DocketNumber： Docket Nos. 39546-87, 39554-87
Judges： Wells
Filed Date： 8/13/1990
Status： Precedential
Modified Date： 11/14/2024
From 1980 through 1985, Ps borrowed money from their employer's qualified plan. On Dec. 9, 1986, the plan's trustees and the Department of Labor (DOL) reached a settlement agreement, which required, inter alia, that loans made from 1982 through 1985 provide for 10- rather than 8-percent interest. On Sept. 25, 1987, respondent's Atlanta Appeals Office sent DOL a letter based on a form from an interagency agreement and which, according to the agreement, constituted notice of an intent to determine excise tax deficiencies. On Dec. 1, 1987, respondent issued notices of deficiency determining
*133 OPINION
The instant case is before the Court on two motions filed by petitioners. The first motion is entitled motion to dismiss for lack of subject matter jurisdiction, or in the alternative, limit the amount of respondent's determination. The second motion is entitled motion to dismiss for lack of subject matter jurisdiction.
The parties have stipulated certain facts. The stipulations of fact and attached exhibits are hereby incorporated by reference.
From 1980 through 1985, petitioners were employees of Gainesville Medical Group -- Andrews & Associates, P.A. (GMG), and were participants in GMG's qualified profit-sharing plan (the plan). *78
From 1980 through 1985, petitioners borrowed money from the plan (sometimes hereinafter collectively referred to as the plan loans). The plan charged 10-percent interest for plan loans made in 1980 and 1981 and 8-percent interest for plan loans made from 1982 through 1985.
In November 1984, Mr. Leston Seaton, a revenue agent, began an examination of the plan. On January 28, 1985, Mr. Seaton learned that DOL was conducting its own investigation of the plan. Mr. Seaton informed his supervisor, Mr. Jackie Jefferson, of the DOL investigation, and Mr. Jefferson instructed Mr. Seaton to suspend respondent's investigation.
Beginning on January 29, 1985, Mr. Seaton corresponded with Mr. Donald Trimas of DOL regarding the DOL investigation of the plan. On February 1, 1985, Mr. Trimas informed Mr. Seaton of loans made by the plan that Mr. Trimas believed could warrant legal action by DOL.
On July 11, 1985, Mr. Jefferson told Mr. Seaton that respondent's investigation would have to resume unless DOL submitted a written request that respondent withhold action. On September 11, 1985, after further *79 correspondence *135 between respondent and DOL, Mr. Seaton resumed his investigation of the plan.
On November 12, 1985, Mr. Seaton received information from Mr. Trimas concerning loans made by the plan to GMG employees. On January 24, 1986, Mr. Seaton completed his examination and submitted a written report for internal review. Between August 1986 and October 28, 1986, Mr. Seaton revised his report, incorporating additional information from DOL, and then resubmitted the report for internal review.
In a letter to counsel for petitioners dated December 9, 1986 (the first DOL letter), Mr. Howard Marsh, an area director for DOL, outlined the terms of a proposed settlement of plan violations. The proposed settlement required that (1) "Key Employees" assign their "vested benefits" as security for plan loans, (2) "existing notes" be amortized over 17 years, (3) notes for loans made from 1982 through 1985 provide for an additional 2-percent interest (10- rather than 8-percent interest), with retroactive accrual of such interest added to the principal balances to be amortized over 17 years, and (4) participants be allowed to manage the investment of their own plan accounts. The first DOL letter *80 also contained the following disclaimer: "Our decision to conclude and accept your proposed settlement cannot bind any other governmental agency, such as I.R.S., nor preclude such agencies from taking any action they deem appropriate."
On January 8, 1987, respondent issued "30-day letters" to petitioners advising them of respondent's intent to determine
In a letter dated June 12, 1987 (the second DOL letter), and addressed to the plan's trustees, Mr. Marsh of DOL confirmed the settlement of plan violations (referred to herein as the DOL settlement). The second DOL letter acknowledged that the plan trustees had taken the remedial measures set forth in the first DOL letter. The second DOL letter referred to a "correction of prohibited loans amounting to $ 2,070,312 as of 12/31/86," but contained a disclaimer *136 similar to that in the first DOL letter, cautioning, "The Department commits only itself and cannot in any way restrain any other * * * governmental agency from taking any further action it may *81 deem appropriate with respect to these or other matters."
On September 25, 1987, Mr. Papadeas sent a letter (the IRS letter) to DOL concerning the plan. The IRS letter stated, "the above referenced case has been referred to us by the Atlanta Key District, EP/EO Division" and requested that DOL review its records and "ascertain if there is any Department of Labor involvement in the above referenced case." The IRS letter asked for a response within 30 calendar days.
The IRS letter conformed to a form letter (the form letter) set forth in appendix D to an agreement between respondent and DOL entitled, "Agreement Between the Internal Revenue Service and the Department of Labor for the Coordination of Examination and Litigation Activities Involving Employee Benefit Plans" (the IRS-DOL agreement). In pertinent part, the IRS-DOL agreement states:
The following procedures apply to all cases received by IRS Appeals Offices involving examinations of employee benefit plans * * *.
A. The Chief, Appeals Office (or designee) will complete and send the Form letter in Appendix D to the appropriate DOL Regional Office as listed in Appendix E. When applicable, the form *82 letter will be considered the notice required by
B. The Appeals Office will not take final action to settle the case, concede any Government issue, enter into a closing agreement with any taxpayer, issue any notice of deficiency with respect to taxes under
C. DOL will, within 30 calendar days of the date of the letter from the Appeals Office, reply to the Appeals Office in writing if DOL is taking any action concerning the referred case. If DOL is taking action with respect to the case, the Appeals Office will coordinate with DOL before taking any of the actions described in section B. of this Part.
As noted, the IRS letter conformed to the form letter. The IRS letter, however, was sent to a Miami office of DOL, *137 *83 although appendix E of the IRS-DOL agreement indicates that it should have been sent to the DOL Regional Office in Atlanta.
The IRS-DOL agreement had been amended effective September 1, 1987, prior to the date of the IRS letter. The amended version of the IRS-DOL agreement (the IRS-DOL amended agreement) contains the following pertinent provisions:
The following procedures apply to all cases received by IRS Appeals Offices involving examinations of employee benefit plans * * *.
A. The Chief, Appeals Office (or designee) will complete and send the Form letter in Appendix E to the Area Director's/District Supervisor's Office as listed in Appendix A. To ensure that notice has been given to DOL as required by
B. The Appeals Office will not take final action to settle the case, concede any Government issue, enter into a closing agreement with any taxpayer, issue any notice of deficiency with respect to taxes under
Appendix A of the IRS-DOL amended agreement indicates that the IRS letter was properly sent to the appropriate DOL office in Miami. The IRS letter, however, differed from the form (the amended form letter) set forth in appendix E of the IRS-DOL amended agreement in two respects. While the IRS letter referred to "Procedures for Coordination of Examination and Litigation Activities," the amended form letter refers to a "Coordination Agreement." Moreover, while the IRS letter gave DOL 30 days to respond, the amended form letter requests a response within 60 days.
On December 1, 1987, respondent issued notices *85 of deficiency to petitioners. The statutory notices determine *138
The plan filed information returns for its fiscal years ending September 30 of 1980 through 1985, prior to the due dates of those returns (April 30 of the succeeding years). *86 "What percentage of plan assets are loaned to a party-in-interest?" The space provided for an answer was left blank.
Between November 24 and December 5, 1986, petitioners signed Forms 872 purporting to extend to April 30, 1988, the period for assessing excise taxes for taxable years 1980 and 1983. *139 A loan between a plan and a disqualified person *87 is a prohibited transaction. The "taxable period" extends from the date of the prohibited transaction to the earlier of (1) the date respondent mails a statutory notice determining a deficiency in Although With respect to loans, the amount involved is defined in section 53.4941(e)-1(b)(2)(ii), Foundation Excise Tax Regs., as follows: "Where the use of money or other property is involved, the amount involved shall be the greater of the amount paid for such use or the fair market value of such use for the period for which the money or other property is used." Thus, if the prohibited transaction is a loan, the amount involved is the greater of interest actually charged or fair market interest. Sec. 53.4941(e)-1(b)(4), example 4, Foundation Excise Tax Regs. (5) Correction. -- The terms "correction" and "correct" mean, with respect to a prohibited transaction, undoing the transaction to the extent possible, but in any case placing the plan in a financial position not worse than that in which it would be if the disqualified person were acting under the highest fiduciary standards. *140 Regulations provide more specific guidance. Section 53.4941(e)-1(c)(4), Foundation Excise Tax Regs., provides in part as follows: (4) (a) The excess (if any) of the fair market value of the use of the property over the amount paid by the disqualified person for such use until such termination, and (b) The excess (if any) of the amount which would have been paid by the disqualified person for the use of the property on or after the date of such termination, for the period such disqualified person would have used the property (without regard to any further extensions or renewals of such period) if such termination had not occurred, over the fair market value of such use for such period. Further, the flush language of the foregoing regulation specifies that for purposes of calculating the amount to be paid pursuant to clause (a), the fair market interest rate for the use of money shall be the higher of the rate on the date of the prohibited transaction or the rate on the date of correction. If a prohibited transaction is not corrected within the *90 taxable period, disqualified persons participating in the prohibited transaction become liable for a second-tier tax equal to 100 percent of the amount involved. Petitioners first argue that the instant case must be dismissed because respondent failed to comply with *141 Because we find that respondent satisfied the notice requirement of The IRS letter conforms to the form letter, and the IRS-DOL agreement expressly provides that such letter "will be considered the notice required by sections * * * We do not consider material the fact that the IRS-DOL agreement was amended and that the IRS letter did not conform in exact detail to the amended form letter. The discrepancies are insignificant and do not detract from the fact that respondent notified DOL of his intent to determine excise tax deficiencies and DOL was given an opportunity to become involved. The statute requires no more. Significantly, the IRS letter was sent to the DOL office prescribed by the amended IRS-DOL agreement. Although the IRS letter requests a response within 30 days, while the amended agreement requires 60 days' notice, respondent did not issue statutory notices until December 1, 1987, more than 60 days after the date of the letter. Moreover, that respondent did not comply, in exact detail, with his own internal operating procedures does not affect the resolution of the issue presented by petitioners' motion, as such procedures do not confer substantive rights upon taxpayers. Cf. Accordingly, we hold petitioners are not entitled to dismissal upon the grounds that respondent violated Petitioners next argue that the DOL settlement requires that we "limit" respondent's determination. *94 is the greater of fair market interest or contract interest; respondent's determination is based on alleged fair market interest rates ranging from 13 percent in 1984 to 23.5 percent in 1981). Second, petitioners contend that because the DOL settlement fixes 10 percent as the fair market interest rate for plan loans, loans made in 1980 and 1981 at that rate were not prohibited transactions. *95 *143 We reject all of petitioners' contentions because the DOL settlement, by its express terms, does not purport to limit in any manner respondent's authority to determine excise tax deficiencies attributable to the prohibited loan transactions. The DOL settlement is a contract, and its effect should be governed by the principles applicable to contracts in general. Further, petitioners have offered no evidence of a contrary intention, assuming such evidence would be admissable and relevant given the language in the letters. See 4 S. Williston, In sum, we hold that by entering into the DOL settlement, DOL and the plan trustees did not purport to settle, in whole or in part, the Petitioners' second motion asks that we dismiss deficiencies for taxable years 1980, 1981, and 1982 on the grounds that assessments for such years are barred by the applicable period of limitations. Section 6501(a) supplies the general rule which requires that a tax be assessed "within 3 years after the return was filed." A return filed prior to its due date is deemed filed on the due date. Sec. 6501(b)(1). Section 6501(l)(1) provides that the return of specified excise taxes, including those imposed by Similarly, section 301.6501(n)-1(a), Proced. & Admin. Regs., provides that for purposes of section 6501, the return of a plan or trust "with respect to any act giving rise to a tax imposed by * * * Thus, in the instant case, the general 3-year period of limitations would bar assessment of Due date 3-year Statutory Plan year of plan period notice return expires issued 9/30/80 4/30/81 4/30/84 9/30/81 4/30/82 4/30/85 9/30/82 4/30/83 4/30/86 9/30/83 4/30/84 4/30/87 12/1/87 9/30/84 4/30/85 4/30/88 9/30/85 4/30/86 4/30/89
*145 Prior to expiration of the general *99 3-year period of limitations, however, a taxpayer and the Commissioner may agree to extend the period of limitations. Sec. 6501(c)(4). Between November 24 and December 5, 1986, petitioners signed Forms 872 purporting to extend the period for taxable years 1980 and 1983. *100 the return is filed. * * *
Section 6501(e)(3) also provides that an amount of
Respondent also cites section 301.6501(e)-1(c)(4), Proced. & Admin. Regs., which provides in pertinent part as follows:
If a taxpayer fails to so disclose an item in its return (or in a schedule or statement attached thereto), the tax arising from any transaction not so disclosed may be assessed, * * * at any time within 6 years after the return was filed. * * * The applicable return for the tax under
If, as respondent contends, the 6-year period of limitations contained in section 6501(e)(3) applies to petitioners' excise tax liabilities, then all years in issue remain open, as illustrated by the following table: *146
| Due date | 6-year | Statutory | |
| Plan year | of plan | period | notice |
| ending | return | expires | issued |
| 9/30/80 | 4/30/81 | *101 4/30/87 | 12/1/87 |
| 9/30/81 | 4/30/82 | 4/30/88 | |
| 9/30/82 | 4/30/83 | 4/30/89 | |
| 9/30/83 | 4/30/84 | 4/30/90 | |
| 9/30/84 | 4/30/85 | 4/30/91 | |
| 9/30/85 | 4/30/86 | 4/30/92 |
In sum, petitioners' second motion requires us to decide whether the 3- or 6-year period of limitations applies to petitioners' excise tax liabilities.
Petitioners point out that the 6-year period of limitations is inapplicable unless "the return omits an amount of such [excise] tax properly includible thereon" (section 6501(e)(3)) and that pursuant to section 6501(l)(1), "the return referred to
In essence, petitioners argue that the 6-year period of limitations cannot apply to their excise tax liabilities because the Form 5500 series returns used by the plan do not provide for the calculation of those liabilities. We do not agree.
Section 6501(e)(3) is a statute of limitations. In
Our task here is to determine the proper construction of the statute of limitations Congress has written for tax assessments. This Court long ago pronounced the standard: "Statutes of limitation sought to be applied to bar rights of the Government, must receive a strict construction in favor of the Government."
With the foregoing rule of construction in mind, we hold that the 6-year period of limitations of section 6501(e)(3) applies when a plan return fails to disclose transactions giving rise to excise taxes which exceed 25 percent of the excise taxes attributable to disclosed transactions. In other words, we hold that the failure to disclose a prohibited transaction is tantamount *103 to omitting the excise taxes attributable to that transaction.
Our holding rests upon the following considerations. First, legislative history discloses that Congress contemplated that the extended assessment period could apply although a plan return does not provide for the calculation of excise tax liability and, therefore, no
Section 6501(l)(1) (then (n)(1)) was added to the Code by the Tax Reform Act of 1969, Pub. L. 91-172, sec. 101(g)(1), 83 Stat. 525. *105 When it enacted that provision, Congress*148 recognized that some modification of exempt organization information returns would be necessary if such returns were to serve as the returns of specified excise taxes for period of limitations purposes. Congress, however, did not intend for information returns to provide for the calculation of excise taxes. The Senate Report states:
The usual statute of limitations applies -- 3 years unless there is a substantial omission of tax on the return filed by the foundation (6-year statute of limitations) * * *. *106
The foregoing language indicates that the 6-year period of limitations can apply although the information return of an exempt organization includes only a single question regarding transactions giving rise to excise taxes. The only inference possible is that the
The next consideration upon which we rest our holding is the policy underlying section 6501(e), of which section 6501(e)(3) is a part. The entire context of a statute must be considered to give effect to the object and policy of the whole law.
We think that in enacting section *107 275(c) Congress manifested no broader purpose than to give the Commissioner an additional two years to investigate tax returns in cases where, because of a taxpayer's omission to report some taxable item, the Commissioner is at a special *149 disadvantage in detecting errors. In such instances the return on its face provides no clue to the existence of the omitted item. * * *
See also
We also consider the fact that our interpretation of section 6501(e)(3) renders the provision effective, while petitioners' interpretation, if adopted, would render the provision inoperative until the Commissioner modifies the Form 5500 series returns so that they provide for the calculation of
Finally, although petitioners' argument has not been addressed expressly by this Court, our interpretation of section 6501(e)(3) is consistent with our precedents. In
We recognize that petitioners' argument is supported by a literal reading of section 6501(e)(3). Nevertheless, literal interpretations of statutes must be rejected if they lead to results which are absurd in light of Congressional intent. *150
Prior to addressing petitioners' next argument, additional explanation of the
As noted,
Moreover, in calculating a taxpayer's
*151 The statutory rule that imposes excise tax in taxable years following that of the prohibited transaction and pyramiding both result in excise tax liability in years subsequent to that in which the prohibited transaction occurs.
Petitioners argue that the Form 5500 series returns filed by the plan for 1981 and 1982 do not inquire into prohibited transactions occurring in prior years, and that therefore there has not been a failure to disclose those earlier transactions. They argue that the 6-year period does not apply because taxes attributable to those transactions are not "properly includible" taxes which have been omitted.
Petitioners direct our attention to Form 990-PF (1990), for use by private foundations. We note that Form 990-PF (1990) contains the following questions respecting self-dealing excise tax liability:
10. * * * a. During the year did you (either directly or indirectly): * * * (1) Borrow money from, lend money to, or otherwise extend credit to (or accept it from) a disqualified person? * * *
* * * *
10. *112 * * * c.
Moreover, the instructions to Form 990-PF direct private foundations disclosing self-dealing transactions to complete and attach a Form 4720, which provides for the computation of excise tax, to the private foundation return.
Respondent counters by referring us to
Under Rule 121(b), summary judgment is appropriate "if the pleadings, answers to interrogatories, depositions, admissions, and any other acceptable materials, together with the affidavits, *113 if any, show that there is no genuine issue as *152 to any material fact and that a decision may be rendered as a matter of law." See
Rule 121(d) provides that "an adverse party may not rest upon the mere allegations or denials of such party's pleading, but such party's response, by affidavits or as otherwise provided in this Rule, must set forth specific facts showing that there is a genuine issue for trial." In deciding whether to grant summary judgment, we construe the pertinent material in a manner most favorable to the party against whom summary judgment is sought.
In *114 the instant case, construing the material in a manner most favorable to respondent, we conclude that petitioners have failed to prove that there exist no genuine issues of material fact and that they are entitled to partial summary judgment as a matter of law. Petitioners argue that the questions on the Form 5500 series returns do not elicit disclosure of amounts
In sum, we conclude that petitioners have failed to prove their entitlement to partial summary judgment on the *153 statute of limitations grounds and accordingly will deny their second motion.
To reflect the foregoing,
APPENDIX
Robert *115 Thoburn
Docket No. 39546-87
| Sec. 4975(a) | |||
| first-tier tax | Additions to tax | ||
| TYE | deficiency | Sec. 6651(a)(1) | Sec. 6651(a)(2) |
| 12/31/80 | $ 604 | $ 136 | $ 151 |
| 12/31/81 | 1,897 | 427 | 474 |
| 12/31/82 | 3,200 | 720 | 640 |
| 12/31/83 | 4,437 | 998 | 621 |
| 12/31/84 | 5,619 | 1,264 | 450 |
| 12/31/85 | 6,856 | 1,234 | 137 |
Respondent also determined a deficiency in second-tier tax under
Richard W. Cunningham
Docket No. 39547-87
| Sec. 4975(a) | |||
| first-tier tax | Additions to tax | ||
| TYE | deficiency | Sec. 6651(a)(1) | Sec. 6651(a)(2) |
| 12/31/80 | $ 1,524 | $ 383 | $ 381 |
| 12/31/81 | 4,211 | 947 | 2,000 |
| 12/31/82 | 6,595 | 1,484 | 2,803 |
| 12/31/83 | 8,972 | 2,019 | 3,275 |
| 12/31/84 | 11,242 | 2,529 | 3,428 |
| 12/31/85 | 13,619 | 2,451 | 2,723 |
Respondent also determined a deficiency in second-tier tax under
Robert C. Slaton
Docket No. 39548-87
| Sec. 4975(a) | |||
| first-tier tax | Additions to tax | ||
| TYE | deficiency | Sec. 6651(a)(1) | Sec. 6651(a)(2) |
| 12/31/82 | $ 43 | $ 10 | $ 9 |
| 12/31/83 | 279 | 63 | 39 |
| 12/31/84 | 503 | 113 | 40 |
| 12/31/85 | 736 | 132 | 15 |
Respondent also determined a deficiency in second-tier tax under
*154 John W. Andrews
Docket No. 39549-87
| Sec. 4975(a) | |||
| first-tier tax | Additions to tax | ||
| TYE | deficiency | Sec. 6651(a)(1) | Sec. 6651(a)(2) |
| 12/31/80 | $ 1,596 | $ 359 | $ 399 |
| 12/31/81 | 4,263 | 959 | 1,066 |
| 12/31/82 | 6,943 | 1,562 | 1,389 |
| 12/31/83 | 9,349 | 2,104 | 1,309 |
| 12/31/84 | 11,643 | 2,620 | 931 |
| 12/31/85 | 14,045 | 2,528 | 281 |
Respondent *116 also determined a deficiency in second-tier tax under
Robert H. McCollough
Docket No. 39550-87
| Sec. 4975(a) | |||
| first-tier tax | Additions to tax | ||
| TYE | deficiency | Sec. 6651(a)(1) | Sec. 6651(a)(2) |
| 12/31/80 | $ 1,170 | $ 263 | $ 293 |
| 12/31/81 | 3,305 | 744 | 826 |
| 12/31/82 | 5,154 | 1,160 | 1,031 |
| 12/31/83 | 6,844 | 1,540 | 958 |
| 12/31/84 | 8,456 | 1,903 | 676 |
| 12/31/85 | 10,144 | 1,826 | 203 |
Respondent also determined a deficiency in second-tier tax under
Donald T. Quick
Docket No. 39551-87
| Sec. 4975(a) | |||
| first-tier tax | Additions to tax | ||
| TYE | deficiency | Sec. 6651(a)(1) | Sec. 6651(a)(2) |
| 12/31/80 | $ 733 | $ 165 | $ 183 |
| 12/31/81 | 1,732 | 390 | 433 |
| 12/31/82 | 2,708 | 609 | 542 |
| 12/31/83 | 3,599 | 810 | 504 |
| 12/31/84 | 4,449 | 1,001 | 356 |
| 12/31/85 | 5,339 | 961 | 107 |
Respondent also determined a deficiency in second-tier tax under
*155 Homer Knizley, Jr.
Docket No. 39552-87
| Sec. 4975(a) | |||
| first-tier tax | Additions to tax | ||
| TYE | deficiency | Sec. 6651(a)(1) | Sec. 6651(a)(2) |
| 12/31/80 | $ 431 | $ 97 | $ 108 |
| 12/31/81 | 1,312 | 295 | 328 |
| 12/31/82 | 2,244 | 505 | 449 |
| 12/31/83 | 3,155 | 710 | 442 |
| 12/31/84 | 4,025 | 906 | 322 |
| 12/31/85 | 4,935 | 888 | 99 |
Respondent also determined a deficiency in second-tier tax under
Melvin C. Dace
Docket No. 39553-87
| Sec. 4975(a) | |||
| first-tier tax | Additions to tax | ||
| TYE | deficiency | Sec. 6651(a)(1) | Sec. 6651(a)(2) |
| 12/31/80 | $ 1,936 | $ 436 | $ 484 |
| 12/31/81 | 4,926 | 1,108 | 1,232 |
| 12/31/82 | 7,788 | 1,752 | 1,558 |
| 12/31/83 | 10,462 | 2,354 | 1,465 |
| 12/31/84 | 13,014 | 2,928 | 1,041 |
| 12/31/85 | 15,685 | 2,823 | 314 |
*117 Respondent also determined a deficiency in second-tier tax under
Mark V. Barrow
Docket No. 39554-87
| Sec. 4975(a) | |||
| first-tier tax | Additions to tax | ||
| TYE | deficiency | Sec. 6651(a)(1) | Sec. 6651(a)(2) |
| 12/31/80 | $ 802 | $ 180 | $ 201 |
| 12/31/81 | 2,482 | 558 | 621 |
| 12/31/82 | 4,195 | 944 | 839 |
| 12/31/83 | 5,717 | 1,286 | 800 |
| 12/31/84 | 7,170 | 1,613 | 574 |
| 12/31/85 | 8,691 | 1,564 | 174 |
Respondent also determined a deficiency in second-tier tax under
1. Cases of the following petitioners have been consolidated herein: Richard W. Cunningham, docket No. 39547-87; Robert C. Slaton, docket No. 39548-87; John W. Andrews, docket No. 39549-87; Robert H. McCollough, docket No. 39550-87; Donald T. Quick, docket No. 39551-87; Homer Knizley, Jr., docket No. 39552-87; Melvin C. Dace, docket No. 39553-87; and Mark V. Barrow, docket No. 39554-87. Except as otherwise noted for convenience we will refer to the foregoing consolidated cases collectively as the "instant case."↩
2. Although petitioners' motion suggests that we lack jurisdiction over years closed by the applicable limitations period, we have jurisdiction over such years, as the statute of limitations is an affirmative defense that must be pleaded. Rule 39;
3. Unless otherwise indicated, all section and Code references are to the Internal Revenue Code as amended and in effect for the years in issue, and all Rule references are to the Tax Court Rules of Practice and Procedure (effective July 1, 1990).↩
4. The deficiencies determined by respondent are set forth in the appendix to this opinion.↩
5. Petitioner Robert C. Slaton was not a participant during the fiscal years of the plan ending Sept. 30, 1980, and Sept. 30, 1981.
6. See Form 5500-C (1979). Sec. 301.6058-1(a)(4), Proced. & Admin. Regs., provides that the information return of a plan required by sec. 6058(a) shall be filed at the time required by the prescribed form and related instructions.↩
7. The Form 872 signed by petitioner Robert C. Slaton purports to extend the period of limitations for 1983 only.↩
8. Title
Unless the Secretary of the Treasury finds that the collection of a tax is in jeopardy, in carrying out the provisions of
9. Because our Rules do not recognize a motion to limit a deficiency determination, petitioners' request should have been cast as a motion for partial summary judgment under Rule 121(c), and we consider the request as such.
10. Petitioners inexplicably ignore the other requirements that must be satisfied before a loan from a plan to a disqualified person will qualify as exempt from
11. In parts of their moving papers, petitioners also argue that the DOL settlement itself constitutes a "correction." Because we hold that the DOL settlement does not fix 10 percent as the fair market interest rate for the plan loans, we need not address whether payment of fair market interest constitutes a correction.
12. The parties stipulated that the period of limitations for calendar years (rather than the plan's fiscal years) would commence on Apr. 30 of the succeeding years. We view their stipulation as contrary to the plain import of the statute and accordingly disregard it. The effect of the stipulation is to curtail the limitations period for October, November, and December of each of the years in issue, and there is no authority permitting the shortening of a limitations period. We are not bound by stipulations of law.
13. As noted, petitioner Robert C. Slaton's Form 872 affects only taxable year 1983.↩
1. Year remains open by agreement entered into prior to expiration of period of limitations.
14. As originally enacted in 1965, sec. 6501(e)(3) did not apply to the
The Excise Tax Reduction Act of 1965 also added sec. 6501(b)(4) to the Code. That provision states that the statute of limitations for the assessment of an excise tax begins to run when a return is filed containing an entry with respect to such tax. The Senate Report indicates that Congress intended to reverse judicial opinions holding that the period of limitations did not commence with respect to an excise tax until the specific transaction giving rise to such tax was reported. S. Rept. 324, 89th Cong., 1st Sess. (1965),
15. The Black Lung Benefits Revenue Act of 1977 amended sec. 6501(l)(1) (then (n)(1)) to provide that the return of
An explanatory statement of Russell B. Long, chairman of the Senate Committee on Finance, on the compromise version of H.R. 5322 provides some guidance as to how the foregoing provision of the Black Lung Benefits Revenue Act relates to sec. 6501(e)(3). The explanation states:
These [excise] taxes are treated like income, estate, and gift taxes * * *. The usual statute of limitations for assessment applies -- 3 years unless there is a substantial omission of tax on the return filed by the trust (6-year-statute of limitations) or no return has been filed (assessment at any time). * * * [123 Cong. Rec. 39,129 (1977).]↩
3.
16. In
17. We need not address whether the 6-year period of limitations would apply when a plan return fails to disclose a transaction but the excise tax attributable to that transaction does not exceed 25 percent of the excise tax attributable to disclosed transactions.
United States v. American Trucking Associations ( 1940 )
Pilot Life Insurance v. Dedeaux ( 1987 )
Louis E. Roszkos and Vivian L. Roszkos v. Commissioner of ... ( 1988 )
estate-of-samuel-c-sachs-deceased-stephen-c-sachs-sophia-r-sachs-co- ( 1988 )
Colony, Inc. v. Commissioner ( 1958 )
United States v. Diebold, Inc. ( 1962 )
Estate of James E. Craft, Thomas J. Craft v. Commissioner ... ( 1979 )
Joseph P. Lucia v. United States of America ( 1973 )
Raymond J. Donovan, Secretary of Labor v. Loran W. Robbins, ... ( 1985 )
Max and Fannie Carasso v. Commissioner of Internal Revenue ( 1961 )
Lucas v. Pilliod Lumber Co. ( 1930 )
E. I. Dupont De Nemours & Co. v. Davis ( 1924 )
D. Ginsberg & Sons, Inc. v. Popkin ( 1932 )
First Federal Savings & Loan Ass'n v. Goldman ( 1986 )
Harrison v. Northern Trust Co. ( 1943 )
J. C. Penney Company, Transferee v. Commissioner of ... ( 1962 )
george-edward-quicks-trust-ua-2333-41-mercantile-trust-company-national ( 1971 )