United States Court of Appeals

FOR THE EIGHTH CIRCUIT

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No. 96-3024

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Arkansas Oil and Gas, Inc., *

*

Appellant, *

*

v. *

*

Commissioner of Internal Revenue, *

*

Appellee. *

__________

Appeals from the

No. 96-3025 United States Tax Court.

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Dale S. Braden, *

*

Appellant, *

*

v. *

*

Commissioner of Internal Revenue, *

*

Appellee. *
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No. 96-3026

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Arkansas Leasing Service, Inc., *

*

Appellant, *

*

v. *

*

Commissioner of Internal Revenue, *

*

Appellee. *

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Submitted: April 14, 1997

 

Filed: June 11, 1997

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Before LOKEN, JOHN R. GIBSON, and MAGILL, Circuit Judges.

___________

MAGILL, Circuit Judge.

The Commissioner of the Internal Revenue Service

(Commissioner) issued notices of federal income tax

deficiencies and penalties to Arkansas Oil & Gas, Inc.

(Arkansas Oil & Gas), Arkansas Leasing Service, Inc.

(Arkansas Leasing), and Dale S. Braden (collectively, the

taxpayers). Braden, an attorney who specializes in oil

and gas matters, is the sole stockholder of both Arkansas

Oil & Gas and Arkansas Leasing. Each of the taxpayers,

through their counsel, Stephen E. Adams, filed a timely

petition in the tax court for a redetermination of the

asserted tax deficiencies and penalties. After the

taxpayers failed to prosecute their claims and after they
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failed to appear at trial, the tax court dismissed the

taxpayers’ petitions for failure to prosecute and

sustained the Commissioner’s determinations of tax

deficiencies and penalties for each
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taxpayer. The taxpayers did not timely appeal this

dismissal, but instead filed motions with the tax court

requesting that the tax court vacate its dismissal orders

and reopen their cases. The tax court denied the

taxpayers’ motions to vacate, and the taxpayers appeal

this denial. Because the tax court lacks jurisdiction to

hear the motions brought by the taxpayers, we vacate the

tax court’s denial of the taxpayers’ motions to vacate.

I.

In December 1992, the Commissioner issued notices of

federal income tax deficiencies and penalties to each of

the taxpayers, asserting numerous tax deficiencies and

penalties for various years from 1980 through 1988. The

asserted tax deficiencies and penalties totaled more than

$1.2 million. The Commissioner sought these deficiencies

and penalties on the ground that the taxpayers had

engaged in tax evasion and fraud.

The taxpayers chose Adams, an attorney certified to

practice before the tax court, to represent them in this

matter. In response to the Commissioner’s notices, each

of the taxpayers, through Adams, filed a timely petition

in the tax court on March 29, 1993, for a redetermination

of the tax deficiencies and penalties.

According to the taxpayers, sometime between March

29, 1993, and June 1993, Adams began to suffer from

severe and debilitating psychological problems that

prevented him from prosecuting the taxpayers’

redetermination claims. During the period from June 4,

1993, the date on which the Commissioner filed answers to
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the taxpayers’ petitions, through March 21, 1994, the

date on which the taxpayers’ petitions were set for

trial, neither the taxpayers nor Adams replied to the

Commissioner’s answers to the taxpayers’ petitions.

Furthermore, neither the taxpayers nor Adams responded to numerous

motions, requests, and telephone calls made by the

Commissioner. Finally, neither the taxpayers nor Adams conducted

discovery, responded to numerous orders entered by the

tax court, or appeared at the
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March 21, 1994 trial of their cases. The taxpayers

failed to take action during this period notwithstanding

that Adams was duly notified of each of the various

motions and orders and notwithstanding that the tax court

sent several notices to Adams, warning him that failure

to appear might result in the dismissal of the taxpayers’

petitions and entry of decisions for the Commissioner.

 

Despite Adams’s alleged psychological problems during

this period, he remained a member of the bar until at

least April 19, 1996. On April 1, 1994, and April 24,

1996, Adams’s office acknowledged receipt of documents

regarding the taxpayers that had been sent by the

Commissioner via certified mail. Moreover, according to

the Commissioner, none of the correspondence sent to

Adams was ever returned.

On October 31, 1994, the tax court entered orders,

dismissing each of the taxpayers’ petitions for failure

to prosecute as well as sustaining the Commissioner’s

determinations of federal income tax deficiencies and

penalties. The tax court concluded that the taxpayers

had “clearly indicated, as shown by [their] conduct and

the overall record in this case, that [they] no longer

wishe[d] to contest any issue involved in this case.”

Arkansas Oil & Gas Mem. Op. (Oct. 11, 1994) at 7,

reprinted in Appellant’s Add. at 8; Braden Mem. Op. (Oct.

11, 1994) at 6, reprinted in Appellant’s Add. at 23; Arkansas Leasing

Mem. Op. (Oct. 11, 1994) at 6, reprinted in Appellant’s Add. at 38.

With respect to the proposed deficiencies and penalties,

the tax court held that, “[i]n light of the record taken

as a whole and reasonable inferences therefrom, we now

find that the facts in this case show, by clear and
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convincing evidence, that [the taxpayers] intended to

evade taxes known to be owing for the tax years at issue

by conduct intended to conceal, mislead, or otherwise

prevent the collection of taxes.” Arkansas Oil & Gas

Mem. Op. at 14, reprinted in Appellant’s Add. at 15; Braden Mem. Op.

at 29, reprinted in Appellant’s Add. at 8; Arkansas Leasing Mem. Op.

at 13, reprinted in Appellant’s Add. at 45. Notices of the October

31, 1994 orders were sent to Adams.
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Although Braden “stayed in contact with Mr. Adams on

a[n] as needed basis,” Dale S. Braden Aff. (Feb. 29,

1996) at 1, reprinted in Arkansas Oil & Gas App. at 249C,

the taxpayers allege that Adams never advised the

taxpayers of his psychological problems and that the

taxpayers did not immediately learn of Adams’s inability

and complete failure to prosecute their claims. Indeed,

according to Braden, the taxpayers “first had knowledge

of a problem when [Braden] began receiving notices of

Internal Revenue Service assessments.” Id. at 2,

reprinted in Arkansas Oil & Gas’s App. at 249D. The

first such notice that Braden received was dated March

29, 1995, nearly two years after the onset of Adams’s

alleged psychological problems. Id. Thus, by the time

Braden received the March 29, 1995 notice of assessment

from the Commissioner, the tax court had already entered

its October 31, 1994 judgment against the taxpayers.

Nearly one year after Braden received the March 29,

1995 notice of assessment from the IRS, each of the

taxpayers filed a motion to vacate the tax court’s

adverse judgment as well as a motion to reopen each of

their respective cases. Braden and Arkansas Oil & Gas

filed their motions to vacate and reopen on March 19,

1996. Arkansas Leasing filed its motions on March 22,

1996.

In support of their motions to vacate, the taxpayers

claimed that the Commissioner and the tax court violated the

taxpayers’ due process rights by failing to inform them

of Adams’s “constructive disappearance.” See Arkansas

Oil & Gas Mot. to Vacate (Mar. 19, 1996) at ¶ 2,

reprinted in Arkansas Oil & Gas App. at 234; Braden Mot.

to Vacate (Mar. 19, 1996) at ¶ 2, reprinted in Braden
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App. at 242; Arkansas Leasing Mot. to Vacate (Mar. 22,

1996) at ¶ 2, reprinted in Arkansas Leasing App. at 174.

The taxpayers also claimed that the Commissioner should

have notified them directly of its adverse decision after

it became “obvious that counsel was not properly

representing” the taxpayers. Arkansas Oil & Gas Mot. to

Vacate at ¶ 3, reprinted in Arkansas Oil & Gas App. at

234; Braden Mot. to Vacate at ¶ 3, reprinted in Braden

App. at 242; Arkansas Leasing Mot. to Vacate at ¶ 3,

reprinted in Arkansas Leasing App. at 174. However, the

taxpayers neither claimed nor presented any
The taxpayers appeal only from the tax court’s May 16, 1996 orders. They do 1

not appeal from the tax court’s original October 31, 1994 orders, dismissing their

claims and sustaining the Commissioner’s determinations of tax deficiencies and

penalties.

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evidence that, prior to the taxpayers’ filing of their

motions to vacate, either the Commissioner or the tax

court had actual knowledge that Adams was allegedly

incapable of prosecuting the taxpayers’ redetermination

claims or that Adams no longer represented the taxpayers.

On May 16, 1996, the tax court entered an order

denying each of the taxpayers’ motions to vacate. The

taxpayers appeal these orders.1

II.

We must first consider whether the tax court had

jurisdiction to hear the taxpayers’ motions to vacate as

well as to hear their motions to reopen the taxpayers’

redetermination claims. We conclude that the tax court

did not have jurisdiction to hear the taxpayers’ motions.

We review de novo the issue of whether a tax court

has jurisdiction to hear a motion. See Nordvik v.

Commissioner, 67 F.3d 1489, 1491 (9th Cir. 1995), cert.

denied, 116 S. Ct. 1682 (1996); Harbold v. Commissioner,

51 F.3d 618, 621 (6th Cir. 1995). Absent extraordinary

circumstances, the tax court lacks jurisdiction to revise

or modify its decisions that have become final. See

Webbe v. Commissioner, 902 F.2d 688, 688 (8th Cir. 1990)

(“In this case we consider the extent of the power of the

United States Tax Court to revise or modify decisions
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that have become final. We conclude that there is no

such power, at least in the absence of extraordinary

circumstances not present here.”); accord Nordvik, 67

F.3d at 1491 (“Once [its] decision becomes final, a tax

court generally lacks jurisdiction to consider a motion

to vacate or revise.”); see also Harbold, 51 F.3d at 621

(“[O]nce a decision of the Tax
The exceptions to this rule are limited to certain cases involving: (1) disputes

2

involving less than $10,000, see I.R.C. §§ 7481(b), 7463 (1994); (2) interest

determinations, see I.R.C. § 7481(c) (1994); or (3) estate taxes, see I.R.C. § 7481(d)

(1994). None of these exceptions is implicated here.

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Court becomes final, the Tax Court no longer has

jurisdiction to consider a motion to vacate its

decision.”).

Except in certain situations not relevant to this

appeal, decisions of the tax court become final “[u]pon

the expiration of the time allowed for filing a notice of

appeal, if no such notice has been duly filed within such

time . . . .” I.R.C. § 7481(a)(1) (1994). The time

2

allowed for filing such notice of appeal is “within 90

days after the decision of the Tax Court is entered.”

I.R.C. § 7483 (1994). However, “[i]f a timely notice of

appeal is filed by one party, any other party may take an

appeal by filing a notice of appeal within 120 days after

the decision of the Tax Court is entered.” Id.

It is undisputed that none of the parties to this

litigation filed a notice of appeal within 90 days of the

tax court’s October 31, 1994 orders. Accordingly, the

tax court’s October 31, 1994 orders were final long

before the taxpayers filed their March 1996 motions to

vacate those orders and to reopen their redetermination

claims. As a result, absent extraordinary circumstances,

the tax court did not have jurisdiction to hear the

taxpayers’ motions.

The taxpayers argue that extraordinary circumstances

exist in this case. Specifically, the taxpayers argue

that the Commissioner and the tax court violated the
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taxpayers’ due process rights. According to the

taxpayers, prior to the expiration of the 90-day period

following the entry of the tax court’s judgment against

each of the taxpayers, the Commissioner and the tax court

knew or should have known that Adams was not prosecuting

the taxpayers’ redetermination claims. The taxpayers

therefore argue that: (1) the Commissioner violated the

taxpayers' due process rights by failing to notify the

taxpayers that Adams, the attorney selected by the

taxpayers to represent
The taxpayers have not sought monetary damages from Adams at least in part 3

because “[i]t appears [Adams’s malpractice] insurance coverage may have been

exhausted.” Appellants’ Reply Br. at 14.

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them, was not prosecuting their redetermination claims,

and (2) the Commissioner and the tax court violated the

taxpayers’ due process rights by failing to notify the

taxpayers directly of the judgment entered against them.

We find the taxpayers’ attempt to shift

responsibility to the Commissioner and the tax court for

Adams’s so-called constructive disappearance to be

disingenuous. First, the taxpayers voluntarily chose

3

Adams to prosecute their claims, and they should not now

be heard to complain of his acts or omissions. Cf. Heim

v. Commissioner, 872 F.2d 245, 248 (8th Cir. 1989) (“We

therefore conclude that any errors committed by Jukkala,

[the taxpayers’ attorney,] even accepting the designation

of gross negligence, do not constitute an adequate

showing of ‘exceptional circumstances,’ warranting

vacation of the tax court decision. The [taxpayers]

voluntarily chose Jukkala to represent them, and they

cannot now avoid his acts or omissions in the

proceeding.”). Moreover, we find it nearly absurd that

the taxpayers now seek to blame the Commissioner and the

tax court for the fact that it took the taxpayers almost

two years to realize that Adams had failed to prosecute

their redetermination claims. The taxpayers make this

argument notwithstanding that Braden “stayed in contact

with Mr. Adams on a[n] as needed basis,” Braden Aff. at
We also note that, consistent with the general tenor of this litigation, it took the 4

taxpayers nearly a full year to file their motions to vacate. Braden must have received

the Commissioner’s March 29, 1995 notice of assessment sometime in April 1995, yet

the taxpayers did not file their motions to vacate until March 1996. Notwithstanding

this delay, the taxpayers offer no evidence in the record that would support an

explanation for why it took them so long to file their motions to vacate.

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1, reprinted in Arkansas Oil & Gas App. at 249C, and

notwithstanding that Braden, himself, is an attorney.4
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Furthermore, in urging that the Commissioner should

have informed the taxpayers that Adams was not properly

representing them, the taxpayers essentially claim that

they were denied their right to effective assistance of

counsel. Cf. Heim, 872 F.2d at 247 (concluding that “the

[taxpayers’] argument here is essentially directed toward

the adequacy of the representation that they received”

where taxpayers argued that the tax court’s denial of

their motions for leave to file a motion to vacate should

be reversed because their attorney was grossly

negligent). However, the taxpayers did not have a right

to effective assistance of counsel in these proceedings.

See Keene Corp. v. Cass, 908 F.2d 293, 297 n.3 (8th Cir.

1990) (“[T]here is no constitutional right to effective

assistance of counsel in a civil case.” (citing Glick v.

Henderson, 855 F.2d 536, 541 (8th Cir. 1988); Allen v.

Barnes Hosp., 721 F.2d 643, 644 (8th Cir. 1983))). As a

result, the Commissioner could not have violated, and

therefore did not violate, the taxpayers’ right to

effective assistance of counsel. 

Finally, for purposes of the jurisdictional issue

presented here and based on the facts of this case, it

was not an extraordinary circumstance that the

Commissioner and the tax court notified only Adams of the

judgment entered against the taxpayers. As a general

rule, in civil proceedings, "clients must be held

accountable for the acts and omissions of their

attorneys.” Pioneer Inv. Servs. Co. v. Brunswick Assocs.

Ltd. Partnership, 507 U.S. 380, 396 (1993); cf. United

States v. Boyle, 469 U.S. 241, 249-50 (1985) (With

respect to the filing of federal estate tax returns,

“Congress has placed the burden of prompt filing on the
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executor, not on some agent or employee of the executor.

The duty is fixed and clear; Congress intended to place

upon the taxpayer an obligation to ascertain the

statutory deadline and then to meet that deadline, except

in a very narrow range of situations. . . . That the

attorney, as the executor’s agent, was expected to attend

to the matter does not relieve the principal of his duty

to comply with the statute.”). The Court has explained

that, under “our system of representative litigation, .

. . each party is deemed bound by the acts of his lawyeragent and is considered to have notice of all facts,

notice of which can be charged upon the attorney.”

Pioneer Inv. Servs., 507 U.S. at 397 (quotations and

citations omitted).
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In the present action, the taxpayers do not claim,

nor is there any evidence in the record, that Adams

received inadequate notice of the judgment entered

against the taxpayers. Moreover, there is no evidence

that either the Commissioner or the tax court had actual

knowledge of Adams’s alleged inability to prosecute the

taxpayers’ petitions. As a result, when Adams received

notice of the judgment entered against the taxpayers, the

taxpayers were “considered to have notice of” the

judgment entered against them because notice of the

judgment “can be charged upon the[ir] attorney.” Id.

(quotations and citations omitted). Thus, in the present

action, no extraordinary circumstances exist that would

give the tax court jurisdiction to hear the taxpayers’

motions.

Because the tax court did not have jurisdiction to

hear the taxpayers’ motions, it could not have granted

those motions. Accordingly, we vacate the tax court’s

orders denying the taxpayers’ motions to vacate. Thus,

we leave undisturbed the tax court’s October 31, 1994

orders dismissing the taxpayers’ petitions and sustaining

the Commissioner’s asserted tax deficiencies and

penalties.

A true copy.

Attest:

CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.