Porter v. Comm'r of Internal Revenue, No. 13558–06.

• Decision Date: 15 May 2008
• Docket Number: No. 13558–06.
• Citation: 130 T.C. No. 10,130 T.C. 115
• Parties: Suzanne L. PORTER, a.k.a. Suzanne L. Holman, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent.
• Court: U.S. Tax Court

130 T.C. 115

130 T.C. No. 10

Suzanne L. PORTER, a.k.a. Suzanne L. Holman, Petitioner

v.COMMISSIONER OF INTERNAL REVENUE, Respondent.

No. 13558–06.

United States Tax Court.

May 15, 2008.

R denied P's application for relief from joint income tax liability under sec. 6015, I.R.C. P petitioned this Court to seek our determination whether she is entitled to relief under sec. 6015(f), I.R.C. R filed a motion in limine to preclude P from introducing at trial any evidence, documentary or testimonial, which was not available to R during the administrative process. R urges us to reconsider our holding in Ewing v. Commissioner, 122 T.C. 32, 2004 WL 158177 (2004), vacated on unrelated jurisdictional grounds 439 F.3d 1009 (9th Cir.2006).

Held: We will continue to follow our holding in Ewing v. Commissioner, 122 T.C. 32, 2004 WL 158177 (2004). Therefore, our determination whether P is entitled to relief under sec. 6015(f), I.R.C., is made in a trial de novo and we may consider evidence introduced at trial which was not included in the administrative record.

Held, further: R's motion in limine will be denied.

Suzanne L. Porter, a.k.a. Suzanne L. Holman, pro se.

Kelly R. Morrison–Lee and Ann M. Welhaf, for respondent.

HAINES, Judge.

The issue for decision is whether in determining petitioner's eligibility for relief under section 6015(f) we may consider evidence introduced at trial which was not included in the administrative record.¹

FINDINGS OF FACT

Some of the facts have been stipulated and are so found. The stipulation of facts, the exhibits attached thereto, and the stipulation of settled issues are incorporated herein by this reference. At the time she filed her petition, petitioner resided in Silver Spring, Maryland.

Petitioner and her husband (Mr. Porter) filed a joint Form 1040, U.S. Individual Income Tax Return, for 2003 (2003 return). Mr. Porter prepared the 2003 return. On April 21, 2004, 6 days after petitioner signed the 2003 return, she and Mr. Porter legally separated.²

On June 20, 2005, respondent issued petitioner and Mr. Porter a statutory notice of deficiency for 2003. Neither petitioner nor Mr. Porter petitioned this Court for redetermination of the deficiency.

On December 1, 2005, petitioner submitted a Form 8857, Request for Innocent Spouse Relief. In a June 14, 2006, final determination, respondent's Appeals officer determined that pursuant to section 6015(c) petitioner was entitled to relief from joint and several liability with respect to the income tax on $12,765 of unreported employee compensation Mr. Porter received in 2003, but denied relief under section 6015(b), (c), and (f) from the 10–percent additional tax of $1,070 imposed by section 72(t) on an IRA distribution of $10,700 reported on the 2003 return. The parties stipulated that petitioner does not qualify for relief from joint and several liability on the 10–percent additional tax under section 6015(b) or (c).

Respondent filed a motion in limine to preclude petitioner from introducing any evidence, documentary or testimonial, which was not available to respondent during the administrative process. The Court took the motion under advisement and permitted petitioner to testify and introduce evidence subject to its ruling on the motion in limine.

OPINION

A. Respondent's Position and Background

Respondent contends that, pursuant to the Administrative Procedure Act (APA), 5 U.S.C. secs. 551–559, 701–706 (2000), and cases decided thereunder, this Court may consider only the administrative record (the record rule) in making our determination in this case. See Camp v. Pitts, 411 U.S. 138, 142, 93 S.Ct. 1241, 36 L.Ed.2d 106 (1973); United States v. Carlo Bianchi & Co., 373 U.S. 709, 715, 83 S.Ct. 1409, 10 L.Ed.2d 652 (1963). We first stated our position on that issue in Ewing v. Commissioner, 122 T.C. 32, 2004 WL 158177 (2004). Respondent urges us to reconsider our position since the U.S. Court of Appeals for the Ninth Circuit vacated our decision in Ewing on jurisdictional grounds. See Commissioner v. Ewing, 439 F.3d 1009 (9th Cir.2006), revg. 118 T.C. 494, 2002 WL 1150775 (2002), vacating 122 T.C. 32, 2004 WL 158177 (2004). However, Congress subsequently confirmed our jurisdiction to determine the appropriate relief available to a taxpayer under section 6015(f) with respect to tax liability remaining unpaid on or after December 20, 2006. Sec. 6015(e)(1)(A); Tax Relief and Healthcare Act of 2006, Pub.L. 109–432, div. C, sec. 408, 120 Stat. 3061.

In Ewing v. Commissioner, 122 T.C. at 44, we held that our determination of whether a taxpayer is entitled to relief under section 6015(f) “is made in a trial de novo and is not limited to matter contained in respondent's administrative record”. Respondent raises many of the same arguments we considered in Ewing. Consequently, our discussion of this issue draws heavily on the reasoning of the majority opinion in Ewing as well as the reasoning of Judge Thornton's concurrence. See id. at 50. For the reasons stated more fully herein, we hold that in determining whether a taxpayer is eligible for relief under section 6015(f) we may consider evidence introduced at trial which was not included in the administrative record.

B. The Applicability of the APA Judicial Review Provisions to Tax Court Proceedings Under Section 6015

Since its enactment in 1946 the APA has generally not governed proceedings in this Court (or in its predecessor, the Board of Tax Appeals). See Ewing v. Commissioner, 122 T.C. at 50 (Thornton, J ., concurring). The U.S. Court of Appeals for the Fourth Circuit, the Court to which an appeal in this case would lie, has held that “The Tax Court * * * is a court in which the facts are triable de novo” and “the Tax Court is not subject to the Administrative Procedure Act.” O'Dwyer v. Commissioner, 266 F.2d 575, 580 (4th Cir.1959), affg. 28 T.C. 698, 1957 WL 1088 (1957). This long-established practice comports with the provisions of the APA and its history. Ewing v. Commissioner, 122 T.C. at 50 (Thornton, J., concurring).

As a statute of general application, the APA does not supersede specific statutory provisions for judicial review. Id. “When Congress enacted the APA to provide a general authorization for review of agency action in the district courts, it did not intend that general grant of jurisdiction to duplicate the previously established special statutory procedures relating to specific agencies.” ³ Bowen v. Massachusetts, 487 U.S. 879, 903, 108 S.Ct. 2722, 101 L.Ed.2d 749 (1988).

The Code has long provided a specific statutory framework for reviewing deficiency determinations of the Internal Revenue Service. Secs. 6213 and 6214; Ewing v. Commissioner, 122 T.C. at 52 (Thornton, J., concurring). Section 6015 is part and parcel of the same statutory framework. Our de novo review procedures emanate from that statutory framework.

Our jurisdiction under section 6015 is couched in language similar to that of our deficiency jurisdiction under sections 6213 and 6214. Section 6015(e)(1)(A) authorizes this Court to “determine” the appropriate relief available under section 6015. Section 6213(a) provides that taxpayers who receive a notice of deficiency may petition this Court for a “redetermination” of the deficiency. Section 6214(a) provides this Court jurisdiction to “redetermine” the amount of the deficiency.

Congress first granted the Board of Tax Appeals (the predecessor to the Tax Court) jurisdiction to “redetermine” deficiencies and additions to tax in 1924. Ewing v. Commissioner, 122 T.C. at 38. Since 1926 we have also had jurisdiction to “determine” overpayments. Id. These determinations and redeterminations have always been made de novo. O'Dwyer v. Commissioner, supra at 580; Greenberg's Express, Inc. v. Commissioner, 62 T.C. 324, 327–328, 1974 WL 2624 (1974); see Clapp v. Commissioner, 875 F.2d 1396, 1403 (9th Cir.1989); Raheja v. Commissioner, 725 F.2d 64, 66 (7th Cir .1984), affg. T.C. Memo.1981–690; Jones v. Commissioner, 97 T.C. 7, 18, 1991 WL 119659 (1991). Congress has defined the jurisdiction of this Court using the words “determine” and “redetermination”.⁴ Ewing v. Commissioner, 122 T.C. at 38. We see no material difference between “determine” in section 6015(e), “determine” in section 6512(b), and “redetermination” in section 6213(a) for purposes of this discussion. Id.

We can presume that in 1998 when Congress chose to use the word “determine” in section 6015, it did so in full awareness of our long history of de novo review.⁵ If Congress includes language from a prior statute in a new statute, courts can presume that Congress intended the longstanding legal interpretation of that language to be applied to the new statute. Commissioner v. Estate of Noel, 380 U.S. 678, 680–681, 85 S.Ct. 1238, 14 L.Ed.2d 159 (1965); United States v. 101.80 Acres, 716 F.2d 714, 721 (9th Cir.1983). The use of the word “determine” in section 6015(e)(1)(A) suggests that Congress intended that we conduct trials de novo in making our determinations under section 6015(f).

C. The Eighth Circuit Decision in Robinette v. Commissioner Does Not Govern the Decision in This Case

Respondent argues that pursuant to the Court of Appeals for the Eighth Circuit's decision in Robinette v. Commissioner, 439 F.3d 455 (8th Cir.2006), revg. 123 T.C. 85, 2004 WL 1616381 (2004), our review is limited to the administrative record. We disagree.

Robinette involved a claim under section 6330, not section 6015(f). We held that the APA was not applicable to our review of the Commissioner's determinations under section 6330. The Court of Appeals reversed. The Court of Appeals' opinion in Robinette, a case brought under section 6330, is distinguishable from the current case brought under section 6015.⁶ Whereas section 6015 provides that we “determine” whether the taxpayer is entitled to relief, section 6330(d) provides for judicial review of the Commissioner's determination by allowing the taxpayer to “appeal...