Judge Rose E. (“Cracklin'”) Jenkins leads off with a full-dress T. C. in Students And Academics For Free Expression, Speech, And Political Action In Campus Education, Inc., 163 T. C. 9, filed 11/26/24. For collectors of cutesy acronyms, this mouthful boils down to SAFE SPACE.

Howbeit, the SAFESPACERs petitioned when, after 270 days since their Section 501(c)(3) was filed, IRS had done nothing. After a brief confab during which IRS claimed their paperwork needs more stuff, the SAFESPACERs move to dismiss without prejudice, and IRS joins in.

Everyone agrees that the petition was timely filed, and Tax Court has Section 7428(a)(1) DJ jurisdiction. But can a Section 7428(a)(1) petition be dismissed without prejudice?

Yes, says Judge Jenkins. Leave aside Sections 6213 and 7459(d), where dismissal otherwise than for jurisdictional defects is not available, because in such cases decision must be entered for IRS in the full amount of the SND.

“However, the Court considers other types of cases to which sections 6213 and 7459(d) do not apply, including under provisions of the Code providing for declaratory judgment by the Court. See, e.g., I.R.C. §§ 7428, 7476, 7477, 7478, 7479. See generally Rule 210. In such cases, the Court has previously granted motions to voluntarily dismiss or withdraw petitions. See Pugh v. Commissioner, 161 T.C. 4, 8–9 (2023) (collecting cases in which voluntary dismissal was permitted and concluding that voluntary dismissal was appropriate for a petition under section 7345); Joseph E. Abe, DDS, Inc. v. Commissioner, 161 T.C. 1, 4 (2023) (concluding that voluntary dismissal was appropriate for a petition for declaratory judgment under section 7476).” 163 T. C. 9, at p. 3.

For the story on Zola Jane Pugh, 160 T. C. 2, filed 8/14/23, see my blogpost “Abroad at Home – Part Deux,” 8/14/23*; for the story on Joseph E. Abe, DDS, see my blogpost “A Hotly Burning Question What Has Swept the Continent – Redux,” 8/3/23**.

And FRCP 41(a) gets a good workout. The key here is prejudice to the nonmovant, but IRS has gone along with this motion, so clearly no prejudice. Anyway, the prospect of further litigation is not considered prejudice. There’s no SOL issue here, as the 270-day threshold in Section 7428 is a minimum, not a maximum. While Judge Jenkins thinks that an incomplete application might mean a failure to exhaust administrative remedies, the SAFESPACERs claim they did and IRS doesn’t claim they didn’t. And IRS has neither answered the petition nor moved for summary J, so FRCP 41(a)(1)(A)(i) is OK.

Petition dismissed without prejudice.

* https://taishofflaw.com/2023/08/14/abroad-at-home-part-deux/

** https://taishofflaw.com/2023/08/03/a-hotly-burning-question-what-has-swept-the-continent-redux/