Golden v. C.I.R.
| Decision Date | 26 November 2008 |
| Docket Number | No. 07-2431.,07-2431. |
| Citation | 548 F.3d 487 |
| Parties | Robert H. GOLDEN and Judith A. Golden, Petitioners-Appellants, v. COMMISSIONER OF INTERNAL REVENUE, Respondent-Appellee. |
| Court | U.S. Court of Appeals — Sixth Circuit |
Robert H. Golden, Southfield, Michigan, for Appellants. Richard L. Parker, United States Department of Justice, Washington, D.C., for Appellee.
ON BRIEF:
Robert H. Golden, Judith A. Golden, Southfield, Michigan, for Appellants. Richard L. Parker, Teresa E. McLaughlin, United States Department of Justice, Washington, D.C., for Appellee.
Before: MOORE and COLE, Circuit Judges; GRAHAM, District Judge.*
Taxpayers Robert and Judith Golden appeal from two orders of the Tax Court sustaining the determination of the Internal Revenue Service ("IRS") Appeals Officer which denied the Goldens relief from the IRS's proposed collection action. The underlying tax dispute, the merits of which are not before us, involved deductions and credits the Goldens claimed on their income-tax returns in the 1970s and early 1980s. In 1990, after the IRS issued a notice of deficiency for these tax years, the Goldens sought review in the Tax Court, and a stipulated decision was entered in 1994. The current litigation stems from the IRS's proposed levy action to collect on these deficiencies. After a collection due-process hearing, the Appeals Officer upheld the proposed levy action, and the Goldens petitioned for review in the Tax Court. The Goldens now appeal the Tax Court's grant of summary judgment to the Commissioner, which sustained the Appeals Officer's determination that the levy action was not time-barred. The Goldens' primary argument on appeal is that the Tax Court erred in finding that the Goldens were precluded by res judicata from challenging the timeliness of the assessment. Additionally, Mrs. Golden appeals the Tax Court's decision, reached after a trial, denying her innocent-spouse relief under Internal Revenue Code ("I.R.C.") § 6015 (26 U.S.C. § 6015). For the reasons explained below, we AFFIRM the Tax Court's orders sustaining the determination of the IRS Appeals Officer.
In the mid-1970s, the Goldens invested $29,000 in a partnership called Spring Hill Associates ("SHA"). Before making the investment, Mr. Golden, who is an attorney, consulted with his wife, a former teacher with a bachelor's degree in education. Although Mrs. Golden initially expressed concern about the investment, she eventually acquiesced, and both Mr. and Mrs. Golden became limited partners in SHA. The Goldens subsequently claimed partnership losses and investment credits from the SHA investment on their joint tax returns for the tax years 1977, 1978, 1979, 1980, and 1981 and amended their 1974 return to claim an investment credit carryback. Although Mrs. Golden had an opportunity to review each return, she did not do so, instead relying on the assurances of her husband and their CPA. The Goldens received periodic reports from SHA, which Mrs. Golden found assured her that "everything was good with this limited partnership." J.A. at 256, 260-61 (Trial Tr. at 38, 42-43). In 1981, the IRS contacted the Goldens, notifying them that SHA was being audited and requesting an extension of the statute of limitations applicable to those tax years, which the Goldens granted. The Goldens refused, however, to grant any extension after 1986. Although Mrs. Golden seems to have deferred to Mr. Golden's judgment, Mr. Golden did consult her before making these decisions.
After an audit, the IRS disallowed the SHA-related losses and credits the Goldens had claimed for the tax years at issue and sent the Goldens a letter on December 9, 1988, proposing increases in the amount of the tax for these years and instructing the Goldens of their right to have a conference with an IRS Appeals Officer. Receiving no response, the IRS sent the Goldens a Notice of Deficiency1 on June 1, 1990, listing the deficiency for each year and informing the Goldens of their right to file for review in the United States Tax Court within ninety days. Accordingly, the Goldens filed a petition in the Tax Court on August 20, 1990, in part arguing that the deficiency was barred by the three-year statute of limitations on assessment in I.R.C. § 6501.2 The parties reached a stipulated decision, which was entered by the Tax Court on February 7, 1994, and the IRS assessed the stipulated deficiencies on May 10, 1994.
The Goldens made no payment, and after nine years, on July 28, 2003, the IRS sent the Goldens a letter demanding payment of the deficiencies plus interest and penalties. The IRS sent a Final Notice on August 20, 2003, notifying the Goldens of the IRS's intent to levy under I.R.C. § 6331 and of the Goldens' right to administrative appeal under § 6330.3 This notice of proposed collection action forms the basis of the case before us.
On September 15, 2003, the Goldens timely filed their request for a Collection Due Process ("CDP") hearing before an IRS Appeals Officer under § 6330, along with a Form 8857, which requested innocent-spouse relief for Mrs. Golden. The Goldens asserted, inter alia, that "[t]he statute of limitations for assessment of tax was not extended to 1994," that the ten-year statute of limitations on collection in I.R.C. § 6502 had expired, and that Mrs. Golden was entitled to innocent-spouse relief. J.A. at 26, 124 (Request for CDP Hearing). The Goldens had a CDP hearing before an IRS Appeals Officer, and the officer issued a Notice of Determination denying relief on August 11, 2004. The officer found that the collection was not time barred, but the discussion focused on the applicability of the ten-year statute of limitations on collection, a challenge that the Goldens have now dropped.4 The officer also found that neither of the three types of innocent-spouse relief provided by § 6015 applied to Mrs. Golden.
On September 10, 2004, the Goldens timely filed a petition in the Tax Court for review of the IRS Appeals Officer's determinations. Among other things, the petition alleged that the collection was barred by both the three-year statute of limitations on assessment and the ten-year statute of limitations on collection and that Mrs. Golden was entitled to innocent-spouse relief. The Commissioner answered on November 4, 2004, alleging as "a defense to the interpreted assignment of error that the statute of limitation bars the collection of the tax due" that "the respondent's records reflect that the respondent assessed the petitioners' tax liabilities for [the relevant tax years] on May 10, 1994 after the entry of the stipulated Decision by [the Tax] Court on February 7, 1994 for Docket No. 18777-90." J.A. at 20 (Answer at 7). The stipulated decision was mentioned elsewhere in the answer and attached as an exhibit.
On December 17, 2004, the Commissioner filed a motion for partial summary judgment "on the issues with respect to the application of the statutes of limitations." J.A. at 41 (Mot. for Partial Summ. J. at 1). Regarding the three-year statute of limitations, the Commissioner argued that res judicata and collateral estoppel barred this claim, because the claim could have been presented in the prior Tax Court action. The Goldens then filed an objection to the motion for partial summary judgment, arguing in part that the issue of the three-year statute of limitations was not precluded by collateral estoppel or res judicata because the issue was never litigated and "the passage of substantial time allows the raising of the statutes of limitation based on new dates and new facts." J.A. at 132-34 (Pet'r Objections at 5-7).
At the hearing on the motion, held on March 15, 2005, Mr. Golden admitted that he "could have raised the three-year statute" during the previous Tax Court proceeding. J.A. at 160 (Summ. J. Hr'g Tr. at 9). After the hearing, the court granted the Goldens' request to file a supplemental brief opposing summary judgment. Although the Goldens's pre-hearing objections had addressed res judicata and collateral estoppel, they now claimed that they "were taken aback by the Court's question because Res Judicata was not mentioned in the written motion by the Respondent, nor was it pled as an affirmative defense by the Respondent," and argued that the Commissioner waived these affirmative defenses by not raising them in the pleadings. J.A. at 138 (Pet'r Br. in Supp. of a Denial of Resp't Mot. for Summ. J. at 2).
The Tax Court granted the Commissioner's motion for partial summary judgment, finding "as a matter of law that petitioners are barred from contesting the existence, amounts, and timeliness of the underlying assessments in this case, and that the period of limitations on collection of the assessments here has not expired." J.A. at 174 (T.C. Memo 2005-170 at 11). The court found that the three-year statute-of-limitations argument was precluded both under I.R.C. § 6330(c)(2)(B), which limits the types of claims that may be raised in a CDP hearing, and by the doctrine of res judicata. In response to the Goldens' claim of surprise as to res judicata, the court "call[ed] petitioners' attention to pages 16 through 20 of respondent's motion." J.A. at 169 (T.C. Memo 2005-170 at 6). The court found that the stipulated judgment was a judgment on the merits and concluded that
The validity of the notice of deficiency is a matter that could have been raised and litigated in connection with the deficiency proceeding, involving these same petitioners, and the same tax years. Because the decision in that case was not appealed and has since become final, res judicata precludes petitioners from now disputing the amounts of the deficiencies or the timeliness of the statutory notice in this collection action.
J.A. at 171-72 (T.C. Memo 2005-170 at 8-9). The Tax Court's grant of summary judgment disposed of the Goldens' challenge to the...
To continue reading
Request your trial
-
In re John Richards Homes Bldg. Co., L.L.C.
...was no prejudice. As noted by Adell, the Sixth Circuit has excused delay where there has been no prejudice. See, e.g., Golden v. C.I.R., 548 F.3d 487, 494 (6th Cir.2008) (allowing a res judicata defense to be raised by motion where no prejudice was shown and plaintiff had an opportunity to ......
-
Steele v. United States
...or was litigated in the prior action; and 4) the causes of action in the prior and subsequent lawsuit are identical. Golden v. Comm'r, 548 F.3d 487, 494 (6th Cir. 2008). Here, plaintiff's claims are barred by the doctrine of res judicata insofar as his claims relate to the assessment of tax......
-
In re John Richards Homes Bldg. Co., L.L.C.
...was no prejudice. As noted by Adell, the Sixth Circuit has excused delay where there has been no prejudice. See, e.g., Golden v. C.I.R., 548 F.3d 487, 494 (6th Cir.2008) (allowing a res judicata defense to be raised by motion where no prejudice was shown and plaintiff had an opportunity to ......
-
Holman v. Comm'r of Internal Revenue
...v. Commissioner, T.C. Memo.2007–328; Dowell v. Commissioner, T.C. Memo.2007–326; Golden v. Commissioner, T.C. Memo.2007–299, affd. 548 F.3d 487 (6th Cir.2008); Billings v. Commissioner, T.C. Memo.2007–234; Beatty v. Commissioner, T.C. Memo.2007–167; Butner v. Commissioner, T.C. Memo.2007–13......