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Tax Litigation: The Week of December 6 – December 10, 2021

Coggin v. Comm’r, 157 T.C. No. 12 | December 8, 2021 | Weiler, J. | Dkt. No. 21580-19

Short Summary: Alice J. Coggin (“Coggin”), who was married during the tax years at issue, learned weeks before her husband’s death that her husband untimely filed (and partially paid) joint personal income tax returns for tax years 2001 through 2009. On the advice of counsel, Coggin filed amended personal income tax returns for tax years 2001 through 2009, claiming refunds for tax years 2001 through 2007. The Internal Revenue Service (“IRS”) rejected Coggin’s refunds for tax years 2003, 2004, and 2007. Coggin then filed a complaint in U.S. District Court, seeking refunds for tax years 2001 through 2007. The U.S. Government filed a counterclaim, seeking to reduce Coggin’s remaining balances due for years 2002 – 2009 to judgment.

The U.S. District Court granted summary judgment in favor of the U.S. Government and dismissed Coggin’s refund claims. However, the U.S. District Court retained jurisdiction over the Government’s counterclaim. In defense, Coggin sought innocent spouse relief, pursuant to I.R.C. § 6015, for tax years 2001 through 2009 and brought a petition a petition before the U.S. Tax Court. In response, the IRS filed a motion to dismiss for lack of jurisdiction.

Key Issues:

• (1) Whether the U.S. Tax Court has jurisdiction with respect to tax years 2001 through 2009.

Primary Holdings:

• (1) The U.S. Tax Court does not have jurisdiction with respect to tax years 2001 through 2007 but does have jurisdiction with respect to tax years 2008 and 2009.

Key Points of Law:

• The Tax Court is a court of limited jurisdiction. Naftel v. Comm’r, 85 T.C. 527, 529 (1985).
• Section 6015(e)(1)(A) provides that “[i]n addition to any other remedy provided by law, the individual may petition the Tax Court (and the Tax Court shall have jurisdiction) to determine the appropriate relief available to the individual under this section” so long as certain statutory conditions are met. Maier v. Comm’r, 119 T.C. 267, 270-271 (2002), aff’d, 360 F.3d 361 (2d Cir. 2004).
• Section 6015(e)(3) provides a limitation on the Tax Court’s jurisdiction: If a suit for refund is begun by either individual filing the joint return pursuant to Section 6532—(A) the Tax Court shall lose jurisdiction of the individual’s action under this section to whatever extent jurisdiction is acquired by the district court or the United States Court of Federal Claims over the taxable years that are the subject of the suit for refund, and (B) the court acquiring jurisdiction shall have jurisdiction over the petition filed under this subsection. I.R.C. § 6015(e)(3)(A)-(B).

Insight: Coggin underscores the procedural issues related to the Tax Court’s jurisdiction. To the extent a taxpayer initiates a suit for refund in U.S. District Court, that court may retain (and the Tax Court does not subsequently acquire) jurisdiction with respect to a later claim for innocent spouse relief for the same years at issue. However, as the Tax Court notes here, if certain taxes have not been paid (e.g., tax years 2008 and 2009), then the taxpayer is not suing for a refund, and the U.S. District Court does not have jurisdiction for those particular years under I.R.C. § 6015(e)(3)(A)-(B).

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