Opinion ID: 771001
Heading Depth: 2
Heading Rank: 2

Heading: Tax Court Application of the Doctrine

Text: 23 Ashman's next attack is based on the Supreme Court's holding that the Tax Court is a court of limited jurisdiction and lacks general equitable powers. Commissioner v. McCoy , 484 U.S. 3, 7, 108 S. Ct. 217, 219, 98 L. Ed. 2d 2 (1987). Nobody doubts either that proposition, or its specific application which prevented the setting aside of a penalty required by law on the general theory that fairness and justice would be fostered thereby. See id. at 5-6, 108 S. Ct. at 218. But that is far from saying that the tax court, and we as a reviewing court, must allow ourselves to be gulled by taxpayers who change the historical facts to suit the needs of the moment. Nor does it mean that no equitable concepts can operate within the boundaries of the tax court's limited jurisdiction. As the Seventh Circuit recently put it:that the Tax Court lacks `general equitable powers' means only that the tax court is not empowered to override statutory limits on its power by forgiving interest and penalties that Congress has imposed for nonpayment of taxes -but then no court is, unless the imposition would be unconstitutional.  Flight Attendants Against UAL Offset v. Commissioner, 165 F.3d 572, 578 (7th Cir. 1999) (citation omitted). 24 We have said much the same thing. We have said that while [the Tax Court] cannot act, equitably or otherwise, in a case over which it lacks or has lost jurisdiction, the Tax Court can act equitably in a case in which it has jurisdiction. Kelley v. Commissioner, 45 F.3d 348, 351 (9th Cir. 1995). Thus, it does have a limited equitable power to act in a case that is properly before it. Id.; see also Buchine v. Commissioner , 20 F.3d 173, 177-78 (5th Cir. 1994); Bokum v. Commissioner , 992 F.2d 1136, 1140 (11th Cir. 1993); Reynolds v. Commissioner , 861 F.2d 469, 472 (6th Cir. 1988); cf. Harrah v. United States , 77 F.3d 1122, 1125 (9th Cir. 1996) (equitable recoupment doctrine is available in the tax area). It is also notable that a number of the cases which have upheld the doctrine, or its equivalent, have been appeals from tax court decisions. See, e.g., LeFever , 100 F.3d at 782; Kelley , 45 F.3d at 349; Lewis, 18 F.3d at 21; Kielmar, 884 F.2d at 960; Herrington , 854 F.2d at 756. 25 In other words, to say that a doctrine is tinged with equity is not to utter an anathema which bans it from the environs of the tax court. Even if the tax court does not have farreaching general equitable powers, it can apply equitable principles and exercise equitable powers within its own jurisdictional competence. In particular, it can apply the duty of consistency doctrine. All of that being said, we must still consider whether the doctrine should apply to this case.