Kollar v. Comm'r of Internal Revenue, 15928–05.

• Decision Date: 25 November 2008
• Docket Number: No. 15928–05.,15928–05.
• Citation: 131 T.C. No. 12,131 T.C. 191
• Parties: Mary Ann KOLLAR, Petitioner v. COMMISSIONER of INTERNAL REVENUE, Respondent.
• Court: U.S. Tax Court

131 T.C. 191

131 T.C. No. 12

Mary Ann KOLLAR, Petitioner

v.COMMISSIONER of INTERNAL REVENUE, Respondent.

No. 15928–05.

United States Tax Court.

Nov. 25, 2008.

P filed a joint 1996 Federal income tax return reporting zero income tax liability. Before Dec. 20, 2006, P amended that return and paid the income tax reported on the amended return. P did not pay any statutory interest that had accrued as to that tax. R assessed accrued interest, and P requested from R equitable relief from the assessed interest pursuant to sec. 6015(f), I.R.C. After R determined that P was not entitled to the requested relief, P petitioned the Court to review that determination under former sec. 6015(e)(1), I.R.C. Relying upon Billings v. Commissioner, 127 T.C. 7, 2006 WL 2059399 (2006), which held that former sec. 6015(e)(1), I.R.C., did not give the Court jurisdiction to decide a case such as this where R did not assert a deficiency against a taxpayer requesting relief under sec. 6015(f), I.R.C. (nondeficiency sec. 6015(f) case), R moved the Court to dismiss this case for lack of jurisdiction. Before the Court decided that motion, Congress enacted the Tax Relief and Health Care Act of 2006, Pub.L. 109–432, div. C, sec. 408, 120 Stat. 3061 (TRHCA sec. 408). TRHCA sec. 408(a) and (c), 120 Stat. 3061, 3062, amended former sec. 6015(e)(1), I.R.C., to clarify that the Court has jurisdiction to decide a nondeficiency sec. 6015(f) case involving the taxpayer's “liability for taxes arising or remaining unpaid on or after” Dec. 20, 2006. R argues that the Court continues to lack the requisite jurisdiction because P paid her reported income tax before Dec. 20, 2006, and the quoted word “taxes” refers only to income tax and not to any related interest.

Held: The quoted word “taxes” includes the accrued interest related to P's 1996 income tax; thus, the Court has jurisdiction under sec. 6015(e)(1), I.R.C., as amended by TRHCA sec. 408(a), to review R's denial of equitable relief under sec. 6015(f), I.R.C., from P's liability for the accrued interest.

Jonathan P. Decatorsmith, for petitioner.

Gregory J. Stull, for respondent.

OPINION

MARVEL, Judge:

Respondent moves the Court to dismiss this case for lack of jurisdiction, asserting that the Court lacks jurisdiction under section 6015(e)(1) to review respondent's determination that petitioner is not entitled to equitable relief under section 6015(f) (section 6015(f) relief).¹ Petitioner requests section 6015(f) relief from her liability for accrued interest owed with respect to her 1996 Federal income tax paid in full before December 20, 2006. We decide whether section 6015(e)(1) gives the Court jurisdiction to decide this case. We hold it does.

Background

During 1996 petitioner was married to Robert J. Kollar. On April 20, 1997, Mr. Kollar died unexpectedly. On October 21, 1997, petitioner filed a joint 1996 Federal income tax return on behalf of herself and her deceased husband. The return reported zero income tax liability.

On or about November 12, 1999, petitioner filed an amended joint 1996 Federal income tax return on behalf of herself and her deceased husband. The amended return reported an income tax liability of $409,156, which petitioner paid with the return. On January 3, 2000, respondent assessed the income tax reported on the amended return and pursuant to section 6601 assessed $98,417.37 of accrued interest owed on the untimely paid income tax. That same day respondent issued to petitioner a notice and demand for payment of the unpaid interest.

On or about July 25, 2000, petitioner filed Form 8857, Request for Innocent Spouse Relief (And Separation of Liability and Equitable Relief), requesting section 6015(f) equitable relief from the unpaid interest. More than 5 years later, respondent mailed to petitioner a notice of determination denying her request. Thirty days after that mailing, petitioner through a nondeficiency stand-alone petition asked the Court to review respondent's determination.² Petitioner resided in Illinois when she petitioned the Court.

Discussion

In general, spouses who file a joint Federal income tax return are each responsible for the accuracy of the return and are jointly and severally liable for the tax reported or reportable thereon. Sec. 6013(d)(3); Butler v. Commissioner, 114 T.C. 276, 282, 2000 WL 502841 (2000). In certain circumstances a spouse may obtain relief under section 6015 from such liability. One type of relief under section 6015 is provided in section 6015(f) as equitable relief “for any unpaid tax or any deficiency (or any portion of either)”.

This Court is a court of limited jurisdiction, and we may exercise our jurisdiction only to the extent authorized by Congress. See sec. 7442; Moore v. Commissioner, 114 T.C. 171, 175, 2000 WL 283865 (2000); Naftel v. Commissioner, 85 T.C. 527, 529, 1985 WL 15396 (1985). Before December 20, 2006, former section 6015(e)(1) provided this Court with jurisdiction to review the Commissioner's denial of relief under section 6015 only “In the case of an individual against whom a deficiency has been asserted and who elects to have subsection (b) or (c) apply”. In Billings v. Commissioner, 127 T.C. 7, 2006 WL 2059399 (2006), we held that former section 6015(e)(1) did not provide this Court with jurisdiction to review a nondeficiency stand-alone petition for relief under section 6015; i.e., a petition for relief under section 6015 filed by an individual against whom the Commissioner had not asserted a deficiency. Shortly thereafter, Congress amended former section 6015(e)(1) to provide this Court with jurisdiction over such stand-alone petitions by adding to that section the words “or in the case of an individual who requests equitable relief under subsection (f)”.³ See Tax Relief and Health Care Act of 2006, Pub.L. 109–432, div. C, sec. 408(a), 120 Stat. 3061 (TRHCA sec. 408).⁴ This amendment applies “with respect to liability for taxes arising or remaining unpaid on or after the date of the enactment of this Act.” Id. sec. 408(c), 120 Stat. 3062. TRHCA was enacted on December 20, 2006. See 120 Stat. 2922.

Respondent asserts that the amendment to former section 6015(e)(1) does not apply to the setting at hand because petitioner paid her 1996 Federal income tax before December 20, 2006, and thus on or after that date petitioner had no remaining unpaid tax for 1996 so as to trigger an application of the amendment. According to respondent, the word “taxes” in TRHCA section 408(c) refers only to income tax and does not refer to any related interest. We disagree. Because TRHCA does not define the word “taxes” for purposes of TRHCA section 408(c), we apply that word in accordance with the meaning that we ascertain was intended by Congress. See Conn. Natl. Bank v. Germain, 503 U.S. 249, 253–254, 112 S.Ct. 1146, 117 L.Ed.2d 391 (1992); United States v. Am. Trucking Associations, 310 U.S. 534, 542, 60 S.Ct. 1059, 84 L.Ed. 1345 (1940). Because Congress's use of the word “taxes” in TRHCA section 408(c) is in the setting of Federal income tax and of various amendments that TRHCA section 408 made directly to section 6015, we believe that Congress's intent for the meaning of the word “taxes” is best gleaned from Congress's understanding of the firmly established meaning of that word as used in the Code (and, as discussed below, applicable to section 6015(f)) when TRHCA was enacted. See Stewart v. Dutra Constr. Co., 543 U.S. 481, 487–488, 125 S.Ct. 1118, 160 L.Ed.2d 932 (2005) (applying the established meaning under general maritime law of the word “seaman” where the applicable statute did not define that word). We do not believe that Congress intended that the word “taxes” have a meaning in the context of TRHCA section 408(c) different from its meaning in the context of the provisions of the Code to which TRHCA section 408 relates.

As of the time when TRHCA was enacted, Congress had provided specifically in sections 6601(e)(1) and 6665(a) that “tax” for purposes of the Code included interest and penalties, except in certain cases that are not relevant to our discussion.⁵ In addition, Congress had provided in section 6015(b)(1) that the word “tax” included “interest, penalties, and other amounts”.⁶ Given these expansive definitions of the word “tax” for purposes of the Code and the fact that we cannot fathom why Congress would have chosen a narrower definition of the word “taxes” in the setting of TRHCA section 408, a remedial provision designed to benefit taxpayers who were precluded by Billings v. Commissioner, supra, from having their claims to section 6015(f) relief decided by this Court, we conclude that “taxes” as used in TRHCA section 408(c) includes the accrued interest at hand. See Leahy v. Commissioner, 129 T.C. 71, 72 & n. 3, 2007 WL 2701367 (2007) (stating that the reference in section 7463(f)(2) to the word “tax” includes interest and penalties on account of sections 6601(e)(1) and 6665(a)); Petrane v. Commissioner, 129 T.C. 1, 4, 2007 WL 2120046 (2007) (stating that the reference in section 6015(f) to “tax” includes interest and penalties on account of sections 6601(e)(1) and 6665(a)); see also Helvering v. Bliss, 293 U.S. 144, 150–151, 55 S.Ct. 17, 79 L.Ed. 246 (1934) (stating that remedial provisions should not be construed narrowly). We are not unmindful that our conclusion as to the meaning of “taxes” in TRHCA section 408(c) also fits squarely within an ordinary, everyday meaning of “tax”. The noun “tax” denotes “a charge usu. of money imposed by authority on persons or property for public purposes”, Merriam–Webster's Collegiate Dictionary 1208 (10th ed. 1999), and statutory interest payable on income tax is as much such a “charge” as income tax is.

Respondent does not reference any legislative history underlying TRHCA section 408 in support of a contrary conclusion; nor do we read any such legislative history to lead to a contrary conclusion. Respondent supports with two assertions his...