In Uncategorized on 09/05/2019 at 19:30

I have oft-times lamented, and joined in the laments of judges and litigants, that US Tax Court has but the shreds of jurisdiction that Congress has bestowed upon it. Compared to the sweeping jurisdiction that the Constitution has vested in USDCs, CCAs and the Supremes, namely, viz., and to wit, the judicial power of the United States of America, Tax Court stands, like the aged man in the poem, “a paltry thing, a tattered coat upon a stick.”

The late Justice Antonin Scalia compared it to a traffic court. Sometimes it seems he wasn’t wrong.

And yet we hang upon its decisions, and recognize its bench as the most qualified group of specialist judges in any Court in this country.

Today David K. Wagstaff and Jeffrey A. Davis, 2019 T. C. Memo. 114, filed 9/5/19, have a valid suggestion, that deserves more than the tired boilerplate.

“The Tax Court is a court of limited jurisdiction and may exercise jurisdiction only to the extent authorized by Congress. See sec. 7442; Naftel v. Commissioner, 85 T.C. 527, 529 (1985) (“It is well settled that the Tax Court is a court of limited jurisdiction, and * * * [it] may exercise * * * [its] jurisdiction only to the extent authorized by Congress.”). If the Court does not have jurisdiction to consider an issue, then despite a party’s choice of the Tax Court as a forum to settle the dispute, the Court may not decide the issue. Naftel v. Commissioner, 85 T.C. at 530. 2019 T. C. Memo. 119, at pp. 5-6.

DWags and JD were fighting about a $3K deficiency, which IRS folded after DWags and JD papered IRS thoroughly pre-SNOD, got their US Senator (now Presidential hopeful, btw) on board, who brought in the Taxpayer Advocate.

Turns out the SSA-1099 that claimed an offset for unemployment comp was wrong, and Labor Dep’t agreed, although IRS seems to have lost the paperwork.

DWags and JD want “…$154.98 in costs consisting of a Tax Court filing fee, postage, and travel expenses.” 2019 T. C. Memo. 114, at p. 4.

IRS, fighting to the last, concedes everything but the affidavit that DWags and JD never sent. That was the 28 U.S.C. sec. 2412(d)(2)(B) (2012) net worth affidavit as required by Rule 231(b)(4), but DWags and JD promptly furnish same, and IRS folds on the $154.98.

But DWags and JD want Tax Court to make a rule to prevent the same sort of whipsaw between two Federal agencies that don’t listen to each other from happening to other hapless taxpayers.

“Petitioners additionally requested that this Court adopt a rule that would be applied when two or more Federal agencies provide conflicting information to a taxpayer, the taxpayer discloses the conflict in his or her return, the taxpayer provides documentation supporting his or her position, and the taxpayer continues to respond timely to respondent. Under petitioners’ proposed rule, if all of these requirements are met, respondent would be prevented from seeking a deficiency, hold the taxpayer harmless, request the immediate assistance of the Federal agencies involved to resolve the conflict, be required to keep the taxpayer informed, and provide the taxpayer with notice and an opportunity to be heard before making an assessment.” 2019 T. C. Memo. 114, at p. 4.

Judge Ruwe responds with the usual. No jurisdiction.

OK, no jurisdiction. But how about a wee whispered suggestion to Treasury that such a reg. might be a good idea, when the amount at issue is less than ten times the filing fee in USDC?



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