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Sixth Circuit Affirms Dismissal of Individual’s Tax Court Case

JAN. 8, 2021

Daniel D. Benham v. Commissioner

DATED JAN. 8, 2021
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Daniel D. Benham v. Commissioner

DANIEL D. BENHAM,
Petitioner-Appellant,
v.
COMMISSIONER OF INTERNAL REVENUE,
Respondent-Appellee.

NOT RECOMMENDED FOR PUBLICATION

UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT

ON APPEAL FROM THE UNITED
STATES TAX COURT

ORDER

Before: GUY, KETHLEDGE, and NALBANDIAN, Circuit Judges.

Daniel D. Benham, a pro se New York litigant, appeals an order of the United States Tax Court dismissing his petition for lack of jurisdiction. Benham also moves to proceed in forma pauperis. This case has been referred to a panel of the court that, upon examination, unanimously agrees that oral argument is not needed. See Fed. R. App. P. 34(a).

In December 2018, Benham filed a petition with the Tax Court, in which he challenged (1) his tax liabilities for the years 2001 through 2008 and (2) the Internal Revenue Service's (“IRS”) collection efforts with respect to those tax liabilities.

The Commissioner of Internal Revenue (“CIR”) filed a motion to dismiss, arguing that (1) the notice of deficiency issued to Benham for tax years 2001-2003 was invalid, (2) no notice of determination was issued to Benham for tax years 2001-2003 that would confer jurisdiction upon the court, (3) no notice of deficiency or notice of determination was issued to Benham for tax years 2004 through 2007 that would confer jurisdiction upon the court, (4) Benham's petition is untimely as to the June 20, 2011, notice of deficiency for tax year 2008, and (5) no notice of determination was issued to Benham for tax year 2008 that would confer jurisdiction upon the court.

The Tax Court agreed, overruled Benham's objections, and granted the CIR's motion.

Standard of Review

We review de novo whether the Tax Court had jurisdiction. Desmet v. Comm'r, 581 F.3d 297, 301 (6th Cir. 2009). “The Tax Court is a court of limited jurisdiction and lacks general equitable powers.” Comm'r v. McCoy, 484 U.S. 3, 7 (1987) (per curiam). Accordingly, it “exercises jurisdiction only to the extent provided by statute.” GAF Corp. & Subsidiaries v. Comm'r, 114 T.C. 519, 521 (2000); see Estate of Mueller v. Comm'r, 153 F.3d 302, 304 (6th Cir. 1998) (“The Tax Code specifies that '[t]he Tax Court and its divisions shall have such jurisdiction as is conferred on them by [Title 26].'” (alterations in original) (quoting 26 U.S.C. § 7442)). In a deficiency case, the Tax Court's jurisdiction “depends upon a valid notice of deficiency and a timely filed petition.” GAF Corp., 114 T.C. at 521; see 26 U.S.C. § 6213(a). In a collection case, jurisdiction depends upon a valid notice of determination — issued after an administrative hearing — and a timely filed petition. See Thornberry v. Comm'r, 136 T.C. 356, 362-63 (2011); see also 26 U.S.C. § 6330(d)(1).

For the following reasons, the Tax Court properly dismissed Benham's petition for lack of jurisdiction.

Tax Years 2001-2003

The CIR maintains that the notice of deficiency for tax years 2001-2003 was invalid because IRS records do not indicate that such a notice, although issued, had been mailed to Benham. The CIR also asserts that no notices of determination were issued for these tax years. Benham counters that he received notices in 2010 and in 2018 for tax years 2000-2008. The record shows that, on October 9, 2009, Benham received a notice of deficiency for tax years 2000-2003. But this notice cannot confer jurisdiction upon the Tax Court because Benham waited well over ninety days after receipt of the notice of deficiency to file his petition. See 26 U.S.C. § 6213(a). And although Benham received a notice of levy in November 2018 for tax years 2001-2004 and 2008, the record does not show that he received a notice of deficiency regarding these tax years. As the statute says, only a notice of deficiency, which is different from a notice of levy, gives the Tax Court jurisdiction over a deficiency case like this one. See id. Benham's arguments with respect to tax years 2001-2003 therefore lack merit.

Tax Years 2004-2007

The record shows that no notice of deficiency or notice of determination was issued to Benham for tax years 2004-2007. Benham does not dispute this fact.

Tax Year 2008

The notice of deficiency for tax year 2008 was mailed to Benham on June 20, 2011. Benham filed his petition on December 19, 2018 — well beyond the ninety-day time limit imposed by 26 U.S.C. § 6213(a). And no notice of determination issued for tax year 2008. Again, Benham does not dispute these facts.

In short, because no valid notices of deficiency or determination were issued to Benham for the tax years in question — or because Benham failed to timely file a petition — the Tax Court lacked jurisdiction.

Opening Brief Arguments

None of the miscellaneous arguments that Benham raises in his opening brief alters this conclusion. First, he argues that the CIR lacks authority to collect taxes and take other related actions. This argument is defied by the Constitution and federal law. In particular, the Sixteenth Amendment gives Congress the power to lay and collect income taxes. Congress delegated this authority and responsibility to the Secretary of the Treasury. See 26 U.S.C. § 6301. The Secretary of the Treasury, in turn, delegated authority to administer the tax laws and collect taxes to the CIR. 26 U.S.C. § 7803(a)(2); see also Hughes v. United States, 953 F.2d 531, 536 (9th Cir. 1992).

Second, Benham argues that the Tax Court's dismissal of his petition deprived him of his rights to due process, to be heard, and to a fair trial. But as noted above, the Tax Court is a court of limited jurisdiction, and Benham's constitutional arguments do not confer jurisdiction on the Tax Court. McCoy, 484 U.S. at 7; see also Ryskamp v. Comm'r, 816 F. App'x 207, 207 (9th Cir. 2020). Benham is free to raise these arguments in a post-payment refund action. See Patmon & Young Pro. Corp. v. Comm'r, 55 F.3d 216, 218 (6th Cir. 1995).

Third, Benham argues that the Tax Court's dismissal of his petition for lack of jurisdiction violates the Tucker Act and the Fifth Amendment. The Tucker Act authorizes the United States Court of Federal Claims to adjudicate tax refund claims. See 28 U.S.C. § 1491(a); Pierce v. United States, 76 Fed. Cl. 638, 641 (Fed. Cl. 2007). The Act does not, however, provide for jurisdiction in the Tax Court. See Meidinger v. Comm'r, 559 F. App'x 5, 6 (D.C. Cir. 2014) (per curiam). Benham's third argument therefore fails.

Fourth, Benham argues that the Tax Court failed to recognize that it had jurisdiction under Tax Court Rule 331(a). But a federal court's rules cannot expand the jurisdiction bestowed upon it by statute. See, e.g., Sibbach v. Wilson & Co., Inc., 312 U.S. 1, 10 (1941) (noting “the inability of a court, by rule, to extend or restrict the jurisdiction conferred by a statute”); Bowles v. Russell, 551 U.S. 205, 211-212 (2007) (noting “the jurisdictional distinction between court-promulgated rules and limits enacted by Congress”). As set forth above, the Tax Court's jurisdiction is limited to that conferred upon it by Title 26 of the Tax Code. And, as we have concluded, Benham failed to establish that the Tax Court had jurisdiction under the relevant statutes of Title 26. This argument therefore lacks merit.

Reply Brief Arguments

Benham raises several new (and largely frivolous) arguments in his reply brief. But we decline to consider them because a party may not, for the first time in a reply brief, raise issues that were not raised in the opening brief. See Sanborn v. Parker, 629 F.3d 554, 579 (6th Cir. 2010) (“We have consistently held . . . that arguments made . . . for the first time in a reply brief are waived.”).

Accordingly, we GRANT the motion for leave to proceed in forma pauperis and AFFIRM the Tax Court's order.

ENTERED BY ORDER OF THE COURT

Deborah S. Hunt, Clerk

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