Ewing v. Commissioner of Internal Revenue ( 2006 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
COMMISSIONER OF INTERNAL 
REVENUE,
Respondent-Appellant, No. 04-73237
v.  TC No.
1940-01
GWENDOLYN A. EWING,
Petitioner-Appellee.


GWENDOLYN A. EWING, No. 04-73699
Petitioner-Appellant,
v.  TC No.
1940-01
COMMISSIONER OF INTERNAL OPINION
REVENUE,
Respondent-Appellee.

Appeals from Decisions of the
United States Tax Court
Argued and Submitted
November 18, 2005—San Francisco, California
Filed February 28, 2006
Before: Jerome Farris, A. Wallace Tashima, and
Consuelo M. Callahan, Circuit Judges.
Opinion by Judge Tashima
2031
COMMISSIONER OF INTERNAL REVENUE v. EWING 2033
COUNSEL
Teresa E. McLaughlin, Department of Justice, Tax Division,
Washington, D.C., for the respondent-appellant and the cross-
appellee.
2034 COMMISSIONER OF INTERNAL REVENUE v. EWING
Karen L. Hawkins, Taggart & Hawkins, Oakland, California,
for the petitioner-appellee and the cross-appellant.
OPINION
TASHIMA, Circuit Judge:
The Commissioner of Internal Revenue challenges a deci-
sion of the United States Tax Court, concluding that Gwendo-
lyn Ewing was entitled to relief under the so-called equitable
innocent spouse provision of the Internal Revenue Code
(“I.R.C.”), 26 U.S.C. § 6015(f).1 The Commissioner further
contends that the Tax Court did not have jurisdiction to
review Ewing’s petition under I.R.C. § 6015(e).2 Ewing cross-
appeals the Tax Court’s failure to order that she be granted a
refund of excess taxes paid. We have jurisdiction to review
decisions of the Tax Court pursuant to I.R.C. § 7482(a)(1).
We conclude that the Tax Court erred in holding that it had
jurisdiction because there was no deficiency asserted, as
required by I.R.C. § 6015(e). We therefore reverse the deci-
sion of the Tax Court.
I
Ewing and Richard Wiwi were married in September 1995.
They decided to file a joint income tax return, rather than sep-
arate returns, for 1995 because the joint return lessened their
1
In subsequent references, Title 26 of the United States Code will be
cited as the “I.R.C.”
2
Although the Commissioner argued before the Tax Court that the court
did have jurisdiction under § 6015(e), he has changed his position. See
Kuntz v. Lamar Corp., 385 F.3d 1177, 1181 (9th Cir. 2004) (stating that
“challenges to a federal court’s subject matter jurisdiction cannot be
waived and may be raised at any time”); Kelton Arms Condo. Owners
Ass’n, Inc. v. Homestead Ins. Co., 346 F.3d 1190, 1192 (9th Cir. 2003)
(stating that “[s]ubject matter jurisdiction may not be waived”).
COMMISSIONER OF INTERNAL REVENUE v. EWING 2035
tax liability. On the return, they reported $57,373 in wages
earned by Ewing as a medical technologist, $23,502 in busi-
ness income earned by Wiwi, who was self-employed as a
financial adviser, and $16,892 in taxes due. Ewing had
$10,862 withheld from her wages, but Wiwi had made no
estimated tax payments; therefore, the return included a form
calculating a $190 penalty for underpayment of estimated tax.
This penalty was listed on the return, resulting in a liability of
$6,220. Ewing and Wiwi both signed the return and included
payment in the form of a check from Ewing for $1,069, and
a check from Wiwi for $551.
In 1999, Ewing filed a Form 8857, Request for Innocent
Spouse Relief, seeking relief from the remaining unpaid 1995
tax liability. “Generally, marital partners who file a joint
return are jointly and severally liable for its accuracy and any
assessments due.” Wiksell v. Comm’r, 90 F.3d 1459, 1461
(9th Cir. 1996); see I.R.C. § 6013(d)(3) (providing that, “if a
joint return is made, the tax shall be computed on the aggre-
gate income and the liability with respect to the tax shall be
joint and several”). However, a spouse may apply for inno-
cent spouse relief from joint and several liability under I.R.C.
§ 6015, which sets forth three possible avenues for relief.
Form 8857 lists the three possible forms of relief, which
correspond to three subsections of § 6015: (1) separation of
liability for an understatement of tax, if the taxpayers are
divorced, separated, or living apart, see § 6015(c); (2) inno-
cent spouse relief for an understatement of tax due to “errone-
ous items” of the spouse or former spouse of which the
innocent spouse was unaware, see § 6015(b); and (3) equita-
ble relief for an underpayment of tax, if the taxpayer does not
qualify for relief under either of the first two options, see
§ 6015(f). Ewing checked the third option, seeking equitable
relief from the 1995 tax liability.
Subsection (f) states in full:
2036 COMMISSIONER OF INTERNAL REVENUE v. EWING
Under procedures prescribed by the Secretary, if —
(1) taking into account all the facts and circum-
stances, it is inequitable to hold the individual liable
for any unpaid tax or any deficiency (or any portion
of either); and
(2) relief is not available to such individual under
subsection (b) or (c),
the Secretary may relieve such individual of such lia-
bility.
I.R.C. § 6015(f).
In a statement attached to her Form 8857, Ewing stated
that, when she married Wiwi on September 9, 1995, she did
not know that Wiwi had failed to make estimated tax pay-
ments, but he later promised to pay the tax due, and she did
not learn that the tax had not been paid until November 1998.
She included a computation, showing her 1995 wages, with-
holdings, and an alleged resultant tax liability of zero.
In a preliminary determination, the Internal Revenue Ser-
vice (“IRS”) denied Ewing relief on the following basis: “You
did not meet the requirements for equitable relief in that you
were not divorced, separated or lived apart for 12 months
prior to the date of the request, lack of hardship and no legal
obligation of one spouse over the other.” Ewing appealed the
preliminary determination.
In a subsequent report, the IRS concluded that Ewing
should have known about the deficiency when she signed the
return, that she and Wiwi were still married and living
together, and that she had sufficient income to pay the liabil-
ity. Accordingly, the IRS sent Ewing a notice of determina-
tion, denying her relief under § 6015. An accompanying
memo addressed the requirements for relief and gave as rea-
COMMISSIONER OF INTERNAL REVENUE v. EWING 2037
sons for the denial that Ewing “is still married to the nonre-
questing spouse, and living with him, there would be no
hardship, there is no marital abuse, and no spousal legal obli-
gation. She had knowledge when the joint return was filed
that there was a deficiency or understatement due to lack of
estimated payments.”
Ewing then filed a petition for review in the Tax Court. The
Commissioner filed a motion to dismiss for lack of jurisdic-
tion, on the basis that Ewing’s petition was not timely filed.
The Tax Court sua sponte raised the issue of whether the
court lacked jurisdiction under I.R.C. § 6015(e) to review the
denial of equitable relief. Ewing v. Comm’r, 118 T.C. 494,
495 (2002) (“Ewing I”). The court concluded that it did have
jurisdiction over the petition and that the petition was timely.3
Id. at 510.
In a subsequent opinion, the Tax Court addressed the issues
of whether, in determining Ewing’s eligibility for relief, it can
consider evidence introduced at trial that was not included in
the administrative record, and whether Ewing was entitled to
relief under § 6015(f). Ewing v. Comm’r, 122 T.C. 32 (2004)
(“Ewing II”). The court concluded that a trial de novo was
appropriate and that the evidence was not limited to the
administrative record. Id. at 44. The court further concluded
that Ewing was entitled to equitable relief and that the Com-
missioner accordingly had abused his discretion in denying
her relief. Id. at 49. The Commissioner filed a timely notice
of appeal. Ewing filed a cross-appeal requesting a refund.
II
Decisions of the Tax Court are reviewed “in the same man-
ner and to the same extent as decisions of the district court in
civil bench trials.” Crawford v. Comm’r, 266 F.3d 1120, 1121
3
The Commissioner does not appeal the finding that the petition was
timely.
2038 COMMISSIONER OF INTERNAL REVENUE v. EWING
(9th Cir. 2001) (per curiam). Factual findings are reviewed for
clear error, and conclusions of law, including the court’s con-
struction of the I.R.C., are reviewed de novo. Suzy’s Zoo v.
Comm’r, 273 F.3d 875, 878 (9th Cir. 2001). The existence of
subject matter jurisdiction is a question of law reviewed de
novo. Crawford, 266 F.3d at 1123; see also Maier v. Comm’r,
360 F.3d 361, 363 (2d Cir. 2004) (stating that the Tax Court’s
interpretation of statutes defining the scope of its own juris-
diction is reviewed de novo).
III
[1] The Tax Court, like any federal court, is a court of lim-
ited jurisdiction. Estate of Branson v. Comm’r, 264 F.3d 904,
908 (9th Cir. 2001); Crawford, 266 F.3d at 1121. As such, it
may exercise jurisdiction only to the extent authorized by
Congress. Branson, 264 F.3d at 908. “The Tax Court’s juris-
diction is defined and limited by Title 26 and it may not use
general equitable powers to expand its jurisdictional grant
beyond this limited Congressional authorization. It may exer-
cise its authority only within its statutorily defined sphere.”
Id.; see also Clapp v. Comm’r, 875 F.2d 1396, 1399 (9th Cir.
1989) (“Congress has granted the Tax Court very narrow, lim-
ited jurisdiction.”).
Section 6015(e) sets forth the requirements for a petition
for review by the Tax Court and states, in pertinent part:
In the case of an individual against whom a defi-
ciency has been asserted and who elects to have sub-
section (b) or (c) apply —
(A) In general. — In addition to any other remedy
provided by law, the individual may petition the Tax
Court (and the Tax Court shall have jurisdiction) to
determine the appropriate relief available to the indi-
vidual under this section . . . .
COMMISSIONER OF INTERNAL REVENUE v. EWING 2039
I.R.C. § 6015(e).
[2] The plain language of the statute clearly indicates that
the Tax Court has jurisdiction over a petition only when a
deficiency has been asserted and the taxpayer has elected
relief under subsection (b) or (c). The Tax Court, however,
concluded that it had jurisdiction over the petition, despite the
fact that no deficiency had been asserted against Ewing, and
despite the fact that she had elected relief only under subsec-
tion (f), i.e., not under subsection (b) or (c). We disagree and
conclude that the Tax Court lacked jurisdiction because no
deficiency had been asserted.
The Tax Court correctly set forth the principle that, if the
statute is ambiguous or silent, the court then may look to leg-
islative history in order to determine congressional intent.
Ewing I, 118 T.C. 503; see, e.g., Cmty. Bank v. G.V.M.
Trust, 366 F.3d 982, 986 (9th Cir. 2004) (stating that, when
the text of a statute is ambiguous, the court may examine the
statute’s purpose, subject matter, context, and legislative his-
tory). The court then proceeded, however, to examine legisla-
tive history to find ambiguities in a statute that appears clear
on its face. Cf. Dep’t of Hous. & Urban Dev. v. Rucker, 535
U.S. 125, 132 (2002) (stating that “reference to legislative his-
tory is inappropriate when the text of the statute is unambigu-
ous”).
The Tax Court began with the background of § 6015. As
initially enacted, § 6015(e) did not contain the language,
“against whom a deficiency has been asserted.” See 26 U.S.C.
§ 6015(e) (1999) (showing that subsection (e) began with the
phrase, “In the case of an individual who elects to have sub-
section (b) or (c) apply”); see also Internal Revenue Service
Restructuring & Reform act of 1998, Pub. L. No. 105-206,
§ 3201, 112 Stat. 685, 734-40 (1998) (same). Congress
amended the statute in December 2000, adding the phrase
“against whom a deficiency has been asserted.” See Consoli-
dated Appropriations Act — FY 2001, Pub. L. No. 106-554,
2040 COMMISSIONER OF INTERNAL REVENUE v. EWING
§ 1(a)(7), 114 Stat. 2763, 2763A-641 to -643 (2000). There is
no dispute that no deficiency had been asserted against
Ewing. See Ewing I, 118 T.C. 505-06 (“Because [the Com-
missioner] has not challenged the tax reported on the return,
no deficiency has been asserted.”).
Despite the plain language of the amendment, the Tax
Court concluded that the statute was ambiguous because
§ 6015(e)(1)(A) “still contains” the language that grants the
Tax Court jurisdiction to determine the relief available to a
petitioner “under this section.” Id. at 504; see I.R.C.
§ 6015(e)(1)(A) (stating that the Tax Court shall have juris-
diction “to determine the appropriate relief available to the
individual under this section” if the petitioner meets the
requirements of the statute). The court reasoned that, prior to
this amendment, it had interpreted the phrase, “under this sec-
tion,” to give it jurisdiction over the entire statute. Ewing I,
118 T.C. 504. The court further reasoned that the Commis-
sioner did not need to issue a notice of deficiency in order to
assess the tax, “[b]ecause the tax was reported on the return,”
and both parties were aware of the unpaid tax liability, thus
vitiating Congress’ concern that taxpayers would submit pre-
mature requests for relief before the Commissioner had
asserted that additional taxes were owed. Ewing I, 118 T.C.
at 506.
The cases on which the Tax Court relied, Fernandez v.
Comm’r, 114 T.C. 324 (2000), and Butler v. Comm’r, 114
T.C. 276 (2000), do not address the question of whether the
Tax Court has jurisdiction where no deficiency has been
asserted because they were decided prior to the amendment
adding the phrase. Rather, those cases dealt with the court’s
jurisdiction over a claim under subsection (f).4
4
The Second Circuit has noted that the question of the Tax Court’s juris-
diction over an appeal of an adverse determination under I.R.C. § 6015(f)
is “not free from doubt.” Maier, 360 F.3d at 363 n.1. The court pointed
out that “only petitions to review IRS determinations under subsections (b)
COMMISSIONER OF INTERNAL REVENUE v. EWING 2041
[3] The Tax Court itself has acknowledged that “[w]hen a
statute appears to be clear on its face, there must be unequivo-
cal evidence of legislative purpose before interpreting the stat-
ute so as to override the plain meaning of the words used
therein.” Fernandez, 114 T.C. 330. Yet, by interpreting the
statute as not requiring the assertion of a deficiency, the Tax
Court simply has written the language out of the statute. See
Ewing I, 118 T.C. 511 (Laro, J., dissenting) (stating that the
majority declines to apply many of the statements in
§ 6015(e) “in order to reach a conclusion that the majority
considers more practical than the plain meaning application
that the text demands”). This violates the basic principle of
statutory construction that “ ‘a statute ought, upon the whole,
to be so construed that, if it can be prevented, no clause, sen-
tence, or word shall be superfluous, void, or insignificant.’ ”
Planned Parenthood of Idaho, Inc. v. Wasden, 376 F.3d 908,
928 (9th Cir. 2004) (quoting TRW Inc. v. Andrews, 534 U.S.
19, 31 (2001)), cert. denied, 125 S. Ct. 1694 (2005); see also
Biehl v. Comm’r, 351 F.3d 982, 986 (9th Cir. 2003) (stating
that “ ‘[s]tatutory interpretation begins with the plain meaning
of the statute’s language’ ”) (quoting Botosan v. Paul
McNally Realty, 216 F.3d 827, 831 (9th Cir. 2000)), cert.
denied, 125 S. Ct. 1292 (2005). We hold that the Tax Court
erred in concluding that it had jurisdiction over Ewing’s peti-
tion because no deficiency had been asserted.
and (c) are expressly enumerated in § 6015(e) and (h).” Id.; see also
French v. United States (In re French), 255 B.R. 1, 2 (Bankr. N.D. Ohio
2000) (dismissing for lack of jurisdiction the debtor’s claim that she was
entitled to relief under § 6015(f) because “Congress chose to exclude from
judicial review the issue of whether a taxpayer is entitled to equitable
relief under § 6015(f)”); Mira v. United States (In re Mira), 245 B.R. 788,
791-92 (Bankr. M.D. Pa. 1999) (reasoning that § 6015(f) grants the Secre-
tary of the Treasury discretion to grant equitable relief and, as a decision
“committed to agency discretion by law,” 5 U.S.C. § 701, it was not
reviewable by the court).
2042 COMMISSIONER OF INTERNAL REVENUE v. EWING
IV
[4] Ewing contends in her cross-appeal that the Tax Court
erred in failing to grant her a refund. We reject her contention
because she failed to raise it below, and she has failed to dem-
onstrate any exceptional circumstances why we should con-
sider it.5 See Kochansky v. Comm’r, 92 F.3d 957, 959 (9th
Cir. 1996) (declining to consider an argument not raised in the
Tax Court); Monetary II Ltd. P’ship v. Comm’r, 47 F.3d 342,
347 (9th Cir. 1995) (deeming an argument waived where the
petitioner did not raise it in the Tax Court and provided no
justification for the failure to do so).
Ewing did not raise the issue of a refund in the Tax Court.
Her Form 8857, Request for Innocent Spouse Relief, contains
no request or claim for a refund. We disagree with Ewing’s
contention that her request for relief in Form 8857 constituted
an informal claim for a refund. Unlike Washington v. Com-
missioner, 120 T.C. 137 (2003), on which she relies, Ewing’s
statement attached to her Form 8857 merely stated that her tax
liability for 1995 was zero. By contrast, the petitioner in
Washington specifically requested tax refunds with interest
for each of the tax years in question. See id. at 162.
[5] Furthermore, Ewing is not entitled to a refund because
she failed to comply with the requirements of I.R.C.
§§ 6015(g) and 6511. We reject Ewing’s contention, raised
for the first time in her reply brief as cross-appellant, that the
5
Even if she had raised her refund claim in the Tax Court, she fails to
support her contention with any argument in her response to the Commis-
sioner’s brief, which, for purposes of her cross-appeal, is her principal
brief. See Fed. R. App. P. 28.1(c) (delineating the requirements of briefs
in cross-appeals). Thus, the issue is not sufficiently raised and is deemed
abandoned. See Yamamoto v. Bank of New York, 329 F.3d 1167, 1169 n.1
(9th Cir. 2003) (“While their brief mentions the issue . . . the issue is not
argued and we deem it abandoned.”), cert. denied, 540 U.S. 1149 (2004);
Greenwood v. FAA, 28 F.3d 971, 977 (9th Cir. 1994) (“We review only
issues which are argued specifically and distinctly in a party’s opening
brief.”).
COMMISSIONER OF INTERNAL REVENUE v. EWING 2043
doctrine regarding an informal claim for a refund, described
in United States v. Kales, 314 U.S. 186 (1941), applies to her
case. The doctrine addresses whether an informal claim for a
refund should stop the running of the statute of limitations for
a refund claim. First Sec. Bank of Idaho, N.A. v. Comm’r, 592
F.2d 1046, 1049 (9th Cir. 1979). It is concerned with claims
that are “deficient merely in one or two of the technical
requirements imposed by the Treasury regulation [26 C.F.R.
§ 301.6402-2(b)(1)].” BCS Fin. Corp. v. United States, 118
F.3d 522, 524 (7th Cir. 1997); see also Kaffenberger v. United
States, 314 F.3d 944, 954 (8th Cir. 2003) (citing Kales and
stating that “the Supreme Court has endorsed informal claims
filed within the statutory period that have technical deficien-
cies, as long as a valid refund claim is subsequently made
after the period has run”). There is no evidence that Ewing
made a technically-deficient claim within the statutory period.
Furthermore, any such informal claim “must have been fol-
lowed by a formal claim that remedied any defects in the
informal claim.” Id. at 955. The informal claim doctrine
accordingly does not apply. For all of these reasons, we dis-
miss Ewing’s cross-appeal.
V
The Tax Court’s interpretation of I.R.C. § 6015(e) conflicts
with a plain reading of the statute. We therefore reverse the
decision of the Tax Court, concluding that it had jurisdiction
over Ewing’s petition.6 In light of our conclusion that the Tax
Court did not have jurisdiction over Ewing’s petition, we
vacate the Tax Court decision in Ewing II, 122 T.C. 32,
addressing the scope of review by the Tax Court and Ewing’s
eligibility for relief. We further reject Ewing’s cross-appeal in
which she requests a refund.
6
Because we conclude that the Tax Court lacked jurisdiction, we decline
to address the other issues raised in the Commissioner’s appeal.
2044 COMMISSIONER OF INTERNAL REVENUE v. EWING
No. 04-73237, REVERSED and VACATED.
No. 04-73699, DISMISSED.