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USCA1 Opinion
February 24, 1994 [NOT FOR PUBLICATION]
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
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No. 93-1398
RAHMAT A. NIAZMAND, M.D.,
Petitioner,
v.
COMMISSIONER OF INTERNAL REVENUE,
Respondent.
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APPEAL FROM THE UNITED STATES TAX COURT
[Hon. Joel Gerber, U.S. Tax Court Judge]
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Before
Cyr, Boudin and Stahl,
Circuit Judges.
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Rahmat A. Niazmand, M.D., on brief pro se.
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Michael l. Paup, Acting Assistant Attorney General, Gary R.
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Allen, Charles E. Brookhart and S. Robert Lyons, Attorneys, Tax
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Division, Department of Justice, on brief for appellee.
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Per Curiam. Rahmat A. Niazmand is appealing
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certain adverse rulings by the Tax Court, rendered in an
opinion which had otherwise found in his favor (i.e., that he
did not owe income taxes for certain tax years). We affirm.
In 1991, the Internal Revenue Service sent Niazmand
a notice of deficiency stating that he owed income taxes and
additions to tax for the years 1979-83 and 1985-86, which
were years in which Niazmand had neither filed tax returns
nor paid any income tax. Niazmand filed a petition in Tax
Court, challenging the IRS's determination and claiming that
the IRS owed him a refund since he had overpaid his income
tax in 1978. He later amended his petition to seek refunds
for previous years because of losses incurred in 1978 and
1979, which he sought to have carried back to years in which
he had paid income taxes. Thereafter, Niazmand and the IRS
entered into a stipulation that Niazmand did not owe any
income tax for the years 1979-83 and 1985-86 as claimed in
the deficiency notice. Niazmand, however, sought
adjudication of two other issues: whether he was entitled to
refunds for the 1975-78 tax years, and what the amount and
nature was of a loss he had incurred in 1979. Evidence on
those issues was presented at trial. In addition, with court
approval, Niazmand introduced evidence to substantiate a
claim he intended to make for litigation costs, although,
under Tax Court Rule 231, Niazmand could not file a motion
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for litigation costs until after the court had served its
written opinion. Soon after the trial, however, Niazmand
filed a motion seeking permission to file a motion for
litigation costs early, which the Tax Court denied the same
day as it served its written opinion.
The Tax Court found that Niazmand owed no income
tax or additions to tax for the years 1979-83 and 1985-86.
It also found that it had no jurisdiction to determine
whether Niazmand had made overpayments (and thus deserved
refunds) for the taxable years 1975-78, since the IRS had not
determined that there were any deficiencies in tax paid for
those years. Concerning Niazmand's claims relating to the
1979 loss, the court essentially said that the only question
properly before it was whether Niazmand owed the IRS any
income tax for the years 1979-83 and 1985-86, as the IRS had
originally claimed. Since Niazmand had not filed any returns
or paid any taxes for those years, however, the question of
overpayments by Niazmand for those years (which included
1979) did not arise. Moreover, since Niazmand did not owe
any income tax for 1979, the court concluded that it had no
need to decide whether Niazmand had suffered a loss in 1979
greater than the amount conceded by the IRS, i.e., the
conceded amount sufficed to show that Niazmand owed no income
tax for 1979. (In a footnote, the court said that it was
"most unlikely" that Niazmand's alleged losses could qualify
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for ordinary loss treatment under 26 U.S.C. 1244.)
Finally, the court concluded that it would be premature to
decide whether to award Niazmand his litigation costs since
Tax Court Rule 231 required a motion for litigation costs to
be filed after service of the written opinion. In a
footnote, the court indicated that Niazmand was unlikely to
prevail on any such motion in any event.
On appeal, Niazmand argues that the Tax Court
should have determined whether the IRS owed him a refund for
pre-1979 tax years and what the precise amount of his loss
for 1979 was, but he cites no supporting authority. Niazmand
also says that the Tax Court ignored an alleged concession by
the IRS at trial that Niazmand's litigation costs should be
awarded to him, and that he had had to file his motion
seeking leave to file an early motion for litigation costs
because a family medical emergency required his departure
from this country. For the following reasons, we find that
his arguments are not persuasive.
First, it is well settled that the Tax Court has
jurisdiction to determine a deficiency or overpayment only
for tax years for which the IRS has sent the taxpayer a
notice of deficiency, and that it may consider facts from
other tax years only as necessary to correctly redetermine
the taxpayer's liability for the years for which the notice
of deficiency was sent. See Harris v. Commissioner, 29
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T.C.M. (CCH) 1510, 1511 (1970), aff'd, 73-1 U.S.T.C. (CCH)
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9205 (9th Cir. 1972); Crawford v. Commissioner, 28 T.C.M.
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(CCH) 909, 910-11 (1969); see also 26 U.S.C. 6214(b) ("The
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Tax Court in redetermining a deficiency of income tax for any
taxable year . . . shall consider such facts with relation to
the taxes for other years or calendar quarters as may be
necessary correctly to redetermine the amount of such
deficiency, but in so doing shall have no jurisdiction to
determine whether or not the tax for any other year or
calendar quarter has been overpaid or underpaid.").
Therefore, the Tax Court had no jurisdiction to determine
that the IRS owed Niazmand a refund for pre-1979 years since
the IRS had not determined that Niazmand's income tax was
deficient in those years.
Second, if Niazmand had paid income tax in 1979, a
year for which the IRS originally asserted a deficiency, then
it might have been important to determine the exact amount of
Niazmand's loss in that year in order to determine his
taxable income and the extent of his alleged overpayment of
taxes. But Niazmand did not pay income tax in 1979, and so
he could not have overpaid his taxes in that year, and the
Tax Court correctly found that it had no need to determine
the precise amount of Niazmand's losses. Furthermore, the
IRS had conceded that there was no deficiency in 1979,
Niazmand had stipulated to the zero deficiency for that year,
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and the Tax Court had accepted the parties' stipulation.
Accordingly, the Tax Court's determination that Niazmand owed
no income tax vindicated Niazmand fully with respect to his
tax position in 1979, and its determination would not have
been further aided by fixing the precise amount of the 1979
operating loss. At trial, Niazmand suggested that
calculating the operating loss was important because the
amount of the loss could affect his tax treatment in future
tax years. The court's refusal to do so under the
circumstances was completely appropriate. Had the court
fixed the amount of the operating loss, its determination
would not have affected issues then before the court, but
would essentially have been an "advisory opinion declarative
of the deduction petitioner may be able to use in some future
years." See LTV Corporation v. Commissioner of Internal
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Revenue, 64 T.C. 589, 593-96 (1975) (the Tax Court declined
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to determine the precise amount of an alleged operating loss
in part because the IRS had conceded sufficient losses to
offset any deficiencies in petitioner's income tax for the
tax years before the court and the alleged operating loss
would at most affect tax years not before the court).
Niazmand remains free to raise the question of the amount of
the 1979 operating loss in litigation concerning future tax
years if necessary. See Chevron Corporation v. Commissioner,
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98 T.C. 590, 592-93 (1992) (the Tax Court declined to
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reclassify petitioners' income where doing so would not
affect the taxable years in question and the doctrines of res
judicata and collateral estoppel would not bar petitioners
from raising questions about the correct classification of
the income in future litigation).1
Finally, the IRS agreed to permit Niazmand to
testify at trial as to his alleged litigation costs only in
order to establish a record on which he could base a later
filed motion for litigation costs. The IRS did not say, as
Niazmand now contends, that an award of costs to Niazmand
should be made. Furthermore, at trial the court told
Niazmand explicitly that Tax Court Rule 231 required motions
for litigation costs to be filed only during the 30-day
period beginning on the date the Tax Court's written opinion
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1. On appeal, Niazmand claims that his pre-1980 losses would
affect the amount of losses for the years 1980-83 and 1985-
86, which were before the court. His contention is
unavailing under the circumstances present here. Before
trial, Niazmand entered into a stipulation with the
government in which he agreed that he had negative taxable
income for the years in question, in the specific amounts set
out in the stipulation. He and the government submitted
their stipulation as evidence to be considered by the court
in arriving at its decision. Niazmand's contention on appeal
amounts to an attempt to retract that stipulation, and so we
reject it. For the same reason, we deny Niazmand's request
to consider his 1986 tax return on appeal (which the clerk of
this court treated as a letter motion to expand the record).
The return was prepared and filed more than a year after the
trial in this case, and shows a negative taxable income in an
amount different than the amount originally stipulated to by
Niazmand.
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is served, and Niazmand indicated that he understood the
requirements of the rule.
Niazmand has not shown that the Tax Court's denial
of his motion to file a motion for costs in advance of the
date the written opinion was served was an abuse of
discretion. See, e.g., Estate of Shafer v. Commissioner,
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749 F.2d 1216, 1218 (6th Cir. 1984) (holding that Tax Court's
application of its procedural rules are reviewed for abuse of
discretion). The Tax Court routinely requires taxpayers to
conform to the time requirements of Rule 231. See, e.g.,
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Groetzinger v. Commissioner, 87 T.C. 533, 548 (1986)
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(rejecting as premature a motion for litigation costs filed
at the date of the evidentiary hearing); Heller v.
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Commissioner, 53 T.C.M. (CCH) 1486, 1490 (1987) (rejecting as
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premature a motion for litigation costs filed with
petitioner's brief).
Affirmed.
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Document Info
Docket Number： 93-1398
Filed Date： 2/24/1994
Precedential Status： Precedential
Modified Date： 9/21/2015