Couple Seeks Supreme Court Review of Fourth Circuit Tax Decision

LOUIS S. SHUMAN; SANDRA SHUMAN,
Petitioners,
v.
COMMISSIONER OF INTERNAL REVENUE,
Respondent.

In the
Supreme Court of the  United States

On Petition for Writ of Certiorari to the
United States Court of Appeals
for the Fourth Circuit

PETITION FOR WRIT OF CERTIORARI

Louis S. Shuman
120 South Lee Street
Alexandria, VA 22314
(301) 641-6003
Email: Ishumani@msn.com

Petitioner Pro Se

Sandra Shuman
120 South Lee Street
Alexandria, VA 22314
(301) 641-6003

Petitioner Pro Se

QUESTION PRESENTED

The question presented is:

Whether the IRS and lower Courts application of IRC 6214(b) and IRC 6402 violate the Due Process Clause of the 5th Amendment.

STATEMENT OF RELATED PROCEEDINGS

Louis S. Shuman and Sandra Shuman v. Commissioner of Internal Revenue No. 18-2426(L) (9th Cir.) (opinion issued and judgment entered August 15, 2019; mandate issued October 30, 2019.

Louis S. Shuman and Sandra Shuman v. Commissioner of Internal Revenue No. 19-1242 (9th Cir.) (opinion issued and judgment entered August 15, 2019; mandate issued October 30, 2019.

There is an additional proceeding pending before the U.S. Tax Court, for the tax years 2008, 2009 and 2010. The final decision in this case will be binding on the case pending in the U.S. Tax Court.

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TABLE OF CONTENTS

QUESTION PRESENTED

STATEMENT OF RELATED PROCEEDINGS

TABLE OF AUTHORITIES

PETITION FOR WRIT OF CERTIORARI

INTRODUCTION

OPINIONS BELOW

JURISDICTION

CONSTITUTIONAL AND STATUTORY
PROVISIONS INVOLVED

STATEMENT OF THE CASE

ARGUMENT

CONCLUSION

APPENDIX

Appendix A Opinion and Judgment in the United States Court of Appeals for the Fourth Circuit (August 15, 2019

Appendix B Memorandum Findings of Fact and Opinion and Decision in the United States Tax Court (August 23, 2018)

Appendix C Order in the United States Tax Court (November 30, 2018)

Appendix D Order in the United States Tax Court (November 30, 2018)

Appendix E Order and Decision in the United States Tax Court (December 7, 2018)

Appendix F Supplement to Respondent's Computations for Entry of Decision, Filed November 20, 2018 in the United States Tax Court (December 6, 2018)

Appendix G Order Denying Petition for Rehearing and Rehearing En Banc in the United States Court of Appeals for the Fourth Circuit (October 22, 2019)

Appendix H Stay of Mandate under Fed. R. App. P. 41(d)(1) in the United States Court of Appeals or the Fourth Circuit (October 1, 2019)

Appendix I Mandate in the United States Court of Appeals for the Fourth Circuit (October 30, 2019)

Appendix J Notice of Federal Tax Lien 2005-2007 (July 3, 2009)

Appendix K Appeals Transmittal and Case Memo-CDP (April 5, 2011)

Appendix L Decision Letter Concerning Equivalent Hearing Under Section 6320 and/or 6330 of the Internal
Revenue Code (April 21, 2011)

Appendix M Certificate of Release of Federal Tax Lien 2005-2007 (May 4, 2011)

Appendix N IRS Notice of Overpaid Tax Applied to Other Taxes You Owe for Tax Year December 31, 2007 (May 16, 2011)

Appendix O IRS Notice We Intend to Levy on Certain Assets (September 20, 2010)

Appendix P IRS Notice of Determination Concerning Collection Action(s) under Section 6320 And/or 6330 of the Internal Revenue Code for Tax Period December 2011 (June 6, 2014)

Appendix Q Form 1040X Amended U.S. Individual Income Tax Return (fold-out exhibit) and Letter to IRS from Louis and Sandra Shuman (April 16, 2012)

Appendix R 26 U.S.C. § 6214

TABLE OF AUTHORITIES

Bolling v. Sharpe, 347 U.S. 497 (1954)

Bull v. United States, 295 U.S. 247 (1935)

Estate of Mueller v. Commissioner, 101 T.C. 551 (1993)

Goldberg v. Kelley, 397 U.S. 254 (1970)

Matthews v. Eldridge, 429 U.S. 319 (1976)

Menard, Inc, v. Commissioner, 130 T.C. 54 (2008), rev’d on another issue 560 F.3d 620 (7th Cir. 2009)

Stone v. White, 301 U.S. 532 (1937)

United States v. Dalm, 494 U.S. 596 (1990)

CONSTITUTION

U.S. Const. Amend. 5

STATUTES

26 U.S.C. § 6214

26 U.S.C. § 6402

OTHER AUTHORITIES

Harold Dubroff & Brant Hell wig “The United States Tax Court — An Historical Analysis” (Second Edition, 2014)

Internal Revenue Service DataBook — 2012

Internal Revenue Service DataBook — 2018

“(Un)Appealing Deference to the Tax Court” (2014). Articles by Maurer Faculty. Paper 1304. http://www.repository.law.indiana.edu/facpub/ 1304, [Vol 63 Duke Law Journal]

Volume One Taxpayer Advocate Service — 2018 Annual Report to Congress

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PETITION FOR WRIT OF CERTIORARI

Internal Revenue Service statistics show that the overall number of individual tax returns filed in 2011, and subjected to audit in 2012 was 1% of all returns filed; and, for Petitioners' tax bracket, the number was approx 2.6%.¹ The most recently available IRS audit statistics show that individual tax returns filed in 2017, subjected to audit in 2018, was.06% of all returns filed; and, for Petitioners' tax bracket, the number was approx.0.6%.²

The selection of Petitioners' 2011 return for audit clearly shows that IRS had major and substantial concerns and objections with the 2011 return as filed, given the extremely low numbers of returns typically selected for audit. Petitioners' original return for 2011, dated January 23, 2013, and filed with IRS on February 4, 2013, showed that Petitioners claimed the amount of $566,889 as estimated tax payments to be applied to the 2011 tax year from tax year 2010.

Petitioners $566,889 claim of estimated tax payments from 2010, reduced the self-reported tax of $40,543 that would otherwise have been due for 2011, with the result that petitioners claimed overpayment of 2010 estimated tax constituted a self-reported refund claim in 2011 in the amount of $526,346.

Petitioners refund claim of $526,346 for 2011, were based on amended returns filed for 2010, containing the following claimed deductions: (1) corrections in calculating stock option basis, to reduce overpayments of income in prior years; and (2) a claimed casualty loss deduction of $197,337.

In the decision below, the Fourth Circuit, in an unpublished, precedentially non-binding per curiam opinion, upheld the LJ.S. Tax Court, based on the reasoning set forth in the Tax Court's decisions and orders. The Tax Court gave a detailed analysis for its denial of the $197,337 claimed casualty loss deduction, but gave no detailed analysis or explanation for denial of the stock option basis deduction, other than to assert that the Tax Court lacked jurisdiction to rule on any taxpayer claim of overpayment or underpayment, under 26 U.S.C. (“IRC”) 6214(b), for any year other than 2011. Yet, there was an IRS acknowledged overpayment of $57,668 from 2007, in the record, which was only partially applied to liabilities by IRS, and which was not addressed by the Tax Court. And, IRC 6214(b) authorized an independent basis for Tax Court jurisdiction, under the doctrine of equitable recoupment, that covers non-deficiency years.

INTRODUCTION

The vast majority of taxpayers in the United States lack the resources to “pay up” and contest a tax dispute with the IRS in the Federal Courts. In 1989, 95% of all federal tax disputes were handled by the U.S. Tax Court.³ In 2012, 96.8% of all federal tax cases were docketed with the U.S. Tax Court.⁴

Statistics for 2010-2012 show that over 75% of cases filed with the U. S Tax Court, were pro se cases.⁵ In the Taxpayer Advocate Service's 2018 Report to Congress, over 80% of cases before the Tax Court were reportedly brought by pro se litigants.⁶

Thus, for the overwhelming majority of taxpayers, if the tax dispute is not resolved within the administrative proceedings before IRS, then, as a practical matter, the taxpayer's limited recourse is to file a Petition with the U.S. Tax Court.

Huge roadblocks then come into the line of sight of the taxpayer seeking justice down the road in Tax Court: one, the amount of the federal tax in dispute; two, the cost, and complexity, of the litigation process. And three, the typically unsophisticated taxpayer is now opposed by U.S. Government attorneys, familiar with the complexities of tax law and litigation, and backed by the full force, might, and resources, of the federal government.

These obstacles simply become too much to overcome, for the typical taxpayer. Unless IRS is held to the minimum standard of following its own rules, as opposed to arbitrary and capricious application of its own rules, the average taxpayer has little hope of success, on the administrative level, or before the Tax Court. Without IRS accountability, requiring IRS to follow and enforce its own rules, the key element in the justice equation — the merits of the case — is effectively eliminated from the justice equation.

OPINIONS BELOW

The Fourth Circuit opinion and judgment (August 15, 2019) are reproduced at Appendix A, p. 1. The Memorandum Findings of Fact and Opinion and Decision in the United States Tax Court (August 23, 2018) are reproduced at Appendix B, p. 6. The Order in the United States Tax Court (November 30, 2018) is reproduced at Appendix C, p. 39. The Order in the United States Tax Court (November 30, 2018) is reproduced at Appendix D, p. 40. The Order and Decision in the United States Tax Court (December 7, 2018) is reproduced at Appendix E, p. 43. The Order Denying Petition for Rehearing and Rehearing En Banc in the United States Court of Appeals for the Fourth Circuit (October 22, 2019) is reproduced at Appendix G, p. 49.

JURISDICTION

The Fourth Circuit Order Denying Petition for Rehearing and Rehearing En Banc was rendered on October 22, 2019, and Petitioners have appealed within the 90 day time limit.

CONSTITUTIONAL AND STATUTORY PROVISIONS INVOLVED

The Fifth Amendment provides, in relevant part that: “No person shall be . . . deprived of life, liberty, or property without due process of law . . .” U.S. Const. Amend. 5.

The relevant provisions of the federal tax statutes: IRC 6214 and IRC 6402 are reproduced at Appendix R, at pp. 115-117.

STATEMENT OF THE CASE

A. Fact History: Events Giving Rise to This Tax Dispute

IRS filed a Federal Tax Lien against Petitioners, dated July 3, 2009, in the amount of $240,306.75, for unpaid income taxes for the years 2005, 2006 and 2007. Appendix J, at pp. 55-57.

For 2005, IRS prepared a Substitute Return-Form 1040A, and claimed $2872.07 was owed by Petitioners for that year, at the time of the filing of the Tax Lien. See IRS Appeals Office-Washington DC (hereafter called “IRS Washington Appeals Office”) Decision Letter dated April 21, 2011 which states that “. . . the balance for 2005 was the result of an additional tax assessment completed by the Internal Revenue Service's Examination Division.” Appendix L, Page 64; Appendix N, pp.72-73. For 2006, the lien was for $115,542.60; and for 2007 the lien was for $121,892.08.

Petitioners filed for a Collection Due Process-Equivalent Hearing, submitting their amended returns for 2005, 2006 and 2007 in support. Appendix L, pp.67-68. Petitioners represented to the IRS Washington Appeals Office, supported by their 2005-2007 returns, that the $240,306.75 liability set forth in the Tax Lien was not owed by Petitioners, since there were errors in calculating the cost basis of stock options; and in correcting the errors in the calculation of stock basis, Petitioners were entitled to a refund. Appendix L, at p.64.

The IRS Washington Appeals Office accepted Petitioners amended returns for 2005, 2006, and 2007, and made the following adjustments, based on Petitioners claim of errors in the calculation of stock option basis, as set forth in those returns.

For 2005, IRS Washington Appeals Office determined, in its CDP Case Memo dated April 21, 2011, that the statute of limitations for refund claims had expired for 2005 (Appendix L, p.66); and that “. . . there is a small balance for 2005 which may be reduced to zero by the amended return for the period.” Appendix K, at p.59.

For 2006, IRS Washington Appeals Office, in its CDP Case Memo dated April 21, 2011, determined that “. . . [d]ue to the amended returns there is no balance for 2006.” Appendix K, at p.59. IRS Washington Appeals Office further determined, in its Decision Letter dated April 21, 2011 that: there was a credit due Petitioners of $30,743.50 for 2006, but this credit could not be refunded to Petitioners because the statute of  imitations had expired. Appendix L, pp.65-66.

For 2007, IRS Washington Appeals Office Decision Letter dated April 21, 2011, determined that there was no income tax due for 2007, but there was an estimated tax penalty of $3,693.35, which would be abated by IRS, resulting in no tax due for 2007. Appendix L, p.65-66.

Although, the IRS Washington Appeals Office Decision Letter, dated April 21, 2011, also stated that “. .  there is still a balance” remaining for tax year 2005, and so the Tax Lien remains (Appendix L, at p.66), the IRS Washington Appeals Office also determined, in its CDP Case Memo dated April 21, 2011, that Petitioners return for 2005 reduced the tax due for 2005 to “0”. Appendix K, p.59.

IRS then issued a Certificate of Release of Tax Lien, (“Certificate”) dated May 4, 2011. Appendix M, pp.69-71. Specifically, the Certificate stated that Petitioners “satisfied the taxes listed below and all statutory additions”, thereby releasing the lien of $2,872.07 for 2005, the lien of $115,542.60 for 2006, and the lien of $121,892.08 for 2007. Appendix M, at pp. 69-70.

Within approx. 12 days of filing the Certificate releasing the $240,306.75 Tax Lien for 2005-2007, IRS issued to Petitioners its Letter dated May 16, 2011, explaining additional adjustments arising from the overpayments derived from their recently filed 2005-2007 returns. Specifically, $1,315.72 of overpaid taxes for 2007, was applied to Petitioners' 2005 return as follows: $406.39 was applied to satisfy amounts owed arising from IRS Form 1040A-substitute return; and $909.33 was applied to satisfy amounts owed IRS from their amended Form 1040 for 2005. Appendix N, pp.72-73. IRS also notified Petitioners that they “. . . may still be due a refund if we applied only part of your overpayment to other taxes.” Appendix M, at pp.72-73.

The 2005-2007 tax returns of Petitioners, upon which IRS determined the tax lien of $240,306.75 was fully satisfied for the tax. years 2005-2007, are specifically identified as follows:

ARGUMENT

Petitioners above tax returns are not covered by the Tax Court's order excluding certain documents of Petitioners, and are therefore in evidence; and, are directly relevant to Petitioners refund claims in this case. Appendix C, at p.39.

Specifically, although the IRS Washington Appeals Office asserted that Petitioners refund claims for 2005 and 2006 were barred by the statute of limitations, no such position was taken for 2007, and so there was a timely and valid refund claim for 2007 for in the amount of $57,668 (less the $1,315 applied to satisfy the income tax due for 2005).

IRC 6402, provides in relevant part, that IRS is entitled to credit any taxpayer overpayment by applying the credit to any tax due to IRS. Petitioners were therefore not expecting refunded monies for 2007, but were entitled to have the 2007 overpayment be applied to future taxes due IRS.

Despite this clear entitlement to have the IRS admitted overpayments from the 2007 tax year be applied to tax due for future years, as evidenced by the IRS Washington Appeals Office CDP Case Memo dated April 21, 2011, the Decision Letter dated April 21, 2011, the Certificate of Release of Tax Lien dated May 4, 2011, and the IRS Overpayment Adjustment Letter dated May 16, 2011, IRS has flatly disregarded its own rulings and refused to credit Petitioners for the acknowledged overpayments for 2007.

While IRC 6402 entitles IRS to apply the 2007 overpayment to taxes due for future years, IRC 6402 does not permit IRS to make an acknowledged credit completely disappear. To the contrary, IRC 6402, in relevant part, specifically states that the amount of any overpayment may be credited to any tax liability owed, but then the IRS shall refund any balance still due to the taxpayer.

Here, the acknowledged overpayment, which should have been applied to liabilities for future years completely disappears, as if the acknowledged overpayment never existed, and Petitioners were given no credit for this $57,668 (less the $1,315 applied to satisfy the income tax due for 2005) acknowledged overpayment for 2007, in violation of IRC 6402(a).

For the years, subsequent to 2005-2007, Petitioners took the following action:

For 2008, Petitioners filed their 2008 income tax return dated July 23, 2010. 4th Circuit Informal Appendix, at pp. 694-717. This original return was amended by Petitioners Form 1040X income tax return for 2008 dated April 16, 2012. Exhibit 33P-4th Circuit Informal Appendix, at pp. 308-321.

For 2009, Petitioners filed their 2009 income tax return dated July 23, 2010. Exhibit 34P, 4th Circuit Informal Appendix, pp. 322-344. This original return was amended by Petitioners Form 1040X income tax return for 2009 dated April 16, 2012. Exhibit 35P, 4th Circuit Informal Appendix, pp. 345-358.

For 2010, Petitioners filed their 2010 income tax return dated October 13, 2011. Exhibit 3J, 4th Circuit Informal Appendix, pp.83-103. This original return was amended by Petitioners Form 1040X income tax return for 2009 dated April 16, 2012. Exhibit 35P, 4th Circuit Informal Appendix, pp. 345-358. Petitioners, thereafter filed a second Form 1040X amended return dated January 23, 2013. Exhibit 37J, 4th Circuit Informal Appendix pp.373-374.

From 2005-2010, Petitioners central basis for their refund claim was founded on their claim for adjustments to be made for errors in calculation of stock basis. In each of these years Petitioners supported and substantiated their claims with detailed analysis and explanations of the relevant facts and applicable law. See Appendix Q, at pp. 92-119: Petitioners Form. 1040X amended return for 2006-Exhibit 31P.

In their 2010 return, Petitioners continued raising the claim for refund adjustments based on stock option basis calculations: claims which IRS continued to be ignore, without explanation, as if they were never made in the first place. But, in this year, Petitioners also raised the claim for a casualty loss deduction, in the amount of $197,337, based on Petitioners forced sale of their home to find the money to pay IRS to satisfy income tax debts — tax debts which subsequently turned out to be overstated, and conceded by IRS to be overstated. See Petition, at p. 10.

For 2011, Petitioners filed their 2011 income tax return dated January 23, 2013. Exhibit 1J, 4th Circuit Informal Appendix, pp.70-79.

IRS then audited Petitioners 2011 return, and issued a Notice of Deficiency dated August 27, 2013 (“Deficiency Notice”). Exhibit 9J-4th Circuit Informal Appendix, at pp. 124-146.

In addressing the finding of the Deficiency Notice, and in addressing Petitioners claim of: (1) estimated tax payments of $566,889.00 from 2010 to be applied to 2011,and (2) casualty loss claim for $197,337, (after noting IRS disallowance of the casualty loss claimed, which the Tax Court affirmed) the Tax Court specifically referenced the following language contained in the Deficiency Notice: “. . . based on the exam there is no evidence to support the prior year over-assessment in the amount of $566,889. As a result there are no payments applied to the total tax owed for tax year 2011.” Appendix B, at p. 14.

By this statement, that there is no evidence to support any payment amounting to $566,889, the IRS, in effect was allowed to sidestep, avoid, and completely ignore any analysis or explanation to address Petitioners claim of stock basis adjustments. This statement also gave cover to IRS' self evidently extreme position of completely disregarding the IRS Washington Appeals Office's admission that there was an overpayment from 2007 that Petitioners were entitled to have applied to future year tax liabilities.

IRS Washington Appeal Office had also acknowledged an overpayment of 30,743.50 for 2006, but stated that this overpayment was a prohibited refund since it did not comply with the statute of limitations governing refunds. Petitioners expressed disagreement with the IRS position on the timeliness of their refund claims, and repeatedly, year after year, gave their detailed fact and legal explanation as to why they believed they were in compliance with the applicable refund limits, as to time and amount. See Appendix Q, at pp. 92-119.

It needs to be noted that this tax dispute came to a head approx, in the year 2009, when Petitioners began their objection to IRS's filing of a Tax Lien dated July 3, 2009. Petitioners Tax Court Petition was filed in November, 2013, and the Tax Court rendered no final decision until approx. 6 years later, in December, 2019.

Through all these approx. 10 years of disputed taxes, there is nothing in the entire record that shows any IRS reasoning, analysis, or explanation, aside from a short conclusory statement, that addresses the issue of statute of limitations. The affirmative defense of statute of limitations was not even raised in IRS's responsive pleadings to Petitioners Petition in Tax Court.

In like manner, there is nothing in the entire record of this case, that shows any IRS reasoning, analysis, or explanation, in opposition to Petitioners position on the calculation of stock option basis. On the contrary, the record shows that the IRS Washington Appeals Office accepted Petitioner's position.

A. Applicable Law Relating To the Facts Of This Case

Under IRC 6402, Petitioners acknowledged overpayment for 2007, of $56,384, should have been applied in full to taxes due, but was not. And there is nothing in the record to explain why this happened, other than the inference, from the record, that IRS arbitrarily chose to ignore it.

The Tax Court ruled that, under IRC 6214(b), it had no jurisdiction to rule on any refund claim, other than a refund claim arising from the deficiency year of 2011. Since Petitioners refund claims covered non-deficiency years, the Tax Court ruled that Petitioners refund claims for non-deficiency years were irrelevant, citing the following language of IRC 6214(b), which states, in relevant part, that the Tax Court, in deciding the tax for a deficiency year “. . . shall consider such facts with relation to the taxes for other years . . . as may be necessary correctly to determine the amount of such-deficiency, but in so doing shall have no jurisdiction to determine whether or not the tax for any other year . . . has been overpaid or underpaid.”

With respect to the acknowledged overpayment of $56,384 for 2007, IRS had already ruled the overpayment was valid, so the Tax Court was not tasked with deciding on this acknowledged overpayment. IRC 6214(b) was therefore no obstacle to Tax Court jurisdiction to require IRS to acknowledge and apply the $56,384 to outstanding liabilities of Petitioners.

As fully analyzed in the Dubroff-Hellwig Treatise, at Pages 358-377, the Tax Court has jurisdiction over refund claims involving non-deficiency years under the doctrine of equitable recoupment. In 2006, Congress amended IRC 6214(b) to add the following language: “Notwithstanding the preceding sentence, the Tax Court may apply the doctrine of equitable recoupment to the same extent it is available in civil tax cases before the district courts of the United States and the United States Court of Federal Claims.” Dubroff-Hellwig Treatise, at p.375.

The case of Menard, Inc, v. Commissioner, 130 T.C. 54 (2008), rev'd on another issue 560 F.3d 620 (7th Cir. 2009), is cited in the Dubroff-Hellwig Treatise, at p.376, to describe the Tax Court's interpretation of its expanded jurisdiction under the doctrine of equitable recoupment, and states the following in relevant part: “As interpreted by the Tax Court in Menard, the statutory “confirmation” of the Tax Court's jurisdiction to entertain claims of equitable recoupment contained in [IRC] 6214(b) actually served to expand the court's recoupment jurisdiction. The provision not only clarified that the court could address claims relating to periods outside those covered by the statutory notice of deficiency for recoupment purposes, the provision further allowed the court to determine the taxpayers's liability for a tax outside of the court's original jurisdiction.”

In Menard, the Court ruled that: “The doctrine of equitable recoupment is a judicially created doctrine that, under certain circumstances, allows a litigant to avoid the bar of an expired statutory limitation period. United States v. Palm, 494 U.S. 596 . . . (1990); Bull v. United States, 295 U.S. 247 . . . (1935). The doctrine prevents an inequitable windfall to a taxpayer or to the Government that would otherwise result from the inconsistent tax treatment of a single transaction, item, or event affecting the same taxpayer or a sufficiently related taxpayer. Estate of Mueller v. Commissioner, 101 T.C. 551 . . . (1993). . . . Equitable recoupment operates as a defense that may be asserted by the taxpayer to reduce the Commissioner's timely claim of a deficiency, or by the Commissioner to reduce the taxpayer's timely claim for a refund. . . . When applied for the benefit of a taxpayer, the equitable recoupment doctrine allows a taxpayer to recoup the amount of a time-barred overpayment by allowing the overpayment to be applied as an offset against a deficiency if certain requirements are met.” 130 T.C. at pp. 62-63.

Menard identifies the elements of an equitable recoupment claim as follows: (1) the overpayment or deficiency is barred by an expired statute of limitations; (2) the time barred overpayment or deficiency arose out of the same transaction, item or taxable event as the overpayment or deficiency before the court; (3) the transaction, item or taxable event has been inconsistently subjected to two taxes; and (4) the same taxpayer is involved, or there is an identity of interest regarding the taxpayer(s) involved. 130 T.C. at pp.62-63. On the inconsistent element, it has been held that there is equitable recoupment where a party seeks recoupment for inconsistent treatment of a time-barred claim relating to the same transaction. Stone v. White 301 U.S. 532 (1937).

In this case, despite strenuous objection by Petitioners, it remains the position of IRS that Petitioner's stock option refund claims are barred by the statute of limitations; the same taxable events are involved; the taxable events have been treated inconsistently; and the same taxpayers are involved. The Tax Court then, did have jurisdictional authority to decide Petitioner's claim under the doctrine of equitable recoupment.

With respect to the 2006 claim, wherein IRS acknowledged the existence of an overpayment of $30,743.50, but IRS also claimed this overpayment was barred by the statute of limitations, the equitable recoupment doctrine should have allowed that sum to be applied to reduce Petitioners' tax liabilities. And, the Tax Court could have directed application of $30,743.50 to Petitioners' tax liabilities. Yet, nothing was done: and so, these monies remain in a suspense account, and have not been allowed to be applied to Petitioners liabilities, despite the authority to do so.

In fact, the IRS Washington Office's treatment of petitioners 2005-2007 tax returns, to eliminate their tax liabilities for 2005-2007, appear to show IRS application of the equitable recoupment doctrine, without specifically stating that it was doing so. As stated in Menard, the Tax Court's expanded jurisdiction under the doctrine of equitable recoupment " . . . offers clarity and a meaningful measure of simplification in that both parties can be confident that the Court may provide a complete remedy for a given taxable year.” 130 T.C. at p. 67.

B. The Issues And Question Presented is of National Significance and Exceptionally Important

Federal tax disputes are virtually all presented to IRS in the first instance, and for the overwhelming majority of taxpayers, who are primarily pro se complainants, their last resort to seek remedy in their tax dispute is the Tax Court. These federal entities should be held accountable for application of their own rules and procedures, in a non-arbitrary manner, especially when dealing with the vulnerable and unsophisticated. The decisions below should have been based on the full and entire record of evidence in the case, and not on a partial, selective review of the evidence in the record. Goldberg v. Kelley, 397 U.S. 254 (1970); Matthews v. Eldridge, 429 U.S. 319 (1976); Bolling v. Sharpe, 347 U.S. 497 (1954).

CONCLUSION

For the foregoing reasons, this Court should grant the petition for certiorari.

Respectfully submitted,

Louis S. Shuman
120 South Lee Street
Alexandria, VA 22314
(301) 641-6003
Email: lshumani@msn.com

Petitioner Pro Se

Sandra Shuman
120 South Lee Street
Alexandria, VA 22314
(301) 641-6003

Petitioner Pro Se

January 21, 2020