TAX COURT OPINION

Case: Lydia P. Yetter
Docket Number: 24636-09S
Judge: Colvin
Opinion Type: bench
Filed: 11/15/2010
Pages: 7

UNITED STATES TAX COURT WASHINGTON, DC 20217 LYDIA P. YETTER, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent ) ) ) ) ) ) ) ) ) Docket No. 24636-09S. O R D E R Pursuant to Rule 152 (b) , Tax Court Rules of Practice and Procedure, it is ORDERED that the Clerk of the Court shall transmit herewith to petitioner and to respondent a copy of transcript of the hearing of Judge Robert N. Armen, Jr. at San Diego, California, on October 26, 2010, containing his oral rendered at the conclusion of the above case before Special Trial findings of the hearing. the pages of the fact and opinion In accordance with the oral findings of fact and opinion, an Order Of Dismissal For Lack Of Jurisdiction will be entered. (Signed) Robert N. Armen, Jr. Special Trial Judge Dated: Washington, D.C. November 15, 2010 | | SERVÉD NOV i 6 2010 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 2 Bench opinion by Special Trial Judge Robert N. Armen, Jr. Lydia P. Yetter v. Commissioner Docket No. 24636-095 October 26, 2010 THE COURT: The Court has decided to render oral findings of fact and opinion in this case, and the following represents the Court's oral findings of fact and opinion. This proceeding was heard as a Small Tax Case pursuant to the provisions of Section 7463 of the Internal Revenue Code of 1986, as amended. This bench is made pursuant to the authority granted by Section 7459 (b) of the Internal Revenue Code of 1986, as amended, and Rule 152 of the Tax Court Rules of Practice and Procedure. Hereinafter in this bench opinion and, unless otherwise indicated, all section numbers refer to the Internal Revenue Code, as amended. Lydia P. Yetter (Petitioner) appeared on her own behalf, and Anna A. Long appeared on behalf of Respondent. By notice dated and served May 14th, 2010, this case was calendared for trial at the Court's trial session beginning on October 18th, 2010 in San Diego, California. However, on October 6, 2010, Respondent filed a motion to dismiss for lack of jurisdiction on the ground that the petition was filed in violation of the automatic stay provisions of 11 U.S.C. Section 362(a)(8). Heritage Reporting Corporation (202) 628-4888 3 Because this Court may only hear and decide a case on the merits if it has jurisdiction, the threshold issue for decision is necessarily whether the petition in this case was filed in violation of the automatic stay provisions of the Bankruptcy Code; i.e.; 11 U.S.C. Section 362(a) (8). If so, then the law requires that we grant Respondent's motion and dismiss this case for lack of jurisdiction. The facts necessary to a resolution of the jurisdictional issue are as follows: On March 26, 2008, Petitioner filed a voluntary petition under Chapter 7 of the Bankruptcy Code with the United States Bankruptcy Court for the Southern District of California (San Diego). The petition was docketed by the Bankruptcy Court as Bankruptcy Petition No. 08-2366 and assigned to James W. Meyers. On July 17, 2009, during ,the pendency of Petitioner's bankruptcy action, Respondent issued a notice of deficiency to Petitioner. See Section 6212. The notice determined deficiencies in, and additions to, Petitioner's Federal income taxes for the taxable years 1997, 1998, and 1999. On October 16, 2009, Petitioner filed a petition for redetermination with this Court in respect of the July 17, 2009 notice of deficiency. See Section 6213(a). At the time that the petition was filed with this Court, Petitioner Heritage Reporting Corporation (202) 628-4888 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 | 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 4 resided in the State of California. As of October 16, 2009, the date that the petition for redetermination was filed with this Court, Petitioner's bankruptcy action was pending before the Bankruptcy Court. Also as of that date, no order had been issued by the Bankruptcy Court either granting or denying a discharge, nor had that court issued any order lifting the automatic stay imposed by Section 362(a) of the Bankruptcy Code in respect of an appeal by Petitioner to this Court from the July 17, 2009 notice of deficiency. As previously mentioned, on October 6, 2010, Respondent filed a motion to dismiss for lack of jurisdiction on the ground that the petition for redetermination was filed in violation of the automatic stay provisions of 11 U.S.C. Section 362(a) (8). Thereafter, by order dated and served October 13, 2010, the Court calendared Respondent's motion for hearing. At the hearing on October 18, 2010 in San Diego, California, Petitioner and Counsel for Respondent appeared and were heard. Petitioner did not challenge any of the factual premises that underlie Respondent's motion; i.e., that as of the date that the petition for redetermination was filed with the Tax Court, the Bankruptcy Court had not closed or dismissed Petitioner's bankruptcy case nor had that court either granted or denied a discharge or lifted Heritage Reporting Corporation (202) 628-4888 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 5 the automatic stay to allow the filing of a petition for redetermination in the Tax Court. The Bankruptcy Code and, in particular, 11 U.S.C. Section 362(a) (8), provides that the filing of a petition in bankruptcy invokes an automatic stay with respect to the commencement or continuation of proceedings in the Tax Court. Allison v. Commissioner, 97 T.C. 544, 545 (1991); Halpern v. Commissioner, 96 T.C. 895, 897-898 (1991). The period that the automatic stay remains in effect is prescribed in 11 U.S.C. Section 362(c). That section provides that unless relief from the automatic stay is granted by order of the Bankruptcy Court, see 11 U.S.C. Section 362(d), the automatic stay generally remains in effect until the earliest of the closing of the case, dismissal of the case, or the granting or denial of a discharge. See Allison v. Commissioner, supra at 545; Smith v. Commissioner, 96 T.C. 10, 14 (1991); Neilson v. Commissioner, 94 T.C. 1, 8 (1990). We note that the Bankruptcy Code, and in particular 11 U.S.C. Section 362(a) (8), was amended by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, Pub. L. 109-8, 119 Stat. 23 (April 20, 2005). As amended, 11 U.S.C. Section 362(a) (8) provides that the filing of a petition in bankruptcy now only invokes an automatic stay with respect to the commencement or continuation of a Heritage Reporting Corporation (202) 628-4888 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 6 proceeding before the Tax Court concerning the tax liability of a debtor who is an individual for a taxable period ending before the date of the order for relief. In the July 17, 2009 deficiency notice, Respondent determined deficiencies and additions to tax for the calendar years 1997, 1998, and 1999. The latest of those three years ended well before the date of the Bankruptcy Court's order for relief, i.e., March 26, 2008. Accordingly, in the present case, the automatic stay became effective on March 26, 2008, the date that Petitioner filed her Chapter 7 petition with the Bankruptcy Court, and the automatic stay was in effect on the date that Petitioner.filed the petition for redetermination with the Tax Court on October 16, 2009. Thus, because the petition for redetermination was filed in violation of the automatic stay, we are constrained to grant Respondent's motion. In closing, because Petitioner's tax dispute with Respondent appears to be ongoing, we take this opportunity to advise Petitioner of the provisions of Section 6213(f). Pursuant to that section, when a debtor is precluded by a bankruptcy proceeding from filing a petition for redetermination with the Tax Court, the running of the time prescribed by Section 6213(a) for filing a timely petition for redetermination with the Tax Court is suspended while the automatic stay remains in effect and for 60 days Heritage Reporting Corporation (202) 628-4888 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 thereafter. Thus, from the date that the automatic stay is no longer in effect, Petitioner will have 90 (plus 60) days within which to timely file a petition for redetermination with the Tax Court. However, because of the complexities related to the interrelationship of bankruptcy and tax law, Petitioner may care to seek legal advice concerning when a petition for redetermination may be filed with the Tax Court so as not to forfeit that opportunity. In order to give effect to the foregoing, an appropriate order will be entered granting Respondent's motion to dismiss for lack of jurisdiction, filed October 6, 2010, and dismissing this case for lack of jurisdiction on the ground that the petition was filed in violation of the automatic stay imposed by 11 U.S.C. Section 362(a) (8). This concludes the Court's oral findings of fact and opinion in this case. (Whereupon, at 9:34 a.m., the bench opinion in the above-entitled case was adjourned.) // // // // // // // Heritage Reporting Corporation (202) 628-4888