Court Opinion

ID: 9556903
Source: CourtListenerOpinion
Date Created: 2023-08-19 00:00:31.654561+00
Date Added: 2024-06-11T09:04:19.332056
License: Public Domain

Case: 22-60624        Document: 00516863704             Page: 1      Date Filed: 08/18/2023

             United States Court of Appeals
                  for the Fifth Circuit
                                     ____________                               United States Court of Appeals
                                                                                         Fifth Circuit

                                                                                       FILED
                                      No. 22-60624                               August 18, 2023
                                    Summary Calendar
                                    ____________                                     Lyle W. Cayce
                                                                                          Clerk
   Ames D. Ray,

                                                                  Petitioner—Appellant,

                                            versus

   Commissioner of Internal Revenue,

                                               Respondent—Appellee.
                     ______________________________

                      Appeal from the United States Tax Court
                                USTC No. 14052-16
                     ______________________________

   Before Clement, Duncan, and Douglas, Circuit Judges.
   Per Curiam: *
         Ames Ray appeals a U.S. Tax Court order denying his motion to
   reopen his deficiency proceedings. Because Ray fails to show “extraordinary
   circumstances which reveal a clear abuse of discretion,” we AFFIRM.
                                               I.
         On March 16, 2016, the Internal Revenue Service issued Ray a notice
   of deficiency concerning his 2014 federal income tax return, asserting a tax
         _____________________
         *
             This opinion is not designated for publication. See 5th Cir. R. 47.5.
Case: 22-60624      Document: 00516863704          Page: 2   Date Filed: 08/18/2023

                                    No. 22-60624

   deficiency of $53,988 and assessing a $9,883 accuracy-related penalty
   pursuant to I.R.C. § 6662(a), which applies to any underpayment attributable
   to one of the ten causes listed in § 6662(b). Ray filed a petition with the Tax
   Court challenging the deficiency and penalty. With respect to the accuracy-
   related penalty under § 6662(a), the Tax Court held that Ray was liable on
   two independent grounds: negligence of the rules or regulations (§
   6662(b)(1)) and substantial understatement of income tax (§ 6662(b)(2)).
          Ray appealed the Tax Court’s determination to this court, and we
   affirmed except for a portion of the penalty, which we determined fell under
   the “reasonable cause and good faith” exception of I.R.C. § 6664(c)(1). Ray
   v. Comm’r, 13 F.4th 467, 482–83 (5th Cir. 2021). We therefore remanded the
   case to the Tax Court to recompute the penalty. Id. at 483.
          On remand, the Tax Court determined that no penalty was owed.
   Unsatisfied, Ray filed a motion to reopen in which he asked the Tax Court to
   consider alleged newly discovered evidence which Ray claimed had been
   concealed by the Commissioner, showed that the Commissioner knew from
   the outset of this case that Ray had not acted negligently, and thus entitled
   Ray to discovery sanctions against the Commissioner. The Tax Court denied
   Ray’s motion, and he now appeals.
                                         II.
          “The Tax Court’s denial of a motion to reopen the record for
   admission of additional evidence is not subject to review except upon a
   demonstration of extraordinary circumstances which reveal a clear abuse of
   discretion.” Robinson v. Comm’r, 70 F.3d 34, 39 (5th Cir. 1995) (internal
   quotation marks and citation omitted). The Tax Court “will not grant a
   motion to reopen the record unless, among other requirements, the evidence
   relied on is not merely cumulative or impeaching, the evidence is material to
   the issues involved, and the evidence probably would change the outcome of

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Case: 22-60624      Document: 00516863704          Page: 3   Date Filed: 08/18/2023

                                    No. 22-60624

   the case.” Butler v. Comm’r, 114 T.C. 276, 287 (2000), abrogated on other
   grounds by Porter v. Comm’r, 132 T.C. 203 (2009).
                                        III.
          Ray has not demonstrated any extraordinary circumstances
   warranting review of the Tax Court’s order. In its original decision, the Tax
   Court determined that the accuracy-related penalty under § 6662(a) was
   justified on either of two independent bases: negligence and substantial
   understatement. The evidence that Ray sought to introduce through his
   motion to reopen went only to the issue of negligence; it was irrelevant to the
   question of substantial understatement. Thus, there was no chance, much
   less probability, that this evidence would have changed the outcome of Ray’s
   original Tax Court proceeding. At most, it would have eliminated negligence
   as a basis for the accuracy-related penalty, yet the Tax Court would have still
   enforced the penalty on the basis of substantial understatement.
          Nor would this evidence have changed the outcome of Ray’s
   subsequent proceedings either. Our court’s previous remand was based on
   the reasonable cause defense; it did not overturn the Tax Court’s ruling on
   either negligence or substantial understatement. See Ray, 13 F.4th at 482–83.
   So, that decision would have been the same as well, regardless of whether one
   or two bases for upholding the accuracy-related penalty had been presented
   to this court. And in the most recent Tax Court proceeding, the court
   determined that Ray owes no penalty, so that outcome would have been no
   different either (nor would Ray have wanted it to be).
          Put simply, Ray did not meet the Tax Court’s standard for granting a
   motion to reopen because he did not demonstrate that the new evidence he
   sought to introduce “probably would change the outcome of the case.” See
   Butler, 114 T.C. at 287. And he certainly has not shown the sort of

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                                   No. 22-60624

   “extraordinary circumstances” necessary to warrant our court’s review of
   the Tax Court’s denial. See Robinson, 70 F.3d at 39.
          AFFIRMED.

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