Edwards v. Commissioner of Internal Revenue , 628 F. App'x 113 ( 2015 )

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
___________
Nos. 15-1742 & 15-1743
___________
VAN KEITH EDWARDS,
Appellant
v.
COMMISSIONER OF INTERNAL REVENUE
____________________________________
On Appeal from the United States Tax Court
(T.C. Nos. 13-26055 & 13-29415)
Tax Court Judge: Honorable David Gustafson
____________________________________
Submitted Pursuant to Third Circuit LAR 34.1(a)
October 6, 2015
Before: GREENAWAY, JR., SCIRICA and RENDELL, Circuit Judges
(Opinion filed October 6, 2015)
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OPINION*
___________
PER CURIAM
In this consolidated appeal, appellant Van Keith Edwards appeals pro so from the
Tax Court’s dismissal of two petitions for lack of prosecution. For the reasons that
follow, we will affirm the Tax Court’s judgment.
*
This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not
constitute binding precedent
I.
Because we write primarily for the benefit of the parties, we provide only a brief
summary of those facts which are necessary to our resolution of this appeal.
Edwards did not file timely federal income tax returns for tax years 2009 or 2010.
On February 18, 2013, the Internal Revenue Service (“IRS”) prepared a substitute for
return (“SFR”) for 2009, pursuant to I.R.C. § 6020(b), based on information regarding
Edwards’s income received from third-party payors. On June 3, 2013, the SFR
documents were mailed to Edwards. These included a Form 4549 (Income Tax
Examination Changes), a Form 886-A (Explanation of Items), and a signed Form 13496
(Certification). On June 11, 2013, Edwards sent a letter to the IRS disagreeing with the
income reported in the SFR, to which he attached a 2009 Form W-2 wage statement. In
response, the IRS agreed that it had incorrectly double-counted Edwards’s wages and
withholdings from one employer, made corresponding corrections to the SFR, and sent
Edwards revised Forms 4549 and 886-A on August 2, 2013. The August 2 letter advised
Edwards that, if he disagreed with IRS’s findings, he should send an explanation and
supporting documentation to the IRS’s Memphis, Tennessee office no later than August
17, 2013. The letter warned Edwards that, if he owed additional tax and did not respond,
the IRS would send him a notice of deficiency disallowing the questioned items and
proposing an increase to his tax liability. On August 28, Edwards mailed a 2009 Form
1040 tax return to the IRS’s Kansas City, Missouri office. The IRS did not accept or file
the late return. On September 15 or 16, 2013, the IRS issued Edwards a notice of
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deficiency for 2009 based on its revised SFR, determining that Edwards had a tax
deficiency of $19,599, plus penalties for his failure to file returns, to pay estimated taxes,
and to pay the tax for that year.
Edwards filed a timely petition for redetermination of liability in the Tax Court.
See T.C. No. 13-29415. Several months later, he moved to dismiss the petition pursuant
to Tax Court Rule 53, or in alternative, for summary judgment, on the grounds that the
Tax Court lacked jurisdiction over the petition. In short, Edwards asserted that the notice
of deficiency was invalid because it was based on an invalid SFR. The Tax Court
rejected Edwards’s arguments regarding the invalidity of the SFR and the notice, noted
that disputed issues of fact remained regarding his 2009 tax liability, and denied
Edwards’s motion.
For the 2010 tax year, the IRS prepared an SFR and issued a notice of deficiency
on August 5, 2013, determining a tax deficiency of $23,068, plus penalties. 1 Edwards
filed a timely petition for redetermination in the Tax Court. See T.C. No. 13-26055.
Edwards does not appear to dispute the income or withholding amounts reported
on the substitute returns for 2009 and 2010. Rather, he contends that he is entitled to
1
The record does not reflect whether Edwards ever received or responded to the 2010
SFR before the notice of deficiency was issued. Edwards alleges that he filed his 2010
Form 1040 on or about August 31, 2013, but the parties dispute whether the IRS ever
received the return. Edwards has not claimed that the 2010 SFR was procedurally
deficient, and did not move to dismiss his Tax Court petition for that year.
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additional deductions and adjustments for those tax years, and should not have been
penalized for his late filing and failure to pay.
On July 14, 2014, the Tax Court scheduled both cases for trial beginning on
December 15, 2014. The notice setting the case for trial directed the parties to exchange
documents and file pretrial memoranda by December 1, and to file stipulated facts by
December 15. Both the notice and the Tax Court’s standing pretrial order directed the
parties to contact each other promptly, and warned that failure to cooperate with each
other, to comply with the Court’s orders, or to appear at trial might result in dismissal of
the case and entry of decision against the non-compliant party. The Commissioner
submitted pretrial memoranda to the Tax Court on November 28, 2014. Edwards did not.
On December 5, 2014, the Tax Court granted the Commissioner’s motions to consolidate
the cases for trial, briefing, and opinion. It also issued an order reminding Edwards of the
upcoming trial date and its associated deadlines and obligations, noting that the Court had
been unable to reach him by telephone for several days, and directing Edwards to call the
Court to schedule a pretrial conference. Edwards did not call, and did not appear for trial
on December 15. The Commissioner moved to dismiss the petitions for failure to
prosecute, and the Tax Court directed Edwards to file a response by January 5, 2015. On
January 14, 2015, having received no response from Edwards, the Tax Court dismissed
both petitions for lack of prosecution and affirmed the tax deficiencies and penalties set
forth in the notices of deficiency. These appeals followed.
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II.
We have jurisdiction over this appeal pursuant to 26 U.S.C. § 7482(a)(1). We
review the Tax Court’s legal conclusions de novo, and its factual findings for clear error.
Anderson v. Comm’r, 698 F.3d 160, 164 (3d Cir. 2012). We review the dismissal for
failure to prosecute under an abuse of discretion standard. Sauers v. Comm’r, 771 F.2d
64, 66 (3d Cir. 1985).
We agree with the Tax Court’s determination that it had jurisdiction over
Edwards’s petitions. The Tax Court acquires jurisdiction when a taxpayer files a timely
petition from a validly issued notice of deficiency. See Robinson v. United States, 920
F.2d 1157, 1158 (3d Cir. 1990); I.R.C. § 6213. The notice must be properly mailed, and
is valid “as long as it informs a taxpayer that the IRS has determined that a deficiency
exists and specifies the amount of the deficiency.” Selgas v. Comm’r, 475 F.3d 697, 700
(5th Cir. 2007).
Edwards argues that the 2009 notice was invalid because it was based on an
“invalid” SFR. Even assuming that the 2009 SFR did not meet all the procedural
requirements of § 6020, his argument is unavailing. Courts have held repeatedly that the
deficiency procedures set forth in §§ 6211-13 of the Internal Revenue Code do not
require the IRS to prepare a substitute return under § 6020 before determining and issuing
a notice of deficiency. See Selgas, 475 F.3d at 700; United States v. Stafford, 983 F.2d
25, 27 (5th Cir. 1993); Geiselman v. United States, 961 F.2d 1, 5 (1st Cir. 1992); Schiff
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v. United States, 919 F.2d 830, 832 (2d Cir. 1990); Roat v. Comm’r, 847 F.2d 1379,
1381-82 (9th Cir. 1988).
Edwards also asserts that the deficiency notices were invalid because he
eventually filed Form 1040 tax returns for 2009 and 2010. He appears to argue that—at
least with regard to the 2009 return, which was mailed after the deadline to respond to the
IRS’s revised SFR, but shortly before the 2009 notice of deficiency was issued—the IRS
was obliged to base its deficiency determination on Edwards’s own return, rather than the
SFR. Neither of his untimely returns invalidated the deficiency notices, or deprived the
Tax Court of jurisdiction. See, e.g., Stevens v. Comm’r, 709 F.2d 12, 13 (5th Cir. 1983)
(“[T]he Tax Court’s jurisdiction is predicated on the Commissioner’s determination that a
deficiency exists . . . not on the correctness of his determination . . . . The taxpayers’
argument . . . that the notice was invalid because they had reported the reimbursement on
an amended return filed before the notice was issued . . . . amounts to little more than a
charge that the Commissioner was mistaken in determining that a deficiency existed.”).
Edwards has not advanced any arguments on appeal challenging the Tax Court’s
dismissal of his petitions for lack of prosecution, and we do not see any error in the Tax
Court’s decision. Edwards repeatedly failed to comply with the Tax Court’s orders
regarding cooperation and preparation for trial, did not file any pretrial memoranda, did
not respond to the Court’s order to call chambers, failed to appear for trial, and, finally,
failed to respond to the motions to dismiss.
Accordingly, we will affirm the Tax Court’s judgment.
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