156 T.C . No. 11

UNITED STATES TAX C OUR T

R OB E R T STEIN AND ELAINE STEIN, Pe titione rs v. C OM M ISSIONER OF INTER NAL REVENUE, R e sponde nt

Doc ke t No. 22695-18. File d June 17, 2021. Ps pe titione d this C ourt pursua nt to I.R .C . se c . 7430(f)(2) for re vie w of R ’ s de nia l of a

n a pplic at ion for a

n a w a rd of a dm inistra

tive c osts. Ps now move to dismiss thepe tition. He ld: TheC o urt ha s disc re tion to gra nt Ps’ m otion to dism

iss be c a use the pe tition did not invoke the C o urt’ s jurisdic tion to re de te rm ine a

de fic ie nc y unde r I.R .C . se c . 6213(a ) and the C ourt thus is not re quire d to e nte r a de c ision under I.R .C . se c . 7459(d) or a ny sim ila r provision. Se e M a insta

y B u s. Sols. v. C om

m i ssione r, 156 T.C . ___ (M ar. 4, 2021); Ja c obson v. C om m issione r, 148 T.C . 68 (2017); Da

vidson v. C om

m issione r, 144 T.C . 273 (2015); W a gne r v. C om m issione r, 118 T.C . 330 (2002). He ld, furthe r, be c a

use R doe s not oppose

Ps’ m otion a

nd will not be pre judic e d by

dism issa l, the m otion will be grante d.

Served 06/17/21- 2 -

R ic ha rd Sam Le h m an, for pe titione rs. Ale xa nde r N. M artini a

nd La ure n B . Epste in, for re sponde n t . OPINION GALE, Judge : The pe t ition in this c a se se e ks re vie w of re sponde nt’ s de c ision de ny ing pe titione rs’ a p plic ation for a

n a w ard of re a sona

b le a d m inistra tive c osts unde r se c tion 7430(a )(1). 1 Pe titione rs re side d in Florida whe n the pe tition wa s file d. Afte r re sponde nt file d his a nswe r to the pe tition, pe titione rs file d a m otion to volunta

rily dism iss this c a se (m otion), to which re sponde nt doe s not obje c t. W e m

ust now de c ide whe the r we have the a uthority to gra nt pe titione rs’ m otion without e

n te ring a de c ision. Se c tion 7430(a

)(1) provide s tha

t a taxpa y e r who pre va ils in a

n a dm inistra

tive proc e e ding be fore the Inte rna l R e ve nue Se rvic e (IR S) c o nc e rning

“ the de te rm ination, c olle c t ion, or re fund of a ny tax, inte re st, or pe n a l ty ” m a y be e ntitle d to a

n a w ard of the re a sona

ble c osts inc urre d in c onne c tion with the a dm inistra

tive proc e e ding. Thetaxpa y e r m ay m ake a re que st for suc h a n award by filing a writte n a pplic ation with the

IR S. Se e se c . 7430(b)(4); se c . 301.7430-2(c ),

1 Unle ss othe rwise note d, a ll se c tion re fe re nc e s a re to the Inte rna l R e ve nue C ode of 1986, a s a

m e nde d, a

n d a ll R ule re fe re nc e s a

re to the Tax C ourt R

ule s of Pra c tic e a nd Proc e dure .- 3 -

Proc e d . & Adm in. R e gs. Pursua nt to se c tion 7430(f)(2), this C ourt ha s jurisdic tion to re vie w the IR S’ de c ision gra nting or de ny ing (in whole or in pa rt) the taxpa

y e r’ s a pplic ation for a

n aw ard, provide d tha

t the taxpa y e r file s a tim e ly pe tition for re vie w of the de c ision. The tim e ly filing of a

pe t ition invoking our jurisdic tion unde r se c tion 7430(f)(2) c o m

m e nc e s a n inde pe nde nt (or sta

nd-a l one ) a c tion for there c ove ry of a dm inistra

tive c osts. Se e Gusta fson v. C om m issione r, 97 T.C . 85, 88 (1991). Tha t is, our jurisdic tion unde r se c t ion 7430(f)(2) is distinct from our jurisdic tion unde r se c t ion 6213(a) ove r pe t itions for re de te rm ination of de fic ie nc ie s. De fic ie nc y c a se s unde r se c tion 6213(a ) have historic a l ly

m a de up the bulk of thec a se s be fore the T a xC ourt, se e Davidson v. C o m m issione r, 144 T.C . 273, 274 (2015), a n d se c t ion 7459(d) provide s tha t in suc h c a se s “ a de c ision of theTax C ourt dismissing the p roc e e ding sha ll be c onside re d a s its de c ision tha t the de fic ie nc y

is the am ount de te rm i ne d by

the Se c re t ary .” A taxpa

y e r c onse q

ue n t ly m a y not a v oid e n try

of a de c ision in a de fic ie nc y

c a se by m oving to withdra

w the pe tition. Esta

te of M ing v. C om m issione r, 62 T.C . 519, 522-523 (1974). In a ddition to our de fic ie nc y jurisdic t ion, howe ve r, C ongre s s ha s gra n te d this C ourt jurisdic tion to re vie w va rious IR S a d

m inistra tive de te rm inations, inc l uding de te rm inations c onc e rning c olle c tion a c tions under se c tions 6320 a nd- 4 -

6330, se e se c s. 6320(c ), 6330(d)(1), de t e rm i nations c o nc e rning “ i nnoc e nt spouse ” re lie f from

joint a n d se ve ra l lia

bility , se e se c . 6015(e )(1), de t e rm i nations c onc e rning whistle

b lowe r awards, se e se c . 7623(b)(4), a nd de te rm inations c onc e rning inte re st a

bate m e nt, se e se c . 6404(h)(1). W e have pre viously grante d m otions to volunta

rily dism iss or withdra

w pe titions invoking our jurisdic tion to re vie w e a c h of thosety

pe s of de te rm inations. Se e M a i nsta y B us. Sols. v. C om m issione r, 156 T.C . ___, ___ (slip op. a t 3-5) (M ar. 4, 2021) (se c tion 6404(h)(1)); Ja c o b son v. C om m issione r, 148 T.C . 68, 70-71 (2017) (se c tion 7623(b)(4)); Da

v idson v. C om

m issione r, 144 T.C . at 278-279 (se c tion 6015(e )(1)); W a gne r v. C om

m issione r, 118 T.C . 330, 332-334 (2002) (se c tions 6320(c ) and 6330(d)(1)). In thoseinsta nc e s the pe titions did not im plic at e our de fic ie nc y jurisdic tion; c onse que ntly se c tion 7459(d) did not m andate e ntry

of de c isions in the C om m issione r’ s favor upon thedism issa ls. B e c a use the re is no R

ule tha t gove rns m otions for volunta ry dism issa l, we look to the

Fe d e ra l R

ule s of C ivil Proc e dure to guide our c onside ration of suc h m otions. Se e R

u l e 1(b), (d); W a gne r v. C om m issione r, 118 T.C . at 332-333, 333 n.6. Unde r rule 41(a )(1)(A) of the Fe de ra l R ule s of C ivil Proc e dure , a pla intiff m ay volunta rily dism iss a c ivil a c tion without a

c ourt orde r e ithe r by

filing a notic e of dism issa l be fore the opposing pa rty se rve s a n a nswe r or a

m otion for sum

m ary- 5 -

judgm e nt or by

filing a stipula tion of dism

issa l signe d by

a ll pa rtie s who ha

ve a ppe are d. Othe rwise , a

c a se m ay be dism isse d

at a pla intiff’ s re que st only by c ourt orde r. Se e Fe d. R . C iv. P. 41(a )(2). A c ourt “ e njoy s broa d disc re tion in de te rm i ning whe the r to a llow a volunta ry dism issa l” pursua

nt to rule41(a )(2) of the Fe de ra l R

ule s of C ivil Proc e dure , Ponte nbe rg v. B os. Sc i. C orp., 252 F.3d 1253, 1255 (11th C ir. 2001), a nd suc h a dism issa l should gene ra lly be grante d

“ unle ss the de fe nda

nt will suffe r c le ar le ga l pre judic e , othe r tha

n the m e re prospe c t of a subse que nt la

wsuit, a s a

re sult” , M c C ants v. Ford M otor C o., 781 F.2d 855, 856-857 (11th C ir. 1986) (e m pha sis omitte d). Wh e n a

c ourt issue s a

n orde r gran ting a volunta ry dism issa l, the dism issa l is de e m e d to be without pre j udic e and the l awsuit is tre ate d a s if it ha d ne ve r be e n

file d. Se e Ponte nbe rg, 252 F.3d at 1255; W a g ne r v. C om

m issione r, 118 T.C . at 333-334. The pe tition in this c a se doe s not invoke our de fic ie nc y

jurisdic tion. Se c tion 7459(d) the re fore doe s not a pply , a nd we are aware of no simila r provision tha

t would re quire us to e n te r a de c ision upon dism

issa l of a sta nd-a lone pe tition for re c o ve ry of a dm inistra

t ive c osts. Ac c ordingly , c onsiste nt with our holdings in M a i nsta y , Ja c obson, Da

vidson, a nd W a gne r, we hold tha

t we have disc re tion to gran t a m otion for volunta

ry dism issa l of a

sta nd-a lone pe tition invoking our jurisdic tion unde r se c tion 7430(f)(2).- 6 -

In e xe rc i sing our disc re t ion, we m u st de te rm ine whe the r the de fe n da nt (he re , the C om m issione r) would “ lose any substa n tia l right * * * [a s a

re sult of] the dism issa l.” Se e W a gne r v. C o m m issione r, 118 T.C . at 333 (quoting Durha m v. Fla . E. C oa st R

y . C o ., 385 F.2d 366, 368 (5th C ir. 1967)). To m ake tha t de te rm i nation, we “ we igh the re le v ant e quitie s a nd do justic e be t

we e n the pa

rtie s in e a c h c a se , im

posing suc h c osts a

nd atta c hing suc h c onditions to the dism issa l a s are d e e m e d a

p propria te .” Id. (quoting M c C a

nts, 781 F.2d a

t 857). B e c a

use re sponde nt doe s not obje c t to our gra nting pe titione rs’ m otion, wec onc l ude tha t he will not be

pre judic e d by

dism i ssa l. 2 W e will a c c ordingly gran t the m otion. To re fle c t the fore going, An a ppropria te orde r of dism issa l will be e nte re d .

2 W e a lso notein this re ga rd tha t the pe riod for filing a

pe tition for re v ie w of re sponde nt’ s de c ision, whic h is da te d Se pte m

b e r 21, 2018, a

ppe ars to ha

ve e xpire d (a ssum ing the de c ision wa s se nt to pe titione rs by c e rtifie d or re giste re d m a il). Se e se c . 7430(f)(2) (providing tha t a pe tition for re vie w m

ust be file d be fore the 91st da y a fte r m a iling of notic e of a de c ision by c e rtifie d or re giste re d m a il). Pe titione rs a

re the re fore unlike ly

to ha ve the option to pursue

furthe r litiga

tion a ga inst re sponde nt with re spe c t to thea dm inistra tive de c ision upon which this c a se is ba se d.