We welcome back frequent guest blogger Carlton Smith. Today Carl highlights a possible cause of confusion for taxpayers, IRS and the Court, involving the Tax Court’s new passport-related jurisdiction. Christine
Section 7345(d) requires the IRS to notify taxpayers when it has sent a certification to the Secretary of State with respect to a “seriously delinquent tax debt” for which the IRS is asking that a passport be denied, revoked, or limited. Section 7345(e)(1) states, in part: “After the Commissioner notifies an individual under subsection (d), the taxpayer may bring a civil action against the United States in a district court of the United States, or against the Commissioner in the Tax Court, to determine whether the certification was erroneous or whether the Commissioner has failed to reverse the certification.”
The Tax Court is now seeing its first passport actions under section 7345(e)(1), and I can report that the Tax Court has decided to place a “P” at the end of the docket number when a taxpayer files a passport action. What the Tax Court has so far failed to do is modify the simplified petition form appearing on its website (Form 2) to contain a box to check for a passport action. I think that is why the Tax Court recently had to enter the following order in Brancatelli v. Commissioner, Docket No. 13836-18P. My guess is that the taxpayer used Form 2, could not figure out which box(es) to check, and so checked boxes relating to notices of deficiency and notices of determination for Collection Due Process actions. The Chief Judge’s September 10 order in the case reads, in full:
The petition in this case was filed on July 13, 2018. Among other things, in his petition petitioner seeks review of (1) a purported notice of deficiency dated June 18, 2018, allegedly issued for his taxable years 2005, and 2007 through 2014, and (2) a purported notice of determination concerning collection action dated June 18, 2018, allegedly issued with respect to his taxable years 2005, and 2007 through 2014.
On September 6, 2018, respondent filed a Motion To Dismiss on Grounds of Mootness stating that respondent, subsequent to the filing of the petition, has notified the Secretary of State that respondent has reversed respondent’s certification of petitioner as an individual owing serous delinquent tax debt for 2005, and 2007 through 2014.
On September 7, 2018, respondent filed an Answer to the petition. In his
Answer respondent acknowledges that a Notice CP508C, notice of your seriously delinquent tax debt was issued to the State Department, was issued with respect to 2005, and 2007 through 2014, but respondent denies that any notice of deficiency for 2005, and 2007 through 2014, and/or notice of determination under I.R.C. section 6320 or 6330 for 2005, and 2007 through 2014, was issued to petitioner.
Upon due consideration, it is
ORDERED that, on or before October 1, 2018, respondent shall file an appropriate jurisdictional motion as to so much of this case relating to the notice of deficiency for 2005, and 2007 through 2014, and the notice of determination under I.R.C. section 6320 or 6330 for 2005, and 2007 through 2014. The Court will hold in abeyance respondent’s September 6, 2018, motion to dismiss on grounds of mootness.
In order to avoid further wasteful use of judicial and party resources dealing with jurisdictional issues, I would hope and expect that the Tax Court would adopt a new Form 2 as soon as possible that contains a box to check for passport actions. Until the Tax Court does so, however, I would advise practitioners representing taxpayers in passport actions not to use Form 2, but to draft custom petitions.
On March 28, 2016, the Tax Court adopted interim rules (which were also issued as proposed rules) dealing with passport actions at Title XXXIV of its Rules of Practice and Procedure (Rules 350 to 354). They can be found on the Tax Court’s website under “Press Releases” for that date. Interim Rule 351(b) specifies the contents of a passport action petition and directs that such petition be captioned: “Petition for Certification or Failure to Reverse Certification Action Under Code Section 7345(e)”. Oddly, while the Tax Court also modified Form 2 at the same time that it proposed and adopted these passport action rules, the new Form 2 did not contain a box to check for passport actions. Nor do the instructions to Form 2 mention passport actions.