DocketNumber: Docket No. 30471-81.
Citation Numbers: 48 T.C.M. 1276, 1984 Tax Ct. Memo LEXIS 140, 1984 T.C. Memo. 528
Filed Date: 10/3/1984
Status: Non-Precedential
Modified Date: 11/20/2020
TENNENWALD,
All of the facts have been stipulated and are found accordingly.
Petitioner was a resident of McLean, Va., at the time she filed her petition herein. She is the widow of a former United States naval officer, Captain Landis Doner. Captain Doner was a member of the United States Navy who was on active duty from March 1941 through July 10, 1966. Captain Doner died on July 15, 1966. At the time of his death, he was considered by the United States Department of the Navy as having a status such as would not have originally provided petitioner with an annuity. Immediately thereafter, petitioner sought a correction of Captain Doner's records, and she continued to seek a change in records until 1978, when the Navy*141 finally determined that Captain Doner should have been placed, prior to his death, on the temporary disability retired list in the grade of captain. As a result of that determination, petitioner was entitled to an annuity for the years 1966 through 1978 and continuing thereafter.
In computing her tax for 1978, petitioner prorated the lump-sum payment over the years during which she would have received her annuity had the Navy Department correctly determined her husband's status at the time of his death and paid her tax for 1978 accordingly. Respondent determined that such proration was incorrect and that the lump-sum payment should have been treated as income in its entirety for 1978. Respondent has stipulated that petitioner is entitled to the benefit of income averaging and that, if his position herein is sustained, the amount of the deficiency for 1978 should be $3,590. 1
Petitioner's position is that*142 her proration of the 1978 lump-sum payment was correct and that to require her to pay any further amount of tax would have the effect of permitting the government to profit from its own mistake. Respondent's position is that, if we were to agree with petitioner's contention, this Court would simply be "doing equity," which is not within its jurisdiction to accomplish. For the reasons hereinafter stated, we conclude, with great reluctance,
Initially, we observe that this Court traditionally has not had equity jurisdiction.
Unfortunately for petitioner, the doctrine of equitable estoppel does not apply to her situation. The respondent has at no time made any misrepresentation of any fact and it is difficult to find any misrepresentation by the Navy Department, albeit that it made a mistake. Nor can it be contended that
We are thus remitted to a consideration of whether we nevertheless have jurisdiction to decide this case on general principles of equity. If we follow the traditional view (see p. 4,
*146 We are satisfied that we should not assume jurisdiction to decide the question of the Navy Department's liability, if any, 5 for damages, much less that we should apply the general equitable principle asserted by petitioner that the Federal government should not be permitted to profit from its mistakes. Venturing into the field of offsets against tax liabilities on general equitable grounds would involve this Court in a host of situations involving actions by various departments and agencies of the Federal government which impact tax liabilities. 6 The numerous cases relied upon by petitioner either do not involve tax matters or the jurisdiction of this Court or contain language which supports petitioner only if taken out of context.
*147 Perhaps petitioner has a remedy to recover damages against the Navy Department in a separate action in the Claims Court or
*148 In view of the parties' stipulation,
1. Petitioner paid this additional amount after the petition herein was filed.↩
2. The interplay between the application of the doctrine of equitable estoppel and the equity jurisdiction of the Court has its slippery aspects. See Dubroff, The United States Tax Court -- An Historical Analysis (1979), pp. 483-493, reprinted from
3. See also
4. Cf. also
5. The record herein is insufficient in terms of the circumstances surrounding the mistake and rectification thereof by the Navy Department to permit us to decide this question, even if we were to conclude that we had jurisdiction.↩
6. Cf.
7. It is also possible that, in the event of an appeal of our decision herein, a circuit court of appeals (which, as an Article III court, has broad equity powers), may decide to exercise its equity jurisdiction to sustain petitioner's position; in the past, circuit courts of appeal have done just that. See, e.g.,
8. See n. 1,
Amelia J. Taylor v. Commissioner of Internal Revenue , 258 F.2d 89 ( 1958 )
Continental Equities, Inc., Cross-Appellant v. Commissioner ... , 551 F.2d 74 ( 1977 )
Leslie E. Hintz v. Commissioner of Internal Revenue , 712 F.2d 281 ( 1983 )
Joseph Eichelberger & Co. v. Commissioner of Internal ... , 88 F.2d 874 ( 1937 )
The Hays Corporation v. Commissioner of Internal Revenue , 331 F.2d 422 ( 1964 )
Alvin v. Graff v. Commissioner of Internal Revenue , 673 F.2d 784 ( 1982 )
Vestal v. Commissioner of Internal Revenue , 152 F.2d 132 ( 1945 )