Choong H. Koh v. Commissioner , 2020 T.C. Memo. 77 ( 2020 )

T.C. Memo. 2020-77
UNITED STATES TAX COURT
CHOONG H. KOH, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 9033-19. Filed June 4, 2020.
Frank Agostino, for petitioner.
Thomas A. Deamus, for respondent.
MEMORANDUM OPINION
GREAVES, Judge: This matter is before the Court on petitioner’s motion
for judgment on the pleadings under Rule 120(a)1 (motion). Petitioner seeks
1
Unless otherwise noted, all Rule references are to the Tax Court Rules of
Practice and Procedure, and all section references are to the Internal Revenue
Code in effect at all relevant times.
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[*2] judgment on the pleadings with respect to “the penalties asserted in paragraph
8 of respondent’s answer.” The Court’s Rules do not provide specifically for
motions for partial judgment on the pleadings; however, the Court has exercised
its discretion to allow a party to move for a judgment on the pleadings as to fewer
than all the issues in a case. See Nis Family Tr. v. Commissioner, 115 T.C. 523,
539 (2000); Brock v. Commissioner, 92 T.C. 1127, 1133 (1989). We deem that
appropriate here, and we will treat the motion as a motion for partial judgment on
the pleadings.
Section 6751(b)(1) provides that the “initial determination” of a penalty
assessment must receive supervisory approval. Petitioner contends that
respondent’s counsel may not make the “initial determination” of a penalty and
that therefore respondent cannot satisfy section 6751(b)(1) with respect to
penalties asserted in an answer. The Court concludes that petitioner’s argument is
without merit. Accordingly, we will deny the motion.
Background
The facts for deciding the motion are straightforward and undisputed in the
pleadings. Petitioner resided in New Jersey at the time he filed the petition.
Respondent sent petitioner and his wife a statutory notice of deficiency
(deficiency notice), which determined the following:
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[*3] Penalty
Year Deficiency sec. 6662(j)
2012 $25,099.00 $9,760.00
2013 18,301.75 7,182.80
Thereafter, petitioner filed a timely petition in this Court seeking
redetermination of the deficiencies and penalties.2 Respondent filed an answer,
which generally denied petitioner’s assertions. In paragraph 8 of the answer,
respondent’s counsel asserted that, in the alternative to the section 6662(j)
penalties determined in the deficiency notice, petitioner is liable for accuracy-
related penalties under section 6662(b)(1) or (2) for the 2012 and 2013 tax years.
Respondent’s counsel and Associate Area Counsel Brian Bilheimer signed the
answer.
Petitioner filed a reply to the answer wherein he denied the assertions in
paragraph 8 of the answer and contended that respondent’s counsel’s authority to
make an initial determination on penalties in the answer is a question of law.
Thereafter, petitioner filed the motion that is now before the Court.
2
Petitioner’s wife did not join petitioner in filing the petition.
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[*4] Discussion
Rule 120 provides that after the pleadings in a case are closed but within
such time as not to delay the trial, a party may move for judgment on the
pleadings. The granting of a motion for judgment on the pleadings is proper only
where the pleadings do not raise a genuine issue of material fact and the moving
party is entitled to judgment as a matter of law. Abrams v. Commissioner, 82 T.C.
403, 408 (1984); Anthony v. Commissioner, 66 T.C. 367 (1976), aff’d without
published opinion, 566 F.2d 1168 (3d Cir. 1977). The sole question presented at
this stage of the proceedings is whether respondent’s counsel may make an initial
determination for purposes of satisfying section 6751(b)(1).3
Section 6751(b)(1) Requirement
Section 6751(b)(1) provides that no penalty shall be assessed unless “the
initial determination of such assessment” was “personally approved (in writing) by
3
In his reply to respondent’s answer, petitioner challenges not only
respondent’s counsel’s authority to assert penalties, but also whether respondent’s
counsel followed the proper procedure under sec. 6751(b)(1). This second issue
may involve factual considerations, and therefore we do not decide it today. We
note that the Court has found that an IRS Chief Counsel attorney satisfies the
supervisory approval requirement under sec. 6751(b) where the attorney’s
immediate supervisor personally approved in writing the assertion of a penalty that
was first raised in the answer, as evidenced by the signature of respondent’s
associate area counsel on the pleading. See Roth v. Commissioner, T.C. Memo.
2017-248, at *11, aff’d, 922 F.3d 1126 (10th Cir. 2019).
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[*5] the immediate supervisor of the individual making such determination.” The
parties do not dispute that respondent’s counsel made the initial section 6662(b)(1)
and (2) penalty determinations in the answer. Rather, the only dispute before us
now is whether respondent’s counsel was authorized to do so.
This is not the first time a taxpayer asked the Court to find that IRS Chief
Counsel attorneys lack the authority to assert penalties in an answer. The Court
rejected this same argument less than three years ago in Roth v. Commissioner,
T.C. Memo. 2017-248, at *10-*11, aff’d, 922 F.3d 1126 (10th Cir. 2019). The
authority of the Chief Counsel (or his delegate) to assert additional penalties in an
answer arises from his role as the IRS’ representative in this Court. Secs. 7803(b),
7452. It is well established that the Commissioner may assert penalties in an
answer. Sec. 6214(a); Chai v. Commissioner, 851 F.3d 190, 221 (2d Cir. 2017),
aff’g in part, rev’g in part T.C. Memo. 2015-42; Graev v. Commissioner, 149 T.C.
485 (2017), supplementing and overruling in part 147 T.C. 460 (2016). It follows
that his representative in this Court also has this authority. Roth v. Commissioner,
at *11; see Rule 142(a); Graev v. Commissioner, 149 T.C. 491-492, 498; Estate
of Jung v. Commissioner, 101 T.C. 412, 448 (1993).
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[*6] Conclusion
We conclude that respondent’s counsel may make an initial determination
for purposes of section 6751(b)(1) in an answer, and we therefore will deny
petitioner’s motion. We considered all of the arguments made by the parties and,
to the extent they are not addressed herein, we find them to be moot, irrelevant, or
without merit.
To reflect the foregoing,
An appropriate order will be issued.