Calvert Anesthesia Associates-Pricha Phattiyakul, M.D., P.A. v. Commissioner ( 1998 )

110 T.C. No. 22UNITED STATES TAX COURT
CALVERT ANESTHESIA ASSOCIATES-PRICHA PHATTIYAKUL,
M.D. P.A., Petitioner v. COMMISSIONER OF
INTERNAL REVENUE, Respondent
Docket No. 18856-97R. Filed April 27, 1998.
R moves to dismiss this case for lack of
jurisdiction, alleging that P's petition for
declaratory judgment with respect to the status of its
profit sharing plan was untimely. P petitioned the
Court 94 days after R issued P a final revocation
letter with respect to the plan.
Held: Sec. 7476(b)(5), I.R.C., requires that a
petition for declaratory judgment be filed before the
91st day after the day after the issuance of a final
revocation letter. Hence, we must dismiss this case
for lack of jurisdiction.
Mark C. Kopec, Paul W. Madden, and Herman B. Rosenthal, for
petitioner.
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Clare J. Brooks, for respondent.
OPINION
LARO, Judge: Respondent moves the Court to dismiss this
case for lack of jurisdiction, alleging that petitioner's
petition for declaratory judgment was not filed within the time
prescribed in section 7476. Petitioner objects thereto.
Petitioner alleges that the petition was timely, and, even if it
was not, that respondent has waived the right to challenge the
timeliness of the petition, or, alternatively, that the Court
should extend the period of time in which the petition had to be
filed. Petitioner alleges that equitable considerations support
its position.
We shall grant respondent's motion. Section references are
to the applicable provisions of the Internal Revenue Code.
Rule references are to the Tax Court Rules of Practice and
Procedure.
Background
Petitioner maintains a profit sharing plan named the Calvert
Anesthesia Associates-Pricha Phattiyakul, M.D. P.A. Profit
Sharing Plan (the Plan). On June 13, 1997, respondent issued
petitioner by certified mail a final revocation letter stating
that the Plan did not meet the requirements of section 401(a) for
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its plan year ended December 31, 1991, that the trust underlying
the Plan (the Trust) was not tax exempt under section 501(a) for
the same year, and that respondent was revoking a July 29, 1987,
favorable determination letter issued to petitioner in connection
with the Plan and the Trust. The reason stated in the final
revocation letter for respondent's action was that petitioner had
"failed to provide the information necessary to determine
allowable deductions under IRC Sec. 404, qualification under
Sec. 401(a), or the financial condition and operation of the
plan."
In a petition that was hand-delivered to this Court on
September 15, 1997, and filed on that day, petitioner petitioned
the Court for a declaratory judgment as to the status of the
Plan. Thereafter, the Court filed the instant motion.
Petitioner has responded to this motion by way of an objection,
and respondent has responded to petitioner's objection.
Discussion
In a case of first impression, we must decide, as a
jurisdictional matter, the number of days that an employer or
other qualified person has to petition this Court for a
declaratory judgment following the issuance of a final revocation
letter. Respondent alleged initially that petitioner, the
employer at hand, had 92 days. In the response to petitioner's
objection, respondent shortens this period by 1 day, alleging
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that the petition must be filed in 91 days. Petitioner refers in
its objection to the 92-day period first mentioned by respondent,
and, after pointing out that the 92d day fell on a Saturday,
notes that the petition was filed 2 days later on Monday. Even
if the petition were untimely, petitioner argues, respondent has
waived the right to challenge the timeliness of the petition, or,
alternatively, the Court should extend the period of time in
which the petition had to be filed. Petitioner alleges that
equitable considerations support a conclusion that the petition
was timely.
We agree with respondent that we do not have jurisdiction to
decide this case. We are a Court of limited jurisdiction, and we
may exercise our jurisdiction only to the extent authorized by
Congress. Neilson v. Commissioner, 94 T.C. 1, 9 (1990); Naftel
v. Commissioner, 85 T.C. 527, 529 (1985); see also sec. 7442.
Whether we have jurisdiction over the subject matter of a dispute
is an issue that either party thereto, or this or an appellate
court sua sponte, may raise at any time. The failure to question
our jurisdiction is not a waiver of the right to do so, for if we
lack jurisdiction over an issue, we do not have power to decide
it. See Insurance Corp. of Ireland, Ltd. v. Compagnie des
Bauxites de Guinee, 456 U.S. 694, 702 (1982); see also Brown v.
Commissioner, 78 T.C. 215, 217-218 (1982), and the cases cited
therein. As a Court of limited jurisdiction, we have no
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authority to apply equitable principles to assume jurisdiction
over a matter not authorized by statute. See Odend'hal v.
Commissioner, 95 T.C. 617, 624 (1990), and cases cited therein.
We must decide whether we have jurisdiction to make a
declaratory judgment as to the qualification of the Plan under
section 401(a). Before the passage of the Employee Retirement
Income Security Act of 1974 (ERISA), Pub. L. 93-406, 88 Stat.
829, we would have had to answer this question "no". Before
ERISA, we were not authorized to grant a declaratory judgment
concerning respondent's determination that an employer's pension
plan failed to qualify under section 401(a). H. Rept. 93-807, at
106 (1974), 1974-3 C.B. (Supp.) 236, 341. Instead, the employer
under the then-existing law could seek judicial review of
respondent's action after the employer made contributions to its
plan, claimed the contributions as a deduction on its Federal
income tax return, and had those deductions disallowed by the
Internal Revenue Service. Id.In 1974, the Congress enacted ERISA to deal with a number of
matters affecting retirement plans, one matter of which was the
unavailability of a judicial forum to grant a declaratory
judgment with respect to the initial or continuing qualification
of retirement plans. H. Rept. 93-807, supra at 6, 1974-3 C.B.
(Supp.) at 241. As part of ERISA, the Congress enacted section
7476 to establish a declaratory judgment procedure under which an
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employer could challenge respondent's determination with respect
to the qualification of its employee benefit plan. H. Rept.
93-807, supra at 107, 1974-3 C.B. at 342. Section 7476 provides:
SEC. 7476. DECLARATORY JUDGMENTS
RELATING TO
QUALIFICATION OF CERTAIN
RETIREMENT PLANS.
(a) Creation of Remedy.--In a case of actual
controversy involving--
(1) a determination by the Secretary
with respect to the initial qualification or
continuing qualification of a retirement plan
under subchapter D of chapter 1, * * *
* * * * * * *
upon the filing of an appropriate pleading,
the Tax Court may make a declaration with
respect to such initial qualification or
continuing qualification. Any such
declaration shall have the force and effect
of a decision of the Tax Court and shall be
reviewable as such. * * *
(b) Limitations.--
(1) Petitioner.--A pleading may be
filed under this section only by a petitioner
who is the employer, the plan administrator,
an employee who has qualified under
regulations prescribed by the Secretary as an
interested party for purposes of pursuing
administrative remedies within the Internal
Revenue Service, or the Pension Benefit
Guaranty Corporation.
* * * * * * *
(5) Time for bringing action.--If the
Secretary sends by certified or registered mail
notice of his determination with respect to the
qualification of the plan to the persons referred
to in paragraph (1) (or, in the case of employees
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referred to in paragraph (1), to any individual
designated under regulations prescribed by the
Secretary as a representative of such employee),
no proceeding may be initiated under this section
by any person unless the pleading is filed before
the ninety-first day after the day after such
notice is mailed to such person (or to his
designated representative, in the case of an
employee).
(c) Retirement Plan.--For purposes of this section,
the term "retirement plan" means--
(1) a pension, profit-sharing, or stock bonus
plan described in section 401(a) or a trust which is
part of such a plan, or
(2) an annuity plan described in section 403(a).
Thus, following the passage of ERISA, our authority to make a
declaratory judgment concerning the qualification of a retirement
plan, or whether the qualification of a retirement plan is
revoked, is subject to five jurisdictional limitations set forth
in section 7476(b). See also Rule 210(c). Any of these
limitations, if not met, will prevent us from making a
declaratory judgment and will result in a dismissal of the
underlying petition. Id.; McManus v. Commissioner, 93 T.C. 79,
84 (1989).
We are concerned with the limitation in section 7476(b)(5),
namely, the time for bringing an action for a declaratory
judgment. Our decision turns on the text of this section, which,
if plain and unambiguous, is the answer to our inquiry. To the
extent that we can understand and apply the plain meaning of
unambiguous statutory text, we shall do so. Garcia v. United
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States, 469 U.S. 70, 76 n.3 (1984); see also Ex parte Collett,
337 U.S. 55 (1949); Venture Funding, Ltd. v. Commissioner,
110 T.C. (1998).
The critical language in section 7476(b)(5) is that "no
proceeding may be initiated * * * [in this Court for a
declaratory judgment] unless the pleading is filed before the
ninety-first day after the day after such notice is mailed to
such person". We find this text to be unambiguous. The text
means that a petition for declaratory judgment must be
filed within 90 days of the day following the day that respondent
issued the final revocation letter, or, in other words, no more
than 91 days after the letter was issued.
Although not necessary to our understanding of the text, we
have reviewed the legislative history of section 7476(b)(5) and
conclude that this history does not change our result. When
passed by the House, the House bill read as follows:
(5) Time for bringing action.--If the Secretary
or his delegate sends by certified or registered mail
his determination with respect to the qualification of
the plan to the persons requesting such determination,
no proceeding may be initiated under this section by
any person unless the pleading is filed before the 91st
day after the date such person is notified by the
Internal Revenue Service of such mailing. [H.R. 12855,
93d Cong., 2d Sess. sec. 1041(a) (1974).]
With respect thereto, the underlying report of the House Ways and
Means Committee stated: "No petition to the Tax Court may be
filed after 90 days from the date on which the Secretary or his
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delegate sends notice to a person of his determination * * * as
to the qualification of the plan." H. Rept. 93-807, supra at
109, C.B. (Supp.) at 344.
When the bill went to the Senate, the Senate changed the
House language to read in relevant part as follows:
(b) Time for bringing action.--
(1) 90-DAY PERIOD.--* * * an action for
declaratory judgment under this part must be commenced
within 90 days after the date on which the Secretary or
his delegate sends by certified or registered mail his
determination with respect to the qualification of the
plan to the person requesting such determination.
[H.R. 2, 93d Cong., 1st Sess. sec. 601(a) (1974).]
The report of the Senate Finance Committee stated in relevant
part:
the petition to the Tax Court for a declaratory
judgment must be filed within 90 days after the date on
which the Commissioner sends by certified or registered
mail his final determination in response to an employer
or trustee's request for a determination. * * *
[S. Rept. 93-383 (accompanying S. 1179), at 116 (1973),
1974-3 C.B. (Supp.) 80, 195.]
The bill was altered in conference, so that instead of a
90-day filing period, section 7476(b)(5) requires that a petition
be filed "before the ninety-first day after the day after such
notice is mailed". (Emphasis added.) The conference report does
not explain the change to this 91-day period. See H. Conf. Rept.
93-1280, at 331-332 (1974), 1974-3 C.B. 415, 492-493. In the
absence of such an explanation, we do not know why the statute as
enacted contains language different from that in the House and
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Senate bills. The phrase "after the day after such notice is
mailed" (emphasis added) appears to be unique to section 7476.1
We decline, however, to second guess Congress' use of these words
or to otherwise ignore them. We hold that an employer such as
petitioner has 91 days from the issuance of the final revocation
letter to petition this Court for a declaratory judgment with
respect thereto.
As applied to the facts at hand, section 7476(b)(5) allows
us to make a declaratory judgment as to the status of the Plan
if, and only if, the petition was filed on or before
September 12, 1997 (the 91st day after the letter was issued),
which was not a Saturday, Sunday, or legal holiday in the
District of Columbia.2 Because it was not filed on or before
that date, we hold that we are without jurisdiction and must
dismiss this case.
We have considered all arguments made by the parties in this
matter, and, to the extent not addressed above, find them to be
irrelevant or without merit.
1
We have been unable to find any other section of the Code
that uses this phrase. Other sections of the Code that authorize
this Court to grant a declaratory judgment include secs. 6234,
7428, 7477, 7478, and 7479.
2
Sec. 7503 acts to lengthen the 91 day period of sec.
7476(b)(5) when the 91st day falls on a Saturday, Sunday, or
legal holiday in the District of Columbia.
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For the foregoing reasons,
An appropriate order
will be entered.