The petition in this case was filed in response to a final determination denying petitioner relief from joint and several liability under section 6015
Section 6015(e) allows a spouse who has requested relief to petition the Commissioner's denial of relief. Such cases are
On January 22, 2015, after respondent had filed his answer, petitioner filed a motion to dismiss, requesting that she be permitted to voluntarily withdraw her petition. Respondent does not object to the motion. Because a question has arisen as to our authority to dismiss without entering a decision, we must decide whether to grant petitioner's motion.
Historically, most cases coming before this Court have involved petitions to redetermine "deficiencies" pursuant to section 6213. Generally, a deficiency occurs when the correct tax liability exceeds that reported on the taxpayer's return. See sec. 6211(a). When our jurisdiction to redetermine a deficiency is invoked section 7459(d) provides:
It follows that in deficiency cases brought pursuant to section 6213 a taxpayer may not withdraw a petition in order to avoid a decision. Estate of Ming v. Commissioner, 62 T.C. 519 (1974).
Over the years Congress has expanded our jurisdiction over controversies that do not require us to redetermine deficiencies. One such area involves our jurisdiction to review the propriety of collection actions pursuant to sections 6330 and 6320. In Wagner v. Commissioner, 118 T.C. 330 (2002), we distinguished Estate of Ming and held that the taxpayers could withdraw their petition to challenge the propriety of a lien filed by the IRS because there was no deficiency involved and therefore section 7459(d) had no application. Because there was no Tax Court Rule that controlled, we looked to the Federal Rules of Civil Procedure (FRCP) for guidance.
FRCP 41(a) sets forth rules for the voluntary dismissal of a civil "action".
In deciding whether to grant a motion to dismiss under FRCP 41(a)(2), a court must exercise its broad equitable discretion to "weigh the relevant equities and do justice between the parties in each case". McCants v. Ford Motor Co., 781 F.2d 855, 857 (11th Cir. 1986); see also Wagner v. Commissioner, 118 T.C. at 333. "The crucial question to be determined is, [w]ould the defendant lose any substantial right by the dismissal." Durham v. Fla. E. Coast Ry. Co., 385 F.2d 366, 368 (5th Cir. 1967).
In Vetrano v. Commissioner, 116 T.C. 272, 280 (2001), we held that the Court had no authority to grant the taxpayer's request for leave to withdraw her election under section 6015 "without prejudice". However, we think that Vetrano is distinguishable from the instant case.
The taxpayer in Vetrano invoked the Court's jurisdiction to review her claim for section 6015 relief by raising that matter as an affirmative defense in a case based on a petition for redetermination of a deficiency timely filed under section 6213. That is one of three ways in which the Court may acquire jurisdiction to review a claim for section 6015 relief. See Van Arsdalen v. Commissioner, 123 T.C. 135, 137-138 (2004). A second way is where a taxpayer timely requests section 6015 relief in a petition for review of a lien or levy action. See id. The third way is where a taxpayer timely files a "stand alone" petition requesting section 6015 relief and invokes the Court's jurisdiction under section 6015(e)(1). See id. In this third instance, the Commissioner must have issued a final determination denying the taxpayer's
In Vetrano there was a trial after which the Court decided that the taxpayer and her husband were liable for the deficiency and for the fraud penalty but reserved judgment on whether the taxpayer was entitled to any of her requested relief from joint liability. See Vetrano v. Commissioner, 116 T.C. at 273-274. The Court ordered the parties to advise the Court whether any further action was required to decide that issue. See id. at 275. The taxpayer responded to the order by asking for permission to withdraw her request for section 6015 relief without prejudice. See id. at 275-276. The Court concluded that it could not grant the request because granting the motion would improperly disregard a congressional mandate set forth in section 6015(g)(2). See id. at 280. Section 6015(g)(2) generally provides that, with a single exception, a court's final decision as to a taxable year is conclusive with respect to an individual's later claim for section 6015 relief. The exception is that the final decision fails to be conclusive as to the later claim for relief to the extent that the later claim for relief was not an issue in the prior proceeding unless the individual participated meaningfully in the prior proceeding.
Here, by contrast, petitioner did not file a petition to redetermine a deficiency. Petitioner invoked the Court's jurisdiction under section 6015(e)(1) to review respondent's final determination denying her section 6015 relief. That was the only issue in this "stand alone" section 6015 case. Congress has not required the Court to enter a decision upon the dismissal of a case such as this. Dismissal of this case through withdrawal of the petition has the same result as if the case was never brought. See Humphreys v. United States, 272 F.2d at 412; Wagner v. Commissioner, 118 T.C. at 333-334; see also Dove v. CODESCO, 569 F.2d at 809 n.3. This also means that section 6015(g)(2) will not apply in any later case that petitioner may commence as to section 6015 relief. Section 6015(g)(2) is operative only if there is a "prior proceeding". Dismissal of this case pursuant to the principles of FRCP 41(a)(2) will serve to treat this case as never having been a "proceeding".
In accordance with the foregoing,
An appropriate order of dismissal will be entered granting petitioner's motion to dismiss.
See Black's Law Dictionary 537 (9th ed. 2009) (defining the term "dismissed without prejudice" in the context of a case to mean that the case is "removed from the court's docket in such a way that the plaintiff may refile the same suit on the same claim"); see also id. (defining the term "dismissal without prejudice" to mean "A dismissal that does not bar the plaintiff from refiling the lawsuit within the applicable limitations period").