Court Opinion

ID: 4332169
Source: CourtListenerOpinion
Date Created: 2018-11-14 00:34:01.415434+00
Date Added: 2024-06-11T14:20:21.966277
License: Public Domain

112 T.C. No. 12

                UNITED STATES TAX COURT

         ROBERT AND LINDA YUEN, Petitioners v.
      COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 16025-98.                Filed March 19, 1999.

     On Sept. 19, 1995, Ps filed a request for
abatement of interest with R for the taxable year 1990.
On Mar. 8, 1996, R notified Ps that their request for
abatement of interest was denied. On Jan. 16, 1998, Ps
resubmitted to R a request for abatement of interest
for the taxable year 1990, presenting the same claim
and basis for relief as their original request. On
Apr. 1, 1998, R informed Ps that R had "rejected" Ps'
attempt to resubmit their request for abatement of
interest on the ground that R had considered and denied
the request on Mar. 8, 1996. On Sept. 24, 1998, Ps
filed a petition with the Court seeking a review of R's
denial of their request for abatement of interest
pursuant to sec. 6404(g) I.R.C. R moved to dismiss the
petition for lack of jurisdiction.

     Held: The Court lacks jurisdiction under I.R.C.
sec. 6404(g) to review a request for abatement of
interest that was filed by the taxpayer and denied by
                                 - 2 -

     the Commissioner prior to the effective date of sec.
     6404(g) I.R.C. See White v. Commissioner, 109 T.C. 96,
     99 (1997). Held further: Because Ps' original request
     for abatement of interest for 1990 was filed and denied
     prior to the effective date of sec. 6404(g) I.R.C., Ps'
     resubmission of their request for abatement of interest
     on Jan. 16, 1998, does not provide a basis for Ps to
     invoke the Court's jurisdiction pursuant to sec.
     6404(g) I.R.C.

     Robert and Linda Yuen, pro sese.

     Laurel M. Robinson and Wendy Abkin, for respondent.

                                OPINION

     COHEN, Chief Judge:     This case was assigned to Chief Special

Trial Judge Peter J. Panuthos pursuant to section 7443A(b)(4) and

Rules 180, 181, and 183.1    The Court agrees with and adopts the

opinion of the Special Trial Judge, which is set forth below.

                OPINION OF THE SPECIAL TRIAL JUDGE

     PANUTHOS, Chief Special Trial Judge:     This matter is before

the Court on respondent's Motion to Dismiss for Lack of

Jurisdiction.   Respondent contends that the Court lacks

jurisdiction under section 6404(g) to consider the petition filed

in this case.   As explained in greater detail below, we shall

grant respondent's motion.

     1
        Section references are to the Internal Revenue Code, as
amended. Rule references are to the Tax Court Rules of Practice
and Procedure.
                               - 3 -

Background

     On May 9, 1994, Robert and Linda Yuen (petitioners) filed a

petition for redetermination with the Court (assigned docket No.

7495-94S) contesting a notice of deficiency that respondent had

issued to petitioners for 1990.   On March 15, 1995, the Court

entered a stipulated decision in docket No. 7495-94S, which

stated that petitioners are liable for a deficiency in income tax

for 1990 in the amount of $6,821 and that petitioners are not

liable for the accuracy-related penalty under section 6662.    The

stipulated decision further stated that petitioners agreed to

waive the restrictions that normally would prohibit the

assessment and collection of the deficiency and statutory

interest until the decision of the Tax Court was final.

     On or about September 19, 1995, petitioners filed with

respondent a Form 843, Claim for Refund and Request for

Abatement, requesting that respondent abate interest for the

taxable year 1990 in the amount of $2,453.69.   Petitioners

asserted in their request that the "IRS had conceded its errors

during 1-18-95 meeting" and that petitioners' liability for

interest for 1990 had been compromised as part of the

negotiations leading to the entry of the stipulated decision in

docket No. 7495-94S.   Petitioners further asserted that

respondent had acknowledged that the stipulated decision in

docket No. 7495-94S represented a compromise of petitioners'
                                 - 4 -

entire tax liability for 1990 when respondent accepted

petitioners' payment by check which contained the statement

"compromise settlement in full".

     On or about October 23, 1995, respondent's Ogden Service

Center sent a letter to petitioners stating that petitioners'

request for abatement of interest for 1990 had been denied on the

ground that petitioners had failed to show that the interest

owing was attributable to an error or delay caused by an Internal

Revenue Service (IRS) employee performing a ministerial act.     The

letter further stated that the decision entered in petitioners'

Tax Court case indicated that statutory interest would be

assessed.

     On or about November 8, 1995, petitioners filed a protest of

the denial of their request for abatement of interest with

respondent's Fresno Appeals Office.      Petitioners' protest

repeated the allegations contained in petitioners' Form 843 dated

September 19, 1995.   On March 8, 1996, the Fresno Appeals Office

issued a detailed, three-page letter denying petitioners'

interest abatement request in full.      Appeals Officer Paul Sivick

was listed as the contact person in the March 8, 1996, letter.

     On May 12, 1997, respondent received a second Form 843 from

petitioners dated May 8, 1995.    (There is no explanation in the

record for the 2-year lapse between the date the Form 843 was

purportedly signed and the date that respondent received it.)     An
                              - 5 -

internal document from the IRS dated July 29, 1997, indicates

that petitioners' interest abatement claim had previously been

filed and denied and that no further claims would be considered.

On August 27, 1997, petitioners wrote to respondent seeking to

appeal the disallowance of their interest abatement claim.   In a

response dated December 10, 1997, John Tagliamento, Chief of the

Joint Compliance Branch in Fresno, informed petitioners that

their request for abatement of interest had been disallowed and

that petitioners would have to pay the interest and seek a refund

in the Federal District Court or the Court of Federal Claims.

However, a little more than a week later, Jerry Li, an IRS

employee with the San Francisco Appeals Office, wrote to

petitioners in response to an earlier telephone call.   Mr. Li

informed petitioners that their request for abatement of interest

had been disallowed by Appeals Officer Sivick on March 8, 1996,

and that the Tax Court had jurisdiction to review such matters.

Mr. Li enclosed with his letter a sample of a final determination

letter disallowing a request for abatement of interest, inquired

whether petitioners had received such a letter, and provided

petitioners with the Court's address so they could request a form

petition.

     On January 27, 1998, respondent's Fresno Appeals Office

received a third Form 843 from petitioners dated January 16,
                               - 6 -

1998.   On April 1, 1998, Appeals Officer Sivick wrote a letter to

petitioners which states in pertinent part:

     I have been told by my National Office Liaison that I
     am to reject your Form 843 Claim for abatement of
     interest under Code Section 6404(e)(1). Back in 1996 I
     considered a previous request for abatement of interest
     and I made the decision that no interest should be
     abated. It is the Service's position that claims
     denied prior to the enactment of the provisions of the
     Taxpayer's Bill of Rights 2 (July 30, 1996) will not be
     given the opportunity to re-file their claims in an
     attempt to petition the United States Tax Court.

     Therefore this letter does not qualify as a Final
     Determination Letter as I am merely notifying you that
     your Form 843 is being rejected rather than denied
     since you have already had the merits of your case
     considered under the provisions of law in effect at the
     time your claim was considered.

     All of the Forms 843 that petitioners submitted to

respondent refer to the tax period as January 1 through December

31, 1990.   All of the Forms 843 present the same claim, that the

settlement of docket no. 7495-94S, which concerned a deficiency

for the taxable year 1990, included a compromise of all taxes and

interest.   The Form 843 submitted on January 27, 1998, seeks an

abatement of $3,051.90, in contrast to the original abatement

request which sought an abatement of   $2,453.69.   We assume that

the difference is the continual accrual of interest during the

intervening period.

     On September 24, 1998, petitioners filed a petition in the

instant case seeking review of respondent's denial of their
                                 - 7 -

request for abatement of interest.       At the time the petition was

filed, petitioners resided in San Francisco, California.

     In response to the petition, respondent filed a Motion to

Dismiss for Lack of Jurisdiction on the ground that petitioners'

request for abatement of interest was filed and denied prior to

the effective date of section 6404(g).      Petitioners filed an

objection to respondent's motion to dismiss asserting that their

petition is valid inasmuch as petitioners resubmitted their

request for abatement of interest to respondent after the

effective date of section 6404(g).

Discussion

     The question presented is whether the Court has jurisdiction

pursuant to section 6404(g) to review respondent's rejection or

denial of petitioners' request for abatement of interest for

1990.     The Tax Court is a court of limited jurisdiction, and we

may exercise our jurisdiction only to the extent authorized by

Congress.     Naftel v. Commissioner, 85 T.C. 527, 529 (1985).

        Section 6404(g), codified under section 302(a) of the

Taxpayer Bill of Rights 2 (TBOR 2), Pub. L. 104-168, 110 Stat.

1452, 1457, provides in pertinent part as follows:

             (g) Review of Denial of Request for Abatement of
        Interest.--

                  (1) In general.--The Tax Court shall have
             jurisdiction over any action brought by a taxpayer
             who meets the requirements referred to in section
             7430(c)(4)(A)(ii) to determine whether the
                                 - 8 -

          Secretary's failure to abate interest under this
          section was an abuse of discretion, and may order
          an abatement, if such action is brought within 180
          days after the date of the mailing of the
          Secretary's final determination not to abate such
          interest.

In sum, the Court is vested with jurisdiction to review the

Commissioner's denial of a taxpayer's request for abatement of

interest if the taxpayer files a petition with the Court within

180 days after the date that the Commissioner mails to the

taxpayer a valid final determination not to abate interest.    See

sec. 6404(g)(1); Rule 280(b)(1); Banat v. Commissioner, 109 T.C.
92, 95 (1997).

     Section 302(b) of TBOR 2, 110 Stat. 1458, provides that

section 6404(g) applies "to requests for abatement after the date

of the enactment of this Act."    TBOR 2 was enacted on July 30,

1996.

     The legislative history underlying section 6404(g) is

contained in H. Rept. 104-506, at 28 (1996), 1996-3 C.B. 49, 76,

which states:

                 Present law

          Federal courts generally do not have the
     jurisdiction to review the IRS's failure to abate
     interest.

                 Reasons for change

          The Committee believes that it is appropriate for
     the Tax Court to have jurisdiction to review IRS's
                                 - 9 -

     failure to abate interest with respect to certain taxpayers.

                Explanation of provision

          The bill grants the Tax Court jurisdiction to
     determine whether the IRS's failure to abate interest
     for an eligible taxpayer was an abuse of discretion.
     The Tax Court may order an abatement of interest. The
     action must be brought within 180 days after the date
     of mailing of the Secretary's final determination not
     to abate interest. An eligible taxpayer must meet the
     net worth and size requirements imposed with respect to
     awards of attorney's fees. No inference is intended as
     to whether under present law any court has jurisdiction
     to review IRS's failure to abate interest.

                Effective date

          The provision applies to requests for abatement
     after the date of enactment.

     The Commissioner's authority to abate interest assessments

attributable to errors and delays by an officer or employee of

the IRS originated with the enactment of section 6404(e) under

the Tax Reform Act of 1986 (TRA 1986), Pub. L. 99-514, sec.

1563(a), 100 Stat. 2085, 2762.    The Commissioner is authorized to

abate interest accruing with respect to deficiencies or payments

for tax years beginning after December 31, 1978.   See TRA 1986,

sec. 1563(b), 100 Stat. 2762.

     Respondent maintains that we lack jurisdiction under section

6404(g) to review the rejection or denial of petitioners' request

for abatement of interest for 1990 on the ground that

petitioners' original request for abatement of interest was filed

and denied prior to July 31, 1996--before section 6404(g) went

into effect.   Petitioners counter that the resubmission of their
                              - 10 -

request for abatement of interest to respondent on January 16,

1998, and denial or rejection on April 1, 1998, provides a basis

for petitioners to invoke the Court's jurisdiction pursuant to

section 6404(g), notwithstanding that their original request for

abatement of interest was denied by respondent prior to July 31,

1996.

     This case presents an issue concerning the Court's

jurisdiction under section 6404(g).    Although we have not had the

opportunity to consider the specific question presented in this

case, we have analyzed the impact of the effective date of

section 6404(g) on the Court's jurisdiction under slightly

different circumstances.

     In Banat v. Commissioner, supra at 94-95, we held that the

taxpayer had properly invoked the Court's jurisdiction pursuant

to section 6404(g) with respect to a request for abatement of

interest filed with the Commissioner prior to the effective date

of section 6404(g) but denied by the Commissioner after the

effective date of the provision.   See Goettee v. Commissioner,

T.C. Memo. 1997-454.   On the other hand, in White v.

Commissioner, 109 T.C. 96, 99 (1997), we held that the Court

lacked jurisdiction pursuant to section 6404(g) to review the

Commissioner's denial of a request for abatement of interest

where the request was filed and denied prior to the effective

date of section 6404(g).   In White v. Commissioner, supra at 99-
                                - 11 -

100, we declined to consider the taxpayers' argument that they

could resubmit their request for abatement of interest after July

30, 1996, and thereby qualify to invoke the Court's jurisdiction

under section 6404(g).

     In sum, the Court has concluded that section 302(b) of TBOR

2, 110 Stat. 1458, which provides that section 6404(g) applies

"to requests for abatement after the date of the enactment of

this Act", limits the Court's jurisdiction to the review of the

denial of requests for abatement of interest where the denial

occurs after July 30, 1996.   See White v. Commissioner, supra;

Banat v. Commissioner, supra.

     Consistent with White v. Commissioner, supra, and Banat v.

Commissioner, supra, the Court lacks jurisdiction to review

respondent's March 1996 denial of petitioners' request for

abatement of interest filed in September 1995.   Moreover, we

agree with respondent that petitioners' resubmission of their

request for abatement of interest to respondent on January 16,

1998, which presented the same claim and ground for relief as

their prior submissions, does not provide a basis for the Court

to exercise jurisdiction over the petition filed herein.

    Although section 302(b) of TBOR 2 does not expressly address

whether a taxpayer may invoke the Court's jurisdiction by

resubmitting a previously denied request for abatement of

interest after the effective date of section 6404(g), we are not
                             - 12 -

persuaded that Congress intended for section 6404(g) to confer

jurisdiction in these circumstances.   Were we to hold otherwise,

the effective date provision, like a limitations period, would

fail to perform its purpose inasmuch as it could be defeated by

the simple expedient of filing in succession duplicative claims.

Cf. Trohimovich v. Commissioner, 776 F.2d 873 (9th Cir. 1985);

Huettl v. United States, 675 F.2d 239 (9th Cir. 1982).

Consequently, we reject petitioners' contention that the

resubmission of their request for abatement of interest and the

denial or rejection of their claim after the effective date of

section 6404(g) provides a basis for the Court to exercise

jurisdiction in this case.

     The record in this case indicates that some of respondent's

agents may have given petitioners erroneous advice respecting

their right to file a petition for review with the Court.

Assuming for the sake of argument that petitioners were

erroneously advised to file the petition herein, erroneous advice

does not provide a basis for the Court to exercise jurisdiction

over a matter not authorized by statute.   See Odend'hal v.

Commissioner, 95 T.C. 617, 624 (1990); Kraft v. Commissioner,

T.C. Memo. 1997-476.

     Respondent presents an alternative argument that the Court

lacks jurisdiction on the ground that the April 1, 1998, letter

does not constitute a final determination within the meaning of
                               - 13 -

section 6404(g)(1).   In the April 1, 1998, letter, respondent

indicated that he was "rejecting" petitioner's claim and that the

letter was not a "denial" and did not constitute a "notice of

final determination letter".     Consistent with our holding that

the Court lacks jurisdiction over a claim for abatement of

interest that has been resubmitted to respondent after having

been filed by a taxpayer and denied by respondent prior to the

effective date of section 6404(g)(1), we need not decide the

question of whether the April 1, 1998, letter constitutes a final

determination within the meaning of said provisions.

     Consistent with the preceding discussion, we shall grant

respondent's Motion to Dismiss for Lack of Jurisdiction.

     To reflect the foregoing,

                               An order will be entered

                          granting respondent's Motion

                          to Dismiss for Lack of Jurisdiction.