of the word "assert" in Webster's Third New International Dictionary Unabridged 131 (1993) is "state or affirm positively". Thus, petitioner could have "asserted" for purposes ofsec. 6015(e)(1) a "deficiency" when he and his spouse filed their amended return and/or the Commissioner could have "asserted" a "deficiency" when the Commissioner assessed the increase in the tax shown in that amended return, which was attributable to the "deficiency" with respect to the original return. The point is thatsec. 6015(e)(1) is not plain or clear regarding who must have asserted a "deficiency". It is thus necessary to consult the legislative history of the amendment ofsec. 6015(e)↩ .15. The Court Opinion seems to recognize as much when it states:
Future cases may well show that Congress meant to give us
jurisdiction when a deficiency was "asserted" because it wanted
to allow taxpayers to petition for relief well before the IRS
sends out a notice of deficiency or makes an assessment --
perhaps as soon as issuance of a revenue agent's report, or some
other time during an examination, when the IRS first "states
that additional taxes may be owed." * * *
Court op. p. 15 note 7.↩
16. Senators Feinstein and Kyl recently introduced S. 3523, 109th Cong., 2d Sess., sec. 1 (2006), that would clarify that the Court has jurisdiction under
sec. 6015(e) to review all claims for relief undersec. 6015(f)↩ . In introducing that bill, Senator Feinstein stated: "this bill clarifies the statute's original intent". 152 Cong. Rec. S5962 (daily ed. June 15, 2006).17. To illustrate, the Eighth Circuit stated in Bartman:
The IRS did not determine a deficiency against Bartman
for tax year 1997. Bartman cites
Ewing v. Commissioner, 118 T.C. 494">118 T.C. 494 , 2002 WL 1150775">2002 WL 1150775 (2002),where the tax court found that it had jurisdiction to review a petition from a denial of a
request for
section 6015 relief, despite the fact that nonotice of deficiency had been issued. Since briefing and
oral argument in this case, however, the Ninth Circuit reversed
the tax court and held that the tax court has no jurisdiction
under
section 6015(e) to consider a petition for review whereno deficiency was determined by the IRS.
Commissioner v. Ewing, 439 F.3d 1009">439 F.3d 1009 , 1012-14 (9th Cir. 2006).We agree with the Ninth Circuit that the tax court lacks jurisdiction under
section 6015(e) unless a deficiency was asserted againstthe individual petitioning for review. The language of section
6015(e)(1) is clear and unambiguous: an individual may petitionthe tax court for review "[i]n the case of an individual
against whom a deficiency has been asserted and who
elects to have subsection (b) and (c) apply. . . ." 26 U.S.C.
section 6015(e)(1) (emphasis added). As such, we end our inquiryinto the meaning of the statute and apply its plain language.
Citicasters v. McCaskill, 89 F.3d 1350">89 F.3d 1350 , 1354-55 (8th Cir.1996);
Arkansas AFL-CIO v. FCC, 11 F.3d 1430">11 F.3d 1430 , 1440 (8thCir. 1993) (en banc). Applying the statute's plain language, we
hold that the tax court had no jurisdiction to review Bartman's
petition for review of the IRS's denial of her tax year 1997
refund request because no deficiency had been assessed
against Bartman for tax year 1997. [Emphasis added; fn. ref.
omitted.]
Bartman v. Commissioner, 446 F.3d at 787-788↩ .18. The conference report accompanying the 2001 Consolidated Appropriations Act states in pertinent part:
Timing of request for relief. -- Confusion currently
exists as to the appropriate point at which a request for
innocent spouse relief should be made by the taxpayer and
considered by the IRS. Some have read the statute to prohibit
consideration by the IRS of requests for relief until after an
assessment has been made, i.e., after the examination has been
concluded, and if challenged, judicially determined. Others have
read the statute to permit claims for relief from deficiencies
to be made upon the filing of the return before any preliminary
determination as to whether a deficiency exists or whether the
return will be examined. * * * Congress did not intend that
taxpayers be prohibited from seeking innocent spouse relief
until after an assessment has been made; Congress intended the
proper time to raise and have the IRS consider a claim to be at
the same point where a deficiency is being considered and
asserted by the IRS. This is the least disruptive for both the
taxpayer and the IRS since it allows both to focus on the
innocent spouse issue while also focusing on the items that
might cause a deficiency. * * * The bill clarifies the intended
time by permitting the election under
[section 6015] (b) and(c) to be made at any point after a deficiency has been asserted bythe IRS. A deficiency is considered to have been asserted by the
IRS at the time the IRS states that additional taxes may be
owed. Most commonly, this occurs during the Examination process.
It does not require an assessment to have been made, nor does it
require the exhaustion of administrative remedies in order for a
taxpayer to be permitted to request innocent spouse relief.
H. Conf. Rept. 106-1033, at 1022-1023 (2000),
3 C.B. 304">2000-3 C.B. 304↩ , 352- 353.19. Before the Eighth Circuit in Bartman began to use interchangeably various terms that have different meanings in the Federal tax law, see supra note 17, the Eighth Circuit stated:
Congress created the United States Tax Court "to provide
taxpayers with a means of challenging assessments made by the
Commissioner without first having to pay the alleged deficiency.
Without such a forum, taxpayers would have to pay the asserted
deficiency and then initiate a suit in federal district court
for a refund."
Samuels, Kramer & Co. v. Commissioner , 930 F.2d 975, 979 (2d Cir. 1991). As an Article I court, the tax court is
a court of "strictly limited jurisdiction."
Kelley v. Commissioner, 45 F.3d 348, 351 (9th Cir. 1995). A notice of deficiency
issued by the IRS pursuant to
section 6212 is thetaxpayer's jurisdictional "ticket to the Tax Court." Bokum v.
Bokum v. Commissioner, 992 F.2d 1136">992 F.2d 1136 , 1139 (11th Cir. 1993) (quotingStoecklin v. Commissioner, 865 F.2d 1221">865 F.2d 1221 , 1224 (11th Cir. 1989) ;Spector v. Commissioner, 790 F.2d 51">790 F.2d 51 , 52 (8th Cir.1986)(per curiam) (citing
Laing v. United States, 423 U.S. 161, 165, 96 S. Ct. 473, 46 L. Ed. 2d 416 n. 4 (1976), and
holding that "the determination of a deficiency and the issue of
a notice of deficiency is an absolute precondition to tax court
jurisdiction"). Accordingly, the IRC provides that the tax court
has jurisdiction over petitions for review from determinations
regarding the availability of
section 6015 relief only where adeficiency has been asserted against the taxpayer.
section 6015(e)(1) .Bartman v. Commissioner, 446 F.3d at 787 .I also read the Eighth Circuit's opinion in Sjodin, which relied on Bartman, as construing the language "a deficiency has been asserted" to mean "a deficiency has been determined" by the Commissioner in a notice of deficiency issued to the taxpayer. Thus, the Eighth Circuit stated in Sjodin : "This circuit has recently concluded [in Bartman] that the issuance of a deficiency by the IRS is a prerequisite for tax court jurisdiction over a petition for review from an IRS determination regarding relief available under
section 6015 ."Sjodin v. Commissioner, 174 Fed. Appx. 359">174 Fed. Appx. 359 , 97 A.F.T.R.2d (RIA) 2622">97 A.F.T.R.2d (RIA) 2622, 2006-1 U.S. Tax Cas. (CCH) P 50357">2006-1 U.S. Tax Cas. (CCH) P50357↩ (emphasis added).20. The Government took the same position on appeal of Ewing I to the Ninth Circuit.↩
21. See supra note 20.↩
22. See supra note 20.↩
23. The only reasonable alternative to my reading of the Eighth Circuit's opinion in Bartman is that, because of the Eighth Circuit's interchangeable use of various terms that are not synonymous in the Federal tax law, that Court's holding as to the meaning of the phrase "against whom a deficiency has been asserted" is ambiguous. In this connection, I note that the Court Opinion states: "We construe Bartman's holding to be the sentence 'We agree with the Ninth Circuit that the tax court lacks jurisdiction under
section 6015(e) unless a deficiency was asserted against the individual petitioning for review'". Court op. pp. 14-15 note 7 (emphasis added). That statement of the Court Opinion ignores what the Eighth Circuit stated its holding to be in Bartman. The Eighth Circuit stated: "Applying the statute's plain language, we hold that the tax court had no jurisdiction to review Bartman's petition for review of the IRS's denial of her tax year 1997 refund request because no deficiency had been assessed against Bartman for tax year 1997."Bartman v. Commissioner, supra at 788↩ (emphasis added).24. Ewing Iwas not a case where tax may or may not have been underreported in a return. Ewing I was a case where the tax due shown in the return was not paid, the Commissioner assessed such unpaid tax, and the taxpayer sought relief under
sec. 6015(f) in a stand-alonesec. 6015(f) "nondeficiency" case. SeeEwing v. Commissioner, 118 T.C. at 506↩ .1. See, e.g.,
Badaracco v. Commissioner, 464 U.S. 386">464 U.S. 386 , 104 S. Ct. 756">104 S. Ct. 756, 78 L. Ed. 2d 549">78 L. Ed. 2d 549↩ (1984).2. Assessment is a technical term in the tax field. It is generally used to describe the formal act of recording on the records of the Internal Revenue Service a tax liability that has been reported on a tax return,
sec. 6201(a)(1) , or that otherwise has become final and/or assessable,sec. 6213(b) ,(c) , and(d) . Seesec. 6203↩ .3. Petitioner filed his initial Form 8857 when he filed his amended return. However, respondent did not process that request. A copy of the initial Form 8857 is not in the record.↩
4. The Commissioner's own regulations also are consistent with the legislative history. After
sec. 6015(e) was amended in 2001, the Commissioner promulgatedsec. 1.6015-5(b)(5), Income Tax Regs. , entitled "Time and manner for requesting relief":(5) Premature requests for relief. -- The Internal
Revenue Service will not consider premature claims for relief
under
section 1.6015-2 ,1.6015-3 , or1.6015-4 . A premature claim isa claim for relief that is filed for a tax year prior to the
receipt of a notification of an audit or a letter or notice
from the IRS indicating that there may be an outstanding
liability with regard to that year. Such notices or letters do
not include notices issued pursuant to
section 6223 relating toTEFRA partnership proceedings. A premature claim is not
considered an election or request under
section 1.6015-1(h)(5) .[Emphasis added.]↩