TAX COURT OPINION

Case: Troy A. Sutton
Docket Number: 14677-09S
Judge: Colvin
Opinion Type: bench
Filed: 06/17/2010
Pages: 8

UNITED STATES TAX COURT WASHINGTON, DC 2021 7 TROY A . SUTTON, Petitioner . V . Docket No . 14677-09 S COMMISSIONER OF INTERNAL REVENUE , Respondent O R D E R Pursuant to Rule 152(b), Tax . Court Rules of Practice and Procedure, it i s ORDERED that the Clerk of the Court shall transmit herewith to petitioner and to respondent a copy of the pages of the .transcript of the hearing of the above case before Special Trial Judge Robert N . Armen, Jr . at Houston, Texas, May 25, 2010, containing his oral findings of .fact and opinion rendered at the conclusion of the hearing . 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 Judg e Dated : Washington, D .C . June 17, 2010 1 Bench Opinion by 2 Special Trial Judge Robert N . Armen, Jr . 3 Sutton v . Commissioner Docket Number 14677-09S 4 May 25, 201 0 5 I . THE COURT HAS DECIDED TO RENDER ORA L 7 FINDINGS OF FACT AND OPINION IN THIS CASE, AND THE 8 FOLLOWING REPRESENTS THE COURT'S ORAL FINDINGS OF FACT 9 AND OPINION . 10 II . 11 This proceeding was heard as a Small Ta x 12 Case pursuant to the provisions of section 7463 of'the 13 Internal Revenue Code of 1986, as amended . 14 III . 15 This bench opinion is made pursuant to the 16 authority granted by section 7459(b) of the Internal 17 Revenue Code of 1986, as amended, and Rule 152 of the 18 Tax Court Rules of Practice and Procedure . 19 Hereinafter in this bench opinion, an d 20 unless otherwise indicated, all section numbers refer 21 to the Internal Revenue Code, as amended . 22 IV . 23 Marilyn S . Ames appeared on behalf o f 24 Respondent . There was no appearance by or on behalf 25 of Petitioner . Heritage Reporting Corporation (202) 628-4888 1 V . 2 By Notice dated and served December 28, 3 2009, this case was calendared for trial at th e 4 Court ' s trial session beginning on May 24, 2010, i n 5 Houston , Texas . However , on March 4 , 2010, Respondent 6 filed a Motion To Dismiss For Lack Of Jurisdiction on 7 the ground that the petition was filed in violation of 8 the automatic stay provisions of 11 U .S .C . sectio n 9 362(a)(8) . 10 VI . 11 Because this Court may only hear and decide 12 a case on the merits if it has jurisdiction, the 13 threshold issue for decision is necessarily whether 14 the petition in this case was filed in violation of 15 the automatic stay provisions of the Bankruptcy Code, 16 i .e ., 11 U .S . C . Section 362(a )( 8) . If so, then the 17 law requires that we grant Respondent ' s motion and 18 dismiss this case for lack of jurisdiction . 19 VII . 20 The facts necessary to a resolution of the 21 jurisdictional issue are as follows : 22 On October 3, 2005, Petitioner filed a 23 voluntary petition for debt adjustment under Chapter 24 13 of the Bankruptcy Code with the United State s 25 Bankruptcy Court for the Southern District of Texas, Heritage Reporting Corporatio n (202) 628-4888 5 1 Houston Division . The petition for debt adjustment 2 was docketed by the Bankruptcy Court as Bankruptc y 3 Petition Number 05-46749 and assigned to Judge Karen 4 K . Brown . 5 On March 23, 2009, during the pendency of 6 Petitioner's bankruptcy action, Respondent issued a 7 notice of deficiency to Petitioner . See section 6212 . 8 The notice determined a deficiency in Petitioner' s 9 federal income tax for the taxable year 2006 in the 10 amount of $8,101, as well as additions to tax under 11 Section 6651(a)(1) for failure to file, under Section 12 6651(a)(2) for failure to pay, and under Section 13 6654(a) for failure to pay estimated tax . 14 On June 16, 2009, Petitioner filed a 15 petition for redetermination with this Court i n 16 respect of the March 23, 2009 notice of deficiency . 17 See section 6213(a) . At the time that the petition 18 was filed with this Court, Petitioner resided in 19 Houston, Texas . 20 As of June 16, 2009, the date that the 21 petition for redetermination was filed with thi s 22 Court, the petition for debt adjustment was pending 23 before the Bankruptcy Court . Also as of that date, no 24 order had been issued by the Bankruptcy Court either 25 granting or denying a discharge, nor had that court Heritage Reporting Corporatio n (202) 628-4888 6 1 issued any order lifting the automatic stay imposed by 2 Section 362(a) of the Bankruptcy Code in respect of an 3 appeal by Petitioner to this Court from the March 23, 4 2009 notice of deficiency . 5 As previously mentioned, on March 4, 2010, 6 Respondent filed a Motion To Dismiss For Lack O f 7 Jurisdiction on the ground that the petition for . 8 redetermination was filed in violation of the 9 automatic stay provisions of 11 U .S .C . Section 10 362(a)(8) . 11 Thereafter, by Order dated March 8, 2010, 12 the Court directed Petitioner to file an objection or 13 other response to Respondent's motion, and by Orde r 14 dated April 20, 2010, the Court directed Respondent to 15 supplement his motion and address the effect, if any, 16 of amendments made to 11 U .S .C . Section 362(a)(8) in 17 2005 on Respondent's motion . Respondent supplemented 18 his motion on May 6, 2010 . No objection or othe r 19 response was ever received from Petitioner . 20 VIII . 21 The Bankruptcy Code, and in particular 11 22 U .S .C . Section 362(a)(8), provides that the filing of 23 a petition in bankruptcy invokes an automatic stay 24 with respect to the commencement or continuation of 25 proceedings in the Tax Court . Allison v . Heritage Reporting Corporation (202) 628-4888 1 2 Commissioner , 97 T .C . 544, 545 (1991) ; Halpern v . Commissioner , 96 T .C . 895, 897-898 (1991) . 3 The period that the automatic stay remains 4 in effect is prescribed in 11 U .S .C . Section 362(c) . 5 That section provides that unless relief from the .6 automatic stay is granted by order of the Bankruptcy 7 Court, see 11 U .S .C . Section 362(d), the automati c 8 stay generally remains in effect until the earliest of 9 the closing of the case, dismissal of the case, or the 10 granting or denial of a discharge . See Allison v . 11 Commissioner , supra at 545 ; Smith v . Commissioner , 96 12 T .C . 10, 14 (1991) ; Neilson v . Commissioner , 94 T .C . 13 1, 8 (1990) .. 14 The Bankruptcy Code, and in particular 11 15 U .S .C . Section 362(a)(8), was amended by the 16 Bankruptcy Abuse Prevention and Consumer Protection 17 Act of 2005, Public Law 109-8, 119 Stat . 23 (April 20, 18 2005) . As amended, and as might be relevant herein, 19 11 U .S .C . Section 362(a)(8) provides that the filing 20 of a petition in bankruptcy now only invokes a n 21 automatic stay with respect to the commencement or 22 continuation of a proceeding before the Tax Court 23 concerning the tax liability of a debtor who is an 24 individual for a taxable period ending before the date 25 of the order for relief . 26 However, the'amendments made by the 2005 Act Heritage Reporting Corporatio n (202) 628-4888 8 1 do not generally apply with respect to bankruptc y 2 cases commenced before the effective date of said Act, 3 and said Act was not effective until October 17, 2005 . 4 Section 1501(a), (b)(1), Public Law 109-8 . Thus, the 5 version of the automatic stay as in effect before the 6 amendments made by the 2005 Act controls the 7 disposition of Respondent's motion . 8 Accordingly, in the present case, th e 9 automatic stay became effective on October 3, 2005, 10 the date that Petitioner filed the petition for debt 11 adjustment with the Bankruptcy Court, and th e 12 automatic stay was in effect on the date tha t 13 Petitioner filed the petition for redetermination with 14 the Tax Court on June 16, 2009 . Thus, because the 15 petition for redetermination was filed in violation of 16 the automatic stay, we are constrained to gran t 17 Respondent's motion . 18 In closing, because Petitioner's tax dispute 19 with Respondent may be on-going, we take thi s 20 opportunity to advise Petitioner of the provisions of 21 Section 6213(f) . Pursuant to that section, when a 22 debtor is precluded by a bankruptcy proceeding from 23 filing a petition for redetermination with the Tax 24 Court, the running of the time prescribed by Section 25 6213(a) for filing a timely petition. for 26 redetermination with the Tax Court is suspended while Heritage . Reporting Corporatio n (202) 628-4888 9 1 the automatic stay remains in effect and for 60 day s 2 thereafter . 3 However , because of the complexity of the 4 law and the importance of complying with statutor y 5 time periods , Petitioner may care to seek legal advice 6 concerning the application of Section 6213 ( f) to the 7 particular situation at hand . 8 IX . 9 In order to give effect to the foregoing, a n 10 appropriate order will be entered granting 11 Respondent ' s Motion To Dismiss For Lack O f 12 Jurisdiction , filed March 4, 2010, and supplemented 13 May 6, 2010 , and dismissing this case for lack o f 14 jurisdiction on the ground that the petition was filed 15 in violation of the automatic stay imposed by 1 1 16 U .S .C . Section 362(a)(8) . 17 X . 18 THIS CONCLUDES THE COURT 'S ORAL FINDINGS OF 19 FACT AND OPINION IN THIS CASE . 20 (Whereupon , at 12 :34 p .m, the bench opinion 21 in the above - entitled matter was concluded . ) 22 23 2 4 25 26 Heritage Reporting Corporation (202) 628-4888