TAX COURT OPINION

Case: Richard E. & Marion B. Snyder
Docket Number: 21267-08
Judge: Wells
Opinion Type: memo
Filed: 01/10/2011
Pages: 14

T.C. Memo. 2011-6 UNITED STATES TAX COURT RICHARD. E. AND MARION B. SNYDER, Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent Docket No. 21267-08. Filed January 10, 2011. Richard E. and Marion B. Snyder, pro sese. Harry J. Negro, for respondént MEMORANDUM OPINION WELLS Judge: , The instant case is before the Court on respondent' s motion .to dismiss .for lack of jurisdiction as to abatement of interest'and collection issues and respondent's motion for partial summary judgment pursuant to Rule 1211 as to Unless otherwise indicated, section references are to the (continued. . . ) SERVED JAN 1 0 2011 - 2 - petitioner wife's claim for relief from joint and several liability. The issues involve petitioners' 1988 and 1989 tax years, and we must decide: (1) Whether we have jurisdiction to decide petitioners' claim for abatement of interest; (2) whether we have jurisdiction to decide petitioners' claim for review of collection actiion; and (3) whether res judicata bars petitioner wife from raising a claim for relief from joint and several liability in this Court . Backq'round The facts set forth beloW are based upon examination of the pleadings, moving papers., responses and -attachments . Petitioners are husband and wife (hereinafter referred to individually as Mr.-Snyd.er and Mrs. Snyder) who resided in DeiLaware .at the time of filing the petition in the instant case. Petitioners filed ,their first petition in this Court over 10 years ago, on December 23, 1997 at docket No. 24568-97 (prior Tax Còurt case) . At that time petitioners resided in Maryland. . continued) Internal Revenue Code of 1986, as amended, and Rule references are tò the Tax Court Riilän of Pradtice and Proc'eduie . etitioners have also filed a motion for summary judgment, which, on the basis of our conclusion below, we wïll deny in the order addressing tlie instant motions . We aset f rth only factual ând'procedur'ai liisÉory reievant to the issues addressed herein.' attempt bankruptcy case sand various adirersary proceedings, given their extent and- complexity . to summarize the entiire history of pètitiohers' It would be impractical to - 3 - In their petition in the prior-Tax Court case,.petitioners e disputed respondent's notice of deficiency foretax years 1988 and 1989 Mrs e Snyder made rno request for relief under section 6015 in the petition insthe prior Tax Court case. It -was not, until Decembere16, 1998, that Mrs. Snyder raised a claim for relief , a under-section 6015,s-when-she filed with respondent'as office a - Form .88571 -Request for Innocent Spouse Relief (And Separation of Liability and Equitable Relief). It does not appear from the record that petitioners ever received any determination from respondents on Mrs. Snyder's claim for innocent spouse relief." The proceedings in the priors Tax Court <case.were stayed when petitioners- filed a bankruptcy petition,in the United.States a Bankruptcy:Court,in the District of Maryland (the bankruptcy a : court) on March:15, 1999. On July 21, .1999, petitioners filed an adversary proceeding against respondent, requesting that the bankruptcy court determine stheir tax liabilities-for their 1988 and 1989 tax years. Among the issues that petitioners -brought beforer the bankruptcy court- was Mrs.,Snyder's claim for relief from -joint -and several liability. On July 20, 2001 the ' bankruptcy-court entered an Order on Remaining Issues (order on remaining-issues)-in which, inter alia it held that_Mrs. Snyder had not established an adequate basis for invoking innocent spouse relief. On April 18, 2003, the bankruptcy court entered an O dér Determining Tax Liability (order -deteemïning tax - 4 - liability). Snyder v. United States, 91 AFTR 2d- 2003-2156 (Bankr. D. Md.-2003). Petitioners subsequently appealed the bankruptcy court's order determining tax liability, and, on September 30, 2005, the U.S. District Court for the District of Maryland (the District Court) reversed a portion of the bankruptcy court's order determining tax liability and remanded the case for further consideration. Snyder v. IRS, 337 Bankr. 542 (D. 'Md. 2005) . On October 30, 2006, the bankruptcy court issued an Order on Remand (order on remand). Snyder v. United States, Adversary No. 99-5583 (Bankr. D: Md. Oct. 30, 2006). The corder on remand ruled that petitioners' unpaid tax/liability for their 1988 tax year was $60,214.94 and that they'were liable-for $3,010 in penalties, pluá interest, -and that their unpaid tax liability for their 1989 tax*year Nas $46,795 and that they were liable för $9,359 in penalties, plus interest. Id. After the -bankruptcy court denied their motion to reconsider the order on remand, petitioners filed another appeal with the District Court 'on January 16, 2007.4 With their appeal, petitioners also filed a Designation of Items and Statement of Issues noting that issues raised on appeal included all those remanded by the Distridt Court' in its 4At the time of this appeal, petitioners had already filed least 13 bankruptcy appeals.:Ua the U.S. District Court for the IRS, No. 1:07-CV-00255-BEL (D. at District of Maryland. Snyder v. Md. Mar. 8, 2007). - 5 - September 30; -2005,4 opinion, as welleas Mrs. Snyder's claim för reliefaunder sectiore 6015(f) .5 The District Court isàued ar unpublished opinionion March 8, 2007, affirming the bankruptcy court ' s order on i-emand . Snyder v . IRS, i Noe 13 07 -CV-00255 (D . Md. Ma'r. 8, 20071) i Petitioners subsequently appealed to the UES. Court of Appeals for the Fourth Circuit (the Court of Appeals), which affirmed, the District Court in an unpublished opinion on September 18, 2007. Snyder,v. IRS, 241 Fed. Appx. 984 .(4th Cir. 2007). At the same time petitioners were pursuing the above appeals in the District Coubt,- they were disputing the bankruptcy court's ordersein thise Court in the'prion Tax Court case. At a hearing in the prior Tax Courtscaber ón January 11§ 2006; to reýort on the ongoing bankruptcy court proceedings, Mr. Snyder indicated that he believed issues not resolved inspetitioners' favor by the bankruptcy court could still be considered by the Tax Court. Specifically, Mr. Snyder stated that he believed this Court could hear Mrs. Snyder's claim for relief under section 6015. After the bankruptcy-court issued its order on remand, this Courta e issuedgan order, onyNovember 17, 2006,,that the parties submit a sIt is unclear from the record whether the Jan. 16, 2007, appeal was the first time petitioners had appealed the bankruptcy court's orderson remaining issues, entered July 20, 2001, which the bankruptcy court had ruled against Mrs. Snyder's sec. 6015 claim, or whether that of petitioners' other appeals to the District Court. issue had already been raised in one in - 6 - proposed-decision in the prior Tax Court case (prior Tax Court case order). ,In the prior Tax Court case order, we noted Mrs. Snyder's claim for relief under section 6015 and stated that there was-nothing for- this Court to decide regarding that claim because he issue "hadebeen raised in the-bankruptcy court but, apparèntly, not decided in her favor." On May 11, 2007, we issued an order and decision in the prior-Ta Court case, deciding petitioners' tai liabilities and penalties consistent with the bankruptcy court's order on remand. After we denied their motion for reconsideration, petitioners appealed and, on June 3, 2008, the Court of Appeals.in an unpublished opinion affirmed this Court's order and decision in thesprior. Tax Court case. Snyder v. IRS, -280 Fed. Appx. 260 (4th Cir. 2008). On August 28, 2008, petitioners filed their petition with this Court in the instant case, seeking: (1) An abatement of interest; (2) relief from joint and several liability pursuant to sectiòn 6015 for Mrs. Snyder; and (3) a revien of respondent's determination concerning collection action. Petitioners concede that they have not received a final determination regarding their request for abatement, and respondent contends that no such determination was issued.- Likewise, petitioners admit that they never received a Notice of Determination Concerning Collection Action, and respondent contends that no sùch nòtice was mailed* to - 7 - petitioners. I. Abatement of Interest Dïšcussiön The Tax Court is a court of limited jurisdiction, and we may exercise jurisdiction only to the extent authorized by Congress. Naftel v. Commissioner, 85 T.C. 527, 529 (1985) . We lack jurisdiction pursuant to section 6404 (h) unless and until the Secretary has mailed the "final determination not to abate such interest." Sec. 6404 (h) (1) ; Rule 280; Williams v. Commissioner, 131 T.C. 54, 57 (2008); Bourekis v. Commissioner, -110 T.C. 20, 27 (1998) . Like a notice of deficiency under section 6213'(a) , a notice sof final determination not to abate interest únder section 6404 (h) isa la prereqüisite "to the Court' s jurisdiction and ser res as a taxpayer's "ticket" to the Tax Court. Bourekis v. Commissioner, suprar at 26. In0the instanNcane, petitioners ackNowledge that they have not received from respondent a cítice öf Îlnal 'defermination not to abate interest, but they contend that respondent' s silence in reply to theír reqdests is tåntamount to a denial" and confers juris dic t ion Én this Court . We. have consistently held that the Commissioner's failure to respond to a taxpayer' s request for abatement of interest within - 8 - a reasonable time does not constitute a final determination under section 6404(h). See.Gilmer v. Commissioner, T.C. Memo.- 2009-296; Ward v. Commissioner, T.C. Memo. 2007-374; Cho v. Commissioner, T.C. Memo. 1998-363. Accordingly, we hold that this Court lacks jurisdiction to consider petitioners' request for an abatement of interest, and we shall grant respondent's motion to dismiss for lack of jurisdiction and to strike as to petitioners' claim for abatement of interest. II. Collection Notice In the Internal Revenue Service, Restructuring and Reform Act of 1998, Pub. L. 105-206, sect. 13401, 112 Stat: 7469 Congress enacted new sections 6320 (pertaining to liens) and 6330 (pertaining to levies) to provide specified protections for taxpayers in tax collection matters.- Sections 6320 and.6330 generally provide that the Commissioner cannot proceed with the collection of taxes by way of a lien or a levy on a taxpayer's property until the taxpayer has been given notice of and the opportunity for an administrative review of the matter (in the form of an Appeals Office due process hearing) and, if dissatisfied, judicial review of the administrative determination. Section 6330(d) provides for judicial review of the administrative determination in the Tax Court. To obtain judicial.review, the taxpayer must file a petition within 30 days 9 - of such determination. Sec 6330 (d) (1) ; Offiler v. Commissioner, 1143 T.C. 492., 498 (2000) From a jurisd ct ional erspective, the ppeals Office determination "provided for in section 56330 is the equivalent of a noticò of deficiency." Offiler v Comnii'ssiorier, supra at 49 . The Tax Court''s'jurisdiction depends upon the issuance of a valid noEice of determination and the f0ind cà a timel petitior f >r review. Rule 330 (b) ; Sarrell . Commissioner, 117 T.C. 122 125 (2001) ; Offiler v. CommiMiorfe , sápra at 498. In the instant case, petitioners admit that they have not received a notice of determination. In the absence of a determination from respondent's Appeals Office, there is no basis for this Court' s jurisdiction under section 6330 (d) . Accordingly, Ne shall grant respondent' s motion to dismiss for lack of jurisdiction and to strike as to petitioners' claim for review of collection action. III. Relief From Joïnt and Several Liability Mrs. Snyder requests relief from oint and several liability pursuant to section 6015 (f) . Respondent contends that summary judgment is proper as to Mrs . Snyder' s section 6015 claim because of res judicata on the basis of the bankruptcy court's prior decision in petitioners' adversary proceeding. 10 - Rule 121(a) allows a party to move "for a summary - adjudication in the moving party's favoroupon all or any part of the legal issues in controversy." Rul,e 121(b) directs that a decision on such a motion shall be rendered "if the' pleadings, answers to interrogatories, depositions, admissions, and any other acceptable materials, together with the affidavits, if any, show that there is no genuine issue as to-any material fact and that a decision may be rendered as a matter of law." . The moving party bears the burden of demonstrating that no genuine issue of material fact exists and that the moving party is entitled to judgment as a matter of law. Sundstrand Corp. v. Commissioner, 98 T.C. 518, 520 (1992), affd. 17 F.3d 965 (7th Cir. 1994). Facts are viewed in a light most favorable to the nonmoving party. Id. However, where a motion for summary judgment has been properly made and supported, the opposing party may not rest upon mere allegations or denials contained in that party' s pleadings but must by affidavits or otherwise set forth specific facts showing that the e is a genuine issue for trial. Rule 121 (d) . Under the doctrine of res judicata, when a court of competent jurisdiction enters a final judgment on the merits of a cause of action, the parties to the action are bound by that decision as to all matters that were or could have been litigated and decided in that proceeding. Commissioner v. Sunnen, 333 U.S. - 11 - 591, 597 -(19'48) ; see .alsö"Gùstãfson v Commissiorier; 97 T.C; 85, 91 (1991T. 'The doctrïne "serves to p onoteMudicial economy and the repose of'disputés" by precluding repetitious laùsuits. 0 Gustafson v. 'Commiesionèr, supra at 91 Because Federal income taxes are determined annually each year is a separatie 6ause of action and res-judicata is applied to bar subhequenteproáeedings involving the same tax- year Commissioner v. Sunnen, supra at 597-598 ; Calcutt v. Commissioner, 91, T . C. 14, , 21.: (1988) . o Under common laeprinciples'öf resajudicata, "a taxpayer who was a party to a prioi--proceeding for the-same tax.year-would be barred froin seeking relief from joint- ind several liability 0 regardless of whether the claim had been faised in the prior a proceeding. Vetrano'v. Comínissiöner, 116 T.C. 272, 280 (2001) . However, sectïon 6015 (g) (2) provides, an exception to res judicata where reltief from joint and several liability was not -an issue in the prioE proceeding, unless the aourt 'determines that the taxpayer seeking such relief participated meaningfully in 'that prior proceeding." Consequently, res judicata will bar a 'Sec. 6015(g) (2) provides: (c) or of any request for equitable relief under Res judicata.--In the case of any election under subsection (b) or subsection (f), proceeding for the same taxable year has become final, such decision shall be conclusive except with respect to the qualification of issue in such proceeding. preceding sentence shallanot apply if the court" determines The exception contained in the the individual :for relief which was not an if a decision of a court in any prior (continued...) - 12 - taxpayer from requesting relief from joint and several liability under section - 6015 (b) , -(c ) , or ( f ) - only if : (1) Such relief was an issue in the prior proceeding; or (2) «the Court decides that the taxpayer- participated meaningfully in the prior proceeding , and could have raised relief under section 6015. See Deihl v. Commissioner, 134 GT.C. 156, 162 (2010) ; Vetrano v. Commissioner, supra at 278; sec. 1.6015-1(e)., Income Tax Regs. There is no question that Mrs . Snyder was a party to prior litigation before the bankruptcy court regarding her tax liabilities for-the years in.issue or that a valid finalsjudgment on the merits was entered in the bankruptcy court case . Consequently, the only issues we need consider are whether Mrs. Snyder's.claim for relief under section 6015 was an issue in the bankruptcy court case or, in the alternative, whether she participated meaningfully, in; that proceeding and could have raised such a claim.= We first consider the question of whether relief from .joint and several liability was an issues in -the prior proceeding. We have held that relief from joint and several liability is an issue in a prior proceeding only when it is raised in the pleadings .for the tax year in question. Deihl v. Commissioner, . continued) (. . that proceeding. the individual participated meaningfully in such prior 13 - supra at 167. The bankruptcy court's order on remaini'ng i'ssuea makes it clear that Mrs . Snyder' s section 6015 claim- was raised as an issue in the bank uptcy court case pleadings . The order on remaining issues labels the section 6015 claim "Issue No. 19, " and it states that the bankruptcy court ruled that petitioners "had not established an adequate basis for invoking the innocent spouse doc trine . " Mrs . Snyder now at tempt s to at tack the easoning underlying the bankruptcy court' s order on remaining issues. However~, it is not our place to review the decisions of the bankruptcy court. Petitioners had the opportunity to, and did, appeal the bankruptcy court's orders to the District Court. Indeed, petitioners filed at least 13 separate appeals from the bankruptcy court in the District Court. Petitioners also appealed the District Court's decision to the Court of Appeals. Petitioners have been given the opportunity to fully litigate their tax liability, including Mrs. Snyder's claim for innocent spouse relief. Because Mrs. Snyder's section 6015 claim was an issue in the bankruptcy court case and because a final judgment has been entered in that case, we conclude that res judicata prohibits Mrs. Snyder from again raising section 6015 relief before this Court. See sec. 6015(g) (2) . We need not consider whether Mrs. Snyder actively participated in the Bankruptcy Court case since we conclude that section 6015 relief was an issue in that, aitigation. See sec. - 14 - 6015 (g) (2) . Accordingly, we shall grant respondenE' s motion for partial summary judgment on Mrs. Snyder's claim for section 6015 relief. reflect the foregoing, An appropriate order and decision will be entered.