Haby v. Comm'r of Internal Revenue (In re Estate of Young)

• Citation: 81 T.C. 879,81 T.C. No. 54
• Decision Date: 17 November 1983
• Docket Number: Docket No. 29433–81.
• Parties: ESTATE OF SETH EDWARD YOUNG, JR., DECEASED, HAYDEN HABY, SR. AND SETH EDWARD YOUNG, SR., CO-EXECUTORS, Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent
• Court: United States Tax Court

81 T.C. 879
81 T.C. No. 54

ESTATE OF SETH EDWARD YOUNG, JR., DECEASED, HAYDEN HABY, SR. AND SETH EDWARD YOUNG, SR., CO-EXECUTORS, Petitioners
v.
COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 29433–81.

United States Tax Court

Filed November 17, 1983.

After examining the decedent's estate tax return, respondent determined a deficiency in estate tax and additions to tax for late filing and late payment under sections 6651(a)(1) and 6651(a)(2), I.R.C. 1954, respectively. The late-payment addition was measured by the amount shown as tax on the return (less that part of the tax paid therewith). In their petition the petitioners disputed the deficiency and both additions to tax but did not claim any overpayment. In his answer respondent admitted that the deficiency and the additions are in dispute. Thereafter the case, specifically including the issue involving the addition for late payment, was tried and briefed on the merits. Held, under the facts herein this Court does not have jurisdiction to redetermine the addition to tax for late payment because it is not attributable to a deficiency. Secs. 6651(a)(2) and 6662(b) [formerly section 6659(b)], I.R.C. 1954.

[81 T.C. 879]

Elwood Cluck, for the petitioners.

John F. Eiman, for the respondent.

OPINION DAWSON, Chief Judge:

This case is before us on the Court's own motion to dismiss for lack of jurisdiction as to one of the additions to tax determined by respondent in the notice of deficiency. The issue for decision is whether under the facts

[81 T.C. 880]

herein this Court has jurisdiction to redetermine the addition to tax for late payment under section 6651(a)(2).¹

Seth Edward Young, Jr., the decedent, died on March 9, 1977. Under section 6075(a) the estate tax return was due December 9, 1977. It was received by the Internal Revenue Service Center at Austin, Texas on September 11, 1978. The return reported a balance due (net estate tax) of $59,751.66. Of this amount $8,843.25 was paid with the return.

After examining the decedent's estate tax return, respondent issued a statutory notice in which he determined the following deficiency in estate tax and additions to tax:

+------------------------------------------------+
                ¦ ¦Additions to tax ¦
                +------------+-----------------------------------¦
                ¦Deficiency ¦Sec. 6651(a)(1) ¦Sec. 6651(a)(2) ¦
                +------------+-----------------+-----------------¦
                ¦ ¦ ¦ ¦
                +------------+-----------------+-----------------¦
                ¦$190,300 ¦$61,019 ¦$2,268 ¦
                +------------------------------------------------+
                

The addition to tax under section 6651(a)(2) was measured by the amount shown as tax on the return (less that part of the tax paid therewith).

In their petition the petitioners disputed the deficiency and both additions to tax and prayed that the Court redetermine that neither the deficiency nor the additions are due. However, they did not claim any overpayment. In his answer the respondent admitted that the deficiency and the additions are in dispute and prayed that the Court approve his determination as set forth in the statutory notice.

The parties subsequently tried this case and briefed the issues on the merits, specifically including the issue involving the addition to tax for late payment under section 6651(a)(2). Neither at trial nor on brief did either party suggest that we might lack jurisdiction to hear and decide that issue.

As a preliminary matter we note that this Court can proceed in a case only if it has jurisdiction and that either party, or the Court sua sponte, can question jurisdiction at any time. Brown v. Commissioner, 78 T.C. 215, 218 (1982); Shelton v. Commissioner, 63 T.C. 193, 197–198 (1974); National Committee to Secure Justice, Etc. v. Commissioner, 27 T.C. 837, 839 (1957);

[81 T.C. 881]

First Nat. Bank of Wichita Falls, Trustee v. Commissioner, 3 T.C. 203, 215 (1944). As we stated in Wheeler's Peachtree Pharmacy, Inc. v. Commissioner, 35 T.C. 177, 179 (1960), “questions of jurisdiction are fundamental and whenever it appears that this Court may not have jurisdiction to entertain the proceeding that question must be decided.” In other words, we have jurisdiction to determine jurisdiction. Brannon's of Shawnee, Inc. v. Commissioner, 69 T.C. 999, 1002 (1978).

We turn now to the issue before us. There is no question that this Court is a court of limited jurisdiction. Medeiros v. Commissioner, 77 T.C. 1255, 1259 (1981); Wilt v. Commissioner, 60 T.C. 977, 978 (1973); Wheeler's Peachtree Pharmacy, Inc. v. Commissioner, supra. We may therefore exercise jurisdiction only to the extent expressly provided by Congress. See section 7442; Breman v. Commissioner, 66 T.C. 61, 66 (1976) (“This Court has pointed out on numerous occasions that its jurisdiction is strictly limited by statute and that it may not enlarge upon that statutory jurisdiction”). See also Rule 13, Tax Court Rules of Practice and Procedure.

Section 6213 confers jurisdiction on this Court to redetermine deficiencies in income, estate, gift, and certain excise taxes. Estate of DiRezza v. Commissioner, 78 T.C. 19, 25 (1982). See sections 6211–6212 and 6214–6215. The key section which confers jurisdiction on this Court in the case of additions to tax is section 6659.² Accordingly, we begin our analysis with that section.

[81 T.C. 882]

Section 6659(a) sets forth the general rule that the deficiency procedures applicable to income, estate, gift, and certain excise taxes are equally applicable to additions to tax. See section 301.6659–1(a), (b), Proced. & Admin. Regs. However, section 6659(b) provides an exception to the general rule in the case (inter alia) of additions to tax under section 6651. An exception to this exception is provided by section 6659(b)(1) in the case of that portion of such an addition which is attributable to a deficiency in tax as defined by section 6211. Accordingly, if the addition in question, i.e., the addition for late payment under section 6651(a)(2), is “attributable to a deficiency,” the deficiency procedures would be applicable and this Court would have jurisdiction over that addition. On the other hand, if the addition in question is not “attributable to a deficiency,” the deficiency procedures would not be applicable and this Court would not have jurisdiction over that addition. Estate of DiRezza v. Commissioner, 78 T.C. at 27. We therefore shift our focus to section 6651.

The addition to tax for late payment under section 6651(a)(2)³ is determined, i. e., measured, by the amount actually shown as tax on the return by the taxpayer.⁴ See

[81 T.C. 883]

section 301.6651–1(a)(2), Proced. & Admin. Regs., and Example (1)(a), section 301.6651–1(f), Proced. & Admin. Regs. Thus, in the case before us, respondent measured the late-payment addition by the amount shown as tax on the return by petitioners (less that part of the tax paid therewith). In contrast, the addition for late filing under section 6651(a)(1) is determined by the amount required to be shown as tax on the return by the taxpayer. The amount shown as tax on the return by the taxpayer is not a deficiency within the meaning of section 6211,⁵ and hence is not subject to the deficiency procedures of subchapter B of chapter 63 (i.e., sections 6211 through 6216). Rather, the amount shown as tax on the return by the taxpayer may be immediately assessed by the Secretary. Section 6201(a)(1); section 301.6201–1(a)(1), Proced. & Admin. Regs. The addition to tax for late payment is not, therefore, “attributable to a deficiency.” Accordingly, the deficiency procedures are not applicable and this Court does not have jurisdiction over that addition. Section 6659(b). Cf. section 301.6659–1(c)(1), Proced. & Admin. Regs.

[81 T.C. 884]

A conclusion contrary to the one that we have reached is not required by either section 6214(a) or Hannan v. Commissioner, 52 T.C. 787 (1969), or by any policy against fractionalizing litigation. We will discuss each of these matters in turn.

Section 6214(a):⁶ The origin of this Court lies in the Revenue Act of 1924, which established the Board of Tax Appeals. Tit. IX, ch. 234, 43 Stat. 253...