Koprowski v. Commissioner

EUGENE KOPROWSKI, PETITIONER v. COMMISSIONER OF

INTERNAL REVENUE, RESPONDENT

Docket No. 13048–10. Filed February 6, 2012.

P and W filed a joint return for 2006. R issued a notice of

deficiency, and P and W filed a petition asking this Court to

redetermine that deficiency. They elected to have the case

proceed under small tax case procedures pursuant to I.R.C.

sec. 7463. P signed the petition and all other filings. P and W

moved for summary judgment; R cross-moved for summary

judgment; and P and W opposed on various grounds,

including P’s entitlement to innocent spouse relief from joint

liability under I.R.C. sec. 6015. At a calendar call before the

Court, P spoke for himself and W. The parties withdrew their

cross-motions and submitted a stipulated decision document

by which P and W conceded the deficiency in full. The Court

entered decision accordingly in November 2009. While the

deficiency suit was pending, P had filed a Form 8857,

‘‘Request for Innocent Spouse Relief ’’, for 2006. In May 2010

R denied the request for relief, and P timely filed a petition

challenging that denial. R moved for summary judgment on

grounds of res judicata arising from the entry of decision in

the prior deficiency case. Held: Res judicata bars the relitiga-

tion of a liability determined in a small tax case under I.R.C.

sec. 7463. Held, further, res judicata precludes P’s attempted

litigation of his I.R.C. sec. 6015(f) claim for the year that was

the subject of the prior deficiency case. I.R.C. sec. 6015(g)(2)

does not prevent the operation of res judicata, since P’s claim

for relief was an issue in the prior case, and he did participate

meaningfully in the prior case.

Eugene Koprowski, for himself.

Michael T. Shelton, for respondent.

54

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(54) KOPROWSKI v. COMMISSIONER 55

OPINION

GUSTAFSON, Judge: Petitioner Eugene Koprowski seeks

this Court’s review, pursuant to section 6015(e), 1 of the

denial by the Internal Revenue Service (IRS) of his request

for relief from his liability for income tax for 2006, for which

he filed a joint return with his wife. The case is currently

before the Court on a motion for summary judgment filed by

respondent (the IRS) under Rule 121. We will grant that

motion and sustain the IRS’s determination on grounds of res

judicata.

Background

The following facts are based on the petition, our record in

Mr. Koprowski’s prior deficiency case (of which we take

notice pursuant to Fed. R. Evid. 201), and facts that the IRS

asserted and supported in its motion for summary judgment

that Mr. Koprowski has not disputed.

2006 income issues

Mr. and Mrs. Koprowski filed a joint Federal income tax

return for the year 2006. The IRS thereafter took the position

that Mrs. Koprowski had received in that year, from the

estate of her late father, taxable distributions that were not

reported on the Koprowskis’ income tax return. In October

2008 the IRS issued to the Koprowskis jointly a notice of defi-

ciency, determining a tax deficiency attributable to the inclu-

sion of those distributions in their taxable income.

2006 deficiency case

In January 2009 the Koprowskis filed a petition in this

Court challenging the IRS’s deficiency determination and

asserting that the distributions at issue were ‘‘non-taxable

inheritance’’. Both Mr. and Mrs. Koprowski signed the peti-

tion, on which they elected to have the case proceed under

small tax case procedures pursuant to section 7463. The defi-

ciency case proceeded as docket No. 1185–09S.

The Koprowskis made three additional filings in docket No.

1185–09S—(1) a motion for summary judgment, (2) a motion

1 Unless otherwise indicated, all section references are to the Internal Revenue Code of 1986

(26 U.S.C.), as amended, and all Rule references are to the Tax Court Rules of Practice and

Procedure.

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56 138 UNITED STATES TAX COURT REPORTS (54)

to strike, and (3) an objection to a motion for summary judg-

ment filed by the IRS, combined with their cross-motion—all

of which were signed by both Mr. and Mrs. Koprowski. In the

objection and cross-motion (filed October 13, 2009), the

Koprowskis stated:

Petitioner Mr. Koprowski maintains an Affirmative Defense provided by

an Innocent Spouse Claim per the case law doctrine of King v. Commis-

sioner (115 TC No. 8 (2000)).

* * * * * * *

9. Petitioner Mr. Koprowski, as the IRS’s evidence demonstrates, did not

receive any income as a beneficiary of a trust or estate.

10. Petitioner Mr. Koprowski should be granted Innocent Spouse Relief

from the IRS regarding its Deficiency Notice. On October 11, 2009 after

he received the evidence requested from the IRS regarding the estate, he

immediately filed a request for innocent spouse relief with IRS. (See

Exhibit B of the Objections filing, IRS Form 8857, Request for Innocent

Spouse Relief.)

[Emphasis omitted.]

When the deficiency case was first called from the calendar

for trial on October 26, 2009, Mrs. Koprowski said only ‘‘Good

morning’’, and Mr. Koprowski spoke for the couple, to

schedule argument on the cross-motions for summary judg-

ment. Later that day a volunteer lawyer entered an appear-

ance on their behalf; and when the case was recalled, both

parties withdrew their motions for summary judgment. Two

days later the Koprowskis’ volunteer lawyer signed on the

Koprowskis’ behalf a stipulated decision document, by which

the Court entered decision on November 9, 2009, sustain-

ing the IRS’s deficiency determination. We assume that there-

after the tax was duly assessed against both the Koprowskis

as the joint and several liability of each of them.

The Koprowskis have not alleged in this case that there

was any defect in those proceedings in docket No. 1185–09S,

and they have not filed in docket No. 1185–09S any motion

to vacate or revise the decision in that case.

Mr. Koprowski’s request for relief

As is noted above, while the deficiency case was pending,

Mr. Koprowski submitted to the IRS in October 2009 a Form

8857, ‘‘Request for Innocent Spouse Relief ’’, seeking to be

relieved from liability for the tax attributable to the distribu-

tions from his wife’s father’s estate. Mr. Koprowski asserts

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(54) KOPROWSKI v. COMMISSIONER 57

(in his petition in the present case)—and we assume true for

purposes of the IRS’s pending motion—that, in conjunction

with his request to the IRS for innocent spouse relief, he pre-

sented to the IRS evidence showing that he ‘‘did not know and

had no reason to know of the understatement at the time the

return was signed.’’ In May 2010 the IRS denied the relief he

requested.

Proceedings in the present case

On June 8, 2010, Mr. Koprowski filed his petition com-

mencing the instant case seeking review of the IRS’s denial

of his request for innocent spouse relief. The petition

indicates that he resides in Illinois. His petition seeks relief

from joint liability on various grounds, including that ‘‘[a]ny

taxes owed on the gift should be paid for by the [wife’s]

father’s estate’’, and ‘‘IRS erred by not following the Internal

Revenue Manual (IRM) which details how to handle cases

hinging on the timely, good faith filing of tax returns.’’ The

IRS filed its answer to the petition on August 3, 2010.

On September 28, 2011, 2 respondent moved for summary

judgment on grounds of res judicata, i.e., that Mr.

Koprowski’s suit is precluded by the decision entered against

him in the deficiency case. By order of September 29, 2011,

the Court ordered Mr. Koprowski to file a response and

advised him:

If Mr. Koprowski disagrees with the facts set out in the IRS’s motion,

then Mr. Koprowski’s response should point out the specific facts in dis-

pute. The response should support Mr. Koprowski’s version of the facts by

attaching relevant documents and/or by attaching one or more affidavits

(i.e., written statements that are signed and sworn before a notary) or

unsworn declarations that are made ‘‘under penalty of perjury’’ (see 28

U.S.C. sec. 1746). If Mr. Koprowski disagrees with the IRS’s argument as

to the law, then his response should also set out his position on the dis-

puted legal issues.

Mr. Koprowski’s attention is directed to Tax Court Rule 121 (available

on the court’s website at www.ustaxcourt.gov), which sets out the prin-

ciples for filing, opposing, and resolving motions for summary judgment.

In particular, Mr. Koprowski should note that Rule 121(d) provides, ‘‘If the

2 Mr. Koprowski opposes the IRS’s motion on the grounds that ‘‘After 16 months of litigation,

and numerous briefs and pleadings, Respondent IRS suddenly raises the issue of res judicata

in its latest pleading, a motion.’’ Under Rule 121(a), however, a motion for summary judgment

is timely if raised ‘‘no later than 60 days before the first day of the Court’s session at which

the case is calendared for trial’’. Since this case is on a calendar set for February 27, 2012, the

IRS’s motion was timely.

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58 138 UNITED STATES TAX COURT REPORTS (54)

adverse party [i.e., Mr. Koprowski] does not so respond [to a motion for

summary judgment], then a decision, if appropriate, may be entered

against such party’’—i.e., against Mr. Koprowski.

Mr. Koprowski’s attention is also directed to Harbin v. Commissioner,

137 T.C. No. 7 (Sept. 26, 2011), and Haag v. Commissioner, T.C. Memo.

2011–87 (Apr. 19, 2011), slip op. at 18–20, two recent decisions of this

Court that discuss res judicata and section 6015(g)(2).

Mr. Koprowski filed his response on September 30, 2011. His

response did not discuss section 6015(g)(2). The Court’s order

of October 17, 2011, observed—

Mr. Koprowski’s recent response does make factual assertions, but it was

not accompanied by any documents, affidavits, or unsworn statements

under penalty of perjury. The Court will give him an opportunity to

supplement his response with such materials

—and ordered him to do so by October 31, 2011. On that date

Mr. Koprowski did file a supplement to his response. His

supplement argued generally that res judicata should not

apply, but it did not present any evidentiary materials, and

it did not discuss section 6015(g)(2).

Discussion

I. General legal principles

A. Relief from joint liability

Section 6013(d)(3) provides that when married taxpayers

file a joint return, the tax is computed on their aggregate

income, and their liability to pay the tax shown on the return

or found to be owing is joint and several. See also 26 C.F.R.

sec. 1.6013–4(b), Income Tax Regs. That is, each spouse is

liable for the entire joint tax liability. However, section 6015

provides several means for a taxpayer to seek relief from

joint liability; and if the IRS determines not to grant such

relief to a taxpayer, section 6015(e) gives this Court jurisdic-

tion to review that determination.

B. Small tax cases under section 7463

Section 7463(a) provides that, where a Tax Court petition

involves an amount not exceeding $50,000—

at the option of the taxpayer concurred in by the Tax Court * * *, pro-

ceedings in the case shall be conducted under this section. Notwith-

standing the provisions of section 7453, such proceedings shall be con-

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(54) KOPROWSKI v. COMMISSIONER 59

ducted in accordance with such rules of evidence, practice, and procedure

as the Tax Court may prescribe. * * *

The Tax Court has implemented this provision in Title XVII

of its Rules (i.e., Rules 170–175). Under Rule 174(b), ‘‘Trials

of small tax cases will be conducted as informally as possible

consistent with orderly procedure, and any evidence deemed

by the Court to have probative value shall be admissible.’’

Section 7463(b) provides as follows:

SEC. 7463(b). FINALITY OF DECISIONS.—A decision entered in any case

in which the proceedings are conducted under this section shall not be

reviewed in any other court and shall not be treated as a precedent for any

other case.

By precluding any appeal of the decision in a small tax case,

section 7463(b) deprives the electing petitioner of his oppor-

tunity to appeal an adverse decision, but it also protects him

from the difficulty of defending any appeal by the IRS of a

decision favorable to him. Presumably, Mr. and Mrs.

Koprowski weighed these considerations in deciding to elect

small tax case status for their prior deficiency case.

C. Res judicata and collateral estoppel

The IRS’s motion now before us invokes only the doctrine

of res judicata, and not the related doctrine of collateral

estoppel. Mr. Koprowski mentions both, but in fact collateral

estoppel is not implicated here. However, we nonetheless

include collateral estoppel in our discussion because the doc-

trines have important differences that affect our analysis.

Both these doctrines ‘‘have the dual purpose of protecting

litigants from the burden of relitigating an identical issue

and of promoting judicial economy by preventing unnecessary

or redundant litigation’’, Meier v. Commissioner, 91 T.C. 273,

282 (1988), but the reach of these two doctrines is not the

same.

1. Res judicata

Res judicata (Latin for ‘‘a thing adjudicated’’), or claim pre-

clusion, is an affirmative defense 3 developed by the courts to

3 Res judicata is not a jurisdictional defense but rather is an affirmative defense, see Rule 39,

that may therefore be waived, see Tully v. Barada, 599 F.3d 591, 594 (7th Cir. 2010); Rizzo v.

Sheahan, 266 F.3d 705, 714 (7th Cir. 2001). Thus, notwithstanding a prior deficiency case, a

Continued

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60 138 UNITED STATES TAX COURT REPORTS (54)

bar repetitious suits on the same cause of action, and this

doctrine is applicable to tax litigation. As the Supreme Court

explained:

[W]hen a court of competent jurisdiction has entered a final judgment on

the merits of a cause of action, the parties to the suit and their privies

are thereafter bound ‘‘not only as to every matter which was offered and

received to sustain or defeat the claim or demand, but as to any other

admissible matter which might have been offered for that purpose.’’ * * *

* * * * * * *

* * * Income taxes are levied on an annual basis. Each year is the origin

of a new liability and of a separate cause of action. Thus if a claim of

liability or non-liability relating to a particular tax year is litigated, a judg-

ment on the merits is res judicata as to any subsequent proceeding

involving the same claim and the same tax year. * * *

[Commissioner v. Sunnen, 333 U.S. 591, 597–598 (1948) (quoting Crom-

well v. Cnty. of Sac, 94 U.S. 351, 352 (1876); emphasis added).]

That is, each tax year is a separate cause of action, and res

judicata makes truly final a final judgment on that cause of

action. Where the cause of action of a taxpayer’s liability in

a given tax year has been litigated (as Mr. Koprowski’s tax

liability for 2006 was litigated in the deficiency case, docket

No. 1185–09S), the parties may thereafter be barred from re-

litigating that liability—whether by reference either to a

‘‘matter which was offered’’ in that prior suit (such as the

adjustments on the notice of deficiency) or to a ‘‘matter which

might have been offered’’ in the prior suit—unless there is an

exception that prevents the application of the doctrine of res

judicata.

2. Collateral estoppel

Collateral estoppel, or issue preclusion, prevents the

relitigation of an issue that has been previously litigated

between the parties in one controversy but that recurs in

other litigation between them in different controversies.

Simply stated the difference between the two doctrines is

this:

section 6015 claim may be litigated where ‘‘[t]he parties previously agreed that any request by

petitioner for relief from joint and several liability under section 6015 would not be determined

in the’’ deficiency case. Greer v. Commissioner, T.C. Memo. 2009–20, slip op. at 4–5, aff ’d, 595

F.3d 338 (6th Cir. 2010). However, neither in the hearings in docket No. 1185–09S nor in the

stipulated decision document that the parties submitted in that case did the Commissioner

waive any res judicata defense against Mr. Koprowski’s section 6015 claim.

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(54) KOPROWSKI v. COMMISSIONER 61

Under res judicata, a final judgment on the merits of an action precludes

the parties or their privies from relitigating issues that were or could have

been raised in that action. * * * Under collateral estoppel, once a court

has decided an issue of fact or law necessary to its judgment, that decision

may preclude relitigation of the issue in a suit on a different cause of

action * * *. [Allen v. McCurry, 449 U.S. 90, 94 (1980).]

Collateral estoppel thus precludes relitigation not only in

connection with the cause of action previously litigated but

even in connection with different claims or causes of action.

Because collateral estoppel has this broader reach, the courts

have perceived that its rigid application might have unjust

results. The Supreme Court has observed that it might be—

unfair to apply offensive estoppel * * * where the second action affords

the defendant procedural opportunities unavailable in the first action that

could readily cause a different result.15

15If, for example, the defendant in the first action was forced to defend in

an inconvenient forum and therefore was unable to engage in full dis-

covery or call witnesses, application of offensive collateral estoppel may be

unwarranted. Indeed, differences in available procedures may sometimes

justify not allowing a prior judgment to have estoppel effect in a subse-

quent action even between the same parties, or where defensive estoppel

is asserted against a plaintiff who has litigated and lost. * * *

[Parklane Hosiery Co. v. Shore, 439 U.S. 322, 331 (1979). 4]

Consequently, there are limits to the application of collat-

eral estoppel. Unlike res judicata, which binds the parties as

to any matter that ‘‘might have been offered’’, whether or not

that matter was actually litigated, collateral estoppel applies

only to issues that were actually litigated in the first suit.

The rule of collateral estoppel provides that ‘‘[w]hen an issue

of fact or law is actually litigated and determined by a valid

and final judgment, and the determination is essential to the

4 The potential unfairness of collaterally estopping relitigation of an issue may be aggravated

where collateral estoppel is used ‘‘offensively’’—i.e., where ‘‘a plaintiff is seeking to estop a de-

fendant from relitigating the issues which the defendant previously litigated and lost against

another plaintiff ’’, Parklane Hosiery, 439 U.S. at 329—and may be particularly acute where an

issue has a small-dollar consequence in the first case and has a large-dollar consequence in the

subsequent case. ‘‘If a defendant in the first action is sued for small or nominal damages, he

may have little incentive to defend vigorously, particularly if future suits are not foreseeable’’.

Id. at 330; see also Yamaha Corp. v. United States, 961 F.2d 245, 254 (D.C. Cir. 1992) (‘‘An ex-

ample of such unfairness would be when the losing party clearly lacked any incentive to litigate

the point in the first trial, but the stakes of the second trial are of a vastly greater magnitude’’);

Otherson v. Dep’t of Justice, INS, 711 F.2d 267, 273 (D.C. Cir. 1983) (issue ‘‘[p]reclusion is some-

times unfair if the party to be bound lacked an incentive to litigate in the first trial, especially

in comparison to the stakes of the second trial’’). These concerns are not implicated where the

same cause of action is at issue in both trials, and the ‘‘stakes’’ of the second trial are, by defini-

tion, not greater than but identical to the ‘‘stakes’’ of the first.

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62 138 UNITED STATES TAX COURT REPORTS (54)

judgment, the determination is conclusive in a subsequent

action between the parties, whether on the same or a dif-

ferent claim.’’ 1 Restatement, Judgments 2d, sec. 27 (1982)

(emphasis added); see also Montana v. United States, 440

U.S. 147, 153–154 (1979). Some even hold that, for purposes

of collateral estoppel, ‘‘the availability of judicial review is a

crucial factor in determining preclusive effect.’’ Wehrli v.

Cnty. of Orange, 175 F.3d 692, 694 (9th Cir. 1999).

A small tax case under section 7463(b) involves a small

amount, is resolved under less formal procedures, and

receives no appellate review. For these reasons, the question

whether a decision in a small tax case gives rise to collateral

estoppel (or ‘‘issue preclusion’’) is controversial, cf. Mitchell v.

Commissioner, 131 T.C. 215, 221–239 (2008) (Holmes, J.,

concurring) (discussing the collateral estoppel effect of small

tax cases); but in this case we do not face the question

whether collateral estoppel arises from a decision in a small

tax case. We resolve only the application of res judicata.

II. Res judicata arising from docket No. 1185–09S

Mr. Koprowski’s income tax liability for 2006 (the year for

which he now seeks relief from joint liability) has already

been decided in the deficiency case, and the doctrine of res

judicata requires us to follow that prior decision. Under the

Supreme Court’s explication of res judicata in Commissioner

v. Sunnen, 333 U.S. at 597–598, four conditions must be met

to preclude relitigation of a claim: (1) the parties in each

action must be identical (or at least be in privity); (2) a court

of competent jurisdiction must have rendered the first judg-

ment; (3) the prior action must have resulted in a final judg-

ment on the merits; and (4) the same cause of action or claim

must be involved in both suits. See United States v.

Shanbaum, 10 F.3d 305, 310 (5th Cir. 1994). Once these

conditions are met, each party is prohibited from raising any

claim or defense that was or could have been raised as part

of the litigation over the cause of action in the prior case. Id.

Those four conditions are met here:

1. In the deficiency case Mr. Koprowski was a petitioner,

and the Commissioner of Internal Revenue was the

respondent. In this case, Mr. Koprowski is again the peti-

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(54) KOPROWSKI v. COMMISSIONER 63

tioner, and the Commissioner is again the respondent. Thus,

the parties are identical.

2. In the deficiency case the Koprowskis filed their defi-

ciency suit in the only court authorized under section 6213(a)

to hear such suits—i.e., this Court. Clearly we had jurisdic-

tion in that prior case.

3. The deficiency case concluded with the entry of a deci-

sion by the Court on November 9, 2009, pursuant to the

stipulation of the parties. Our decision was a final judgment

on the merits of the Koprowskis’ 2006 joint and several

liability.

4. Finally, in the present case Mr. Koprowski seeks

innocent spouse relief from the very liability—i.e., the 2006

joint income tax liability—as to which this Court in the defi-

ciency case determined that he was jointly and severally

liable. The claims are thus identical.

Since the four conditions for claim preclusion are present,

relitigation of Mr. Koprowski’s claim is barred by res judi-

cata, unless he can invoke some exception to its application.

III. Arguments against the application of res judicata

A. Res judicata arising from a small tax case

Mr. Koprowski asserts that the deficiency case was a

‘‘small case’’ that proceeded under section 7463; and it

appears he may be arguing that res judicata does not arise

from such a case. If this is his argument, then we must reject

it. To assert that res judicata does not attach to the decision

of a small tax case under section 7463 is to assert that Con-

gress created in that statute a regime exempt from res judi-

cata. This assertion, however, effectively overlooks section

7463(b), which explicitly provides:

SEC. 7463(b). FINALITY OF DECISIONS.—A decision entered in any case

in which the proceedings are conducted under this section shall not be

reviewed in any other court and shall not be treated as a precedent[5] for

any other case.

5 If Mr. Koprowski’s denial of res judicata is prompted by the provision of section 7463(b) that

a small tax case decision ‘‘shall not be treated as precedent’’, then that position is answered by

observing (i) that res judicata is a bar to litigation, not a ‘‘precedent’’ that dictates its outcome,

and (ii) that before denying ‘‘precedent’’ status to small tax case decisions, subsection (b) first

gives those decisions ‘‘Finality’’ by providing that no other court can review them. Thus, in

Ginalski v. Commissioner, T.C. Memo. 2004–104, we rejected in dictum the argument that ‘‘the

limitation on citing Summary Opinions as precedence deprives them of the effect of res judi-

Continued

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64 138 UNITED STATES TAX COURT REPORTS (54)

This subsection assures the ‘‘[f]inality’’ 6 of a small tax case

decision by exempting it from appellate review. It would

flatly contradict the evident congressional purpose to hold

that the denial of appellate review deprives the decision of

finality.

If res judicata did not apply to decisions in small tax cases

because of a principle that such cases, by their nature,

should not bar future litigation, then this principle would be

subject to anomalies: Section 6512(a) bars a taxpayer from

filing a refund suit for a tax year for which he has previously

filed a timely Tax Court petition. On the other hand, section

6215(a) bars the Government from filing suit to collect any

part of a deficiency determined by the IRS that the Tax Court

has ‘‘disallowed’’. These provisions, equivalent to res judicata,

grant preclusive effect to Tax Court litigation, without distin-

guishing between regular cases and small tax cases. In light

of these provisions, it would be incoherent to find that sec-

tion 7463(b) implicitly exempts small tax cases from the

effect of res judicata.

The Court of Claims explicitly held that attempted relitiga-

tion after a decision in a small tax case in the Tax Court

under section 7463 ‘‘is barred under the doctrine of res judi-

cata.’’ Vaitkus v. United States, 230 Ct. Cl. 815, 815 (1982).

The text of section 7463(b) permits no other result. We there-

fore hold that the doctrine of res judicata does bar relitiga-

tion after a decision in a small tax case under section 7463.

B. Section 6015(g)(2)

Mr. Koprowski further resists the application of res judi-

cata on the grounds that his entitlement to innocent spouse

relief ‘‘was not raised in previous litigation nor adjudicated

on its merits in the previous case.’’ Mr. Koprowski is wrong

in asserting that the defense ‘‘was not raised’’, since in the

deficiency case he did assert an innocent spouse defense in

cata’’.

6 The heading of section 7463(b)—‘‘Finality of Decisions’’—helps to illuminate its meaning and

purpose. See Almendarez-Torres v. United States, 523 U.S. 224, 234 (1998) (‘‘ ‘the title of a stat-

ute and the heading of a section’ are ‘tools available for the resolution of a doubt’ about the

meaning of a statute’’ (quoting Trainmen v. Baltimore & Ohio R. Co., 331 U.S. 519, 528–529

(1947))); Active Disposal, Inc. v. City of Darien, 635 F.3d 883, 886 (7th Cir. 2011) (‘‘ ‘while a stat-

ute’s title does not define its meaning, it is relevant’ ’’ (quoting United States v. Chemetco, 274

F.3d 1154, 1159 (7th Cir. 2001))); cf. sec. 7806(b) (‘‘descriptive matter relating to the contents

of ’’ the Internal Revenue Code shall not ‘‘be given any legal effect’’).

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(54) KOPROWSKI v. COMMISSIONER 65

his opposition to the IRS’s motion for summary judgment (as

we quote above). However, in a sense he is correct in

asserting that the issue ‘‘was not * * * adjudicated’’, since

the parties withdrew their cross-motions for summary judg-

ment and the Koprowskis conceded the case in full, so that

the Court entered decision without addressing section 6015

(or any other issue).

In circumstances outside section 6015 this would be beside

the point, since res judicata bars not just issues that were

actually raised but rather ‘‘issues that were or could have

been raised in that action’’. Allen, 449 U.S. at 94 (emphasis

added). Thus, in other circumstances we would not inquire to

learn the extent to which the particular issue had actually

been raised and adjudicated; res judicata would apply in any

event.

However, under section 6015(g)(2) an innocent spouse

claimant can sometimes overcome res judicata, if the claim-

ant can meet two conditions. Section 6015(g)(2) provides:

(2) RES JUDICATA.—In the case of any election under subsection (b) or

(c) or of any request for equitable relief under subsection (f), if a decision

of a court in any prior proceeding for the same taxable year has become

final, such decision shall be conclusive except with respect to the qualifica-

tion of the individual for relief which was not an issue in such proceeding.

The exception contained in the preceding sentence shall not apply if the

court determines that the individual participated meaningfully in such

prior proceeding. [Emphasis added.]

Under this statute, to escape the effect of res judicata from

prior litigation, the requesting spouse must show (1) that his

innocent spouse claim ‘‘was not an issue’’ in the prior pro-

ceeding and (2) that he did not ‘‘participate[ ] meaningfully’’

in the prior proceeding. Mr. Koprowski meets neither of

those conditions.

First, his innocent spouse claim was explicitly put at issue

in the prior proceeding by the Koprowskis’ objection and

cross-motion, quoted above. For this reason alone, section

6015(g)(2) does not apply to relieve Mr. Koprowski from the

‘‘conclusive’’ effect of the prior suit.

Second, even if Mr. Koprowski had not explicitly raised an

innocent spouse claim in the deficiency case, to overcome res

judicata in the present case he would also have to show that

he did not meaningfully participate in the deficiency case;

and to make such a showing, he would have to overcome the

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66 138 UNITED STATES TAX COURT REPORTS (54)

contrary indications in our records: Mr. Koprowski signed the

petition in the deficiency case—and all other papers that the

petitioners filed with the Court. The innocent spouse claim,

which was to his benefit and was to the detriment of Mrs.

Koprowski, was asserted in their opposition to the IRS’s

motion for summary judgment. When they appeared in per-

son before the Court, Mrs. Koprowski was all but silent, and

it was Mr. Koprowski who spoke for the two of them. The

record thus indicates that he did meaningfully participate in

the deficiency case, and he does not allege that he did not.

He therefore fails, for this additional reason, to satisfy sec-

tion 6015(g)(2), and he is not relieved from the operation of

res judicata in this instance.

Because res judicata does bar Mr. Koprowski’s relitigation

of the 2006 income tax liability that he already litigated in

the deficiency case, we will grant the IRS’s motion for sum-

mary judgment and will affirm the IRS’s determination not to

grant Mr. Koprowski relief from that liability.

To reflect the foregoing,

An appropriate order and decision will be

entered.

Reviewed by the Court.

COLVIN, COHEN, HALPERN, FOLEY, VASQUEZ, GALE,

THORNTON, GOEKE, WHERRY, KROUPA, HOLMES, and MORRI-

SON, JJ., agree with this opinion of the Court.

MARVEL and PARIS, JJ., concur in the result only.

HOLMES, J., concurring: I agree with the rest of the Court

that a final decision in an S case precludes any claim in a

later case that could have been raised, subject to the statu-

tory exception of section 6015(g)(2). I write separately only to

note that the same result will certainly follow when the

Court finally addresses the question of whether decisions in

S cases collaterally estop losing parties from relitigating the

same issues in later cases. See Mitchell v. Commissioner, 131

T.C. 215, 221–39 (2008) (Holmes, J., concurring).

The Supreme Court has reminded us that we should not

‘‘carve out an approach to administrative review good for tax

law only.’’ Mayo Found. for Med. Educ. & Research v. United

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(54) KOPROWSKI v. COMMISSIONER 67

States, 562 U.S. ll, ll, 131 S. Ct. 704, 713 (2011). The

same goes for the federal common law of judgments: ‘‘The

preclusive effect of a federal-court judgment is determined by

federal common law.’’ Taylor v. Sturgell, 553 U.S. 880, 891

(2008). It is not our job to try to figure out whether pre-

clusion is a good policy or a bad one and in what cir-

cumstances we think it best applies: ‘‘A fundamental precept

of common-law adjudication, embodied in the related doc-

trines of collateral estoppel and res judicata, is that a ‘right,

question or fact distinctly put in issue and directly deter-

mined by a court of competent jurisdiction . . . cannot be

disputed in a subsequent suit between the same parties or

their privies.’ ’’ Montana v. United States, 440 U.S. 147, 153

(1979) (quoting S. Pac. R.R. Co. v. United States, 168 U.S. 1,

48–49 (1897)).

f

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