T.C. Memo. 2002-206

UNITED STATES TAX COURT

MICHAEL R. OLSEN AND SHEILA OLSEN, Petitioners v.

COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 4950-02. Filed August 16, 2002.

Michael R. Olsen and Sheila Olsen, pro sese.

Christian A. Speck and William A. Heard III, for 

respondent.

MEMORANDUM OPINION

ARMEN, Special Trial Judge: This matter is before the Court

on respondent’s Motion to Dismiss for Lack of Jurisdiction. 

Respondent contends that this case should be dismissed on the

ground that the petition was not timely filed pursuant to section
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1 Unless otherwise indicated, all section references are to

the Internal Revenue Code, as amended, and all Rule references

are to the Tax Court Rules of Practice and Procedure.

6213(a) or section 7502.1 As discussed in detail below, we shall

grant respondent’s motion to dismiss.

Background

On February 28, 2001, petitioners commenced an action (the

refund action) in the U.S. District Court for the Eastern

District of California seeking tax refunds for 1997 and 1998. 

Although the record in this case does not include a complete copy

of petitioners’ complaint, it appears that the refund action was

brought on the theory that petitioners were entitled to a credit

carryforward that would result in overpayments for 1997 and 1998. 

On May 1, 2001, respondent sent petitioners a notice of

deficiency. In the notice, respondent determined deficiencies in

petitioners’ Federal income taxes for 1997 and 1998 in the

amounts of $1,138 and $889, respectively. The deficiencies were

attributable to respondent’s disallowance of medical expenses and

Schedule C deductions claimed by petitioners on their 1997 and

1998 income tax returns and respondent’s determination that

petitioners failed to report a State tax refund on their 1998

return. The notice advised petitioners how they could contest

respondent’s deficiency determinations by filing a petition for

redetermination with this Court. In that regard, the notice

further advised petitioners that “Last Day to File a Petition
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With the United States Tax Court: JUL 30 2001".

On or about June 13, 2001, the United States moved to

dismiss petitioners’ refund action for lack of jurisdiction. On

June 22, 2001, an Order and Findings and Recommendation was filed

by a United States magistrate judge recommending that

petitioners’ refund action be dismissed for lack of jurisdiction. 

The Order and Findings and Recommendation concluded that the

District Court lacked jurisdiction on the ground that petitioners

could not be deemed to have paid the taxes that were the subject

of their refund claim inasmuch as “approval of a credit from

overpayment by the Internal Revenue Service is a prerequisite to

filing suit for a refund under section 7422". See 26 U.S.C. sec.

7422(d) (1994). On January 31, 2002, the District Court filed an

Order dismissing petitioners’ refund action for lack of

jurisdiction based on the prior Order and Findings and

Recommendation of the magistrate judge.

On February 28, 2002, petitioners filed a petition for

redetermination with this Court contesting the notice of

deficiency dated May 1, 2001. The envelope in which the petition

was mailed to the Court bears a U.S. Postal Service postmark date

of February 12, 2002, and postmark place of Sacramento,

California. 

As indicated, respondent filed a motion to dismiss for lack

of jurisdiction on the ground that the petition was not timely
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filed. Petitioners filed an objection to respondent’s motion to

dismiss asserting that their petition was timely filed following

the District Court’s dismissal of their refund action. 

Petitioners argue that they will not have any remedy if this

Court dismisses their case. Respondent filed a reply to

petitioners’ objection.

This matter was called for hearing at the Court’s motions

session in Washington, D.C. Counsel for respondent appeared at

the hearing and offered argument in support of respondent’s

motion to dismiss. There was no appearance by or on behalf of

petitioners at the hearing, nor did petitioners file a statement

pursuant to Rule 50(c), the provisions of which were explained in

the Court’s Order calendaring respondent’s motion for hearing.

Discussion

The Tax Court is a court of limited jurisdiction, and we may

exercise our jurisdiction only to the extent authorized by

Congress. Naftel v. Commissioner, 85 T.C. 527, 529 (1985). This

Court's jurisdiction to redetermine a deficiency depends on the

issuance of a valid notice of deficiency and a timely filed

petition. Rule 13(a), (c); Monge v. Commissioner, 93 T.C. 22, 27

(1989); Normac, Inc. v. Commissioner, 90 T.C. 142, 147 (1988). 

Section 6212(a) expressly authorizes the Commissioner, after

determining a deficiency, to send a notice of deficiency to the

taxpayer by certified or registered mail. The taxpayer, in turn,
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has 90 days (or 150 days if the notice is addressed to a person

outside of the United States) from the date the notice of

deficiency is mailed to file a petition in this Court for a

redetermination of the deficiency. Sec. 6213(a). Pursuant to

section 7502(a), a timely mailed petition will be treated as

though it were timely filed. 

There is no dispute in this case that respondent mailed the

notice of deficiency for 1997 and 1998 to petitioners on May 1,

2001. However, the petition in this case was not filed with the

Court until February 28, 2002-–10 months after the mailing of the

notice of deficiency. Moreover, the envelope in which the

petition was mailed to the Court bears a U.S. Postal Service

postmark date of February 12, 2002. Under these circumstances,

it follows that the petition was not filed within the 90-day

period prescribed by section 6213(a).

Petitioners nonetheless contend that the petition should be

considered timely filed on the theory that the period for filing

a petition with this Court was tolled during the pendency of

their refund action in the District Court. We disagree.

Simply put, there is no provision in the Internal Revenue

Code that serves to toll the statutory period for filing a

petition with this Court during the pendency of a refund action

in a U.S. District Court or the Court of Federal Claims. To the

contrary, section 7422(e), which establishes the procedures to be
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followed where the Commissioner issues a notice of deficiency to

a taxpayer who has a pending refund action, provides for the stay

of the refund action and, where appropriate, the shifting of

jurisdiction to the Tax Court. 

Section 7422(e) provides in pertinent part as follows:

SEC. 7422(e). Stay Of Proceedings.–-If the

Secretary prior to the hearing of a suit brought by a

taxpayer in a district court or the United States

Claims Court for the recovery of any income tax, estate

tax, gift tax, or tax imposed by chapter 41, 42, 43, or

44 (or any penalty relating to such taxes) mails to the

taxpayer a notice that a deficiency has been determined

in respect of the tax which is the subject matter of

taxpayer’s suit, the proceedings in taxpayer’s suit

shall be stayed during the period of time in which the

taxpayer may file a petition with the Tax Court for a

redetermination of the asserted deficiency, and for 60

days thereafter. If the taxpayer files a petition with

the Tax Court, the district court or the United States

Claims Court, as the case may be, shall lose

jurisdiction of taxpayer’s suit to whatever extent

jurisdiction is acquired by the Tax Court of the

subject matter of taxpayer’s suit for refund. If the

taxpayer does not file a petition with the Tax Court

for a redetermination of the asserted deficiency, the

United States may counterclaim in the taxpayer’s suit,

or intervene in the event of a suit as described in

subsection (c) (relating to suits against officers or

employees of the United States), within the period of

the stay of proceedings notwithstanding that the time

for such pleading may have otherwise expired. * * * 

Section 7422(e) does not provide for the tolling of the

normal 90-day period during which a petition for redetermination

is required to be filed with this Court under section 6213(a). 

Cf. sec. 6213(f)(1). The plain language of section 7422(e)

indicates that, if the Commissioner issues a notice of deficiency

to a taxpayer who has a pending refund action, the taxpayer must
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invoke the jurisdiction of the Tax Court, if at all, by filing a

petition for redetermination within the statutorily prescribed

filing period. If the taxpayer files a timely petition with the

Tax Court, the court with jurisdiction of the refund action

“shall lose jurisdiction of taxpayer’s suit to whatever extent

jurisdiction is acquired by the Tax Court of the subject matter

of taxpayer’s suit for refund.” Sec. 7422(e); see sec. 6512(a) 

(prohibiting taxpayers from bringing suits for refund while

simultaneously litigating the same taxable year in the Tax

Court); see also sec. 6512(b)(1) (conferring jurisdiction on the

Tax Court to determine overpayments in respect of a taxable year

for which an action for redetermination has been commenced).

Because there is no provision for the tolling of the

statutory period for filing a petition for redetermination with

this Court under the circumstances presented in the present case,

we shall grant respondent’s motion to dismiss.

As a final matter, we observe that petitioners are not

without a remedy. Although petitioners cannot pursue their case

in this Court, they can still pay the taxes in question, file a

claim for a refund with the Internal Revenue Service and, if the

claim is denied, sue for a refund in the Federal District Court

or the U.S. Court of Federal Claims. See McCormick v.

Commissioner, 55 T.C. 138, 142 (1970). 
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To reflect the foregoing,

An Order will be entered

granting respondent’s Motion to 

Dismiss for Lack of Jurisdiction.