The Tax Court of Canada in Brief – December 2021 | Free human rights

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Freeman Law’s “Tax Court at a Glance” covers all of the Tax Court’s important opinions, providing a weekly summary of its decisions in clear and concise prose.

For a link to our podcast covering the Tax Court in Brief, download here or discover other episodes of Bill Freeman.

Tax litigation: The week of December 6 to December 10, 2021

Coggin v. Comm’r, 157 TC n ° 12 | December 8, 2021 | Weiler, J. | Dkt. No. 21580-19

Short summary: Alice J. Coggin (“Coggin”), who was married in the tax years in question, learned weeks before her husband’s death that her husband had filed (and partially paid) joint joint tax returns for the 2001 to 2009 tax years. In counsel’s opinion, Coggin filed amended personal income tax returns for the 2001 to 2009 tax years, claiming refunds for the 2001 tax years to 2007. The Internal Revenue Service (“IRS”) rejected Coggin’s refunds for the 2003, 2004, and 2007 tax years. Coggin then filed a complaint with the United States District Court, requesting refunds for the 2001-2007 taxation years. The US government has filed a counterclaim, seeking to reduce Coggin’s remaining balances owed for the 2002-2009 years until judgment.

The U.S. District Court issued summary judgment in favor of the U.S. government and dismissed Coggin’s claims for reimbursement. However, the United States District Court retained jurisdiction over the government’s counterclaim. In his defense, Coggin applied for innocent spouse relief, pursuant to IRC § 6015, for the 2001 to 2009 tax years and filed a petition with the United States Tax Court. In response, the IRS filed a motion to dismiss for want of jurisdiction.

Key questions:

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

Main Holdings:

  • (1) The United States Revenue Court does not have jurisdiction for fiscal years 2001 to 2007, but it does have jurisdiction for fiscal years 2008 and 2009.

Key points of law:

  • The Tax Court is a court of limited jurisdiction. Naftel v. Comm’r, 85 TC 527, 529 (1985).
  • Section 6015 (e) (1) (A) provides that “[i]In addition to any other remedy provided by law, the individual may apply to the Tax Court (and the Tax Court shall have jurisdiction) to determine the appropriate relief available to the individual under this section ”as long as that certain legal conditions are met. Maier v. Comm’r, 119 TC 267, 270-271 (2002), confirmed, 360 F.3d 361 (2d Cir. 2004).
  • Section 6015 (e) (3) provides for a limitation on the jurisdiction of the Tax Court: this section to the extent that jurisdiction is acquired by the District Court or the Federal Claims Court of the United States in during the taxation years which are the subject of the action for reimbursement, and (B) the court which acquires jurisdiction has jurisdiction to hear the application filed under this subsection. IRC § 6015 (e) (3) (A) – (B).

Overview: Coggin highlights procedural issues related to the jurisdiction of the Tax Court. To the extent that a taxpayer brings an action for reimbursement in a United States district court, that court may retain (and the tax court does not subsequently acquire) jurisdiction over a subsequent claim for relief for the innocent spouse for the same years in question. However, as the Tax Court notes here, if certain taxes have not been paid (for example, the 2008 and 2009 tax years), the taxpayer does not sue for a refund, and the District Court of the United States does not have jurisdiction for those particular years under IRC § 6015 (e) (3) (A) – (B).

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