T.C. Memo. 2000-246

UNITED STATES TAX COURT

EUGENE W. ALPERN, Petitioner v.

COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 20304-98. Filed August 8, 2000. 

 

Eugene W. Alpern, pro se.

Gregory J. Stull, for respondent.

MEMORANDUM OPINION

GOLDBERG, Special Trial Judge: Respondent determined a

deficiency in petitioner’s Federal income tax of $2,139 for the

taxable year 1996. Unless otherwise indicated, section

references are to the Internal Revenue Code in effect for the

year in issue, and all Rule references are to the Tax Court Rules

of Practice and Procedure.
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1 Respondent concedes that petitioner correctly excluded

his Social Security benefits from gross income in 1996.

2 The Judgment for Dissolution of Marriage incorporated

by reference a related Memorandum Order which the circuit court

(continued...)

After a concession by respondent,1 the issues for

determination are: (1) Whether the Tax Court lacks jurisdiction

in this case because of an automatic stay pursuant to 11 U.S.C.

section 362(a)(8) (1994); (2) whether petitioner must include

individual retirement account (IRA) distributions of $6,905 in

gross income for the 1996 taxable year; and (3) petitioner’s

correct filing status for the 1996 taxable year. The

stipulations of fact, the supplemental stipulations of fact, and

the attached exhibits are incorporated herein by this reference. 

At the time the petition was filed, petitioner resided in Morton

Grove, Illinois.

Petitioner has degrees in pharmacy and chemistry from the

University of Michigan. Petitioner has worked in the chemistry,

pharmaceutical, and computer consulting fields.

Petitioner married Phyllis Alpern in 1960 and has three sons

from the marriage. Phyllis Alpern ceased living with petitioner

on October 3, 1989, and they were divorced on August 10, 1992,

pursuant to a Judgment for Dissolution of Marriage of the Circuit

Court of Cook County, Illinois, County Department, Domestic

Relations Division (circuit court).2 Petitioner disputes the
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2(...continued)

had previously entered in the case on May 29, 1992.

3 Fidelity reported two separate IRA distributions for

the 1996 taxable year to the Internal Revenue Service on Forms

1099-R, Statements for Recipients of Distributions From Pensions,

Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance

Contracts, etc., in the amounts of $1,205 and $11,700.

validity of the divorce judgment and contends that he is still

married to Phyllis Alpern. 

On April 8, 1993, petitioner filed a voluntary petition in

bankruptcy under chapter 7 of the U.S. Bankruptcy Code in the

U.S. Bankruptcy Court for the Northern District of Illinois,

Eastern Division (bankruptcy court), case No. 93-B-07643. The

bankruptcy court entered an order discharging the debtor in this

case on September 28, 1993. By order dated October 12, 1993, the

bankruptcy court granted petitioner’s motion to convert the case

to a chapter 11 proceeding under the Bankruptcy Code. An order

of Discharge of Debtor under the chapter 11 proceeding was

entered on July 18, 1994, by the bankruptcy court. 

In 1996, petitioner received IRA distributions of $12,905.89

from Fidelity Service Co. (Fidelity).3 Though petitioner

reported total IRA distributions of $12,905.89 on line 15a of his

1996 Federal income tax return, he reported only $6,000 as the

taxable amount of his IRA distributions for 1996 on line 15b of

his return. In addition, petitioner did not attach a Form 8606,

Nondeductible IRAs (Contributions, Distributions, and Basis), to
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his 1996 Federal income tax return, a form which is required for

reporting the receipt of IRA distributions.

In a notice of deficiency, respondent determined that all

the IRA distributions from Fidelity for the 1996 taxable year

were includable in gross income and therefore included an

additional $6,905 of 1996 IRA distributions from Fidelity in

petitioner’s 1996 gross income.

Tax Court Jurisdiction

First, petitioner contends that the order of Discharge of

Debtor which was entered in case No. 93-B-7643 on July 18, 1994,

is void ab initio because of fraud on the part of the bankruptcy

court. Therefore he asserts that the bankruptcy petition is

still pending and that the provisions of 11 U.S.C. section

362(a)(8) are applicable. Petitioner specifically alleges that

the judge in the bankruptcy proceedings received a bribe of at

least $6,700. Petitioner contends that any order issued by the

judge in case No. 93-B-7643 is therefore void for fraud.

This Court is a court of limited jurisdiction and may

exercise its jurisdiction only to the extent authorized by

Congress. See sec. 7442; Commissioner v. Gooch Milling &

Elevator Co., 320 U.S. 418, 420, 422 (1943); Naftel v.

Commissioner, 85 T.C. 527, 529 (1985). This includes Federal

income, estate, and gift taxes which are subject to the

deficiency notice requirements of sections 6212(a) and 6213(a). 
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Because this Court is a court of limited jurisdiction,

petitioner’s fraud argument is misplaced. The Court lacks

jurisdiction to review or set aside the order of discharge

entered by the bankruptcy court. Therefore, petitioner’s

contention that the bankruptcy discharge is void because of fraud

on the court is not proper subject matter for our decision. 

We accordingly reject petitioner’s contention that the

property of the estate is still under the consideration of the

bankruptcy court and the order of Discharge of Debtor, dated July

18, 1994, has no force and effect. According to petitioner’s

contentions, the automatic stay of Tax Court proceedings under 11

U.S.C. section 362(a)(8) was still in effect when he filed the

Tax Court petition, his petition is premature, and the Tax Court

lacks jurisdiction to determine petitioner’s tax liability for

the year in issue. 

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,

generally has 90 days from the date the notice of deficiency is

mailed to file a petition in this Court for a redetermination of

the deficiency. See sec. 6213(a).

An exception to the normal 90-day filing period arises where

the taxpayer has filed a petition for relief under the Bankruptcy
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Code. In particular, 11 U.S.C. section 362(a)(8) provides in

pertinent part: 

(a) Except as provided in subsection (b) of this

section, a petition filed under section 301, 302, or

303 of this title, * * * operates as a stay, applicable

to all entities, of–-

* * * * * * * 

(8) the commencement or continuation of a proceeding

before the United States Tax Court concerning the

debtor.

In short, the filing of a bankruptcy petition invokes the

automatic stay that precludes the commencement or continuation of

proceedings in this Court. See Allison v. Commissioner, 97 T.C.

544, 545 (1991). 

The period that the automatic stay remains in effect is

prescribed in 11 U.S.C. section 362(c) (1994) as follows:

(c) Except as provided in subsections (d), (e), and (f) of

this section--

(1) the stay of an act against property of the estate 

under subsection (a) of this section continues until such

property is no longer property of the estate; and

(2) the stay of any other act under subsection (a) of 

this section continues until the earliest of--

(A) the time the case is closed;

(B) the time the case is dismissed; or

(C) if the case is a case under chapter 7 of this title 

concerning an individual or a case under chapter 9, 11, 12, 

or 13 of this title, the time a discharge is granted or 

denied.

While we do not have subject matter jurisdiction to

determine whether a tax deficiency has been discharged in a
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bankruptcy proceeding, it is clear that we do have jurisdiction

to determine whether we lack jurisdiction because of the

continuance of an automatic stay. See Moody v. Commissioner, 95

T.C. 655, 658 (1990). If the stay pursuant to 11 U.S.C. section

362(a)(8) had been in effect on December 22, 1998, the date on

which petitioner filed a petition, the Tax Court would not have

jurisdiction. The record, however, reflects that the order of

Discharge of Debtor was entered by the bankruptcy court on July

18, 1994, and terminated the stay pursuant to 11 U.S.C. section

362(c)(2)(C).

Petitioner’s contention that the automatic stay continues

until the property is no longer property of the bankruptcy

estate, at which time the bankruptcy proceeding is completely

closed, is based on 11 U.S.C. section 362(c)(1). However, the

proceedings before us fall under 11 U.S.C. section 362(c)(2)(C),

wherein the stay of “any other act” is lifted upon order of

discharge in a chapter 11 bankruptcy proceeding. The proceeding

before us is not an act against the property of the bankruptcy

estate per 11 U.S.C. section 362(c)(1). See Bigelow v.

Commissioner, 65 F.3d 127, 128 (9th Cir. 1995).

We therefore find that the automatic stay ended with the

entry of the July 18, 1994, order of Discharge of Debtor. Since

petitioner filed his petition with this Court on December 22,
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4 Though petitioner failed to include $6,905.89 of IRA

distributions in gross income on his 1996 Federal income tax

return, respondent determined in the notice of deficiency that

the correct amount includable in gross income for the 1996

taxable year was $6,905. 

1998, we hold that we have jurisdiction to adjudicate

petitioner’s Federal tax liability for the year in issue. 

Individual Retirement Account

Respondent determined that petitioner received taxable

distributions from his IRA during the year in issue of $12,905.89

and that petitioner failed to include $6,9054 of that amount in

gross income for the 1996 taxable year.

Petitioner contends that he is entitled to exclude from

gross income $6,905.89 of the IRA distribution on the grounds

that he had a basis in the IRA contributions. 

Section 408(d)(1) provides generally that “any amount paid

or distributed out of an individual retirement plan shall be

included in gross income by the payee or distributee, as the case

may be, in the manner provided under section 72.” The term

“individual retirement plan” includes an IRA. Sec.

7701(a)(37)(A).

For this purpose, all IRA’s are treated as one contract, all

distributions during any taxable year are treated as one

distribution, and the value of the contract, the income on the

contract, and the investment in the contract are computed as of
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the close of the calendar year in which the taxable year begins. 

See sec. 408(d)(2).

Generally, a taxpayer is allowed a basis in IRA

contributions to the extent the contributions are considered an

“investment in the contract”. Secs. 408(d)(2), 72. Section

72(e)(6) defines generally “investment in the contract” as being

the consideration paid for the contract less amounts previously

received under the contract that are excludable from gross

income. Thus, nondeductible contributions a taxpayer has made to

a retirement plan may be excluded from gross income when such

distributions are made. See Campbell v. Commissioner, 108 T.C.

54 (1997). In addition, Form 8606 must be attached to the return

for reporting the receipt of IRA distributions if the taxpayer

made any nondeductible IRA contributions before or during the

taxable year.

The derivation and computation of the amounts reported on

the Forms 1099-R by Fidelity are not in dispute. The only

question is whether these amounts are includable in petitioner's

gross income.

At trial, petitioner testified that he did not remember how

he calculated the excluded portion of his IRA or whether any

portion of the IRA distributions was from nondeductible IRA

contributions. In addition, petitioner failed to produce any tax
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records which would have established nondeductible IRA

contributions during, or before, the 1996 taxable year.

In sum, the record is devoid of any evidence regarding

petitioner’s alleged nondeductible IRA contributions except for

petitioner's brief self-serving testimony. We are not required

to accept a taxpayer's self-serving, unverified, and undocumented

testimony, and we decline to do so here. See Tokarski v.

Commissioner, 87 T.C. 74, 77 (1986).

Petitioner failed to establish that he was entitled to

exclude the $6,905 portion of his IRA distributions for 1996 from

gross income for the taxable year in issue. Respondent is

sustained on this issue.

Filing Status

Petitioner contends that his correct filing status for the

1996 taxable year is married, filing separately. Respondent

contends that petitioner’s correct filing status for 1996 is

single because petitioner and his wife were divorced on August

10, 1992, as evidenced by the Judgment for Dissolution of

Marriage, and petitioner was unmarried during the year in issue.

As with the bankruptcy order discussed above, petitioner

contends that the divorce judgment of the circuit court was

obtained by fraud and is also void ab initio. Petitioner claims

that the fraud perpetrated in the circuit court included the
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failure of Phyllis Alpern to file a valid petition in the divorce

proceeding. 

As stated above, this Court is a court of limited

jurisdiction. Petitioner seeks a remedy, to set aside the

Judgment for Dissolution of Marriage, which cannot be properly

addressed in this forum. Particularly in the area of family law,

we must rely on the premise that “‘the whole subject of the

domestic relations of husband and wife, parent and child, belongs

to the laws of the states and not to the laws of the United

States’”. Ohio ex rel. Popovici v. Agler, 280 U.S. 379, 383

(1930) (quoting Ex parte Burrus, 136 U.S. 586, 594 (1890)). 

Therefore, we have long recognized that marital status for tax

purposes generally is governed by local law. See Lee v.

Commissioner, 64 T.C. 552 (1975), affd. per curiam 550 F.2d 1201

(9th Cir. 1977). Consequently, we decline to disregard the

divorce judgment or treat it as a nullity. 

In this case, petitioner merely alleges that the divorce was

not final and has introduced no evidence to support that

allegation. We find that petitioner and Phyllis Alpern were

divorced as of August 10, 1992, and that petitioner was unmarried

during the year in issue. Petitioner’s correct filing status for

1996 is single. Respondent is sustained on this issue.
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To reflect the foregoing, 

Decision will be entered

under Rule 155.