Douglas P. Snow & Deborah J. Snow v. Commissioner , 142 T.C. 413 ( 2014 )

DOUGLAS P. SNOW AND DEBORAH J. SNOW, PETITIONERS v.
COMMISSIONER OF INTERNAL REVENUE, RESPONDENT
DOUGLAS P. SNOW, PETITIONER v. COMMISSIONER
OF INTERNAL REVENUE, RESPONDENT
Docket Nos. 6838–95, 6839–95. Filed June 17, 2014.
In 1993 R mailed notices of deficiency regarding Ps’ 1987
and 1990 tax years. In 1995 Ps filed petitions with the Court.
Ps moved to dismiss for lack of jurisdiction alleging that the
413
VerDate Mar 15 2010 13:39 Apr 28, 2015 Jkt 000000 PO 00000 Frm 00001 Fmt 3857 Sfmt 3857 V:\FILES\BOUNDV~1.WIT\BV864A~1.142\SNOW JAMIE
414 142 UNITED STATES TAX COURT REPORTS (413)
notices of deficiency had not been mailed to Ps’ last known
address and were therefore invalid. R also moved to dismiss
for lack of jurisdiction because the petitions were untimely.
These cases were assigned to a Special Trial Judge who wrote
an initial report granting Ps’ motions to dismiss. Because of
the amounts in issue, the decisions in these cases were
required by statute to be made by a regular Judge. After the
Special Trial Judge submitted his initial report for review, the
report was rewritten to grant R’s motions to dismiss rather
than Ps’ motions. A regular Judge adopted the rewritten
report and then entered orders dismissing for lack of jurisdic-
tion on Oct. 15, 1996. See Snow v. Commissioner, T.C. Memo.
1996–457. The orders, which are treated as decisions, became
final on Jan. 13, 1997. In August 2005 the Court informed Ps
that the initial report of the Special Trial Judge had proposed
to grant Ps’ motions. The Court sent Ps a copy of the initial
report. This notification was in reaction to Ballard v. Commis-
sioner, 544 U.S. 40 (2005). On July 3, 2013, Ps filed motions
for leave to file motions to vacate the orders of dismissal that
had become final on Jan. 13, 1997. Held: As a general rule,
the finality of a Tax Court decision is absolute; the recognized
exceptions are when there has been a fraud on the Court or
when the decision was void because the Court did not have
jurisdiction to enter the decision. Here there was no fraud on
the Court and the Court clearly had jurisdiction to decide
whether we had jurisdiction to redetermine the deficiencies
involved. Ps’ motions will be denied.
Jonathan P. Decatorsmith, for petitioners.
George W. Bezold, for respondent.
OPINION
RUWE, Judge: The matter before us concerns petitioners’
motions for leave to file motions to vacate orders of dis-
missal. 1 The motions were filed on July 3, 2013. The orders
of dismissal that petitioners’ motions seek to vacate were
entered on October 15, 1996, pursuant to our opinion in
Snow v. Commissioner, T.C. Memo. 1996–457.
Background
The petitions in these cases were filed in 1995 regarding
notices of deficiency for the taxable years 1987 and 1990. The
notices of deficiency had been mailed in May 1993.
1 Proposed motions to vacate were embodied in petitioners’ motions for
leave to file.
VerDate Mar 15 2010 13:39 Apr 28, 2015 Jkt 000000 PO 00000 Frm 00002 Fmt 3857 Sfmt 3857 V:\FILES\BOUNDV~1.WIT\BV864A~1.142\SNOW JAMIE
(413) SNOW v. COMMISSIONER 415
Shortly after the petitions were filed, the parties each
moved to dismiss for lack of jurisdiction. Petitioners alleged
that the notices of deficiency were invalid because they had
not been sent to petitioners’ last known address as required
by section 6212. 2 Respondent alleged that the notices of defi-
ciency had been sent to petitioners’ last known address, and
were valid, but that the petitions had not been filed within
the 90-day period following the dates on which the notices of
deficiency had been mailed as required by section 6213(a).
The Court granted respondent’s motions to dismiss, holding
that the notices of deficiency were valid and the petitions
were untimely.
Section 7459(c) provides that ‘‘if the Tax Court dismisses
a proceeding for lack of jurisdiction, an order to that effect
shall be entered in the records of the Tax Court, and the
decision of the Tax Court shall be held to be rendered upon
the date of such entry.’’ ‘‘[A]n order of dismissal for lack of
jurisdiction is treated as the Court’s decision.’’ Stewart v.
Commissioner, 127 T.C. 109, 112 (2006). Section 7481(a)(1)
provides that the decision of the Tax Court becomes final
upon the expiration of the time allowed for filing an appeal.
Section 7483 provides that a notice of appeal must be filed
within 90 days after the decision of the Tax Court is entered.
Petitioners did not appeal, and the Court’s decisions became
final on January 13, 1997.
Petitioners’ motions for leave to file motions to vacate come
over 16 years after the decisions in these cases became final.
Petitioners, however, argue that special circumstances war-
rant vacating these decisions. These circumstances require
some explanation.
The decisions in these cases were entered by Judge Daw-
son and were based on an opinion of Special Trial Judge
Goldberg with which Judge Dawson agreed. 3 See Snow v.
Commissioner, T.C. Memo. 1996–457. Pursuant to section
7443A, the Chief Judge may assign certain types of cases to
be heard by a Special Trial Judge. In cases such as peti-
2 Unless otherwise indicated, all section references are to the Internal
Revenue Code, and all Rule references are to the Tax Court Rules of Prac-
tice and Procedure applicable to the relevant events.
3 The Tax Court is composed of Judges appointed by the President and
several Special Trial Judges appointed from time to time by the Tax
Court’s Chief Judge. Judge Dawson was appointed by the President.
VerDate Mar 15 2010 13:39 Apr 28, 2015 Jkt 000000 PO 00000 Frm 00003 Fmt 3857 Sfmt 3857 V:\FILES\BOUNDV~1.WIT\BV864A~1.142\SNOW JAMIE
416 142 UNITED STATES TAX COURT REPORTS (413)
tioners’, which involved disputed deficiencies exceeding
$10,000, 4 section 7443A required a presidentially appointed
Judge (hereinafter regular Judge) to make the decision. See
Rules 180, 181, and 183 as they existed prior to amendment
in 2005. At the time the instant cases were decided, it was
the practice of the Court to have the report of a Special Trial
Judge in such a case submitted to the Chief Judge, who
would then assign it to a regular Judge for review, adoption,
and entry of decision. If, upon review, the regular Judge dis-
agreed with the Special Trial Judge’s report, the two would
confer and changes might be made through a collaborative
process. See Ballard v. Commissioner, 544 U.S. 40, 57 (2005).
The Special Trial Judge’s initial report in these cases,
which was submitted to the Chief Judge pursuant to Rule
183(b), had proposed to grant petitioners’ motions to dismiss
for lack of jurisdiction because the notices of deficiency had
not been properly sent to petitioners’ last known address. In
arriving at this conclusion, the initial report emphasized cer-
tain facts and circumstances that occurred after the mailing
of the notices of deficiency.
After the Special Trial Judge submitted his initial report
to the Chief Judge, the report was rewritten. The rewritten
report explained that the appropriate test for deciding
whether the notices were properly addressed was whether, at
the time the notices of deficiency were mailed, the Internal
Revenue Service (IRS) knew or should have known that peti-
tioners had moved to a new address. See Ward v. Commis-
sioner, 907 F.2d 517 (5th Cir. 1990), rev’g 92 T.C. 949 (1989);
Pomeroy v. United States, 864 F.2d 1191 (5th Cir. 1989);
Monge v. Commissioner, 93 T.C. 22 (1989). Using this anal-
ysis, the revised report considered facts occurring after the
mailing of the notices of deficiency to be irrelevant and held
that the notices of deficiency had been mailed to petitioners’
last known address. As a result, the revised report held that
the notices of deficiency were valid and that respondent’s
motions to dismiss should be granted because the petitions
were untimely. Judge Dawson then adopted the revised
report, which appears at T.C. Memo. 1996–457, and, on
October 15, 1996, entered the orders (decisions) granting
respondent’s motions to dismiss for lack of jurisdiction.
4 The amount is now $50,000. See sec. 7443A(b)(3), (c).
VerDate Mar 15 2010 13:39 Apr 28, 2015 Jkt 000000 PO 00000 Frm 00004 Fmt 3857 Sfmt 3857 V:\FILES\BOUNDV~1.WIT\BV864A~1.142\SNOW JAMIE
(413) SNOW v. COMMISSIONER 417
In accordance with Rule 183 in effect from 1983 to 2005,
it was the Tax Court’s practice to treat a Special Trial
Judge’s initial report submitted to the Chief Judge for adop-
tion and decision by a regular Judge as an internal docu-
ment. Therefore, Special Trial Judges’ initial reports were
not made available to the parties. Only the adopted reports
and the decisions were served on the parties. See Ballard v.
Commissioner, 544 U.S. at 45–46.
Years later, in 2005, a case handled under Rule 183 as it
existed from 1983 to 2005 was heard by the United States
Supreme Court. In Ballard, the Supreme Court held that for
purposes of appealing a Tax Court decision, the parties were
entitled to have access to a copy of the Special Trial Judge’s
initial report. The Supreme Court held that this was
required because an appellate court could not otherwise
review whether the regular Judge had properly followed Rule
183, which required that the regular Judge give due regard
to the fact that the Special Trial Judge had the opportunity
to evaluate the credibility of witnesses and give the Special
Trial Judge’s findings of fact the presumption of correctness.
Neither Ballard nor Rule 183 required the reviewing Judge
to always accept the findings of the Special Trial Judge. Rule
183 permitted the reviewing Judge to modify or reject the
Special Trial Judge’s report in whole or in part after giving
it due regard and the presumption of correctness.
In reaction to the 2005 Ballard opinion, the Tax Court
revised its Rules so as to prospectively provide the parties a
copy of the initial report of the Special Trial Judge and allow
them to comment on that report before it was reviewed by
a regular Judge. See Rule 183 effective September 20, 2005,
and Amendments to Rules of Practice and Procedure of the
United States Tax Court, with explanatory notes. 125 T.C.
339, 342–347. The Court also attempted to find initial copies
of Special Trial Judges’ reports that had previously been sub-
mitted for review and adoption. The initial reports which
could be found were then served on the parties. The initial
report of Special Trial Judge Goldberg was served on peti-
tioners by an order dated August 19, 2005. 5
5 The August 19, 2005, order stated:
The Supreme Court decided in Ballard v. Commissioner, 544 U.S. ll
Continued
VerDate Mar 15 2010 13:39 Apr 28, 2015 Jkt 000000 PO 00000 Frm 00005 Fmt 3857 Sfmt 3857 V:\FILES\BOUNDV~1.WIT\BV864A~1.142\SNOW JAMIE
418 142 UNITED STATES TAX COURT REPORTS (413)
Petitioners’ motions that are now under consideration were
filed almost 8 years after petitioners first learned of the Spe-
cial Trial Judge’s initial report and over 16 years after the
decisions had become final. Petitioners allege that after
receiving the Special Trial Judge’s initial report in August
2005 they began exploring all options to obtain representa-
tion for the purpose of vacating the decisions that had been
entered in 1996. Petitioners state that they contacted
numerous attorneys, foundations, Senators, and Congress-
men in their effort, but to no avail. They allege that it was
not until late in 2012 that they were able to obtain their cur-
rent counsel who filed the motions now under consideration
in July 2013.
Respondent opposes petitioners’ motions on the grounds
that the Court is without jurisdiction to grant petitioners’
motions to vacate the decisions that have long been final and
that the opinion of the Court reported at T.C. Memo. 1996–
457 is a correct application of the law to the facts.
Discussion
Rule 162 provides that any motion to vacate a decision
shall be filed within 30 days after the decision is entered,
unless the Court otherwise permits. Petitioners’ motions
were not filed within 30 days. In order for petitioners’ pro-
(2005), that draft opinions submitted to the Chief Judge by Special Trial
Judges under Rule 183(b) of the Court’s Rules of Practice and Procedure
should have been available to the parties. From 1983 until issuance of
the Supreme Court’s opinion in Ballard, this Court did not file the draft
opinions of Special Trial Judges submitted under Rule 183(b). In retro-
spect and considering the Supreme Court’s holding, draft opinions would
have been filed and included in the public file. Accordingly, the Court
has decided that retained Special Trial Judge draft opinions will be filed
and, thereafter, made publicly available.
The Court recently conducted a search for retained copies of initial
draft opinions submitted by Special Trial Judges to the Chief Judge
under Rule 183(b). A draft opinion was retained in the above-captioned
cases in which a Special Trial Judge’s draft opinion was adopted under
the procedures of Rule 183(b).
The foregoing considered, it is
ORDERED that the Clerk of the Court file a copy of the Special Trial
Judge’s draft opinion submitted to the Chief Judge under Rule 183(b)
and serve the same on the parties to these cases, and it is further
ORDERED that the decisions in these cases are final under I.R.C. sec-
tion 7481 and remain in full force and effect.
VerDate Mar 15 2010 13:39 Apr 28, 2015 Jkt 000000 PO 00000 Frm 00006 Fmt 3857 Sfmt 3857 V:\FILES\BOUNDV~1.WIT\BV864A~1.142\SNOW JAMIE
(413) SNOW v. COMMISSIONER 419
posed motions to vacate to be considered, Rule 162 required
petitioners to file motions for leave to file their motions to
vacate. The granting of such motions lies within the sound
discretion of the Court. Stewart v. Commissioner, 127 T.C. at
111–112; see also Drobny v. Commissioner, 113 F.3d 670, 677
(7th Cir. 1997), aff ’g T.C. Memo. 1995–209. But before we
can exercise any discretion, we must have jurisdiction.
When jurisdiction is in issue, it is clear that we have juris-
diction to decide whether we have jurisdiction. Stewart v.
Commissioner, 127 T.C. at 112. Thus, we must first deter-
mine whether we have jurisdiction to grant the requested
relief. As we stated in Stewart:
In order for us to consider the substantive merits of petitioner’s motion
for leave, we must still have jurisdiction. Except for very limited excep-
tions, none of which applies here, this Court lacks jurisdiction once a
decision becomes final within the meaning of section 7481. Abatti v.
Commissioner, 859 F.2d 115, 117–118 (9th Cir. 1988), affg. 86 T.C. 1319(1986); Lasky v. Commissioner, 235 F.2d 97, 98 (9th Cir. 1956), affd. 352
U.S. 1027 (1957). As relevant here, a decision of the Tax Court becomes
final ‘‘Upon the expiration of the time allowed for filing a notice of
appeal, if no such notice has been duly filed within such time’’. Sec.
7481(a)(1). Section 7483 provides that a notice of appeal may be filed
within 90 days after a decision is entered. As previously explained, an
order of dismissal for lack of jurisdiction is treated as the Court’s deci-
sion. [Id.; fn. ref. omitted.]
Section 7481 provides for the finality of a Tax Court decision
upon the expiration of the time for appeal. There were no
appeals in these cases. Our jurisdiction in a case where our
previous decision has become final is severely limited by both
statute and caselaw.
As a general rule, the finality of a decision is absolute. See
Abatti v. Commissioner, 86 T.C. at 1323. There are very few
exceptions. Cinema ‘84 v. Commissioner, 122 T.C. 264 (2004),
aff ’d, 412 F.3d 366 (2d Cir. 2005). One exception is where
there was a fraud on the court. See Toscano v. Commissioner,
441 F.2d 930 (9th Cir. 1971), vacating 52 T.C. 295 (1969);
Kenner v. Commissioner, 387 F.2d 689 (7th Cir. 1968);
Cinema ‘84 v. Commissioner, 122 T.C. at 270, 271; Taub v.
Commissioner, 64 T.C. 741, 751 (1975), aff ’d without pub-
lished opinion, 538 F.2d 314 (2d Cir. 1976); see also Senate
Realty Corp. v. Commissioner, 511 F.2d 929 (2d Cir. 1975).
We have also vacated an otherwise final decision in a situa-
VerDate Mar 15 2010 13:39 Apr 28, 2015 Jkt 000000 PO 00000 Frm 00007 Fmt 3857 Sfmt 3857 V:\FILES\BOUNDV~1.WIT\BV864A~1.142\SNOW JAMIE
420 142 UNITED STATES TAX COURT REPORTS (413)
tion where the Court had never acquired jurisdiction to make
a decision. See Abeles v. Commissioner, 90 T.C. 103 (1988);
accord Seven W. Enters., Inc. & Subs. v. Commissioner, 723
F.3d 857 (7th Cir. 2013), vacating and remanding 136 T.C.
539 (2011); Billingsley v. Commissioner, 868 F.2d 1081,
1084–1085 (9th Cir. 1989); Brannon’s of Shawnee, Inc. v.
Commissioner, 69 T.C. 999, 1002 (1978). We may also ‘‘cor-
rect’’ a final decision where a clerical error in the decision is
discovered after the decision has become final. Michaels v.
Commissioner, 144 F.3d 495 (7th Cir. 1998), aff ’g T.C. Memo.
1995–294. Here it is clear that there was neither fraud on
the Court nor clerical error and that we had jurisdiction for
purposes of deciding whether to dismiss petitioners’ cases for
lack of jurisdiction. Petitioners make no argument to the con-
trary.
In Cinema ’84 we noted that the Court of Appeals for the
Sixth Circuit had previously held that a final decision of the
Tax Court could be vacated in situations involving mutual
mistake, see Reo Motors, Inc. v. Commissioner, 219 F.2d 610(6th Cir. 1955), but that in a more recent case, Harbold v.
Commissioner, 51 F.3d 618, 622 (6th Cir. 1995), the Court of
Appeals for the Sixth Circuit held that Reo Motors, Inc. was
overruled by the Supreme Court in Lasky v. Commissioner,
352 U.S. 1027 (1957), and that the Court would no longer fol-
low the rationale of Reo Motors, Inc., Cinema ’84 v. Commis-
sioner, 122 T.C. at 270, 271.
In Wapnick v. Commissioner, 365 F.3d 131, 132 (2d Cir.
2004), the court explained the finality of Tax Court decisions,
stating:
[S]ection 7481 of the Internal Revenue Code provides that a decision of
the Tax Court becomes final ‘‘[u]pon the expiration of the time allowed
for filing a petition for certiorari, if the decision of the Tax Court has
been affirmed or the appeal dismissed by the United States Court of
Appeals and no petition for certiorari has been duly filed.’’ 26 U.S.C.
§ 7481(a)(2)(A). In considering the predecessor to section 7481, the
Supreme Court ruled that after an order of the Tax Court has become
final the ‘‘statute deprives us of jurisdiction over the case.’’ R. Simpson
& Co. v. Commissioner, 321 U.S. 225, 230 (1944); see also Lasky v.
Commissioner, 235 F.2d 97, 99 (9th Cir. 1956). The Court recognized
that ‘‘the usual rules of law applicable in court procedure must be
changed’’ to achieve the finality needed in the realm of tax decisions. See
Simpson, 321 U.S. at 228.
VerDate Mar 15 2010 13:39 Apr 28, 2015 Jkt 000000 PO 00000 Frm 00008 Fmt 3857 Sfmt 3857 V:\FILES\BOUNDV~1.WIT\BV864A~1.142\SNOW JAMIE
(413) SNOW v. COMMISSIONER 421
The rule of finality can result in either the taxpayer or the
Commissioner receiving a benefit that would not have been
available had an error been corrected before a decision
became final. 6
We do not have equitable power to expand our jurisdiction.
See Commissioner v. McCoy, 484 U.S. 3 (1987); Drobny v.
Commissioner, 113 F.3d 670 (7th Cir. 1997); Woods v.
Commissioner, 92 T.C. 776, 784 (1989). As we stated in
Cinema ’84 v. Commissioner, 122 T.C. at 271:
Finally, movant alleges that the Court’s affirmance of respondent’s
determinations created a whipsaw that ‘‘is patently unreasonable,
unfair, unjust and inequitable.’’ We are willing to assume that this is
also correct. But the fact is that none of these allegations, standing alone
or together, constitute a fraud on the Court or other valid reason for
vacating a final decision of this Court. [Fn. ref. omitted.]
When a Tax Court decision becomes final and there is no
jurisdiction in any other Federal court, lack of jurisdiction
trumps equity. For example, in United States v. Dalm, 494
U.S. 596 (1990), the taxpayer, who had been the administra-
trix of her former employer’s estate, received substantial pay-
ments from the deceased employer’s brother. Those payments
were reported on a Federal gift tax return, and the gift tax
was paid by the taxpayer. Subsequently, the IRS examined
the taxpayer’s income tax return for the year in which she
received the payments and determined that the payments
were taxable income rather than gifts. The taxpayer peti-
tioned this Court, and we decided that the payments were
taxable income. Subsequently, the taxpayer filed a claim for
refund of the gift tax. The IRS denied the claim. In subse-
quent litigation over the erroneously paid gift tax, the United
States Supreme Court held that the statute deprived the Dis-
trict Court of jurisdiction over the action for refund of the
gift tax, noting that ‘‘Dalm does not seek to invoke equitable
recoupment in determining her income tax liability; she has
already litigated that liability [in the Tax Court] without
raising a claim of equitable recoupment and is foreclosed
from relitigating it now.’’ Dalm, 494 U.S. at 606. Here, as in
6 For a discussion of the hardships that can result from the rules gov-
erning finality, see Estate of Bailly v. Commissioner, 81 T.C. 949, 955 n.10
(1983).
VerDate Mar 15 2010 13:39 Apr 28, 2015 Jkt 000000 PO 00000 Frm 00009 Fmt 3857 Sfmt 3857 V:\FILES\BOUNDV~1.WIT\BV864A~1.142\SNOW JAMIE
422 142 UNITED STATES TAX COURT REPORTS (413)
Dalm, our decisions have become final. As a result, we do not
have jurisdiction to modify the decisions.
Recently, the Court of Appeals for the Seventh Circuit
addressed the issue of our jurisdiction to vacate decisions
that had become final where the decisions contained clerical
errors. In Seven W. Enters., Inc. & Subs. v. Commissioner,
723 F.3d 857, 862 (7th Cir. 2013), the Court of Appeals held
that the Tax Court had no jurisdiction to vacate an incorrect
decision that had become final, stating:
Our case law makes it clear that, absent a fraud that infected the Tax
Court’s decision, the Tax Court cannot vacate a decision that has become
final. Here, the Tax Court issued its decisions on June 8, and those
decisions became final on September 6, 2011. The Commissioner does
not contend that the June 8 decisions were the result of fraud. Con-
sequently, the Tax Court did not have the authority to vacate those
decisions. Instead, as was done in Michaels, the Tax Court should have
corrected the initial decisions without vacating them.
Finally, both petitioners and respondent rely on an unre-
ported case decided by the Court of Appeals for the Fifth Cir-
cuit, to which these cases are appealable. See Hilal v.
Commissioner, 237 Fed. Appx. 932 (5th Cir. 2007). 7 In
denying Hilal’s motion to vacate a Tax Court decision where
the motion was filed almost two years after the decision
became final, the Court of Appeals stated:
As a general rule, once a decision of the tax court becomes final, the tax
court lacks jurisdiction to vacate that decision. See, e.g., Davenport
Recycling Assocs. v. Comm’r, 220 F.3d 1255, 1259 (11th Cir. 2000).
Courts have made exceptions to the finality rule in only three situa-
tions. Id. These exceptions to the general rule ‘‘must be construed nar-
rowly’’ so that the finality of judgments is preserved. Id. The first excep-
tion to the finality rule is when the tax court may have originally lacked
jurisdiction to enter a final decision. Billingsley v. Comm’r, 868 F.2d
1081, 1084–85 (9th Cir. 1989). The rationale for this exception is that
it would ‘‘border on absurdity’’ to prevent the tax court on jurisdictional
grounds from vacating a decision it lacked jurisdiction to enter in the
first place. Id. at 1085. Some circuits also allow an exception to the
finality rule when there is a fraud upon the court. See, e.g., Drobny v.
Comm’r, 113 F.3d 670, 677 (7th Cir. 1997). The third possible exception
to the finality rule is for mutual mistake, where the tax court decision
was predicated on the parties’ stipulation, and both the government and
7 Fifth
Cir. R. 47.5.4 provides that, except under limited circumstances
not relevant here, unpublished opinions issued on or after January 1, 1996,
are not precedent. However, an unpublished opinion issued after January
1, 2007, may be cited pursuant to Fed. R. App. P. 32.1(a).
VerDate Mar 15 2010 13:39 Apr 28, 2015 Jkt 000000 PO 00000 Frm 00010 Fmt 3857 Sfmt 3857 V:\FILES\BOUNDV~1.WIT\BV864A~1.142\SNOW JAMIE
(413) SNOW v. COMMISSIONER 423
the taxpayer concede they mistakenly entered into the stipulation.
Abatti v. Comm’r, 859 F.2d 115, 118 (9th Cir. 1988). The validity of this
third exception is questionable. See, e.g., Harbold, 51 F.3d at 622; Swall
v. Comm’r, 122 F.2d 324, 324 (9th Cir. 1941). The tax court lacks juris-
diction to vacate its decision on other grounds, including newly discov-
ered evidence, an intervening change in the law, and excusable neglect.
Kenner v. Comm’r, 387 F.2d 689, 690–91 (7th Cir. 1968); Toscano v.
Comm’r, 441 F.2d 930, 932 (9th Cir. 1971).
[Hilal v. Commissioner, 237 Fed. Appx. at 933–934.]
None of the recognized exceptions to finality is present
here. We had jurisdiction in 1996 to decide the question of
our jurisdiction and to grant respondent’s original motions to
dismiss for lack of jurisdiction. Indeed, dismissal for lack of
jurisdiction was also the remedy petitioners sought, albeit for
different reasons than respondent. There is no allegation or
evidence of fraud on the Court. Finally, there is no allegation
or evidence of mutual mistake or clerical error.
Petitioners, nevertheless, argue that we should override
the above precedents by applying rule 60(b) of the Federal
Rules of Civil Procedure, 8 specifically, rule 60(b)(4) and (6).
Paragraph (c) requires that motions pursuant to paragraph
(b)(4) and (6) shall ‘‘be made within a reasonable time’’. Our
Rule 1(b) provides that where there is no applicable rule, we
may give ‘‘weight to the Federal Rules of Civil Procedure to
the extent that they are suitably adaptable to govern the
matter at hand.’’
Rule 60(b)(4) of the Federal Rules of Civil Procedure allows
for relief from a judgment that is void. A judgment that was
8 Fed. R. Civ. P. 60(b) provides, in part:
(b) Grounds for Relief from a Final Judgment, Order, or Proceeding. On
motion and just terms, the court may relieve a party or its legal rep-
resentative from a final judgment, order, or proceeding for the fol-
lowing reasons:
(1) mistake, inadvertence, surprise, or excusable neglect;
(2) newly discovered evidence that, with reasonable diligence, could
not have been discovered in time to move for a new trial under
Rule 59(b);
(3) fraud (whether previously called intrinsic or extrinsic), misrepre-
sentation, or misconduct by an opposing party;
(4) the judgment is void;
(5) the judgment has been satisfied, released, or discharged; it is
based on an earlier judgment that has been reversed or vacated;
or applying it prospectively is no longer equitable; or
(6) any other reason that justifies relief.
VerDate Mar 15 2010 13:39 Apr 28, 2015 Jkt 000000 PO 00000 Frm 00011 Fmt 3857 Sfmt 3857 V:\FILES\BOUNDV~1.WIT\BV864A~1.142\SNOW JAMIE
424 142 UNITED STATES TAX COURT REPORTS (413)
made by a court that was without jurisdiction is a void judg-
ment. See Billingsley v. Commissioner, 868 F.2d 1081 (9th
Cir. 1989); Abeles v. Commissioner, 90 T.C. 103 (1988). As
previously explained, a Tax Court decision is considered void
when the Court lacked jurisdiction to make the decision.
Such a void decision can be vacated. However, as also pre-
viously explained, because petitioners filed petitions, we had
jurisdiction to decide our jurisdiction, which is what we did
in dismissing these cases in 1996.
Petitioners also allege that because they did not receive
notice of the Special Trial Judge’s initial report in time to
timely appeal, they were deprived of due process and the
decisions are void. Petitioners cite no cases where an alleged
due process violation was grounds for vacating a final Tax
Court decision. Indeed, a long line of previously cited cases
severely restricts our jurisdiction to vacate a final decision to
the narrow circumstances previously stated. 9
Rule 60(b)(6) of the Federal Rules of Civil Procedure allows
relief for ‘‘any other reason that justifies relief ’’ from the
operation of the judgment. However, the previously cited
authorities narrowly restrict the ‘‘reasons’’ that can be used
9 Petitioners
cite no cases that have held that the failure to provide the
initial Special Trial Judge’s report was a violation of due process. In this
regard, we note that our decision in Snow v. Commissioner, T.C. Memo.
1996–457, did not deprive petitioners of a forum in which to contest their
tax liabilities. In that opinion we advised petitioners as follows:
Petitioners are not without recourse. Because they paid the defi-
ciencies, interest, and penalties in full on May 1, 1995, the time for filing
a claim for refund has not yet run. Sec. 6511(a). If a timely refund claim
is disallowed by respondent, petitioners could file a suit for refund in the
U.S. District Court or the U.S. Court of Federal Claims and thus litigate
the merits of their tax liabilities for the years in question. [Id., slip op.
at 13 n.2.]
As far as we know from the record, petitioners have not filed claims for
refund. It therefore appears that petitioners may now be barred by sec.
6511(a) from obtaining any refunds for the years 1987 and 1990, regard-
less of whether we were to grant their current motions. See sec. 6511(a).
As the Supreme Court stated in United States v. Dalm, 494 U.S. 596, 602
(1990), ‘‘unless a claim for refund of a tax has been filed within the time
limits imposed by § 6511(a), a suit for refund, regardless of whether the
tax is alleged to have been ‘erroneously,’ ‘illegally,’ or ‘wrongfully collected,’
§§ 1346(a)(1), 7422(a), may not be maintained in any court.’’
VerDate Mar 15 2010 13:39 Apr 28, 2015 Jkt 000000 PO 00000 Frm 00012 Fmt 3857 Sfmt 3857 V:\FILES\BOUNDV~1.WIT\BV864A~1.142\SNOW JAMIE
(413) SNOW v. COMMISSIONER 425
to override the finality of Tax Court decisions, and none of
those reasons exists here.
Finally, even if we had jurisdiction to exercise discretion to
vacate under paragraph (b)(4) or (6), paragraph (c) requires
that such motions be made within a reasonable time. Peti-
tioners’ motions were made almost 8 years after petitioners
received our August 19, 2005, order and a copy of the Special
Trial Judge’s initial report. While petitioners allege that they
immediately began seeking assistance from various quarters,
we find this explanation insufficient to establish that their
motions were filed within a reasonable time as required by
paragraph (c). 10
For the foregoing reasons, we will deny petitioners’
motions for leave to file motions to vacate.
Appropriate orders will be issued.
f
10 As
explained supra note 9, the passage of time can prove fatal to relief
even if taxes were erroneously collected.
In petitioners’ proposed motions to vacate they ask this Court to order
the refund of the tax deficiencies that they paid on May 1, 1995. We have
held that we have no jurisdiction over the deficiency determinations in
these cases. Indeed, we would have lacked jurisdiction even if we had
granted petitioners’ motions to dismiss for lack of jurisdiction. Lacking ju-
risdiction over the deficiencies, we have no power to order a refund. See
sec. 6213(a), which provides in pertinent part: ‘‘The Tax Court shall have
no jurisdiction to enjoin any action or proceeding or order any refund
under this subsection unless a timely petition for a redetermination of the
deficiency has been filed and then only in respect of the deficiency that is
the subject of such petition.’’
VerDate Mar 15 2010 13:39 Apr 28, 2015 Jkt 000000 PO 00000 Frm 00013 Fmt 3857 Sfmt 3857 V:\FILES\BOUNDV~1.WIT\BV864A~1.142\SNOW JAMIE