T.C. Memo. 1998-396

UNITED STATES TAX COURT

MICHAEL ALAN JABLONSKI, Petitioner v.

COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 24874-97R. Filed November 10, 1998.

Michael Alan Jablonski, pro se.

David W. Sorensen, for respondent.

MEMORANDUM OPINION

POWELL, Special Trial Judge: This case is before the Court

on respondent's motion to dismiss for lack of jurisdiction. 

Petitioner filed a petition for declaratory judgment to review a

favorable determination by respondent with respect to amendments

to a retirement plan.

The facts may be summarized as follows. Petitioner was

employed by Design Analysis Associates, Inc. from September 1,

1982, until November 1, 1989. During part of his employment
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1 Unless otherwise indicated, all section references are to

the Internal Revenue Code, and all Rule references are to the Tax

Court Rules of Practice and Procedure.

petitioner participated in a retirement plan (the plan). 

Originally petitioner had the right to withdraw the entire amount

of his accrued benefits in one lump sum distribution. The plan

was amended in 1994, retroactive to 1989. The amendment, inter

alia, barred lump sum distributions. The administrators of the

plan sought a determination from respondent that the plan was

qualified under section 401.1 Petitioner opposed the amendment

and the continuing qualification of the plan. By letter dated

September 19, 1997, respondent issued a favorable determination

to the plan, as amended. Petitioner then filed a petition for

declaratory judgment with this Court under section 7476. 

Discussion

The Tax Court's jurisdiction is limited to the extent

expressly permitted by statute. See sec. 7442; Trost v.

Commissioner, 95 T.C. 560, 565 (1990). Section 7476(a)

authorizes this Court to determine the outcome of a controversy

involving the qualification or continuing qualification of a

retirement plan upon the filing of an appropriate pleading. A

petition may be filed only by an employer, the plan

administrator, or an employee who qualifies as "an interested

party". Sec. 7476(b)(1); Rule 211(c)(4)(A).
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Section 7476(b)(1) limits the persons who may file a

petition under section 7476 to, inter alia, "an employee who has

qualified under regulations prescribed by the Secretary as an

interested party". For purposes here, the definition of an

interested party is generally limited to "present employees of

the employer who are eligible to participate in the plan" and

"other present employees of the employer" who share the same

place of business. Sec. 1.7476-1(b)(1), Income Tax Regs.;

emphasis added. With regard to certain plan amendments, section

1.7476-1(b)(3), Income Tax Regs., provides:

In the case of an application for an advance determination

as to whether a plan amendment affects the continuing

qualification of a plan, if

(i) there is outstanding a favorable determination

letter for a plan year to which section 410 applies, and

(ii) the amendment does not alter the participation

provisions of the plan,

then [paragraph] (b)(1) * * * shall not apply, and all

present employees of the employer who are eligible to

participate in the plan * * * shall be interested parties. 

* * * [Emphasis added.]

The only circumstance in which a former employee qualifies as an

interested party is in the event of a plan termination. Sec.

1.7476-1(b)(5), Income Tax Regs. Petitioner concedes that this

situation does not involve a plan termination. In short, except

in the event of a plan termination, under the regulations former

employees are not interested parties for purposes of section 7476

and are not authorized to file a petition with this Court. 
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Dillon v. Commissioner, T.C. Memo. 1993-239, affd. per curiam

without published opinion 12 F.3d 1227 (8th Cir. 1994); Jones v.

Commissioner, T.C. Memo. 1980-512, affd. without published

opinion 676 F.2d 710 (9th Cir. 1982); see also Romann v.

Commissioner, 111 T.C. (1998).

It also should be noted that these are legislative

regulations issued pursuant to a specific congressional

delegation to the Secretary and, as such, are entitled to greater

deference than an interpretive regulation promulgated under the

general rulemaking power vested in the Secretary by section

7805(a). Peterson Marital Trust v. Commissioner, 102 T.C. 790,

797 (1994), affd. 78 F.3d 795 (2d Cir. 1996). We accord such

regulations the highest level of judicial deference; viz, we are

not to invalidate the regulations unless they are arbitrary,

capricious, or manifestly contrary to the statute. Chevron

U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S.

837, 843-844 (1984); see also Ahmetovic v. INS, 62 F.3d 48, 51

(2d Cir. 1995). The regulations need not be the only, or even

the best, construction of section 7476. See Atlantic Mut. Ins.

Co. v. Commissioner, 523 U.S. ___, 118 S. Ct. 1413, 1418 (1998). 

The Supreme Court has stated that a reviewing court

need not conclude that the agency construction was the only

one it permissibly could have adopted to uphold the

construction, or even the reading the court would have

reached if the question initially had arisen in a judicial

proceeding. [Chevron U.S.A., Inc. v. Natural Resources

Defense Council, Inc., supra at 843 n.11; citations

omitted.]
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Thus, to the extent that petitioner contends that the regulations

are invalid, we reject that argument.

Petitioner also asserts that during the process leading to

respondent's favorable determination the Internal Revenue Service

treated him as an interested party. Because respondent treated

him as an interested party during the administrative procedure,

petitioner did not pursue alternative resolutions to this matter. 

Petitioner contends, therefore, that respondent should be

equitably estopped from challenging his status as an interested

party. 

We do not question that petitioner may have been treated as

an interested party during the administrative proceedings. We,

however, are not bound by the actions and the determinations of

the parties. Furthermore, jurisdiction cannot be acquired by

estoppel. Jurisdiction either exists or it does not, and in this

case it does not. Dillon v. Commissioner, supra. Accordingly,

respondent's motion to dismiss is granted.

An appropriate order of dismissal 

will be entered.