In Uncategorized on 12/08/2021 at 18:24

We all know that Section 6015(e)(3) ousts Tax Court of innocent spousery when the alleged innocent sues for a refund. But does it matter whether the innocent sues first and petitions afterwards? Nope, says Judge Christian N. (“Speedy”) Weiler, in Alice J Coggin, 157 T. C. 12, filed 12/8/21.*

Judge Speedy Weiler has a great syntactical chaw. “Sec. 6015(e)(3) provides: ‘If a suit for refund is begun’; it does not say ‘[i]f a suit for refund is [later] begun’ or ‘is begun [after the Tax Court case]’. It provides that ‘the Tax Court shall lose jurisdiction’, not that ‘the Tax Court shall lose [earlier acquired] jurisdiction’. It provides that ‘the [district] court acquiring jurisdiction shall have jurisdiction over the [Tax Court] petition’, not ‘the  [district] court [subsequently] acquiring jurisdiction’ nor ‘shall have jurisdiction over the [previously filed Tax Court] petition’.” 157 T. C. 12, at p. 20, footnote 19.

Alice was 50-50 in a Sub S with late spouse Phil. Late spouse Phil was also late filer Phil. Alice claims late spouse forged her signature on late-filed MFJs for years 2001-2009. Just before late filer Phil became late spouse Phil, he paid all of 2001-2007 (tax, but not add-ons, chops or interest), part of 2008 (ditto), and nothing of 2009. After late spouse Phil became so, IRS socks Alice with joint-and-several for whatever late spouse-filer didn’t pay. Alice files amended MFSs, claiming refunds. IRS says no, so Alice sues in USDCMDNC for refunds, never mentioning innocent spousery. DOJ counterclaims for the unpaid stuff. USDCMDNC tosses the refund claims, but doesn’t rule on the DOJ counterclaims (reserving same for trial).

Alice finally petitions as a stand-alone (no SNOD), asking USDCMDNC for a stay pending Tax Court proceedings, which USDCMDNC grants, saying it’s not ruling on innocent spousery, but might like to hear what pore l’il ol’ Tax Court has to say, if Tax Court has jurisdiction, 157 T. C. 12, at p. 22, footnote 23.

If. How many cases revolve, rise, or set on that word.

Well, Judge Speedy Weiler, like an even greater juridical mind of old, renders a split decision. Tax Court decides tax years; claims may involve several years (identical issues, identical parties), but only the years placed in issue count. USDCMDNC put paid to years 2001-2007. Alice could’a would’a should’a raised innocent spousery there; after all, she amended her pleadings three (count ’em, three) times, and anyhow, she conceded 2001. Thus res judicata (claim preclusion) bars Tax Court from considering innocent spousery for those tax years.

But 2008 was never paid in full, and 2009 not at all. Alice did petition more than six (count ’em, six) months after DOJ tossed her, so stand-alone is definitely in play, barring res judicata.

IRS wants Judge Speedy Weiler to toss the whole shebang, arguing that when Alice invoked the jurisdiction of USDCMDNC, Tax Court was out. OK, she’s out as to 2001-2007 tax years, but there remain 2008 and 2009 tax years. Those years may serve as a defense to the DOJ counterclaims, so as USDCMDNC has jurisdiction over the trial, it has jurisdiction over that issue. But Tax Court has innocent spousery stand-alone jurisdiction for those years as well.

“Section 6015(e)(3) does not address this overlap in jurisdiction and therefore leaves us to consult principles of comity to decide whether both courts should go forward on these common issues or, if not, which one should proceed.” 157 T. C. 12, at p. 22.

Remember, USDCMDNC wanted to hear what Tax Court would say. And judges are no different from the rest of us: if someone else wants to take the heavy lifting, go to it, mate.

Alice can go for innocent spousery for years 2008 and 2009 in USTC.

*Alice J Coggin 157 T C 12 12 8 21


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