Court Opinion

ID: 9465537
Source: CourtListenerOpinion
Date Created: 2023-08-05 00:48:49.488558+00
Date Added: 2024-06-11T17:39:13.467286
License: Public Domain

GRANT, District Judge,
concurring:
In concurring with the majority opinion, I wish, however, to comment on three areas: (1) the legislative history of 26 U.S.C. § 7422(e); (2) a potentially misleading case, and (3) 26 U.S.C. § 7459(b).
I— Both the Senate and House Reports1 on Section 7422(e) evidence two policies: (1) to give jurisdiction over the cause of action to only one court, and thereby prevent relitigation of identical issues, and (2) to give the taxpayer the choice of which court shall have jurisdiction. This choice was intended to be given to the taxpayer rather than the government. Pfeiffer Company v. United States, 518 F.2d 124, 129 (8th Cir. 1975). In the case at bar, even if taxpayer would have paid the deficiency in order to preserve district court jurisdiction over the refund, the Pfeiffer case indicates that again her choice of forums to litigate the deficiency need not be recognized by the government. Under Pfeiffer, even if taxpayer pays the deficiency, the government “may —but seemingly is not required to — bring a counterclaim”2 in the district court. See also Caleshu v. United States, 570 F.2d 711 (8th Cir. 1978). This view of the law might work to defeat the Congressional purpose of choice of forum. See Judge Heaney’s concurring opinion in Pfeiffer.
II— To prevent a recurrence of the taxpayer’s present plight (of failing to make a timely appeal of her Tax Court decision in reliance upon the mistaken assumption that the district court had continuing jurisdiction), I would stress that, as the law stands now, all issues that can be raised before the Tax Court must be raised, and that once the Tax Court decision is final, there is no further recourse to a district court regarding non-equitable issues. Plaintiff has cited the case of Falese v. United States, 26 A.F.T.R.2d 70-5940 (N.D.Ill.1970), for the proposition that the issues comprising the subject matter of a refund suit are divisible and that when one issue is presented to the Tax Court, that fact does not mean that all other issues from that year must necessarily follow the first issue into the Tax Court’s jurisdiction. I would warn that such has proved to be a losing proposition.
Ill — Finally, plaintiff’s protest over the application of Section 7422(e)’s ban on continuing district court jurisdiction can be appreciated here because of the fact that the Tax Court apparently did not consider anything beyond the threshold barrier of the statute of limitations. The pleadings before the Tax Court show that what actually happened was that the taxpayer requested that the government’s claim of deficiency be dismissed with prejudice because of the statute of limitations, and that the taxpayer’s refund claim be dismissed without prejudice so that the pending district court refund suit could proceed. The government opposed both motions for dismissal and reminded the Tax Court that it had jurisdiction to determine an overpayment and that the government was ready to proceed to trial on that issue. The Tax Court, however, thereupon rendered the following decision:
DECISION
At the hearing in this case held at Portland, Oregon, on May 9, 1974, the parties admitted that the statutory notice was not mailed to the petitioner within *1074the time prescribed by law. Petitioner has pleaded the statute of limitations. Accordingly, it is hereby
DECIDED: That there is no deficiency in income tax or additions to tax under section 6651 of the Internal Revenue Code due from the petitioner for the taxable year ended December 31, 1965.
(signed) William H. Quealy
Judge
This all too brief entry by the Tax Court resolved the deficiency issue on the threshold barrier of the statute of limitations, but did not address the overpayment issue. Therefore, it is not clear whether the merits of either issue were ever litigated before the Tax Court. Apparently they were not.
Section 7459(b) of 26 U.S.C. prescribes the duty of a Tax Court in rendering a decision:
(b) Inclusion of findings of fact or opinions in report. — It shall be the duty of the Tax Court and of each division to include in its report upon any proceeding its findings of fact or opinion or memorandum opinion. The Tax Court shall report in writing all its findings of fact, opinions, and memorandum opinions.
Section 7459(b) appears to impose an affirmative duty on the Tax Court to put in writing all of its findings of fact and opinions. Furthermore, courts have held that the Tax Court is required to resolve all material issues properly raised before it and to make appropriate fact-findings upon such issues. Transport Manufacturing & Equipment Co. of Del. v. C.I.R., 374 F.2d 173 (8th Cir. 1967). Because of this duty to make written findings, an inference can be made that because the Tax Court’s decision included no findings of fact regarding overpayment or theft deductions, the Tax Court did not consider that those issues were properly before it. If this is what actually occurred, then it would suggest that the Tax Court erred. When the petition for redetermination of deficiency was filed with the Tax Court, both the issue of deficiency, as well as any overpayment issue, were properly before the Tax Court and, regardless of the pending refund action, the Tax Court should have made findings regarding the computations basic to determinations of those issues. Unfortunately for plaintiff, however, the case at bar is an appeal from the judgment of the District Court for the District of Oregon, not an appeal from the 1974 decision of the Tax Court.

. Both the House and Senate Reports read in part:
. The result under subsection (e) is to give jurisdiction over the cause of action to only 1 court (2 courts may acquire jurisdiction under existing law), and to give the taxpayer the choice of which court shall have jurisdiction. The taxpayer, by filing a petition in the Tax Court, would cause that court to have sole jurisdiction, or, by failing to file a petition in the Tax Court, would cause the district court or the Court of Claims to have sole jurisdiction . . . (Emphasis supplied.)
H.Rep.No.1337, 83d Cong., 2d Sess., p. '09 (3 U.S.Code Cong. & Admin.News, pp. 4017, 4136 (1954)); S.Rep.No.1622, 83d Cong. 2d Sess., pp. 149, 610-611 (3 U.S.Code Cong. & Admin. News, pp. 4621, 4782-4783, 5261 (1954)).

. Pfeiffer at p. 128 quoting Flora v. U. S., 362 U.S. 145, 80 S.Ct. 630, 4 L.Ed.2d 623 (1960).