TAX COURT OPINION

Case: Mandie Bradford Gaston
Docket Number: 14245-13S
Judge: Carluzzo
Opinion Type: bench
Filed: 06/12/2014
Pages: 7

UNITED STATES TAX COURT WASHINGTON, D.C. 20217 MANDIE BRADFORD GASTON, Petitioner, v. COMMISSIONER OF INTERNAL REVENUE, Respondent. ) ) ) ) ) Docket No. 14245-13S ) ) ) ) ORDER Pursuant to the determination of the Court as set forth in its bench opinion rendered on May 15, 2014, it is 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 trial in the above case before Special Trial Judge Lewis R. Carluzzo at Houston, Texas, containing his oral findings of fact and opinion rendered at the trial session at which the case was heard. In accordance with the oral findings of fact and opinion, an appropriate order granting respondent's motion and dismissing this case for lack ofjurisdiction will be entered. (Signed) Lewis R. Carluzzo Special Trial Judge Dated: Washington, D.C. June 12, 2014 SERVED JUN 1 3 20f4 Capital Reporting Company 3 1 Bench Opinion by Special Trial Judge Lewis R. 2 Carluzzo 3 Docket No. 14245-13S 4 Mandie Bradford Gaston May 15, 2014 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 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 (bench opinion). Unless otherwise noted, section references made in this bench opinion are to the Internal Revenue Code of 1986, as amended, in effect for the relevant period, and Rule references are to the Tax Court Rules of Practice and Procedure. This bench opinion is made pursuant to the authority granted by section 7459(b) and Rule 152. This proceeding for the redeterminations of deficiencies is a small tax case subject to the provisions of section 7463 and Rules 170 through 175. Pursuant to section 7463(b) the order of dismissal entered in this case shall not be treated as precedent for any other case. Except as provided in Rule 152(c), this bench opinion shall not be cited as authority. This case is before the Court on respondent's Motion to Dismiss for Lack of Jurisdiction, filed May 12, 2014, when the case was 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 4 called from the calendar for trial on that date in Houston, Texas. Counsel for respondent appeared and argued in support of the motion. Petitioner appeared and noted her objection to it. According to respondent's motion, the Court is without jurisdiction in this matter because it was commenced during the pendency of a related bankruptcy proceeding. According to petitioner, she was unaware that the bankruptcy proceeding prohibited her from filing a petition in this Court in response to a notice of deficiency dated May 9, 2013 (notice), a copy of which is attached to the petition. Following the proceedings on May 12, 2014, the Court set respondent's motion for further hearing on May 14, 2014. The parties appeared on that date and were heard. The facts relied upon in support of respondent's motion are not in dispute and are easily summarized as follows. On December 30, 2012, petitioner commenced an 11 U.S..C. Chapter 13 proceeding (bankruptcy proceeding) in the United States Bankruptcy Court for the Southern District of Texas. The notice was issued while the bankruptcy proceeding was pending. This case was initiated in response to the notice on June 26, 2013. As with 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 5 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 the notice, the petition in this case was filed while the bankruptcy proceeding was pending, and but for the pending bankruptcy case the petition was otherwise timely. See sec. 6213(a). The bankruptcy proceeding was dismissed by order dated December 17, 2013. In general, the commencement of a bankruptcy proceeding by a taxpayer gives rise to an automatic stay that bars the taxpayer from the commencement or continuation of a proceeding before this Court. See 11. U.S.C. sec. 362(a)(8). Subject to exceptions not relevant here, unless relief from the automatic stay is granted by the bankruptcy court under 11 U.S.C. sec. 3 62(d), the automatic stay continues until the earliest of (1) the date the bankruptcy case is closed, (2) the date the bankruptcy case is dismissed, or (3) the date a bankruptcy discharge is granted or denied. See 11 U.S.C. sec. 362(c)(2); Smith v. Commissioner, 96 T.C. 10, 14 (1991). This Court is without jurisdiction in a case if the case was commenced by a taxpayer in violation of the automatic stay. See Thompson v. Commissioner, 84 T.C. 645(1985). Such actions are considered void from the beginning. Roberts v. Commissioner, 175 F.3d 889, 893 n. 3 (11th Cir. 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 6 1 2 3 4 1999); Cassel v. Commissioner, T.C. Memo. 2006-132. Because the automatic stay was in effect when the petition was filed in this case it is invalid and as respondent's motion suggests, the case 5 must be dismissed for lack of jurisdiction. Our 6 7 8 9 10 11 12 13 14 15 16 17 18 dismissal order will terminate this case, however, the termination of this case does not necessarily end petitioner's opportunity to challenge the determinations made in the notice in this Court. Section 6213(f) provides that the period for filing a Tax Court proceeding in response to a notice of deficiency is suspended during the time that the automatic stay is in effect and for 60 days thereafter. As relevant here, that period equals 150 days because the automatic stay (1) was in effect during the entire period contemplated in section 6213(a) (in this case 90 days) and (2) remained in effect until not earlier than December 17, 2013. This 19 means that petitioner has 150 days from December 17, 20 21 22 23 24 25 2013, to commence a deficiency proceeding in this Court in response to the notice, which period expires soon and will have expired by the time the parties are served with this bench opinion. All of this was explained to petitioner at the further hearing and the imminent expiration of 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 7 1 2 3 the period prescribed in section 6213(f) was emphasized. She expressed some concern over the prospect of having to start all over again and then 4 wait for the yet to be filed case to progress to 5 6 7 8 9 10 11 12 trial. She pointed out that the present case has been pending for almost a year, and that she is anxious to get her Federal income tax liabilities for the years here in dispute resolved. She also pointed out that the first time she was made aware of any jurisdictional problem was on the day the case was called for trial. Her points, although well-taken, have no effect on the Court's jurisdiction in this 13 matter, but her points can be taken into account in a 14 15 16 17 18 19 20 21 22 23 24 25 yet to be filed case. Whether petitioner elects to submit another petition in this Court in response to the notice within the time period prescribed by section 6213(f), of course, is up to her. If she does, however, she was advised that the Court is scheduled to return to Houston, Texas, for a trial session set to begin on Monday, November 3, 2014. She was further advised that she could make a motion that the yet to be filed case be set for trial during that trial session. To reflect the foregoing, an appropriate order granting respondent's motion will be entered. 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company This concludes the Court's oral findings of 8 fact and opinion in this case. (Whereupon, at 9:35 a.m., the above- entitled matter was concluded.) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 866.488.DEPO www.CapitalReportingCompany.com