Court Opinion

ID: 9350874
Source: CourtListenerOpinion
Date Created: 2022-12-28 20:01:38.851836+00
Date Added: 2024-06-11T16:57:49.154538
License: Public Domain

United States Tax Court

                          T.C. Memo. 2022-127

                        SUSAN P. KECHIJIAN,
                             Petitioner

                                     v.

            COMMISSIONER OF INTERNAL REVENUE,
                        Respondent

                                —————

Docket No. 3430-20.                              Filed December 28, 2022.

                                —————

             P and H were parties to a previous deficiency case in
      this Court. They filed joint federal income tax returns for
      the years 2000 to 2004. In January 2010 R issued to P and
      H notices of deficiency for those years. In April 2010 P and
      H, represented by counsel whom H had hired, jointly filed
      a petition asking this Court to redetermine those
      deficiencies. Before their case was decided, H died in
      September 2013, and P and E were named co-executors of
      H’s estate. This Court substituted H’s estate as a party to
      the deficiency case, and thereafter the co-petitioners were
      P and H’s estate (with P and E as co-executors). In April
      2017 this Court determined no deficiencies for 2000 to 2003
      but decided that H and his business partner had failed to
      report taxable income for 2004 and were thus liable for the
      income tax deficiency as well as an accuracy-related
      penalty under I.R.C. § 6662(a).

             P then filed Form 8857, “Request for Innocent
      Spouse Relief”, requesting relief under I.R.C. § 6015(b), (c),
      and (f) from joint and several liability for the 2004 liability.
      R denied this request.

            In February 2020 P filed a Petition with this Court
      challenging this denial. P moved for summary judgment
      on grounds that she is eligible for innocent spouse relief

                            Served 12/28/22
                                           2

[*2]    under I.R.C. § 6015(b) and (c), and that, pursuant to I.R.C.
        § 6015(g)(2), res judicata arising from the previous
        deficiency case does not bar her Petition because innocent
        spouse relief was not at issue in that case and because she
        did not meaningfully participate in that case. R opposed
        the motion and cross-moved, arguing that P did
        meaningfully participate in the previous deficiency case
        both in her own capacity and as a co-executor of H’s estate
        and that the I.R.C. § 6015(g)(2) exception to res judicata
        therefore does not apply.

               Held: P meaningfully participated in the previous
        deficiency case through counsel, and res judicata therefore
        precludes P from raising her I.R.C. § 6015 claim for the
        year that was the subject of that case. The exception of
        I.R.C. § 6015(g)(2) does not apply.

                                     —————

Lynn F. Chandler and Lucas D. Garber, for petitioner.

Olivia H. Rembach and Timothy J. Driscoll, for respondent.

                          MEMORANDUM OPINION

        GUSTAFSON, Judge: Petitioner Susan P. Kechijian seeks this
Court’s review, under section 6015(e), 1 of the denial by the Internal
Revenue Service (“IRS”) of her request for relief from joint and several
liability for a federal income tax liability for 2004, a year for which she
filed a joint return with her late husband. This case is currently before
the Court on Ms. Kechijian’s motion for summary judgment under Rule
121, to which respondent, the Commissioner of Internal Revenue, filed
a reply that we deemed a cross-motion for summary judgment. We will
grant respondent’s motion and sustain the IRS’s determination on
grounds of res judicata.

        1 Unless otherwise indicated, statutory references are to the Internal Revenue

Code (“the Code”, Title 26 of the United States Code) as in effect at the relevant times;
regulation references are to Title 26 of the Code of Federal Regulations (“Treas. Reg.”),
as in effect at the relevant times; and Rule references are to the Tax Court Rules of
Practice and Procedure.
                                           3

[*3]                                Background

       The following facts are based on the parties’ pleadings, motions
for summary judgment, and declarations attached thereto, as well as the
record of Ms. Kechijian’s prior deficiency case (of which we take notice
pursuant to Federal Rule of Evidence 201). 2 Unless otherwise noted,
these facts are not in dispute. When Ms. Kechijian filed her petition,
she resided in North Carolina. 3

2004 deficiency determination

       Arthur E. Kechijian and Susan P. Kechijian filed joint federal
income tax returns for the years 2000 to 2004. The IRS thereafter
determined that Mr. Kechijian and his business partner, Larry E.
Austin, failed to report income they had received in those years related
to S corporation stock that they owned.           For purposes of the
Commissioner’s motion, we assume that Ms. Kechijian had no
involvement in or knowledge of the unreported income and had no role
in dealing with the IRS’s audit. The IRS then issued to both the
Kechijians and the Austins (Larry Austin and his wife) notices of
deficiency determining deficiencies in federal income tax and penalties
for the years 2000 to 2004.

Deficiency case

       In April 2010 both the Kechijians and the Austins timely
petitioned this Court for redetermination of the deficiencies and related
penalties. The Austins’ petition (Doc. 1 in No. 8966-10) and the
Kechijians’ petition (Doc. 1 in No. 8967-10) were both signed by Attorney
Lynn F. Chandler as “Counsel for [the plural] Petitioners”. The cases
were consolidated for briefing, trial, and opinion.

      Mr. Kechijian died in September 2013, and in that month
Ms. Kechijian made a motion: “Petitioner Susan P. Kechijian, through
undersigned counsel, hereby moves this Court to substitute the personal

        2 The record of which we take notice consists of the Tax Court’s record in Estate
of Kechijian v. Commissioner, Docket No. 8967-10, which was consolidated with Austin
v. Commissioner, Docket No. 8966-10, and was decided in Austin v. Commissioner, T.C.
Memo. 2017-69, aff’d sub nom. Est. of Kechijian v. Commissioner, Docket No. 18-2277,
962 F.3d 800 (4th Cir. 2020), and the record of the Court of Appeals for the Fourth
Circuit.
        3 Unless stipulated otherwise, venue for an appeal in this case would evidently

be the U.S. Court of Appeals for the Fourth Circuit. See § 7482(b).
                                           4

[*4] representatives of the Estate of Arthur E. Kechijian, deceased, who
are currently Susan P. Kechijian and Scott E. Hoehn, for Mr. Kechijian
in his individual capacity.” (Doc. 73 in No. 8967-10.) The “undersigned
counsel” was again Attorney Lynn F. Chandler. The Court granted that
motion, and Ms. Kechijian and Scott E. Hoehn, a senior employee of
Mr. Kechijian’s S corporation, began to represent Mr. Kechijian’s estate.

       In December 2013 the Court denied cross-motions for summary
judgment that had been previously filed, see Austin v. Commissioner,
141 T.C. 551 (2013), and the parties thereafter conducted additional
discovery. The trial took place in May 2015, more than a year and a half
after Mr. Kechijian’s death. Throughout the case petitioners’ filings
identified Attorney Lynn F. Chandler as counsel for all petitioners,
including Susan Kechijian personally. Ms. Kechijian did not participate
in the IRS Appeals process while this deficiency case was docketed; she
did not participate in any pretrial meetings; she did not participate in
settlement negotiations; she did not sign any court documents; and she
did not otherwise participate at trial except sitting in the courtroom
during trial. Regarding her participation in the deficiency case after the
death of her husband, Ms. Kechijian stated in her declaration in the
current case:

       After Art’s death, his estate was substituted as a party and
       I was named again because I was a co-executor of Art’s
       estate. However, I never participated[4] in the litigation in
       any way before or after Art’s death. Scott Hoehn, my co-
       executor and the former Controller of UMLIC [an S
       corporation founded and directed by Mr. Kechijian and
       Mr. Austin], handled all aspects of the litigation with the
       law firm hired by my husband before his death, including
       pretrial meetings, discovery, settlement negotiations, and
       testifying at trial. I attended the trial and sat in the gallery
       as an observer, but I did not participate in the trial and
       provided no input whatsoever.

        4 As we explain below in Part I.A, we assume that Ms. Kechijian’s allegations

are true, for purposes of the Commissioner’s motion for summary judgment; but under
Rule 121(d), sentence 4, the facts that we assume here are the specific facts about the
hiring of counsel, attendance at trial, providing input, and so forth, and not her broad
generalization that she “never participated”.
                                    5

[*5] Similarly, Scott Hoehn, the co-executor of Mr. Kechijian’s estate,
stated in his declaration in the current case the following about Ms.
Kechijian’s participation in this deficiency case:

      After Art’s death, I was substituted along with Susie as the
      Petitioner representing Art’s estate. As a Co-Executor, . . .
      I assumed sole responsibility for communicating with
      counsel about the conduct of the Prior Litigation and did
      not consult with Susie or include Susie in those
      communications. Susie delegated all responsibility for the
      Prior Litigation to me as her Co-Executor because the
      issues involved UMLIC. Susie never had any involvement
      with UMLIC during her marriage to Art, and she lacked
      any knowledge or understanding of those issues.

For purposes of the Commissioner’s motion, we accept the allegations of
Ms. Kechijian and Mr. Hoehn.

       In April 2017 this Court issued its opinion, determining no
deficiencies for 2000 to 2003 but holding that both Mr. Kechijian and
Mr. Austin had failed to include taxable compensation income for 2004
in their tax returns and sustaining the IRS’s determination that both
were also liable for accuracy-related penalties for 2004. Austin, T.C.
Memo. 2017-69. Decisions were entered in August 2018.

       Petitioners—i.e., Ms. Kechijian personally, Ms. Kechijian and Mr.
Hoehn as representatives of the Estate of Arthur Kechijian, and the
Austins—appealed this Court’s decision to the U.S. Court of Appeals for
the Fourth Circuit. The notice of appeal was filed in the Tax Court on
behalf of all petitioners (including Ms. Kechijian personally) by Attorney
Lynn F. Chandler; and Ms. Chandler (among others) filed in the Court
of Appeals an “Appearance of Counsel Form” identifying herself as
counsel for all petitioners, including “Susan Kechijian, individual[ly]”.
The appellate briefs show Ms. Chandler as lead counsel. In June 2020
the Fourth Circuit upheld this Court’s judgment. See Est. of Kechijian
v. Commissioner, 962 F.3d at 802.

      However, innocent spouse relief for Ms. Kechijian under section
6015 was not an issue raised in the deficiency case—neither in this
Court nor in the appeal.
                                    6

[*6] Susan Kechijian’s request for relief

       In June 2019 Ms. Kechijian filed with the IRS Form 8857,
“Request for Innocent Spouse Relief”, requesting relief from joint and
several liability pursuant to section 6015(b), (c), and (f). Attorney Lynn
F. Chandler signed the Form 8857 as “Preparer”. For purposes of the
Commissioner’s motion, we assume that Ms. Kechijian’s request for
relief had merit. The IRS denied her request in November 2019,
claiming that she did not meet the basic eligibility requirements.

Innocent spouse case

       Ms. Kechijian then commenced this case by filing a Petition under
section 6015(e) in February 2020, asking this Court to review the relief
available to her under section 6015(b), (c), or (f). On December 8, 2021,
Ms. Kechijian (through counsel) moved for summary judgment under
Tax Court Rule 121, claiming (1) that she is entitled to relief under
section 6015(b), (2) that she is entitled to elect relief under section
6015(c), and (3) that under section 6015(g)(2), she is not barred by res
judicata from raising the innocent spouse relief in the current case
because she did not meaningfully participate in the prior deficiency case.
Regarding the lack of meaningful participation, Ms. Kechijian argues
that her participation in the previous deficiency case was limited to
being represented by her counsel and sitting in the gallery during the
trial. Ms. Chandler, Ms. Kechijian’s counsel in the previous deficiency
case, also concurrently represented Mr. Kechijian and subsequently
Mr. Kechijian’s estate in that case, and she continues to represent
Ms. Kechijian in this current case.

       The Commissioner filed a response to Ms. Kechijian’s motion for
summary judgment. The Commissioner admits that, regarding the 2004
deficiency, Ms. Kechijian did not directly participate in the audit or in
meetings with the IRS Office of Appeals, did not directly participate in
pretrial meetings or discovery, did not directly participate in settlement
discussions, did not personally sign any pleadings or other court
documents, was not deposed, and was not called as a witness at trial.
The Commissioner instead argues that petitioner, in her capacity both
as a co-petitioner and as co-executor of Mr. Kechijian’s estate,
meaningfully participated in the prior deficiency case through her
counsel and is now barred by res judicata from raising her current claim
for innocent spouse relief.       We issued an order deeming the
Commissioner’s response to be a cross-motion and allowing
Ms. Kechijian to file a response.
                                    7

[*7]                           Discussion

I.     General principles of law

       A.    Summary judgment

      The purpose of summary judgment is to expedite litigation and
avoid unnecessary trials. Fla. Peach Corp. v. Commissioner, 90 T.C.
678, 681 (1988). We may grant a motion for summary judgment when
there is no genuine dispute of material fact and a decision may be
rendered as a matter of law.       Rule 121(b); Elec. Arts, Inc. v.
Commissioner, 118 T.C. 226, 238 (2002).

       The moving party bears the burden of presenting evidence to
“show that there is no genuine dispute as to any material fact and that
a decision may be rendered as a matter of law”, Rule 121(b); and if the
movant does so, then the opposing party “must set forth specific facts
showing that there is a genuine dispute for trial”, Rule 121(d). In
determining the presence or absence of a genuine dispute, the Court will
view factual materials and draw inferences in the light most favorable
to the nonmoving party. Dahlstrom v. Commissioner, 85 T.C. 812, 821
(1985). As we consider the Commissioner’s cross-motion for summary
judgment, we therefore will draw inferences in favor of Ms. Kechijian.

       However, in doing so we keep in mind that the fourth sentence of
Rule 121(d) obliges the non-moving party to “set forth specific facts” (in
contrast to “mere allegations or denials”). Ms. Kechijian could not
immunize herself from summary judgment by a general denial that she
“participated meaningfully” under section 6015(g)(2) (discussed in
Part II below) but rather must “set forth specific facts showing that” she
did not participate meaningfully.

       B.    Relief from joint and several liability

        Section 6013(d)(3) provides that when married taxpayers file a
joint federal income tax return, the tax is computed on their aggregated
income, and their liability to pay the tax shown on the return or found
to be owing is joint and several. See also Treas. Reg. § 1.6013-4(b). That
is, each spouse is liable for the entire tax liability. Under section 6015,
however, a taxpayer may seek relief from joint and several liability; and
if the IRS determines not to grant such relief to a taxpayer, then
section 6015(e) gives the taxpayer the right to petition this Court for
review of that determination.
                                     8

[*8]   C.    Res judicata

       Res judicata (Latin for “a thing adjudicated”), otherwise known
as “claim preclusion”, is an affirmative defense developed by the courts
to bar repetitious suits on the same cause of action, and this doctrine is
applicable to tax litigation. As the Supreme Court explained:

       [W]hen a court of competent jurisdiction has entered a final
       judgment on the merits of a cause of action, the parties to
       the suit and their privies are thereafter bound “not only as
       to every matter which was offered and received to sustain
       or defeat the claim or demand, but as to any other
       admissible matter which might have been offered for that
       purpose.” . . .

             ....

       . . . Income taxes are levied on an annual basis. Each year
       is the origin of a new liability and of a separate cause of
       action. Thus if a claim of liability or non-liability relating
       to a particular tax year is litigated, a judgment on the
       merits is res judicata as to any subsequent proceeding
       involving the same claim and the same tax year.

Commissioner v. Sunnen, 333 U.S. 591, 597–98 (1948) (quoting
Cromwell v. Cnty. Of Sac, 94 U.S. 351, 352 (1876)). That is, each tax
year is a separate cause of action, and res judicata makes truly final a
final judgment for a particular tax year. Where the cause of action of a
taxpayer’s liability in a given tax year has already been litigated, the
parties may thereafter be barred from relitigating that liability—
whether by reference either to a “matter which was offered” in that prior
suit or to a “matter which might have been offered” in the prior suit—
unless an exception to the doctrine of res judicata applies.

        However, section 6015(g)(2), discussed below, creates an
exception to res judicata in the case of an “innocent spouse” claiming
relief from joint liability in a subsequent suit, where that spouse did not
“participate[] meaningfully in such prior proceeding.”
                                     9

[*9] II.    Analysis

       A.    Res judicata bars litigation of innocent spouse relief from
             the 2004 deficiency in this case.

       Under the Supreme Court’s explication of res judicata in Sunnen,
this Court has required that four conditions be met to preclude the
relitigation of a claim: (1) the parties in each action must be identical (or
at least be in privity); (2) a court of competent jurisdiction must have
rendered the first judgment; (3) the prior action must have resulted in a
final judgment on the merits; and (4) the same cause of action or claim
must be involved in both suits. See Breland v. Commissioner, 152 T.C.
156, 161 (2019); Koprowski v. Commissioner, 138 T.C. 54, 62 (2012);
see also Covert v. LVNV Funding, LLC, 779 F.3d 242, 246 (4th Cir. 2015).
If a party appeals this Court’s decision to the appropriate Court of
Appeals (as Ms. Kechijian did after the adverse decision in the previous
deficiency case), then the judgment of that Court of Appeals shall be the
final decision (unless the case is thereafter granted certiorari by the
Supreme Court). See § 7481(a). “Once these conditions are met, each
party is prohibited from raising any claim or defense that was or could
have been raised as part of the litigation over the cause of action in the
prior case.” Koprowski, 138 T.C. at 62 (emphasis added). These four
conditions are met here:

       First, in the prior deficiency proceedings, Ms. Kechijian was a
petitioner in the Tax Court, and the Commissioner of Internal Revenue
was the respondent; Ms. Kechijian was an appellant in the Fourth
Circuit, and the Commissioner was the appellee. See generally Austin,
T.C. Memo. 2017-69; Est. of Kechijian v. Commissioner, 962 F.3d 800.
In this case Ms. Kechijian is again the petitioner, and the Commissioner
is again the respondent. Thus, the parties are identical.

       Second, in the prior deficiency case, the Kechijians filed their
deficiency suit in this Court, which is authorized under section 6213(a)
to hear such suits. We had jurisdiction in that prior case to render
judgment. The Fourth Circuit also had jurisdiction under section 7482
to review the decision rendered by this Court.

        Third, the deficiency case concluded with the entry of a decision
on June 23, 2020, by the Fourth Circuit implementing our opinion filed
on April 24, 2017. The Fourth Circuit’s affirmance was the final
judgment on the merits of the Kechijians’ 2004 federal income tax
liability, for which they are jointly and severally liable.
                                    10

[*10] Fourth, in the present case, Ms. Kechijian seeks innocent spouse
relief from that very liability—i.e., the federal income tax liability for
2004—as to which the Fourth Circuit affirmed this Court’s holding in
the deficiency case that she was jointly and severally liable. The subject
matter of the claims is thus identical.

      Since these four conditions are present, relitigation of
Ms. Kechijian’s liability for the 2004 federal income tax deficiency is
barred by res judicata unless she can invoke some exception to its
application.

      B.     Ms. Kechijian has not shown that any exception to the
             doctrine of res judicata applies.

             1.     The exception of section 6015(g)(2)

       Ms. Kechijian argues that, pursuant to section 6015(g)(2), res
judicata does not bar her request for relief from joint liability under
section 6015 because such relief was not an issue in the previous
deficiency proceedings and she did not meaningfully participate in the
previous proceedings. Section 6015(g)(2) provides:

             (2) Res judicata.—In the case of any election under
      subsection (b) or (c) or of any request for equitable relief
      under subsection (f), if a decision of a court in any prior
      proceeding for the same taxable year has become final,
      such decision shall be conclusive except with respect to the
      qualification of the individual for relief which was not an
      issue in such proceeding. The exception contained in the
      preceding sentence shall not apply if the court determines
      that the individual participated meaningfully in such prior
      proceeding.

        Under this statute, to escape the effect of res judicata from prior
litigation, Ms. Kechijian must show (1) that her innocent spouse claim
“was not an issue” in the prior deficiency case and (2) that she did not
“participate[] meaningfully” in the prior deficiency case.             The
Commissioner concedes that Ms. Kechijian did not raise the issue of
innocent spouse relief in the previous deficiency case. Thus, the only
question before us is whether she “participated meaningfully” in the
previous deficiency case within the meaning of section 6015(g)(2).
                                          11

[*11]           2.      Meaningful participation

       In an innocent spouse case, the requesting spouse ultimately
bears the burden of proving that she did not participate meaningfully in
the prior proceeding. See Deihl v. Commissioner, 134 T.C. 156, 162
(2010). In the context of summary judgment (explained in Part I.A
above), she bears the simpler burden of setting forth specific facts to
raise a “genuine dispute” on that issue. For the reasons we now explain,
we hold that Ms. Kechijian fails to carry this burden.

                        a.      Facts and circumstances

       The phrase “participated meaningfully” is not defined in section
6015(g)(2).     This Court looks to the totality of the facts and
circumstances to determine whether a taxpayer participated
meaningfully in a prior proceeding. See Harbin v. Commissioner, 137
T.C. 93, 98 (2011); Rogers v. Commissioner, T.C. Memo. 2017-130,
at *13, aff’d, 908 F.3d 1094 (7th Cir. 2018). Particularly, this Court
views the following factors as probative of meaningful participation:
(1) exercising exclusive control over the handling of the prior proceeding;
(2) having a high level of participation in the prior proceeding (e.g.,
signing court documents and participating in settlement negotiations);
and (3) having the opportunity to raise a claim for relief from joint and
several liability in the prior proceeding. Harbin, 137 T.C. at 98; Rogers
v. Commissioner, T.C. Memo. 2018-53, at *97–98, supplemented by T.C.
Memo. 2019-61, aff’d, 9 F.4th 576 (7th Cir. 2021); see also Haag v.
Shulman, 683 F.3d 26, 31 (1st Cir. 2012), aff’g T.C. Memo. 2011-87.

       Citing a proposed regulation, 5 Ms. Kechijian stresses the
following facts and circumstances: She did not participate in the IRS
Appeals process while the deficiency case was docketed; 6 she did not

        5 Proposed Treasury Regulation section 1.6015-1(e)(3), 80 Fed. Reg. 72649,
72656 (Nov. 20, 2015), suggests a “nonexclusive list of acts to be considered”, and
Ms. Kechijian contends that consideration of those listed acts shows that she did not
meaningfully participate in the prior deficiency case. As we have previously explained,
proposed regulations do not have the force of law but rather “are merely suggestions
made for comment. Proposed regulations ‘carry no more weight than a position
advanced on brief by the respondent.’” Zinniel v. Commissioner, 89 T.C. 357, 369
(1987) (citations omitted) (quoting F.W. Woolworth v. Commissioner, 54 T.C. 1233,
1265–66 (1970)). In this instance, however, the facts and circumstances suggested in
the proposed regulation are consistent with the caselaw cited above.
        6 Ms. Kechijian alleges more broadly (and we assume) that she “did not

participate in the IRS audit or Appeals process”. But section 6015(g)(2) has us consider
                                          12

[*12] participate in any pretrial meetings; she did not participate in
settlement negotiations; she did not sign any court documents; and other
than sitting in the courtroom she did not participate at trial. All these
facts are relevant, and we assume them to be true. Taken by
themselves, they tend against a holding of meaningful participation.

                        b.      Participation through counsel

       On the record before us, however, those facts and circumstances
are overwhelmed by one additional fact: Ms. Kechijian had a lawyer who
represented her throughout the prior proceeding and who, on her behalf,
very meaningfully participated in that proceeding. 7 We have held that
“[t]he fact that the taxpayer was represented by counsel and
communicated with counsel at the prior proceeding is an indication of
meaningful participation”. Rogers, T.C. Memo. 2018-53, at *97–98. Ms.
Kechijian was the client of Attorney Lynn F. Chandler, who did
participate in pretrial meetings and settlement negotiations, did sign
and file court documents (including original and amended pleadings),
and did argue before the Court and examine witnesses at trial. A lawyer
who enters an appearance on behalf of a petitioner thereafter acts for
and on behalf of the petitioner. When a petitioner is represented by
counsel, the acts of counsel fulfill the obligations of the petitioner as
litigant. We do not disregard the acts of the attorney in order to conclude
(under Rule 123(a)) that the “party has failed to plead or otherwise
proceed” or to conclude (under Rule 123(b)) that there has been a “failure
of a petitioner properly to prosecute”. On the contrary, the represented
petitioner does adequately “proceed” and does “properly . . . prosecute”
her case by hiring a lawyer who fulfills her obligations.

      The “participated meaningfully” standard of section 6015(g)(2)
cannot be reasonably construed to always require direct and immediate

her participation “in such prior proceeding”, i.e., a “proceeding” in which there was “a
decision of a court”. Her non-involvement in the administrative audit or Appeals
process is not directly relevant. The proposed regulation (which is not binding, see
supra note 5) does reasonably include, in its “list of acts to be considered”, “[w]hether
the requesting spouse participated in the IRS Appeals process while the prior
proceeding was docketed”, Prop. Treas. Reg. § 1.6015-1(e)(3), 80 Fed. Reg. at 72656
(emphasis added), since that activity before Appeals in a docketed case can be viewed
as a sort of adjunct to the Tax Court proceeding.
        7 As Ms. Kechijian acknowledges, the proposed regulation that she cites does

include, on its “list of acts to be considered”, “whether the requesting spouse was
represented by counsel in the prior proceeding”. Prop. Treas. Reg. § 1.6015-1(e)(3),
80 Fed. Reg. at 72656.
                                         13

[*13] participation by the petitioner herself as opposed to participation
by the petitioner’s lawyer retained for that purpose. It seems impossible
that Congress could have intended the perverse and even absurd results
of such a construction. If participating indirectly through counsel could
not constitute meaningful participation, then a deficiency petitioner
with a potential claim under section 6015 could sometimes exempt
herself from res judicata by retaining counsel to handle her deficiency
case, deliberately refraining from raising that claim in the deficiency
case, and then, if she lost that deficiency case, getting a second bite at
the apple by raising her section 6015 claim in an innocent spouse case
under section 6015(e). 8

       We conclude that section 6015(g)(2) certainly contemplates that
participation through counsel in a prior proceeding can constitute
meaningful participation that triggers res judicata and bars a
subsequent innocent spouse case.

                       c.      Potential    non-meaningful            participation
                               despite having counsel

       Being represented by counsel in a prior proceeding is a fact
showing participation, but it is not the only relevant fact, and there can
be circumstances in which a taxpayer who was a co-petitioner
represented by counsel in a deficiency case nonetheless did not
meaningfully participate in that case. In Deihl, we held that a taxpayer
who (with her husband) was represented by counsel in prior
consolidated deficiency cases did not participate meaningfully in those
cases. Deihl, 134 T.C. at 165. The taxpayer did not sign any court
documents or review the petition or the stipulations of facts in the prior
cases. Id. at 163–64. The attorneys jointly representing the taxpayer
and her husband did not discuss these documents with the taxpayer. Id.
at 164. The taxpayer did not meet with any IRS personnel or participate
in any of the settlement negotiations. Id. Although the taxpayer in
Deihl testified briefly at trial in the deficiency cases, we concluded that
she testified “more like a third-party fact witness than a participating
litigant”, and that the taxpayer’s husband “controlled the litigation . . .

        8 The record before does not suggest any such cynical calculation by Ms.

Kechijian, and we assume there was none. But it might often be true that a spouse
who hopes she and her husband will prevail in disproving a deficiency, but who also
has a potential innocent spouse claim, would prefer not to undermine her husband’s
credibility in the deficiency case by proving herself to have been an innocent spouse—
and him guilty.
                                     14

[*14] until his death” after the trial had been concluded and the Tax
Court had issued its opinion. Id. at 165.

       In Harbin, the ex-husband (Mr. Harbin) was the spouse
requesting relief under section 6015, and the ex-wife (Ms. Nalls) was the
non-requesting spouse and intervenor.           The record showed that
Ms. Nalls exercised “exclusive control over the prior deficiency case”,
Harbin, 137 T.C. at 98, and that Mr. Harbin did not sign any court
documents other than the petition and the amended petition, see id.
at 94, 99. Moreover, Mr. Harbin’s innocent spouse relief claim was
directly in conflict with the interest of Ms. Nalls, but their joint attorney,
who represented both Mr. Harbin and Ms. Nalls, neither obtained
Mr. Harbin’s written consent waiving the conflict of interest nor even
disclosed this conflict to Mr. Harbin but “proceeded with the joint
representation despite the conflict of interest”. Id. at 99. We held that
Mr. Harbin did not participate meaningfully in the previous case
because the attorney’s concurrent representation of the two former
spouses, whose interests were adverse, “obscured and obstructed”
Mr. Harbin’s opportunity to raise a claim for relief under section 6015.
See id.

      Thus, it is possible that a petitioner in a deficiency case who is
represented by an attorney in that case nonetheless does not participate
meaningfully in that case—depending on other facts and circumstances.

                     d.     Ms. Kechijian’s meaningful         participation
                            through counsel

        The other facts and circumstances present in Deihl and Harbin
that disproved “meaningful” participation through counsel in those
cases are not shown or alleged here. The most significant distinction
between those cases and this one is that here Mr. Kechijian had died a
year and a half before the trial in this case. He was not able thereafter
to restrict Ms. Kechijian’s pursuit of her interests and, in particular, her
pursuit of a claim under section 6015. She was no longer under the
shadow of Mr. Kechijian but rather was in a position to control the
litigation however she wished—both as a petitioner in her own right and
as the co-executor of Mr. Kechijian’s estate.

      As to her co-executor, Mr. Hoehn, we assume it is true, as
Ms. Kechijian alleges, that only he and not she gave instructions to
counsel for the handling of the deficiency case after Mr. Kechijian’s
death. However, that was by Ms. Kechijian’s choice. As Mr. Hoehn
                                    15

[*15] explains, “Susie delegated all responsibility for the Prior
Litigation to me as her Co-Executor”. This may well have been a
sensible decision on Ms. Kechijian’s part, and it freed her from actually
having to make decisions about the litigation; that is, the manner in
which she decided to participate in the case was by delegation to Mr.
Hoehn and to her lawyer, Ms. Chandler.

       Unlike the petitioner in Deihl, Ms. Kechijian had unrestricted
control over the prior deficiency case after Mr. Kechijian passed away in
September 2013—both as a co-petitioner personally and as a
representative of Mr. Kechijian’s estate. We ruled for the requesting
spouse in Deihl because the requesting spouse’s low level of
participation in the prior case was the result of the non-requesting
spouse’s controlling the litigation.       That is not the case here.
Mr. Kechijian may have controlled the proceedings before his death, but
once he died and Ms. Kechijian was named the co-executor of his estate,
Ms. Kechijian’s husband was no longer controlling the case.

       Unlike the petitioner in Harbin, Ms. Kechijian has made no
showing or allegation that the Kechijians’ joint attorney failed to
disclose any conflict of interest and proceeded with the joint
representation in the presence of such a conflict. In fact, Ms. Kechijian’s
declaration submitted in support of her motion for summary judgment
makes no allegation whatever as to any communication or lack of
communication between her attorney and herself about her interests.
She makes no comment about any respect in which the joint
representation obscured or obstructed her attorney’s attention to her
interests in the prior case, and she retained that same attorney to
represent her in this case. Thus, she does not articulate any reason to
conclude that she did not meaningfully participate through her attorney
even before Mr. Kechijian’s death; and after his death, she had no
possible competition for her attorney’s attention and loyalty. She was
in control as much as she chose to be.

       Therefore, even though it is undisputed that Ms. Kechijian only
sat in the gallery during the trial in the prior deficiency case, she has
not alleged or shown that this was the result of her counsel’s and co-
executor’s excluding her from participating in that case. Without
evidence supporting such an exclusion, we can only conclude that
Ms. Kechijian’s low level of visible participation in the prior case was
due to her deliberate delegation of her responsibility in that case to her
attorney and her co-executor. Such delegation does not establish that
Ms. Kechijian did not meaningfully participate in the prior deficiency
                                   16

[*16] case; to the contrary, it shows that Ms. Kechijian could have raised
the issue of innocent spouse relief in the prior deficiency case—but she
did not. Therefore, she does not qualify for the exception in section
6015(g)(2), and in this case she is not excepted from the application of
res judicata to the issue of innocent spouse relief from joint and several
liability.

       Because res judicata bars Ms. Kechijian from relitigating her
joint and several liability for the 2004 federal income tax that she
already litigated in the prior deficiency case, we will deny
Ms. Kechijian’s motion for summary judgment, will grant the
Commissioner’s cross-motion for summary judgment, and will sustain
the IRS’s determination to deny Ms. Kechijian relief under section 6015
from joint and several liability for the 2004 deficiency and the accuracy-
related penalty.

      To reflect the foregoing,

      An appropriate order and decision will be entered.