t c no united_states tax_court suzanne l porter a k a suzanne l holman petitioner v commissioner of internal revenue respondent docket no filed date r denied p’s application_for relief from joint income_tax_liability under sec_6015 i r c p petitioned this court to seek our determination whether she is entitled to relief under sec_6015 i r c r filed a motion in limine to preclude p from introducing at trial any evidence documentary or testimonial which was not available to r during the administrative process r urges us to reconsider our holding in 122_tc_32 vacated on unrelated jurisdictional grounds 439_f3d_1009 9th cir held we will continue to follow our holding in 122_tc_32 therefore our determination whether p is entitled to relief under sec_6015 i r c is made in a trial de novo and we may consider evidence introduced at trial which was not included in the administrative record held further r’s motion in limine will be denied suzanne l porter a k a suzanne l holman pro_se kelly r morrison-lee and ann m welhaf for respondent haines judge the issue for decision is whether in determining petitioner’s eligibility for relief under sec_6015 we may consider evidence introduced at trial which was not included in the administrative record findings_of_fact some of the facts have been stipulated and are so found the stipulation of facts the exhibits attached thereto and the stipulation of settled issues are incorporated herein by this reference at the time she filed her petition petitioner resided in silver spring maryland petitioner and her husband mr porter filed a joint form_1040 u s individual_income_tax_return for return mr porter prepared the return on date day sec_1unless otherwise indicated section references are to the internal_revenue_code as amended rule references are to the tax_court rules_of_practice and procedure amounts are rounded to the nearest dollar after petitioner signed the return she and mr porter legally_separated on date respondent issued petitioner and mr porter a statutory_notice_of_deficiency for neither petitioner nor mr porter petitioned this court for redetermination of the deficiency on date petitioner submitted a form_8857 request for innocent spouse relief in a date final_determination respondent’s appeals officer determined that pursuant to sec_6015 petitioner was entitled to relief from joint_and_several_liability with respect to the income_tax on dollar_figure of unreported employee compensation mr porter received in but denied relief under sec_6015 c and f from the 10-percent additional tax of dollar_figure imposed by sec_72 on an ira distribution of dollar_figure reported on the return the parties stipulated that petitioner does not qualify for relief from joint_and_several_liability on the percent additional tax under sec_6015 or c respondent filed a motion in limine to preclude petitioner from introducing any evidence documentary or testimonial which was not available to respondent during the administrative process the court took the motion under advisement and 2a judgment of absolute divorce was entered on date permitted petitioner to testify and introduce evidence subject_to its ruling on the motion in limine opinion a respondent’s position and background respondent contends that pursuant to the administrative_procedure_act apa u s c secs and cases decided thereunder this court may consider only the administrative record the record rule in making our determination in this case see 411_us_138 373_us_709 we first stated our position on that issue in 122_tc_32 respondent urges us to reconsider our position since the u s court_of_appeals for the ninth circuit vacated our decision in ewing on jurisdictional grounds see 439_f3d_1009 9th cir revg 118_tc_494 vacating 122_tc_32 however congress subsequently confirmed our jurisdiction to determine the appropriate relief available to a taxpayer under sec_6015 with respect to tax_liability remaining unpaid on or after date sec_6015 tax relief and healthcare act of publaw_109_432 div c sec_408 120_stat_3061 in ewing v commissioner t c pincite we held that our determination of whether a taxpayer is entitled to relief under sec_6015 is made in a trial de novo and is not limited to matter contained in respondent’s administrative record respondent raises many of the same arguments we considered in ewing consequently our discussion of this issue draws heavily on the reasoning of the majority opinion in ewing as well as the reasoning of judge thornton’s concurrence see id pincite for the reasons stated more fully herein we hold that in determining whether a taxpayer is eligible for relief under sec_6015 we may consider evidence introduced at trial which was not included in the administrative record b the applicability of the apa judicial review provisions to tax_court proceedings under sec_6015 since its enactment in the apa has generally not governed proceedings in this court or in its predecessor the board_of_tax_appeals see ewing v commissioner t c pincite thornton j concurring the u s court_of_appeals for the fourth circuit the court to which an appeal in this case would lie has held that the tax_court is a court in which the facts are triable de novo and the tax_court is not subject_to the administrative_procedure_act o’dwyer v commissi266_f2d_575 4th cir affg 28_tc_698 this long-established practice comports with the provisions of the apa and its history ewing v commissioner t c pincite thornton j concurring as a statute of general application the apa does not supersede specific statutory provisions for judicial review id when congress enacted the apa to provide a general authorization for review of agency action in the district courts it did not intend that general grant of jurisdiction to duplicate the previously established special statutory procedures relating to specific agencies 487_us_879 the code has long provided a specific statutory framework for reviewing deficiency determinations of the internal_revenue_service sec_6213 and sec_6214 ewing v commissioner t c pincite thornton j concurring sec_6015 is part and 3applying these principles the u s court_of_appeals for the fifth circuit has indicated that the apa is not an appropriate vehicle for challenging the commissioner’s denial of a request to abate interest under sec_6404 see 336_f3d_419 n 5th cir review under the apa is accordingly available only where ‘there is no other adequate remedy in a court ’ quoting u s c sec_704 similarly in an unpublished opinion involving the validity of the commissioner’s issuance of a notice_of_deficiency the u s court_of_appeals for the seventh circuit concluded the apa is irrelevant however because the irs’s issuance of a notice of tax_deficiency and the tax court’s review of it are governed by the internal_revenue_code and the rules and procedures of the tax_court and not by the apa bratcher v commissioner 116_f3d_1482 7th cir affg without published opinion tcmemo_1996_252 see also 299_fsupp_465 e d la rejecting taxpayer’s claim that review to restrain enforcement of irs summons is governed by apa sec_703 and sec_704 because sec_7602 and sec_7604 and 375_us_440 provide an adequate remedy parcel of the same statutory framework our de novo review procedures emanate from that statutory framework our jurisdiction under sec_6015 is couched in language similar to that of our deficiency jurisdiction under sec_6213 and sec_6214 sec_6015 authorizes this court to determine the appropriate relief available under sec_6015 sec_6213 provides that taxpayers who receive a notice_of_deficiency may petition this court for a redetermination of the deficiency sec_6214 provides this court jurisdiction to redetermine the amount of the deficiency congress first granted the board_of_tax_appeals the predecessor to the tax_court jurisdiction to redetermine deficiencies and additions to tax in ewing v commissioner t c pincite since we have also had jurisdiction to determine overpayments id these determinations and redeterminations have always been made de novo o’dwyer v commissioner supra pincite 62_tc_324 see 875_f2d_1396 9th cir 725_f2d_64 7th cir affg tcmemo_1981_690 97_tc_7 congress has defined the jurisdiction of this court using the words determine and redetermination ewing v commissioner t c pincite we see no material difference between determine in sec_6015 determine in sec_6512 and redetermination in sec_6213 for purposes of this discussion id we can presume that in when congress chose to use the word determine in sec_6015 it did so in full awareness of our long history of de novo review if congress includes language from a prior statute in a new statute courts can presume that congress intended the longstanding legal interpretation of that language to be applied to the new statute 380_us_678 716_f2d_714 9th cir the use of the word determine in sec_6015 suggest sec_4as another example sec_6404 authorizes this court to determine whether the secretary’s refusal to abate interest was an abuse_of_discretion our practice has been to make our determination after providing an opportunity for a trial de novo see eg goettee v commissioner tcmemo_2003_43 affd 192_fedappx_212 4th cir jean v commissioner tcmemo_2002_256 jacobs v commissioner tcmemo_2000_123 5there are other situations besides the redetermination of deficiencies in which we make determinations de novo for example sec_7436 provides that the tax_court may determine whether the commissioner’s determination regarding an individual’s employment status is correct the legislative_history shows that congress intended for us to conduct a trial de novo with respect to our determinations regarding employment status see h rept pincite 1997_4_cb_319 s rept pincite 1997_4_cb_1067 h conf rept pincite 1997_4_cb_1457 that congress intended that we conduct trials de novo in making our determinations under sec_6015 c the eighth circuit decision in robinette v commissioner does not govern the decision in this case respondent argues that pursuant to the court_of_appeals for the eighth circuit’s decision in 439_f3d_455 8th cir revg 123_tc_85 our review is limited to the administrative record we disagree robinette involved a claim under sec_6330 not sec_6015 we held that the apa was not applicable to our review of the commissioner’s determinations under sec_6330 the court_of_appeals reversed the court of appeals’ opinion in robinette a case brought under sec_6330 is distinguishable from the current case brought under sec_6015 whereas sec_6015 provides that we determine whether the taxpayer is entitled to relief sec_6330 provides for judicial review of the commissioner’s determination by allowing the taxpayer to appeal such determination to the tax_court and vesting the tax_court with jurisdiction with respect to such matter as discussed above the use of the word determine suggests that we conduct a trial de novo that congress chose not to use the word determine or some derivation thereof in sec_6330 6no inference should be drawn that by distinguishing 439_f3d_455 8th cir we are changing our position in lien and levy cases as expressed in 123_tc_85 distinguishes 439_f3d_455 8th cir from cases arising under sec_6015 d the scope of review in other areas of our jurisdiction we have jurisdiction to issue declaratory judgments relating to the status qualification valuation or classification of certain sec_501 organizations retirement plans gifts governmental obligations and installment payments under sec_6166 sec_7428 sec_7476 sec_7477 sec_7478 sec_7479 in contrast to sec_6015 none of those sections authorizes us to make a determination instead those sections authorize this court after the commissioner has made a determination to make a declaration with respect to the matter our rules regarding declaratory judgments generally require these actions to be disposed of on the basis of the administrative record see rule a the reason for this limited review lies in congress’s legislative directive that the court is to base its determination upon the reasons provided by the internal_revenue_service in its notice to the party making the request for a determination or based upon any new_matter which the service may wish to introduce at the time of trial h rept pincite 7our rules relating to declaratory_judgment cases provide for consideration under various circumstances of evidence not in the administrative record see ewing v commissioner t c pincite n c b supp see rule a explanatory note 68_tc_1048 congress in full awareness of our history of de novo review did not impose a similarly restrictive standard on our review of the commissioner’s determinations under sec_6015 ewing v commissioner t c pincite thornton j concurring unlike the statutes providing our jurisdiction to issue declaratory judgments nothing in sec_6015 or its legislative_history indicates that the apa is to apply to sec_6015 cases or that we are to restrict our review to the administrative record id sec_6015 expanded the court’s jurisdiction to review all denials of relief from joint_and_several_liability id as described in the conference_report the house bill specifically provides that the tax_court has jurisdiction to review any denial of innocent spouse relief h conf rept pincite 1998_3_cb_747 similarly under the senate amendment the tax_court has jurisdiction of disputes arising from the separate liability election id pincite c b pincite the conference agreement follows the house bill and the senate amendment in establishing jurisdiction in the tax_court over disputes arising in this area id that sec_6015 postdates the apa does not render the apa judicial review procedures applicable here ewing v commissioner t c pincite thornton j concurring apa section provides that the apa does not limit or repeal additional requirements imposed by statute or otherwise recognized by law u s c sec when the apa was enacted in this court’s de novo procedures for reviewing irs functions were well established and recognized by law within the meaning of apa section see ewing v commissioner t c pincite these de novo trial procedures which have remained essentially unchanged since the apa’s enactment provide a stricter scope of review of the commissioner’s determinations than would obtain under apa review procedures ewing v commissioner t c pincite thornton j concurring consequently pursuant to apa section the 8when the apa was enacted this court had jurisdiction not only to redetermine deficiencies but also to determine certain overpayments to redetermine excessive profits on defense contracts as previously determined by the secretary and to hear claims for refunds of processing taxes all these matters were reviewed de novo see revenue act of ch sec_701 58_stat_86 excessive profits revenue act of ch sec_504 b 56_stat_957 refunds of processing taxes revenue act of ch sec e stat part overpayments revenue act of ch sec_274 43_stat_297 deficiencies apa does not limit or repeal our de novo review procedures id pincite thornton j concurring e abuse_of_discretion and de novo review we have reviewed the commissioner’s denial of relief in cases arising under sec_6015 for abuse of discretiondollar_figure 118_tc_106 affd 353_f3d_1181 10th cir van arsdalen v commissioner tcmemo_2007_48 review for abuse_of_discretion does not trigger application of the apa record rule or preclude us from conducting a de novo trial ewing v commissioner t c pincite our longstanding practice has been to hold trials de novo in many situations where an abuse_of_discretion standard applies in 9the legislative_history of the apa confirms this understanding see s comm on the judiciary 79th cong 1st sess administrative_procedure_act comm print reprinted in administrative_procedure_act legislative_history pincite stating that there are exempted from apa formal adjudication requirements matters that are subject_to de novo review of facts and law such as the tax functions of the bureau of internal revenue which are triable de novo in the tax_court s rept 79th cong 1st sess reprinted in administrative_procedure_act legislative_history pincite explaining that pursuant to apa provisions governing the scope of judicial review courts establish facts de novo where the agency adjudication is not subject_to apa formal adjudication provisions such as tax assessments not made upon an administrative hearing and record where contests may involve a trial of the facts in the tax_court h rept 79th cong 2d sess reprinted in administrative_procedure_act legislative_history pincite same 10in deciding respondent’s motion in limine relating to our scope of review we need not decide any issue relating to the standard of review our determination of the proper scope of review does not depend on the standard of review applied those cases our practice has not been to limit taxpayers to evidence contained in the administrative record or arguments made by the taxpayer at the administrative level examples of actions in which we conduct a trial de novo include those where we must decide whether it was an abuse_of_discretion for the commissioner to determine that a taxpayer’s method_of_accounting did not clearly reflect income under sec_446 eg 439_us_522 supreme court used tax_court findings in making its determination mulholland v united_states cl_ct reallocate income or deductions under sec_482 eg 933_f2d_1084 2d cir u s court_of_appeals for the second circuit implicitly approved our de novo consideration of sec_482 reallocations affg 92_tc_525 fail to waive penalties and additions to tax eg 99_tc_132 based in part on the commissioner’s expert’s testimony that taxpayers were influenced by energy crisis to invest in energy partnerships failure to waive the addition_to_tax for underpayment attributable to valuation_overstatement under sec_6659 was an abuse_of_discretion affd sub nom 28_f3d_1024 10th cir refuse to abate interest under sec_6404 eg goettee v commissioner tcmemo_2003_43 affd 192_fedappx_212 4th cir jean v commissioner tcmemo_2002_ jacobs v commissioner tcmemo_2000_123 refuse to grant the taxpayer’s request for an extension of time to file eg estate of proios v commissioner tcmemo_1994_442 taxpayer’s failure to call witnesses held against the taxpayer and disallow a bad_debt_reserve deduction eg 28_tc_837 testimony and evidence considered we are aware of no reason to depart from this longstanding practice in making our determination under sec_6015dollar_figure f neither magana v commissioner nor giamelli v commissioner governs this case respondent contends that under 118_tc_488 we may not consider facts or issues that were not previously raised by the taxpayer during the commissioner’s consideration of the taxpayer’s request for relief under sec_6015 in magana v commissioner supra pincite a case in which we reviewed the commissioner’s determination under sec_6330 that tax_lien filings were appropriate we held that 11this is not to say however that we could not or should not in appropriate circumstances borrow principles of judicial review embodied in the apa see 72_tc_896 this court looked to apa caselaw in adopting a substantial evidence rule as the appropriate measure for reviewing the reasonableness of the commissioner’s determination as to tax_avoidance in a declaratory_judgment action arising under former sec_7477 affd without published opinion 642_f2d_1211 5th cir absent special circumstances the taxpayer could not raise before this court an issue he had not raised in a hearing conducted by the commissioner’s appeals officer under sec_6330 see also 129_tc_107 neither magana nor giamelli applies here see ewing v commissioner t c pincite first in magana v commissioner supra pincite n we said we were not deciding whether our holding therein applies to claims for relief from joint liability under sec_6015 raised in a collection proceeding under sec_6330 in giamelli we did not extend our holding to claims under sec_6015 second we did not say in magana or giamelli that the taxpayer would be limited to the administrative record or that the taxpayer may not offer evidence in the proceeding in this court third in neither magana nor giamelli did we discuss the apa or the record rule thus magana and giamelli do not govern here g our adoption of respondent’s position would lead to inconsistent procedures in similar cases adoption of respondent’s position would lead to the anomaly of proceedings in some sec_6015 cases on the basis of the commissioner’s administrative record and in other such cases on the basis of trials de novo see ewing v commissioner t c pincite consider two examples first we have jurisdiction to make a determination if a taxpayer petitions this court months after filing an election for sec_6015 relief and the commissioner has made no determination granting or denying relief sec_6015 ewing v commissioner t c pincite a trial de novo would be necessary and is clearly authorized in this situation there may be only a skeletal administrative record second in a deficiency case we hold a trial de novo relating to a taxpayer’s affirmative defense that he or she is entitled to innocent spouse relief under sec_6015 adoption of respondent’s position would cause us to apply different procedures in our determinations in cases under sec_6015 see ewing v commissioner t c pincite we believe that cases in which the taxpayer seeks relief under sec_6015 should receive similar treatment and thus the same scope of review the nonrequesting spouse may intervene in the proceeding in which we determine whether the requesting spouse qualifies for relief under sec_6015 sec_6015 intervention by the nonrequesting spouse is available both in deficiency cases in which sec_6015 relief is requested and in stand-alone case such as this case rule ewing v commissioner t c pincite 115_tc_118 114_tc_354 that congress provided for intervention by nonrequesting spouses suggests congress intended that we conduct trials de novo under sec_6015 to permit the intervenor an opportunity to offer evidence relating to the requesting spouse’s entitlement to relief see ewing v commissioner t c pincite h conclusion we read sec_6015 and f to give effect to both ewing v commissioner t c pincite our de novo review of the commissioner’s determinations under sec_6015 gives effect to the congressional mandate that we determine whether a taxpayer is entitled to relief under sec_6015 the measure of deference provided by the abuse_of_discretion standard is a proper response to the fact that sec_6015 authorizes the secretary to provide procedures under which on the basis of all the facts and circumstances the secretary may relieve a taxpayer from joint liability that approach de novo review applying an abuse_of_discretion standard properly implements the statutory provisions at issue here and has a long history in numerous other areas of tax_court jurisprudence to reflect the foregoing an order will be issued denying respondent’s motion in limine reviewed by the court colvin cohen swift wells foley vasquez gale thornton marvel goeke and wherry jj agree with this majority opinion vasquez j concurring i agree with the majority opinion and write separately to clarify the confusion that exists between the terms scope of review and standard of review it is important to distinguish between two separate concepts scope of review and standard of review the scope of judicial review refers merely to the evidence the reviewing court will examine in reviewing an agency decision the standard of judicial review refers to how the reviewing court will examine that evidence see 934_f2d_1127 10th cir in 439_f3d_455 8th cir revg 123_tc_85 the u s court_of_appeals for the eighth circuit stated the agreed-upon standard of review abuse_of_discretion itself implies that review is limited to the administrative record to support this conclusion the court_of_appeals relied on 411_f3d_621 6th cir see robinette v commissioner supra pincite living care however dealt with the standard of review abuse_of_discretion and not the scope of review de novo or the administrative record with all due respect to the court_of_appeals for the eighth circuit i believe it is incorrect to conclude when the standard of review is abuse_of_discretion that a fortiori our scope of review is limited to the administrative record see majority op pp listing numerous instances where the standard of review the court applies is abuse_of_discretion but where the scope of our review is not limited to the administrative record-- ie we conduct trials de novo and receive evidence in accordance with rule and sec_7453 swift and wells jj agree with this concurring opinion thornton j concurring i agree with the majority opinion and write separately to offer additional historical perspective a status of the tax_court under the apa when the apa was enacted in the tax_court of the united_states was an agency of the executive branch in substance however it functioned as a court consequently for over two decades after the apa’s enactment there was uncertainty as to whether or how the apa should apply to the tax_court partly to resolve that question in the united_states tax_court as it was newly renamed was formally incorporated into the judiciary as an article i court tax reform act of during consideration of the apa at the request of the chairman of the senate judiciary committee the attorney_general commented on various aspects of the legislation in his statement which was later appended to the senate report the attorney_general opined that for purposes of the apa the term courts included the tax_court and that consequently the apa did not apply to its procedures s rept 79th cong 1st sess reprinted in administrative_procedure_act legislative_history pincite notwithstanding this authority contemporary commentators disagreed over whether the apa applied to the tax_court compare note effect of the administrative_procedure_act on decisions of the tax_court tax l rev concluding that the apa applied to the tax_court with gordon reviewability of tax_court decisions tax l rev concluding that the apa did not apply to the tax_court there developed a split in the circuits as to whether the tax_court was to be considered an agency so as to be subject_to the provisions of the apa governing agency adjudications compare 170_f2d_196 9th cir affg a memorandum opinion of this court and 164_f2d_870 7th cir affg 5_tc_443 both holding that the apa provisions did not apply to the tax_court with 162_f2d_379 6th cir holding that review of tax_court decisions was governed by the apa revg 6_tc_37 publaw_91_172 secs 83_stat_730 since then it has been clear that this court is not subject_to the apa rules that govern agency adjudications similarly the apa has never affected this court’s long- established practice of conducting trials de novo in deficiency actions and most other actions including those involving claims for relief from joint_and_several_liability the explanation for this well-established practice lies largely in the history of the tax_court and of the apa b historical roots of de novo review in the tax_court the precursor of the tax_court the committee on appeals and review the committee was part of the bureau of internal revenue dubroff the united_states tax_court an historical analysi sec_39 this committee was not a fact finder instead it operated under its own version of a record rule the taxpayer was generally permitted to introduce evidence to the committee only in affidavit or documentary form and could not adduce evidence that had not been considered by the income_tax unit id pincite pressures to replace the committee resulted largely from two factors the committee was not independent of the bureau of internal revenue and the proceedings in the committee were not adversary were not public and did not permit the introduction of new evidence id pincite to address these concerns the revenue act of ch 43_stat_253 replaced the committee with the board_of_tax_appeals the board originally the administration had proposed that the board be created as an informal hearing body within treasury dubroff supra pincite under the original administration proposal the board was to consider its cases on the basis of bureau files since under the proposal the board was to be a part of treasury there was no impediment to access by the board to bureau files id pincite in the legislation congress changed this plan to make the board an independent agency in the executive branch it was generally required to follow formal judicial procedures id pincite moreover the board’s record had to be independently compiled id pincite thus the board stressed that ‘ w hat has been submitted to or considered by the bureau of internal revenue is beyond the ken of this board e vidence that has been presented before any other department of the government must be reintroduced before this board before we can consider it ’ id quoting lyon v commissioner 1_bta_378 the revenue act of left the resolution of most procedural and evidentiary issues to the discretion of the board dubroff supra pincite in adopting judicial standards for the receipt of evidence the board chose to follow the liberal rules of evidence applicable in equity proceedings in the district of columbia where most of its cases were tried id pincite in this evidentiary rule was codified revenue act of ch sec_1000 44_stat_105 essentially the same provision survives today in sec_7453 in the board_of_tax_appeals was renamed the tax_court of the united_states this name change did not significantly affect the jurisdiction powers or duties that previously had belonged to the board dubroff supra pincite in sum when the apa was enacted in de novo trials in the deficiency actions and various other matters within the tax court’s jurisdiction were well-established practice and fundamental to this court’s reason for existence similarly it was well-established practice in federal district courts to conduct trials de novo in tax_refund cases see eg 284_us_281 c legislative_history of the apa in enacting the apa congress expressly recognized that tax matters were the subject of de novo proceedings in the courts apa sec_554 which defines the procedures that generally govern agency adjudications applies only in the case of an adjudication required by statute to be determined on the record after opportunity for an agency hearing it excepts all matters that are subject_to a subsequent trial of the law and of the facts de novo in a court the associated legislative_history states the exception of matters subject_to a subsequent trial of the law and the facts de novo in any court exempts such matters as the tax functions of the bureau of internal revenue which are triable de novo in the tax_court s comm on the judiciary 79th cong 1st sess administrative_procedure_act comm print reprinted in administrative_procedure_act legislative_history pincite as a corollary to these apa provisions regarding agency adjudications apa sec_706 expressly contemplates that certain types of agency actions will be subject_to de novo judicial review in particular apa sec_706 provides that the reviewing court shall hold unlawful and set_aside agency action findings and conclusions found to be unwarranted by the facts to the extent that the facts are subject_to trial de novo by the reviewing court although the statute does not otherwise specify the types of cases in which the facts are to be subject_to trial de novo the legislative_history illuminate sec_2 the senate and house reports explain this provision in identical terms noting that it is one of several exceptions affecting even adjudications otherwise required by statute to be made after hearing the first exception where the adjudication is subject_to a judicial trial de novo is included because whatever judgment the agency makes is effective only in a prima facie sense at most and the party aggrieved is entitled to complete judicial retrial and decision s rept 79th cong 1st sess reprinted in administrative_procedure_act legislative_history pincite h rept 79th cong 2d sess reprinted in administrative_procedure_act legislative_history pincite this matter the senate and house reports state identically thus where adjudications such as tax assessments are not made upon an administrative hearing and record contests may involve a trial of the facts in the tax_court or the united_states district courts s rept 79th cong 1st sess reprinted in administrative_procedure_act legislative_history pincite h rept 79th cong 2d sess reprinted in administrative_procedure_act legislative_history pincite d de novo review in deficiency actions consistent with this legislative_history the courts have uniformly held that deficiency proceedings in the tax_court are de novo and not governed by the apa in o’dwyer v commissi266_f2d_575 4th cir affg 28_tc_698 the court_of_appeals for the fourth circuit stated the tax_court is given jurisdiction to redetermine the deficiency asserted by the commissioner and in doing so it is empowered to prescribe rules_of_practice and procedure and is required to apply the rules of evidence applicable to nonjury trials in the united_states court of the district of columbia and make findings_of_fact upon such evidence sec_6213 sec_7453 and sec_7459 internal_revenue_code of the tax_court thus renders its decision only upon the evidence produced before it the tax_court rather than being a reviewing court within the meaning of sec e the apa provision governing scope of judicial review reviewing the record is a court in which the facts are triable de novo we agree that the tax_court is not subject_to the administrative_procedure_act in a more recent unpublished opinion the court_of_appeals for the ninth circuit reached the same conclusion sharon v commissioner u s app lexis wl 9th cir affg without published opinion tcmemo_1990_604 the court_of_appeals cited 875_f2d_1396 9th cir which states the tax_court has as its purpose the redetermination of deficiencies through a trial on the merits following a taxpayer petition it exercises de novo review the courts carefully review administrative action for arbitrariness when an agency exercises final statutory decisionmaking authority such as an agency rulemaking in tax cases such as this the tax_court or united_states district_court review the commissioner’s decision on the merits de novo too detailed a substantive review of the commissioner’s threshold determination undertaken solely for purposes of exercising subject matter jurisdiction would be duplicative and burdensome on the courts and the commissioner similarly in an unpublished opinion involving the validity of the commissioner’s issuance of a notice_of_deficiency the court_of_appeals for the seventh circuit concluded the apa is irrelevant however because the irs’s issuance of a notice of tax_deficiency and the tax court’s review of it are governed by the internal_revenue_code and the rules and procedures of the tax_court and not by the apa bratcher v commissioner 116_f3d_1482 7th cir affg without published opinion tcmemo_1996_252 although some have criticized the rationale of these decisions even among these critics there appears to be no dispute that the apa does not affect the tax court’s long-established practice of conducting trials de novo in deficiency actions e de novo review in actions involving claims for relief from joint_and_several_liability the original statutory provision for relief from joint_and_several_liability as contained in former sec_6013 was enacted in although this relief provision postdated enactment of the apa actions involving claims for relief under former sec_6013 were subject_to de novo review in both the tax_court and the federal district courts in the same manner as deficiency actions and tax_refund actions always had been see eg 72_tc_1164 sanders v the decision in o’dwyer v commissi266_f2d_575 4th cir affg 28_tc_698 has been criticized as being premised on a now-outmoded understanding that informal agency action cannot be reviewed based on an administrative record 439_f3d_455 8th cir revg 123_tc_85 see also 122_tc_32 halpern and holmes jj dissenting characterizing o’dwyer as being of dubious continuing relevance vacated 439_f3d_1009 9th cir even these critics of o’dwyer however do not appear to disagree with its holding that deficiency actions in the tax_court are properly conducted de novo but apparently they arrive at that conclusion by a different route construing apa sec_706 narrowly as contemplating trials de novo in income_tax deficiency proceedings seemingly to the exclusion of all other types of tax proceedings see ewing v commissioner supra pincite halpern and holmes jj dissenting as discussed infra this narrow interpretation of apa sec_706 is contrary to the legislative_history of the apa and the well-established practice of the tax_court and the district courts united_states 369_fsupp_160 n d ala affd 509_f2d_162 5th cir similarly claims arising pursuant to the more recently enacted provisions of sec_6015 and c are subject_to de novo review see eg 119_tc_306 affd 101_fedappx_34 6th cir hence although an action for relief under former sec_6013 or under sec_6015 or c technically may not constitute a deficiency action there appears to be no question that such actions are appropriately subject_to trial de novo f sec_6015 claims for relief abuse_of_discretion standard does not preclude de novo review similarly a claim for relief from joint_and_several_liability that arises under sec_6015 is appropriately subject_to de novo judicial review this is true even if the standard of review is for abuse_of_discretion as the majority opinion discusses at page this court has long conducted trials de novo in numerous types of actions in which the pertinent question was whether the commissioner had abused his or her discretion for example in determining that a taxpayer’s method_of_accounting did not clearly reflect income under sec_446 or in reallocating income or deductions under sec_482 some have suggested that actions involving sec_6015 claims for relief demand different treatment reasoning that although de novo review of the commissioner’s exercise of discretion is appropriate with respect to deficiency actions it is inappropriate with respect to other actions such as actions involving claims for relief from joint_and_several_liability 122_tc_32 halpern and holmes jj dissenting vacated 439_f3d_1009 9th cir the premise seems to be that apa sec_706 contemplates trials de novo in income_tax deficiency actions but seemingly in no other type of tax proceeding including actions involving claims for relief from joint_and_several_liability see id pincite no authority has been cited and none has been discovered in support of this restrictive view as to the types of tax matters subject_to trials de novo under apa sec_706 as shown by the previous discussion this restrictive view is not supported by the text or legislative_history of the apa and is contradicted by the well-established practice of the courts both the tax_court and the district courts to review de novo claims for relief from joint_and_several_liability sec_6015 claims arising in deficiency actions in any event sec_6015 claims for relief can and do arise in deficiency actions as affirmative defenses if the taxpayer prevails on his or her claim for sec_6015 relief this court will enter a decision reflecting a reduced deficiency due after application of sec_6015 notably sec_6015 claims in such cases will not necessarily arise as challenges to administrative determinations made before the commencement of the tax_court litigation sec_6015 contains no requirement of an appeals_office hearing nor does it fix a specific point from which to measure the commissioner’s determination consequently while the commissioner’s determination can be made in response to a form_8857 request for innocent spouse relief it can also be made by way of an answer to a petition in this court which might raise entitlement to relief under sec_6015 for the first time as an affirmative defense see eg 115_tc_183 the taxpayer’s claim for equitable relief was initiated in her petition the commissioner conceded partial relief before trial and this court held that the taxpayer was entitled to additional relief under sec_6015 affd 282_f3d_326 5th cir rowe v commissioner tcmemo_2001_325 the taxpayer raised sec_6015 claims in an amended petition the commissioner granted partial relief in his amended answer and subsequently conceded sec_6015 relief for other items and this court held that the taxpayer was entitled to additional relief under sec_6015 sec_6015 claims based on administrative inaction in other cases sec_6015 claims might come before this court on a stand-alone basis the statute expressly contemplates that the petition might be filed in the tax_court before there has been any administrative action it provides that if the internal_revenue_service has failed to act on the individual’s request for relief within months the individual may petition the tax_court for relief sec_6015 consequently in a variety of circumstances sec_6015 claims for relief may be raised in the tax_court even in the absence of prior administrative action in such circumstances limiting judicial review to the administrative record would be meaningless statutorily mandated standards and procedures statutorily mandated standards and procedures contemplate that the tax_court will generally conduct trials de novo in its proceedings including actions involving claims for relief from joint_and_several_liability sec_7453 provides that with limited exceptions not relevant here the proceedings of the tax_court shall be conducted in accordance with such rules_of_practice and procedure other than rules of evidence as the tax_court may prescribe and in accordance with the rules of evidence applicable in trials without a jury in the united_states district_court of the district of columbia as previously discussed this is substantially the same requirement that has been in effect since the inception of the board_of_tax_appeals in the requirement was in direct response to the legislative imperative that the board independently compile the record upon which it decided cases moreover sec_7459 requires the tax_court to make findings_of_fact in each report upon any proceeding instituted before the tax_court jurisdictional grant under sec_6015 contemplates trials de novo sec_6015 grants the tax_court jurisdiction to determine the appropriate relief available to the individual who requests equitable relief under subsection f particularly in the light of this court’s inability to remand sec_6015 cases for further administrative consideration see 124_tc_220 a trial de novo is appropriate and often necessary to enable the court to determine the appropriate relief in determining the appropriate relief it is not necessarily sufficient to decide whether the commissioner abused his or her discretion for instance the court might conclude that the commissioner had abused his or her discretion in the methodology or procedures employed in denying sec_6015 relief but still decide after a de novo trial that no relief was appropriate or the court might conclude that the commissioner had abused his or her discretion and decide on the basis of evidence presented at trial that the taxpayer was entitled to either partial or full relief as the majority opinion notes the jurisdictional grant in sec_6015 for the tax_court to determine the appropriate relief available to the individual differs significantly from its jurisdictional grant in sec_6330 with respect to such matter as may involve an appeals_office determination in a collection proceeding moreover sec_6015 unlike sec_6330 contains no statutory requirement of an appeals_office hearing and there is no assurance of any meaningful record to review with respect to a sec_6015 request for relief the jurisdictional grant pursuant to sec_6015 lies entirely with the tax_court so there is no risk of disparate forms of judicial review depending on which court was reviewing the claim for relief as seemed to concern the court_of_appeals in 439_f3d_455 8th cir revg 123_tc_85 with respect to judicial review of collection determinations pursuant to sec_6330 colvin swift wells gale and marvel jj agree with this concurring opinion in any event the court of appeals’ concern in this particular regard was addressed by congress in the pension_protection_act of publaw_109_280 120_stat_1019 which gave the tax_court exclusive jurisdiction in collection matters to hear appeals from notices of determination issued after date goeke j concurring i agree with the conclusion of the majority opinion but write separately for two reasons applying the record rule to sec_6015 cases would be contrary to congress’s mandate that the commissioner use the appeals process for administrative hearings in sec_6015 cases and an abuse_of_discretion standard is not the appropriate standard of review in sec_6015 cases the record rule is not appropriate in sec_6015 cases in addition to the reasons provided by the statutory analysis in the majority opinion i believe that the court’s review of sec_6015 decisions should not be limited to the administrative record because the informal appeals process by which the commissioner makes decisions under sec_6015 is incompatible with a rule that limits the court’s review to a well- defined administrative record any attempt to limit the court’s review to such a record would be problematic in the vast majority of sec_6015 cases the office_of_chief_counsel attempted to define the administrative record in sec_6015 cases in chief_counsel notice cc-2004-026 date the administrative record is that part of the petitioner’s administrative file that the service considered or the petitioner or nonrequesting spouse submitted to the service for consideration with respect to petitioner’s claim for relief this includes but is not limited to form_8857 request for innocent spouse relief form innocent spouse statement form questionnaire for nonrequesting spouse form questionnaire for requesting spouse all written correspondence between the petitioner and the service all written correspondence between the nonrequesting spouse and the service any documents presented to the examiner or appeals officer the preliminary notice_of_determination the final notice_of_determination any written analysis by the examiner or appeals officer and the appeals case memorandum notably this explanation does not include a record of any hearings or other oral communications between the taxpayer and the settlement officer in addition what is characterized as the administrative record in fact ranges widely from case to case in some cases the stipulated administrative record includes draft reports and miscellaneous documents from the internal revenue service’s irs cincinnati service_center in others the administrative record consists of correspondence sent to the taxpayer and abbreviated notes from telephone conversations with the taxpayer another practical problem with the record rule is that the administrative record however defined is frequently incomplete many taxpayers assume that the settlement officers will request more information if they do not have enough evidence to grant relief and the taxpayers therefore do not produce all relevant evidence they have because they are not specifically asked for it in some of these situations consideration of additional evidence establishes that relief is appropriate even though the settlement officer initially denied relief see eg 120_tc_137 in other cases the financial situations of the taxpayers may deteriorate after the settlement officer denies relief making it more likely that the taxpayers are eligible for relief on the basis of their economic hardship while the court should not relieve taxpayers of their burden of proving that relief is appropriate and coming forward with relevant evidence it would be inconsistent with the focus of sec_6015 on equitable relief for the court to turn a blind eye to any relevant information that the taxpayer can provide unless the taxpayer withholds or conceals the information at the administrative level or otherwise fails to cooperate with the settlement officer although the court has long accepted telephone hearings in both sec_6015 and sec_6330 cases see eg 126_tc_1 115_tc_329 magee v commissioner tcmemo_2005_263 hendricks v commissioner tcmemo_2005_72 pahamotang v commissioner tcmemo_2003_177 the trend toward expediency has made it increasingly difficult to determine the accuracy of representations made about conversations between the taxpayer and the settlement officer the court is often left with only the often-cryptic notes of the settlement officer as evidence of those conversations this is not a criticism of the commissioner’s administrative practices the appeals process is and has been an expedited and efficient means to resolve tax disputes the appeals process has never been conducted to create a reviewable administrative record and is ineffective for that purpose congress enacted sec_6015 as part of the internal_revenue_service restructuring and reform act rra of publaw_105_ sec_3201 112_stat_734 replacing sec_6013 in rra congress also mandated a reorganization of irs particularly the appeals process the reorganization plan shall ensure an independent appeals function within the internal_revenue_service including the prohibition in the plan of ex_parte communications between appeals officers and other internal_revenue_service employees to the extent that such communications appear to compromise the independence of the appeals officers rra sec_1001 112_stat_689 furthering this mandate senator roth chairman of the senate_finance_committee explained in his statement introducing rra for senate debate one of the major concerns we heard throughout our oversight initiative was that the taxpayers who get caught in the irs hall of mirrors have no place to turn that is truly independent and structured to represent their concerns this legislation requires the agency to establish an independent office of appeals--one that may not be influenced by tax collection employees or auditors appeals officers will be made available in every state and they will be better able to work with taxpayers who proceed through the appeals process cong rec statement of senator roth as the court discussed in 128_tc_48 congress saw the informal appeals process as serving an important function in resolving tax disputes while giving taxpayers a meaningful opportunity to voice their concerns but because the appeals conferences in sec_6015 cases have always been informal the information that settlement officers receive from taxpayers to determine whether relief is appropriate is not always well documented a problem arises when the commissioner attempts to limit the court’s review to the evidence contained in the administrative record but because of the informality of the proceedings the administrative record does not include a complete and accurate account of the taxpayer’s situation applying the administrative_procedure_act apa u s c secs to the administrative procedures under sec_6015 might be effective if the commissioner adopted formal procedures to review requests for relief under sec_6015 but this would be contrary to the congressionally mandated use of the traditional appeals function which has never included transcripts of the hearings or records of the proceedings in 145_fsupp_952 arising under the wunderlich act which was the subject of 373_us_709 upon which the court_of_appeals for the eighth circuit in 439_f3d_455 8th cir revg 123_tc_5 and the dissent in 122_tc_32 vacated 439_f3d_1009 9th cir relied heavily the court of claims considered the government’s argument that where a department’s decision must be upheld unless it is fraudulent or capricious or arbitrary or so grossly erroneous as necessarily to imply bad faith or is not supported by substantial evidence the court’s review of the department’s decision is limited to the administrative record the court explained the flaw in the government’s argument as follows there is logic in the government’s position but we do not adopt it it would require two trials in many cases involving this question the first trial would include the presentation of the administrative record and its study to determine whether on the basis of what was in it the administrative decision was tolerable but the so-called administrative record is in many cases a mythical entity there is no statutory provision for these administrative decisions or for any procedure in making them whoever makes it has no power to put witnesses under oath or to compel the attendance of witnesses or the production of documents there may or may not be a transcript of the oral testimony the deciding officer may and even in the departments maintaining the most formal procedures does search out and consult other documents which it occurs to him would be enlightening and without regard to the presence or absence of the claimant volentine littleton v united_states ct_cl pincite although volentine littleton arose under a different statute the logic used therein is compelling in the context of sec_6015 cases even after united_states v carlo bianchi co supra the court of claims adhered to the idea that the supreme court did not create a rule_of general application in that case 396_f2d_989 the court of claims adopted the rule that whether to apply the record rule is a matter that should be determined after considering the relationship between the judicial function and the role of the agency as well as the adequacy of the administrative record id pincite f 2d pincite in cases such as the one before the court where the court is well equipped to apply sec_6015 to individual taxpayers and the settlement officer has frequently failed to create an administrative record adequate for the court’s review a de novo review of the facts is appropriate in many of the cases where courts have found it appropriate to limit their review to the administrative record the administrative record was clearly defined and extensive and if there was an administrative hearing closely resembled the record that would be created in one of our own cases for example in united_states v carlo bianchi co supra pincite the board_of claims and appeals of the corps of engineers created a substantial record by holding an adversarial hearing allowing the parties to offer evidence and allowing each side the opportunity for cross- examination in 987_fsupp_1250 e d cal the smaller of the two administrative records at issue contained documents including reports from a 2-year investigation comments and proposals submitted by interested parties and the agency’s responses to those comments and proposals the larger of the administrative records contained big_number of the same types of documents id pincite see also 436_f3d_182 3d cir the apa itself suggests that hearings conducted under its rules will be well documented apa sec_556 sec_5 u s c sec_556 which provides the rules for hearings conducted under apa sec_553 and sec_554 explains the contents of the record as follows e the transcript of testimony and exhibits together with all papers and requests filed in the proceeding constitutes the exclusive record for decision in accordance with sec_557 of this title and on payment of lawfully prescribed costs shall be made available to the parties when an agency decision rests on official notice of a material fact not appearing in the evidence in the record a party is entitled on timely request to an opportunity to show the contrary by contrast the administrative record in sec_6015 cases does not include testimony or a transcript of the conference furthermore the administrative record is rarely if ever given to the taxpayer in full to allow the taxpayer to present before the court a case based on the administrative record finally because settlement officers unilaterally decide what information is shared with the taxpayer and generally control what is included in the administrative record the safeguard available to parties to apa hearings under apa section 556--to ask for the opportunity to contradict agency findings based on material facts not in the record--would offer little protection to taxpayers in sec_6015 cases while courts have applied the record rule in cases where the procedures are less formal than sec_6015 conferences the record rule was generally more appropriate in those cases because the agencies’ decisions did not depend as heavily on informal communication with individuals see eg 411_us_138 333_f3d_156 d c cir 30_f3d_1057 9th cir in those cases resolution of the dispute depended largely on written information available to the agency even without substantial evidentiary submissions by the other party making a clearly defined administrative record unnecessary by contrast equitable relief under sec_6015 depends largely upon statements and evidence provided by the requesting spouse and the requesting spouse generally has few resources available to ensure that the statements and evidence produced are completely and adequately represented in the record the court often receives an incomplete administrative record where the truth of the parties’ claims is difficult to determine as the majority opinion points out the court holds trials de novo under sec_6015 where a taxpayer petitions the court months after filing an election for sec_6015 relief and has not received a determination and in such cases the administrative record is generally deficient the court also allows intervention by the nonrequesting spouse in both deficiency cases and stand- alone cases and allows the nonrequesting spouse to present evidence that is not part of the administrative record in the administrative process the commissioner recognizes that intervenors have the right to participate but because intervenors have even less of an opportunity to create a complete and accurate administrative record than requesting spouses the court allows intervenors to supplement the record at trial see 115_tc_118 in deficiency cases the court accepts evidence outside of the administrative record where taxpayers may raise sec_6015 as an affirmative defense the fact that sec_6015 commits review of innocent spouse cases to the tax_court confirms that congress believes that the court is well equipped to address questions under sec_6015 rejecting the record rule does not mean that taxpayers will be free to withhold information at the administrative level and then introduce it at trial where the settlement officer has requested relevant facts or documents from the taxpayer and the taxpayer has not cooperated the court may exclude evidence that while revproc_2003_19 2003_1_cb_371 gives the nonrequesting spouse the right to participate at the administrative level in practice the nonrequesting spouse frequently suffers from the same problems as the requesting spouse in building a complete administrative record and does not have a statutory right to an in-person or telephone hearing is not part of the administrative record however the court should not assume that because certain facts or evidence are not in the administrative record it necessarily follows that the taxpayer had an adequate opportunity to present them my concern is that lost in the statutory debate both in our court and in the courts of appeals is the impracticality of the commissioner’s narrow position and the inconsistency of the commissioner’s position with decades of administrative practice in the appeals process the standard of review i agree with judge wherry’s concurring opinion that the court should not apply an abuse_of_discretion standard of review in sec_6015 cases i write separately to explain in greater detail why the court’s current reliance on 114_tc_276 and its progeny as the source of the court’s standard of review in sec_6015 cases is misplaced in the light of the amendment to sec_6015 by the tax relief and health care act of publaw_109_432 div c sec_408 120_stat_3061 after congress enacted sec_6015 in rra sec_3201 butler v commissioner supra was the first tax_court case to consider the court’s jurisdiction to review the commissioner’s denial of relief under sec_6015 in butler v commissioner supra pincite the court faced the issue of whether the commissioner’s decision to deny relief under sec_6015 was subject_to judicial review at all or was committed to agency discretion the court then concluded that it had jurisdiction to review the commissioner’s denial of relief under sec_6015 and stated without discussion that the standard of review was abuse_of_discretion id pincite sec_6015 provides that the commissioner may grant relief under certain circumstances indicating that the commissioner’s decision is discretionary before congress had not specified whether the court had jurisdiction to review the commissioner’s decision whether to grant relief under sec_2 mira v united_states bankr bankr m d pa was the first case to address this issue the court concluded that because of the word may in sec_6015 the commissioner’s determinations were committed to agency discretion by law and therefore were not reviewable by any court id pincite in 114_tc_276 the court found that there was an ascertainable_standard upon which to review the commissioner’s discretionary denial of relief pursuant to sec_6015 pointing out that the court had applied a facts and circumstances analysis in considering the application of former sec_6013 which uses substantially the same language as the current sec_6015 the court supported this argument by citing cases such as 72_tc_1164 and kistner v commissioner tcmemo_1995_66 where the court made de novo determinations of whether the taxpayers satisfied former sec_6013 however the court declined to apply the same standard of review to sec_6015 as it had applied to former sec_6013 f or if it did what standard of review the court should use although sec_6015 gave the court jurisdiction to determine appropriate relief under sec_6015 and c it was silent as to sec_6015 in the absence of any clear guidance from congress it was logical for the court in butler v commissioner supra to hold that it did have jurisdiction to review the commissioner’s decisions but to find that the standard of review was abuse_of_discretion because of the discretionary language in sec_6015 after the court’s opinion in 127_tc_7 congress amended sec_6015 to make it clear that the court has jurisdiction to review taxpayers’ requests for equitable relief under sec_6015 however sec_6015 does not provide the court with jurisdiction to review the commissioner’s decision but to determine the appropriate relief available to the individual under this section emphasis added after sec_6015 was amended the court continued to review the commissioner’s denial of relief under sec_6015 using an abuse_of_discretion standard relying on 118_tc_106 affd 353_f3d_1181 10th cir and butler v commissioner supra banderas v commissioner tcmemo_2007_129 ware v commissioner tcmemo_2007_112 farmer v commissioner tcmemo_2007_74 van arsdalen v commissioner tcmemo_2007_48 the court in jonson v commissioner supra pincite stated that the court reviews the commissioner’s denial of relief under sec_6015 for an abuse_of_discretion citing butler v commissioner supra pincite as the source of the court’s jurisdiction while it was logical for the court in butler and other pre- billings cases to review the commissioner’s denial of relief under sec_6015 for an abuse_of_discretion using the reasoning of mailman and gardner given the ambiguity in sec_6015 at the time the amendment to sec_6015 warrants a reconsideration of our standard of review in sec_6015 cases this explicit grant of authority to make determinations under sec_6015 in sec_6015 should now be the source of the court’s standard of review colvin swift foley marvel wherry and kroupa jj agree with this concurring opinion wherry j concurring in the result i agree with the majority’s designated scope of review but write separately to urge the adoption of a matching standard of review when the merits of this case are decided the majority concludes that the administrative_procedure_act u s c secs does not control and that our scope of review in this case allows us to look beyond the administrative record the majority then correctly notes that the court has historically applied an abuse_of_discretion standard of review in determining whether relief is warranted see 114_tc_276 see also 114_tc_324 however notwithstanding the caselaw cited by the majority regarding the standard of review sec_6015 itself provides no basis for the imposition of that deferential standard of review in any sec_6015 case 1the majority denies respondent’s motion in limine to limit our review to the administrative record the court has not yet applied a standard of review because it has yet to address the merits of petitioner’s case in addition although the terms scope of review and standard of review are sometimes used interchangeably there is undoubtedly a difference between them our scope of review relates to what we will consider in determining whether the commissioner committed an error our standard of review relates to how much if any deference to afford the commissioner in determining whether an error was made 2it is unclear to me why the court has adopted a deferential standard of review when addressing sec_6015 even in the context of a petition for redetermination of a deficiency a continued given that the recent amendment to sec_6015 tax relief and health care act of publaw_109_432 div c sec_408 c 120_stat_3061 resolves any lingering doubts regarding our jurisdiction over sec_6015 cases it is appropriate to revisit the issues of the scope and standard of review to be used in determining whether such relief is warranted moreover because sec_6015 grants us the authority to determine whether relief is warranted under sec_6015 c and f we look to subsection e rather than to subsection f in order to determine the appropriate scope and standard of review in sec_6015 cases sec_6015 provides in relevant part as follows sec_6015 petition for review by tax_court -- in general --in the case of an individual against whom a deficiency has been asserted and who elects to have subsection b or c apply or in the case of an individual who requests equitable relief under subsection f -- a in general --in addition to any other remedy provided by law the individual may petition the tax_court and the tax_court shall have jurisdiction to determine the appropriate relief continued context in which our standard of review is normally unrestricted see 114_tc_276 that the court has conducted de novo trials using an abuse_of_discretion standard of review under other circumstances sheds no light whatsoever on whether it should do so in this particular context in addition considering evidence that was not part of the administrative record while at the same time analyzing the agency’s decision for an abuse_of_discretion presents difficult conceptual problems available to the individual under this section if such petition is filed emphasis added i agree with the majority that the use of the word determine suggests that congress intended for us to use a de novo scope of review in determining the appropriateness of relief under sec_6015 in other instances where the word determine or redetermine is used such as in sec_6213 and sec_6512 the court applies a de novo scope of review and standard of review if as the majority notes the use of the word determine in sec_6015 suggests a de novo scope of review why does it not also suggest a de novo standard of review importantly nothing in sec_6015 suggests that congress intended for us to use an abuse_of_discretion standard of review despite the fact that in similar circumstances congress has shown that it knows how to limit our standard of review when it wants to see sec_6404 providing the court with jurisdiction to determine whether the secretary’s failure to abate interest was an abuse_of_discretion emphasis added in amending sec_6015 congress gave u sec_3 sec_6404 was amended in a historical context similar to that in which congress recently amended sec_6015 before statutory amendments in this court lacked jurisdiction to determine whether interest abatement was warranted whether a taxpayer warranted such relief was entirely within the discretion of the secretary see 336_f3d_419 5th cir in congress amended sec_6404 to give us jurisdiction to determine whether interest abatement is warranted under an abuse_of_discretion standard of review in amending continued jurisdiction over sec_6015 cases without any such limitation an abuse_of_discretion standard of review is also at odds with our decision to decline to remand sec_6015 cases to the secretary for reconsideration 124_tc_220 sec_6330 is analogous to sec_6015 insofar as both sections consider economic hardship as a factor in determining whether relief is appropriate in sec_6330 congress provided that the internal_revenue_service office of appeals would retain jurisdiction over collection cases to allow it to consider changes in the taxpayers’ circumstances the fact that congress did not include a similar provision in sec_6015 is consistent with the recent amendment to sec_6015 that allows the court to determine whether relief for taxpayers under sec_6015 is appropriate see friday v commissioner supra pincite there is in sec_6015 no analog to sec_6330 granting the court jurisdiction after a hearing at the commissioner’s appeals_office continued sec_6015 to provide unequivocally that we possess jurisdiction over sec_6015 cases congress imposed no such limitation upon our standard of review 4see 347_us_373 we find no indication that congress intended to make this phase of national banking subject_to local restrictions as it has done by express language in several other instances finally it is noteworthy that sec_6015 which addresses our jurisdiction over requests for innocent spouse relief applies to subsections b c and f the court applies a de novo scope and standard of review in determining whether relief is warranted under subsections b and c see eg 119_tc_306 applying the abuse_of_discretion standard of review only to sec_6015 not subsection b or c affd 101_fedappx_34 6th cir because subsection e grants us jurisdiction to determine the appropriate relief available under subsections b c and f our scope and standard of review should be the same in all cases under sec_6015 there is no reason to single out taxpayers seeking relief under subsection f for disparate treatment yet that is the consequence of a nonuniform standard of review in innocent spouse cases colvin swift foley gale marvel goeke and kroupa jj agree with this concurring opinion halpern and holmes jj dissenting respectfully we dissent the majority repeats what we considered to be the error of its analysis in 122_tc_32 halpern and holmes dissenting with respect to the scope of review appropriate to the 439_f3d_1009 9th cir we see no need to repeat or elaborate on what we said in ewing


tax exempt and government entities department of the treasury internal_revenue_service washington d c apr t cpa tal in fe this letter constitutes notice that with respect to the above-named defined benefit pension_plan we have granted a conditional waiver of the minimum_funding_standard for the plan_year ended september this conditional waiver for the plan_year ended september granted in accordance with sec_412 of the internal_revenue_code and sec_303 of the employee_retirement_income_security_act_of_1974 erisa the waived amount is the contribution which would otherwise be required to reduce the balance in the funding_standard_account to zero as of the end of the plan_year for which this conditional waiver has been granted has been the company has a june to may fiscal_year for the fiscal_year ending may and through the first the company has had negative earnings in addition net sales have been in a declining pattern for the last ending may years and through the first are trending toward their lowest level in the last months of the fiscal_year years months of the fiscal_year ending may the company's management at that time represented that it the company previously received a waiver for this plan for the plan_year ending september had undertaken numerous cost cutting measures to affect a recovery these measures were successful as the company after receiving the waiver recorded consecutive years of positive earnings to affect a recovery from its current financial difficulties the company’s management which includes the same top ' officers who led the company cost reduction program and to increase revenues set a corporate objective of increasing sales to non-domestic customers years ago has again undertaken an aggressive as of october plan's current_liability because the prospects for recovery are uncertain and because the plan is under-funded we are granting this waiver subject_to the following condition the value of the assets of the plan was equal to of the the contributions required to satisfy the minimum_funding_standard for the plan years ending september sec_412 of the code without a waiver being granted for such years are to be timely made as defined in and if this condition is not satisfied the waiver is retroactively null and void you agreed to this condition in a letter dated date your attention is called to sec_412 of the code and sec_304 of erisa which describe the consequences that would result in the event the plan is amended to increase benefits change the rate in the accrual_of_benefits or to change the rate of vesting while any portion of the waived_funding_deficiency remains unamortized please note that any amendment to other retirement plans maintained by the company or to the company’s profit sharing plan to increase the liabilities of those plans would be considered an amendment for purposes of sec_412 of the code and sec_304 of erisa the company and the union representing the plan's participants entered into a new collective bargaining agreement that provided for prospective increases in the plan's normal_retirement_benefit formula to be effective on october and october because these benefit increases were negotiated prior to the date of submission of the request for this waiver such increases would not conflict with sec_412 of the code this ruling is directed only to the taxpayer that requested it sec_61 k of the code provides that it may not be used or cited by others as precedent when filing form_5500 for the plan_year ended september the date of this letter should be entered on schedule b actuarial information a copy of this letter is being sent to your authorized representative in accordance with a power_of_attorney form on file a copy of this letter has also been sent to the manager employee_plans classification in should be furnished to the enrolled_actuary for the plan a copy of this letter if you have any questions on this ruling letter please contact sincerely pave mllobf james e holland jr manager employee_plans actuarial group


internal_revenue_service number release date index no 468a cc psi plr-106367-00 date re revised schedule of ruling amounts legend taxpayer parent plant location commission a commission b state x district law application decision dear this letter responds to the request dated date submitted on behalf of taxpayer by its authorized representative for a revised schedule of ruling amounts in accordance with sec_1_468a-3 of the income_tax regulations commission a decreased the amount of decommissioning costs included in taxpayer’s cost of service taxpayer was previously granted a revised schedule of ruling amounts on information was submitted pursuant to sec_1_468a-3 we understand the facts as presented by taxpayer to be as plr-106367-00 follows taxpayer as one of the owners of the plant has a interest as a tenant in common the plant is situated in location the plant’s operating license was originally scheduled to expire on taxpayer is under the jurisdiction of commission a and commission b however percent of the recovery_of plant’s decommissioning costs is allocated to the jurisdiction of commission a and therefore this request for a revised schedule of ruling amounts applies only to commission a taxpayer proposes to decommission the plant using the prompt removal dismantling method taxpayer is under the audit jurisdiction of the district_director of district on the governor of state x signed the law under the law certain costs relating to generation-related assets and obligations including the plant are being recovered over the life of the plant by way of a nonpassable charge on per kilowatt hour usage to all electric distribution customers in taxpayer’s historic service area taxpayer entered into a settlement agreement application with parties objecting to on behalf of ratepayers to terms previously proposed by the taxpayer this settlement agreement was approved by commission in decision in decision commission a included annual decommission costs of in taxpayer's cost of service for ratemaking purposes commission a used a base cost of for decommissioning the taxpayer's interest in the plant the cost of decommissioning the plant escalated at an annual average of results in a future decommissioning cost of the funding_period for the plant extends from the level_funding limitation period extends from the estimated_useful_life of the plant is the estimated period for which the nuclear decommissioning fund fund will be in effect is therefore the qualifying percentage is the after-tax rate of return expected to be earned on the assets of the fund is there are no proceedings before either commission that may result in an increase or decrease in the amount of decommissioning costs for the plant included in taxpayer's cost of service for ratemaking purposes plr-106367-00 sec_468a of the internal_revenue_code provides that a taxpayer may elect to deduct the amount of payments made to a qualified nuclear decommissioning fund however sec_468a limits the amount_paid into the fund for any_tax year to the lesser_of the amount of nuclear decommissioning costs allocable to the fund that is included in the taxpayer’s cost of service for ratemaking purposes for the tax_year or the ruling_amount applicable to this year sec_468a of the code provides that no deduction shall be allowed for any payment to the nuclear decommissioning fund unless the taxpayer requests and receives from the secretary a schedule of ruling amounts the ruling_amount for any_tax year is defined under sec_468a as the amount which the secretary determines to be necessary to fund that portion of nuclear decommissioning costs which bears the same ratio to the nuclear power plant as the period for which the fund is in effect bears to the estimated_useful_life of the plant this term is further defined to include the amount necessary to prevent excessive funding of nuclear decommissioning costs or funding of these costs at a rate more rapid than level_funding taking into account such discount rates as the secretary deems appropriate sec_468a of the code provides that a taxpayer shall be deemed to have made a payment to the nuclear decommissioning fund on the last day of the tax_year if the payment is made on account of this tax_year within months after the close of the tax_year sec_1_468a-1 of the regulations provides that an eligible_taxpayer may elect to deduct nuclear decommissioning costs under sec_468a of the code an eligible_taxpayer as defined under sec_1_468a-1 is a taxpayer that has a qualifying interest in a nuclear power plant as defined under sec_1_468a-1 a qualifying interest is among other things a direct ownership_interest including an interest held as a tenant in common or joint tenant sec_1_468a-2 of the regulations provides that the maximum amount of cash payments made or deemed made to a nuclear decommissioning fund during any_tax year shall not exceed the lesser_of the cost of service amount applicable to the nuclear decommissioning fund for such tax_year or the ruling_amount applicable to the nuclear decommissioning fund for such tax_year sec_1_468a-3 of the regulations provides that in plr-106367-00 general a schedule of ruling amounts for a nuclear decommissioning fund is a ruling specifying annual payments that over the tax years remaining in the funding_period as of the date the schedule first applies will result in a projected balance of the nuclear decommissioning fund as of the last day of the funding_period equal to and in no event more than the amount of decommissioning costs allocable to the fund sec_1_468a-3 bases the schedule of ruling amounts on the reasonable assumptions and determinations used by the applicable public_utility commission s in establishing or approving the amount of decommissioning costs to be included in the cost of service for ratemaking purposes taking into account amounts that are otherwise required to be included in the taxpayer’s income under sec_88 of the code and the regulations thereunder each schedule of ruling amounts shall be based on the public_utility commission’s reasonable assumptions concerning i the after-tax rate of return to be earned by the amounts collected for decommissioning ii the total estimated cost of decommissioning the nuclear power plant and iii the frequency of contributions to the nuclear decommissioning fund for a tax_year sec_1_468a-3 of the regulations permits the internal_revenue_service to provide a schedule of ruling amounts identical to the schedule proposed by the taxpayer but no such schedule shall be provided by the service unless the taxpayer’s proposed schedule is consistent with the principles and provisions of this section sec_1_468a-3 of the regulations provides that the ruling_amount specified in a schedule of ruling amounts for any_tax year in the level_funding limitation period shall not be less than the ruling_amount specified in such schedule for any earlier tax_year under sec_1_468a-3 the level_funding limitation period begins on the first day of the first tax_year for which a deductible payment is made to the nuclear decommissioning fund and ends on the last day of the tax_year that includes the estimated date on which the nuclear power plant will no longer be included in the taxpayer’s rate base for ratemaking purposes sec_1_468a-3 of the regulations provides that the amount of decommissioning costs allocable to a nuclear decommissioning fund is the taxpayer’s share of the total estimated cost of decommissioning the nuclear power plant multiplied by the qualifying percentage sec_1_468a-3 of the regulations provides that in general the total estimated cost of decommissioning a nuclear plr-106367-00 power plant is the reasonably estimated cost of decommissioning used by the applicable public_utility commission in establishing or approving the amount of these costs to be included in cost of service for ratemaking purposes sec_1_468a-3 of the regulations provides that a taxpayer’s share of the total estimated cost of decommissioning a nuclear power plant equals the total estimated cost of decommissioning such plant multiplied by the taxpayer’s qualifying interest in the plant sec_1_468a-3 of the regulations provides that if two or more public_utility commissions establish or approve rates for electric energy generated by a single nuclear power plant then the schedule of ruling amounts shall be separately determined pursuant to the rules of sec_1_468a-3 through e for each public_utility commission that has determined the amount of decommissioning costs to be included in the cost of service for ratemaking purposes for this plant under sec_1_468a-3 this separate determination shall be based on the reasonable assumptions and determinations used by the relevant public_utility commission and shall take into account only that portion of the total estimated cost of decommissioning that is properly allocable to the ratepayer whose rates are established or approved by the public_utility commission according to sec_1_468a-3 the ruling amounts for any_tax year is the sum of the ruling amounts for such tax_year determined under the separate schedules of ruling amounts sec_1_468a-3 of the regulations provides that the internal_revenue_service shall not provide a taxpayer with a schedule of ruling amounts for any nuclear decommissioning fund unless the public_utility commission that establishes or approves the rates for electric energy generated by the plant has determined the amount of decommissioning costs to be included in the taxpayer’s cost of service for ratemaking purposes and has disclosed the after-tax rate of return and any other assumptions and determinations used in establishing or approving the amount sec_1_468a-3 of the regulations provides that a taxpayer is required to request a revised schedule of ruling amounts for a nuclear decommissioning fund if a any public_utility commission that establishes or approves rates for the furnishing or sale of electric energy generated by a nuclear power plant to which the nuclear decommissioning fund relates increases the proposed period over which the decommissioning costs of the nuclear power plant will be included in cost of service for ratemaking purposes adjusts the estimated date on which the nuclear power plant will no longer be included in the taxpayer’s rate base for ratemaking purposes or reduces the plr-106367-00 amount of decommissioning costs to be included in cost of service for any_tax year and b the taxpayer’s most recent request for a schedule of ruling amounts did not provide notice to the service of such action by any public_utility commission we have examined the representations and data submitted by the taxpayer in relation to the requirements set forth in the code and the regulations based solely on these representations of the facts we reach the following conclusions taxpayer has a qualifying interest in the plant and is therefore an eligible_taxpayer under sec_1_468a-1 of the regulations commissions a and b have previously determined the amount of decommissioning costs to be included in the taxpayer’s cost of service for ratemaking purposes as required by sec_1_468a-3 of the regulations the taxpayer as one of the owners of the plant has previously calculated its share of the total decommissioning costs under sec_1_468a-3 of the regulations the taxpayer subject_to the jurisdiction of two public_utility commissions for ratemaking purposes has previously calculated its share of the total decommissioning costs allocable to commission a as required by sec_1_468a-3 of the regulations the taxpayer has previously proposed a schedule of ruling amounts which meets the requirements of sec_1_468a-3 and of the regulations the annual payments specified in the proposed schedule of ruling amounts are based on the reasonable assumptions and determinations used by commission a and will result in a projected fund balance at the end of the funding_period equal to or less than the amount of decommissioning costs allocable to the fund the maximum amount of cash payments made or deemed made to the fund during any_tax year is restricted to the lesser amount of the decommissioning costs applicable to such fund or the ruling applicable to this fund as set forth under sec_1 468a- b of the regulations plr-106367-00 the qualifying percentage under sec_1_468a-3 of the regulations is calculated to be based on the above determinations we conclude that the taxpayer’s proposed schedule of ruling amounts satisfies the requirements of sec_468a of the code approved schedule of ruling amounts commissions a and b year a b total approval of the schedule of ruling amounts is contingent on there being no change in the facts and circumstances known or assumed at the time the current ruling is issued if any of the events described in sec_1_468a-3 of the regulations occur in future years the taxpayer must request a review and revision of the schedule of ruling amounts generally the taxpayer is required to file such a request on or before the deemed payment deadline date for the first tax_year in which the rates reflecting such action became effective when no such event occurs the taxpayer must file a request for a revised schedule of ruling amounts on or before the deemed payment deadline of the 10th tax_year following the close of the tax_year in which the most recent schedule of ruling amounts was received the approved schedule of ruling amounts is relevant only to those payments made to the fund payments allocable to any funds other than the fund cannot qualify for purposes of the deduction under the provisions of sec_468a of the code as stated earlier payments made to such fund can qualify only to the the ruling amounts for commission b were approved in a prior schedule of ruling amounts those ruling amounts expired in plr-106367-00 extent that they do not exceed the lesser_of the decommissioning costs applicable to such fund or the ruling amounts applicable to this fund in the tax_year this ruling is directed only to the taxpayer who requested it section 6ll0 k of the code provides it may not be used or cited as precedent pursuant to a copy of the power_of_attorney on file with this office a copy of this letter is being sent to your authorized representatives pursuant to sec_1_468a-7 of the regulations a copy of this letter must be attached with the required election statement to the taxpayer’s federal_income_tax return for each tax_year in which the taxpayer claims a deduction for payments made to the fund sincerely yours peter c friedman assistant to the branch chief branch office of associate chief_counsel passthroughs and special industries cc


internal_revenue_service number release date ct-705764-99 uiln date memorandum for district_counsel from assistant chief_counsel criminal tax cc el ct subject search warrant request on this responds to the above-referenced search warrant request submitted for approval by memorandum dated we note that it was not received by our office until as of this office has advised of your office our review of this application has led us to conclude that the affidavit does not set forth a sufficient factual predicate to establish probable cause to believe that the alleged violations of title_26 have transpired and that the books records and computer equipment sought are likely to contain evidence of such crimes accordingly we are not inclined to approve the application as presently drafted and are closing our files and returning the search warrants and application package the search warrants are sought in connection with an ongoing criminal investigation of for possible violations of sec_7201 and sec_7206 for the years through the special_agent alleges that skimmed money from her law practice and omitted this income from tax returns operated as a sole_proprietorship until incorporated as a sub-chapter s_corporation in has had at least over the past the attached tax returns indicate reported between dollar_figure and dollar_figure of adjusted_gross_income for the years through the returns show schedule c gross_income of over dollar_figure for the years through there are no s-corp returns attached for each of the years and there is however no indication that is living beyond means on unreported income the search warrant affidavit is based primarily on information obtained from confidential sources who where either sometime in or early for anywhere between and this raises an initial concern regarding the confidential informants’ information regarding the years at issue the warrant seeks records from through the present there is no indication that any of the informants before accordingly it would be difficult for ct-705764-99 them to attest to business practices before their furthermore there is a possible staleness issue since the last contact of a confidential source with was in in addition the affidavit does not describe any clear theory for advancing the belief that the subject has committed tax_evasion in violation of sec_7201 the affidavit contains several allegations which could arouse a general suspicion that may have engaged in some illicit conduct but the affidavit does not explain their nexus to the specific evasion scheme for instance the affidavit indicates paid for personal expenses out of account there is no indication how knew this information or the extent of the payments a detail of the personal expenses and an explanation of how each confidential source knew this information would be helpful to corroborate their story probable cause is more than bare suspicion probable cause exists were the facts and circumstances within the officers’ knowledge and of which they had reasonably trustworthy information are sufficient in themselves to warrant a man of reasonable caution in the belief that an offense has been or is being committed 338_us_160 citing 267_us_132 here the reader is left to infer that the evasion theory advanced in the affidavit is one based on skimmed business receipts moreover these allegations alone do not establish a factual predicate for the belief that has evaded income_tax by failing to report monies allegedly skimmed from this is because there is no information suggesting that these monies were not properly accounted for or that failed to report any income derived from pocketing these monies when paid in cash an original receipt would be filed in a binder and the cash would be clipped to copies of the receipts afterwards would go through the receipts and remove some of the cash for there is no indication that the money removed was not properly booked or otherwise accounted for particularly since a receipt would still remain in fact there is no information regarding the preparation of tax returns finally there is no probable cause to believe that the computer hardware and software contain evidence of a crime at this point all that is known is that kept a listing of all on the computer repeatedly advised not to put anything regarding in the computer the importance of obtaining for example pocketing cash business receipts and paying personal expenses out of business accounts ct-705764-99 the information from the computer must be explained similarly attachment b sets forth an exhaustive list of the type of records to be seized while the affidavit indicates did not keep ordinary business records in fact there is probable cause to the contrary the affidavit indicates that had never seen any general journals ledgers or any formal books for the only records that knew kept consisted of receipts and bank account records based on these concerns we are returning the warrant application to you without authorizing its referral to the department of justice should you have any questions concerning the warrant please feel free to contact martin needle of my staff on attachments