United States Tax Court

161 T.C. No. 1

JOSEPH E. ABE, DDS, INC.,

Petitioner

v.

COMMISSIONER OF INTERNAL REVENUE,

Respondent

—————

Docket No. 20378-22R. Filed August 3, 2023.

—————

P established a retirement plan for its employees. 

R selected P’s retirement plan for audit. R issued a 

determination letter revoking the plan’s qualification. 

P petitioned the Court pursuant to I.R.C. § 7476 seeking a 

declaratory judgment. R timely filed an Answer. P moved 

to dismiss the case. R did not object to the Motion to 

Dismiss.

Held: The Court has discretion to grant motions for 

voluntary dismissal in nondeficiency cases filed pursuant 

to I.R.C. § 7476.

Held, further, the Court will dismiss the case.

—————

Daniel W. Layton, for petitioner.

Edward T. Mitte, for respondent.

Served 08/03/23
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OPINION

FOLEY, Judge: The sole issue for decision is whether the Court, 

on petitioner’s Motion, may dismiss a petition for declaratory judgment 

filed pursuant to section 7476.1

Background

Petitioner, Joseph E. Abe, DDS, Inc., is a California corporation.

Petitioner created the Joseph E. Abe, DDS, Inc., Retirement Plan (the 

plan) which became effective on July 1, 1982. On September 9, 1987, the 

Internal Revenue Service sent petitioner a favorable determination 

letter that informed petitioner that the plan met the requirements of

section 401(a). On August 7, 2019, petitioner terminated the plan, 

effective January 1, 2019.

In a letter dated November 25, 2020, respondent notified 

petitioner that the plan was selected for audit. The audit initially 

covered 2018 and 2019 but was later extended to include 2012 through 

2017. On October 27, 2021, respondent sent petitioner a Revenue Agent 

Report with the results of the audit and revoked the plan’s qualification 

relating to 2012 through 2019. In a final revocation letter dated June 

21, 2022, respondent informed petitioner that the plan did not meet the 

requirements of section 401(a).

On September 16, 2022, petitioner timely filed a Petition with the 

Court seeking a declaratory judgment pursuant to section 7476 that 

from 2012 through 2019 the plan was a qualified retirement plan. The 

Court, on November 17, 2022, filed respondent’s timely Answer. On 

January 14, 2023, petitioner moved to dismiss the Petition. Respondent 

did not object to the Motion.

Discussion

The Tax Court is a court of limited jurisdiction and may exercise 

jurisdiction only to the extent authorized by Congress. Naftel v. 

Commissioner, 85 T.C. 527, 529 (1985). The Court primarily hears cases 

involving petitions to redetermine deficiencies. See § 6213; Mainstay 

Bus. Sols. v. Commissioner, 156 T.C. 98, 99 (2021). The Court also hears 

certain nondeficiency cases, including collection actions pursuant to 

1 Unless otherwise indicated, statutory references are to the Internal Revenue 

Code, Title 26 U.S.C. (Code), in effect at all relevant times, and Rule references are to 

the Tax Court Rules of Practice and Procedure.
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sections 6320 and 6330, innocent spouse determinations pursuant to 

section 6015, whistleblower award determinations pursuant to section 

7623(b)(4), and interest abatement actions pursuant to section 6404(h). 

Mainstay, 156 T.C. at 99. In addition the Court’s jurisdiction extends to 

reviewing the Commissioner’s decisions regarding the initial or 

continuing qualification of a retirement plan. § 7476(a). 

When the Court grants a motion to dismiss, unless the dismissal 

is for lack of jurisdiction, section 7459 requires the Court to sustain the 

Commissioner’s determination set forth in the notice of deficiency.

§ 7459(d). This Court has held that taxpayers may not move to withdraw 

a petition in deficiency redetermination cases. See Estate of Ming v. 

Commissioner, 62 T.C. 519, 522–23 (1974) (holding section 7459(d) 

applies in cases filed pursuant to section 6213 and mandates an entry of 

decision in the Commissioner’s favor). 

In nondeficiency cases filed pursuant to Code sections other than 

section 6213, this Court has previously granted taxpayers’ motions to 

dismiss or withdraw petitions. See generally Stein v. Commissioner, 156 

T.C. 167 (2021) (administrative costs pursuant to section 7430(f)(2)); 

Mainstay, 156 T.C. at 100 (failure to abate interest pursuant to section 

6404(h)); Jacobson v. Commissioner, 148 T.C. 68 (2017) (whistleblower 

awards pursuant to section 7623(b)(4)); Davidson v. Commissioner, 144 

T.C. 273 (2015) (innocent spouse determinations pursuant to section 

6015(e)); Wagner v. Commissioner, 118 T.C. 330 (2002) (collection 

actions pursuant to sections 6320(c) and 6330(d)). Section 6213 was not 

applicable to these nondeficiency cases and therefore section 7459(d) did 

not mandate entry of decisions in the Commissioner’s favor upon the 

dismissals. See, e.g., Stein, 156 T.C. at 169.

Because there is no Tax Court Rule on motions for voluntary 

dismissal, the Court may look to the Federal Rules of Civil Procedure 

(FRCP). See Rule 1(b). FRCP 41 permits plaintiffs to voluntarily dismiss 

a civil action without a court order by filing either (1) a notice of 

dismissal before the opposing party serves an answer or a motion for 

summary judgment or (2) a stipulation of dismissal signed by all parties 

who have appeared. FRCP 41(a)(1)(A). In all other circumstances, a 

court may dismiss a case “at the plaintiff’s request only by court order, 

on terms that the court considers proper.” FRCP 41(a)(2). The granting 

of a motion pursuant to FRCP 41(a)(2) is without prejudice, unless the 

Court orders otherwise. Davidson, 144 T.C. at 276; Settles v. 

Commissioner, 138 T.C. 372, 375 (2012). Accordingly, a voluntary 

dismissal is generally treated as if the action had never been filed. See
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Humphreys v. United States, 272 F.2d 411, 412 (9th Cir. 1959); Wagner, 

118 T.C. at 333–34.

FRCP 41(a)(2) permits voluntary dismissal at a court’s discretion,

and the caselaw interpreting the provision provides that a court should 

grant such dismissal “unless the defendant will suffer clear legal 

prejudice.” Wagner, 118 T.C. at 333 (quoting McCants v. Ford Motor Co., 

781 F.2d 855, 856–57 (11th Cir. 1986)). In considering whether the 

nonmoving party would be prejudiced by the granting of a motion to 

voluntarily dismiss, the Court must “weigh the relevant equities and do 

justice between the parties in each case.” Id. (quoting McCants, 781 F.2d 

at 857). Where the Commissioner does not object to the granting of a 

taxpayer’s motion to dismiss, the Court has concluded that he will not 

be prejudiced. See, e.g., Stein, 156 T.C. at 170; Wagner, 118 T.C. at 331, 

333–34. The Court also considers whether the statutory period for filing 

a petition has expired and has granted motions to voluntarily dismiss 

where the period for filing had expired. E.g., Jacobson, 148 T.C. 

at 70–71; Wagner, 118 T.C. at 333–34.

Consistent with our holdings in Stein, Mainstay, Jacobson,

Davidson, and Wagner, we hold it is within the Court’s discretion to 

grant motions for voluntary dismissal in nondeficiency cases filed 

pursuant to section 7476. Respondent does not object to the granting of 

petitioner’s Motion, the statutory period for refiling a petition has 

expired, and we conclude he would not be prejudiced by the dismissal. 

Accordingly, we will grant the Motion and dismiss the case without 

prejudice. 

An order granting petitioner’s Motion to Dismiss will be entered.