Koprowski v. Comm'r of Internal Revenue, Docket No. 13048-10

Citation138 T.C. No. 5
Decision Date06 February 2012
Docket NumberDocket No. 13048-10
PartiesEUGENE KOPROWSKI, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
CourtUnited States Tax Court

P and W filed a joint return for 2006. R issued a notice of deficiency, and P and W filed a petition asking this Court to redetermine that deficiency. They elected to have the case proceed under small tax case procedures pursuant to I.R.C. sec. 7463. P signed the petition and all other filings. P and W moved for summary judgment; R cross-moved for summary judgment; and P and W opposed on various grounds, including P's entitlement to innocent spouse relief from joint liability under I.R.C. sec. 6015. At a calendar call before the Court, P spoke for himself and W. The parties withdrew their cross-motions and submitted a stipulated decision document by which P and W conceded the deficiency in full. The Court entered decision accordingly in November 2009.

While the deficiency suit was pending, P had filed a Form 8857, "Request for Innocent Spouse Relief", for 2006. In May 2010 R denied the request for relief, and P timely filed a petition challenging that denial. R moved for summary judgment on grounds of res judicata arising from the entry of decision in the prior deficiency case.

Held: Res judicata bars the relitigation of a liability determined in a small tax case under I.R.C. sec. 7463.

Held, further, res judicata precludes P's attempted litigation of his I.R.C. sec. 6015(f) claim for the year that was the subject of the prior deficiency case. I.R.C. sec. 6015(g)(2) does not prevent the operation of res judicata, since P's claim for relief was an issue in the prior case, and he did participate meaningfully in the prior case.

Eugene Koprowski, for himself.

Michael T. Shelton, for respondent.

OPINION

GUSTAFSON, Judge:

Petitioner Eugene Koprowski seeks this Court's review, pursuant to section 6015(e),1 of the denial by the Internal Revenue Service (IRS) of his request for relief from his liability for income tax for 2006, for which he filed a joint return with his wife. The case is currently before the Court on amotion for summary judgment filed by respondent (the IRS) under Rule 121. We will grant that motion and sustain the IRS's determination on grounds of res judicata.

Background

The following facts are based on the petition, our record in Mr. Koprowski's prior deficiency case (of which we take notice pursuant to Fed. R. Evid. 201), and facts that the IRS asserted and supported in its motion for summary judgment that Mr. Koprowski has not disputed.

2006 income issues

Mr. and Mrs. Koprowski filed a joint Federal income tax return for the year 2006. The IRS thereafter took the position that Mrs. Koprowski had received in that year, from the estate of her late father, taxable distributions that were not reported on the Koprowskis' income tax return. In October 2008 the IRS issued to the Koprowskis jointly a notice of deficiency, determining a tax deficiency attributable to the inclusion of those distributions in their taxable income.

2006 deficiency case

In January 2009 the Koprowskis filed a petition in this Court challenging the IRS's deficiency determination and asserting that the distributions at issue were "non-taxable inheritance". Both Mr. and Mrs. Koprowski signed thepetition, on which they elected to have the case proceed under small tax case procedures pursuant to section 7463. The deficiency case proceeded as docket No. 1185-09S.

The Koprowskis made three additional filings in docket No. 1185-09S--(1) a motion for summary judgment, (2) a motion to strike, and (3) an objection to a motion for summary judgment filed by the IRS, combined with their cross-motion-all of which were signed by both Mr. and Mrs. Koprowski. In the objection and cross-motion (filed October 13, 2009), the Koprowskis stated:

Petitioner Mr. Koprowski maintains an Affirmative Defense provided by an Innocent Spouse Claim per the case law doctrine of King v. Commissioner (115 TC No. 8 (2000)).
9. Petitioner Mr. Koprowski, as the IRS's evidence demonstrates, did not receive any income as a beneficiary of a trust or estate.
10. Petitioner Mr. Koprowski should be granted Innocent Spouse Relief from the IRS regarding its Deficiency Notice. On October 11, 2009 after he received the evidence requested from the IRS regarding the estate, he immediately filed a request for innocent spouse relief with IRS. (See Exhibit B of the Objections filing, IRS Form 8857, Request for Innocent Spouse Relief.) [Emphasis omitted.]

When the deficiency case was first called from the calendar for trial on October 26, 2009, Mrs. Koprowski said only "Good morning", and Mr. Koprowskispoke for the couple, to schedule argument on the cross-motions for summary judgment. Later that day a volunteer lawyer entered an appearance on their behalf; and when the case was recalled, both parties withdrew their motions for summary judgment. Two days later the Koprowskis' volunteer lawyer signed on the Koprowskis' behalf a stipulated decision document, by which the Court entered decision on November 9, 2009, sustaining the IRS's deficiency determination. We assume that thereafter the tax was duly assessed against both the Koprowskis as the joint and several liability of each of them.

The Koprowskis have not alleged in this case that there was any defect in those proceedings in docket No. 1185-09S, and they have not filed in docket No. 1185-09S any motion to vacate or revise the decision in that case.

Mr. Koprowski's request for relief

As is noted above, while the deficiency case was pending, Mr. Koprowski submitted to the IRS in October 2009 a Form 8857, "Request for Innocent Spouse Relief", seeking to be relieved from liability for the tax attributable to the distributions from his wife's father's estate. Mr. Koprowski asserts (in his petition in the present case)--and we assume true for purposes of the IRS's pending motion--that, in conjunction with his request to the IRS for innocent spouse relief, he presented to the IRS evidence showing that he "did not know and had no reasonto know of the understatement at the time the return was signed." In May 2010 the IRS denied the relief he requested.

Proceedings in the present case

On June 8, 2010, Mr. Koprowski filed his petition commencing the instant case seeking review of the IRS's denial of his request for innocent spouse relief. The petition indicates that he resides in Illinois. His petition seeks relief from joint liability on various grounds, including that "[a]ny taxes owed on the gift should be paid for by the [wife's] father's estate", and "IRS erred by not following the Internal Revenue Manual (IRM) which details how to handle cases hinging on the timely, good faith filing of tax returns." The IRS filed its answer to the petition on August 3, 2010.

On September 28, 2011,2 respondent moved for summary judgment on grounds of res judicata, i.e., that Mr. Koprowski's suit is precluded by the decision entered against him in the deficiency case. By order of September 29, 2011, the Court ordered Mr. Koprowski to file a response and advised him:

If Mr. Koprowski disagrees with the facts set out in the IRS's motion, then Mr. Koprowski's response should point out the specific facts in dispute. The response should support Mr. Koprowski's version of the facts by attaching relevant documents and/or by attaching one or more affidavits (i.e., written statements that are signed and sworn before a notary) or unsworn declarations that are made "under penalty of perjury" (see 28 U.S.C. sec. 1746). If Mr. Koprowski disagrees with the IRS's argument as to the law, then his response should also set out his position on the disputed legal issues.
Mr. Koprowski's attention is directed to Tax Court Rule 121 (available on the court's website at www.ustaxcourt.gov), which sets out the principles for filing, opposing, and resolving motions for summary judgment. In particular, Mr. Koprowski should note that Rule 121(d) provides, "If the adverse party [i.e., Mr. Koprowski] does not so respond [to a motion for summary judgment], then a decision, if appropriate, may be entered against such party"--i.e., against Mr. Koprowski.
Mr. Koprowski's attention is also directed to Harbin v. Commissioner, 137 T.C. No. 7 (Sept. 26, 2011), and Haag v. Commissioner, T.C. Memo. 2011-87 (Apr. 19, 2011), slip op. at 18-20, two recent decisions of this Court that discuss res judicata and section 6015(g)(2).

Mr. Koprowski filed his response on September 30, 2011. His response did not discuss section 6015(g)(2). The Court's order of October 17, 2011, observed--

Mr. Koprowski's recent response does make factual assertions, but it was not accompanied by any documents, affidavits, or unsworn statements under penalty of perjury. The Court will give him an opportunity to supplement his response with such materials

--and ordered him to do so by October 31, 2011. On that date Mr. Koprowski did file a supplement to his response. His supplement argued generally thatres judicata should not apply, but it did not present any evidentiary materials, and it did not discuss section 6015(g)(2).

Discussion

I. General legal principles

A. Relief from joint liability

Section 6013(d)(3) provides that when married taxpayers file a joint return, the tax is computed on their aggregate income, and their liability to pay the tax shown on the return or found to be owing is joint and several. See also 26 C.F.R. sec. 1.6013-4(b), Income Tax Regs. That is, each spouse is liable for the entire joint tax liability. However, section 6015 provides several means for a taxpayer to seek relief from joint liability; and if the IRS determines not to grant such relief to a taxpayer, section 6015(e) gives this Court jurisdiction to review that determination.

B. Small tax cases under section 7463

Section 7463(a) provides that, where a Tax Court petition involves an amount not exceeding $50,000--

at the option of the taxpayer concurred in by the Tax Court * * * , proceedings
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1 cases
  • Haag v. Shulman
    • United States
    • U.S. Court of Appeals — First Circuit
    • July 2, 2012
    ...in the prior proceeding and (2) that [s]he did not ‘participate meaningfully’ in the prior proceeding.” Koprowski v. Comm'r, 138 T.C. No. 5, 2012 WL 371888, at *8 (Feb. 6, 2012) (original alterations omitted). As the accentuated conjunction suggests, a taxpayer must satisfy both factors to ......

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