In Uncategorized on 03/04/2021 at 16:32

I thought it was settled law that, where the statute did not mandate entry of decision in favor of IRS in a sum certain specified (deficiency cases), petitioner could successfully move to dismiss. That was settled with CDP cases, with whistleblowers, and innocent spouses, all of which I’ve blogged. So when petitioners seek abatement of interest per Section 6404(h), and fold when IRS limps in, why not?

The old Tax Court website (pardon a nostalgic sigh) had this definition of a full-dress T. C. opinion: “Generally, a Tax Court Opinion is issued in a regular case when the Tax Court believes it involves a sufficiently important legal issue or principle.” A couple times (hi, Judge Holmes), I disagreed over the years with the classification of a case into the T. C. or T. C. Memo. (settled law) category.

Today, I’m perplexed.

Judge Kerrigan must have had an idle moment because she gives us a full-dress five-page T.C. in reply to my question, Mainstay Business Solutions, 156 T. C. 7, filed 3/4/21.

“In 1996 Congress granted the Tax Court jurisdiction through what is now designated section 6404(h) to determine whether the Secretary’s failure to abate interest under section 6404 was an abuse of discretion. Taxpayer Bill of Rights 2, Pub. L. No. 104-168, sec. 302(a), 110 Stat. at 1457 (1996).

“For the review of collection actions, determination of innocent spouse relief, and whistleblower award determinations, we have concluded that a petitioner is able to withdraw a petition. As we did in Wagner, Davidson, and Jacobson, we look to the Federal Rules of Civil Procedure (FRCP) for guidance because there is no Tax Court Rule that controls. See Rule 1(b), (d). FRCP 41 allows a plaintiff to dismiss a civil action voluntarily without a court order if the plaintiff files a notice of dismissal before the opposing party serves either an answer or a motion for summary judgment or if the plaintiff files a stipulation of dismissal signed by all parties who have appeared. See Fed. R. Civ. P. 41(a)(1)(A). In all other circumstances a plaintiff is allowed to dismiss a civil action voluntarily only through a court order. See id. subpara. (2). A court has discretion to dismiss a case pursuant to FRCP 41(a)(2). Consistent with our holdings in Wagner, Davidson, and Jacobson, which allowed the withdrawal of nondeficiency petitions, we have the authority to allow a petition to be withdrawn voluntarily in a case for review of the Secretary’s failure to abate interest.” 156 T. C. 7, at pp. 3-4. (Citations omitted).

And Judge Kerrigan lets the Mainstays slack the stays and heave-to, as IRS doesn’t object.

Of course, if the respondent (IRS) is prejudiced and objects, la partie continue.

But for this we needed a full-dress T. C.? With six (count ’em, six) lawyers?


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