A latest Tax Court docket case thought-about its jurisdiction when the IRS erroneously included a denied innocent-spouse aid declare for a previous yr in a later willpower for one more yr. Because the case holds, that later willpower can successfully revive the Tax Court docket’s jurisdiction over the denied declare for the prior yr due to its inclusion within the new willpower—even when its inclusion was in error.
United States Tax Court docket constructing in Washington DC
getty
Within the case, for the tax years at challenge, 2010 and 2013, the taxpayer filed joint returns together with her then-spouse.
In 2015, the taxpayer requested harmless partner aid for tax yr 2013, and, in March of 2016, the Commissioner issued a ultimate willpower denying that request. As a part of that denial, the willpower famous that the taxpayer had 90-days to file a petition with the Tax Court docket to problem the willpower.
Ninety-one days later, the taxpayer mailed a petition to the Tax Court docket; the Commissioner moved to dismiss for lack of jurisdiction, which the Tax Court docket granted.
In November of 2016, nevertheless, the taxpayer submitted one other request for harmless partner aid for tax yr 2010; in that request, although, she additionally re-raised the 2013 legal responsibility, together with attaching a duplicate of her Kind 8857 for 2013.
In March of 2019, the Commissioner denied the request filed in November 2016. In that response, the header of the letter famous it regarded tax yr 2010, however, within the precise physique of the letter, it famous substantive determinations for each tax yr 2010 and 2013.
The taxpayer well timed filed a Tax Court docket petition, difficult the March 2019 willpower; in that petition, she expressly included challenges for tax yr 2010 and tax yr 2013.
The Commissioner, nevertheless, filed a movement to dismiss in regards to the 2013 tax yr request for lack of jurisdiction. The Commissioner argued that the March 2019 letter was not a “second willpower” for 2013.
Part 6015(e) offers that taxpayers might petition the Tax Court docket to evaluation determinations of harmless partner aid. Specifically, it offers that petitions could also be filed (and the court docket may have jurisdiction), amongst different methods, if the petition is filed inside 90 days after “the date the Secretary mails, by licensed or registered mail to the taxpayer’s final identified deal with, discover of the Secretary’s ultimate willpower of aid out there to the person . . . .”
Because the court docket famous, “[f]inal determinations in harmless partner circumstances are usually singular, conclusive choices.” However, the Tax Court docket famous, “nothing in [§ 6015(e)(1)(A)(i)(I)] prohibits the Commissioner from issuing multiple ultimate willpower as to a given tax yr.” Furthermore, even when that provision might be interpreted to permit just one ultimate willpower, the Tax Court docket defined, “it doesn’t specify whether or not it’s one ultimate willpower per request for harmless partner aid or one ultimate willpower per tax yr.”
The Tax Court docket additionally thought-about the § 6015 laws. The Tax Court docket famous that the laws “depart open the chance for the Commissioner to challenge a second ultimate willpower.” Supporting this, the Tax Court docket defined that, for instance, “if a requesting partner modifications marital standing, the laws allow a second declare, leading to a second ultimate willpower.”
Analyzing its prior case regulation, the Tax Court docket additionally famous that the Commissioner can deny reconsideration with out issuing a second ultimate willpower. For instance, in Barnes v. Comm’r, 130 T.C. 248 (2008), the Tax Court docket held {that a} Letter 3657C, which declined to rethink the unique denial for harmless partner aid, was not handled as a ultimate willpower.
Not like Barnes, nevertheless, on this case, the Tax Court docket discovered that the Commissioner did challenge a second ultimate willpower. Equally, the Tax Court docket famous that within the whistleblower context, successive letters that purport to be determinations can bestow successive alternatives to file a petition.
Certainly, the Commissioner famous that inclusion of tax yr 2013 within the March 2019 willpower was an error. Nevertheless, the Tax Court docket concluded that, “[e]rror or not, the Commissioner’s discover is unambiguous in its denial as to each 2010 and 2013.” Nothing within the letter, the Tax Court docket defined, “conflicts with the notion that this can be a denial on the deserves as to each 2010 and 2013.”
However, once more harkening to its whistleblower caselaw, the Tax Court docket defined that, “we now have beforehand held that we now have jurisdiction to evaluation determinations issued in error.” The identical is true beneath the Tax Court docket’s deficiency case regulation, in line with the court docket.
In closing, the Tax Court docket held that, “[w]hen the Commissioner points a discover, we decide the validity and scope of that discover from its face.” Subsequently, as a result of the March 2019 discover on its face decided each tax years 2010 and 2013, and a well timed petition was filed, the Tax Court docket had jurisdiction over each years.
The case is Vera v. Comm’r, 157 T.C. No. 9 (Aug. 23, 2021). You possibly can learn the opinion right here.
That is solely a abstract of the case and a few parts—together with details, points, citations, or evaluation—might have been omitted or edited; should you want recommendation on this space, please evaluation the case in its entirety and seek the advice of an lawyer.