Estate of Young v. Commissioner

Swift, J., dissenting: Generally, resort to legislative history is only justified where the face of the statute is inescapably ambiguous. Sehwegmann Bros. v. Calvert Distillers Corp., 341 U.S. 384 (1951) (Jackson, J., concurring). See also Ex Parte Collett, 337 U.S. 55 (1949); 2A C. Sands, Statutes and Statutory Construction, sec. 48.02, at 184 (4th ed. 1973). Section 6214(a) clearly states, with no ambiguity, that where there is a deficiency (notice of which has been mailed to the taxpayer), the Tax Court shall have jurisdiction to redetermine not only the taxes determined to be due but also "any * * * addition to the tax.” In the instant case, a notice of deficiency was mailed by the Commissioner which determined an estate tax deficiency and two additions to the tax under section 6651(a). The plain language of section 6214(a) vests jurisdiction in this Court to determine the correctness of each of these additions.

A contrary interpretation of section 6214(a) would be inconsistent with a number of prior decisions of this Court in which jurisdiction over a section 6651(a)(2) addition to the tax was assumed. See Estate of Bennett v. Commissioner, T.C. Memo. 1980-292 ; Madden v. Commissioner, T.C. Memo. 1980-350 ; Estate of Rapelje v. Commissioner, 73 T.C. 82, 88-91 (1979); Nittler v. Commissioner, T.C. Memo. 1979-440 ; Pehlke v. Commissioner, T.C. Memo. 1978-254 ; Snyder v. Commissioner, 66 T.C. 785 (1976); Hip Sing Association, Inc. v. Commissioner, T.C. Memo. 1982-203 ; and Keen v. Commissioner, T.C. Memo. 1981-313 . The reasonable inference to be drawn from, and the probable explanation for, the failure in those cases to challenge the jurisdiction of the Court over the section 6651(a)(2) addition is that1 the governing statute (namely, section 6214(a)) was not considered ambiguous and provided jurisdiction. In one Tax Court decision, Bregin v. Commissioner, 1A T.C. 1097 (1980), jurisdiction over an erroneous income tax refund was found to be lacking where the taxpayer had filed a petition in the Tax Court after receipt of a notice of deficiency. To the extent that decision is contrary to the assertion of Tax Court jurisdiction over an addition to tax under section 6651(a)(2), as reflected in the above decisions and as submitted herein, Bregin should be overruled.

A contrary interpretation of section 6214(a) also produces the unfortunate and inefficient result that a taxpayer faced with the not uncommon situation of an income tax deficiency, an addition to tax for failure to file (section 6651(a)(1)) and an addition to tax for failure to pay (section 6651(a)(2)), may be contesting the income tax deficiency and the failure to file addition in this Court but will have to go to the U.S. Claims Court or one of the Federal District Courts to contest the addition to tax for failure to pay. The extra litigation which will result, particularly in light of the essentially identical issues involved, is unnecessary where a commonsense reading of section 6214(a) would support the jurisdiction of this Court over all section 6651 additions to tax.

The majority errs in concluding that section 6214(a) is merely complementary to section 6659(b). The independent jurisdictional status of section 6214(a) is illustrated by this Court’s jurisdiction over the section 6651(a)(1) addition to tax. Consider a hypothetical situation where a notice of income tax deficiency is issued and where no addition to tax is included in the notice. The taxpayer files a timely petition in this Court, and in the course of the litigation, the Commissioner files an amended answer in which he for the first time asserts an addition to tax under section 6651(a)(1).

The majority correctly would conclude that Tax Court jurisdiction in that hypothetical situation over the section 6651(a)(1) addition to tax would be proper but would incorrectly conclude that section 6659(b)(1) would be the basis therefor. To the contrary, because section 6659(b)(1) mandates that additions to tax under section 6651(a)(1) must comply with the deficiency procedures of subchapter B of chapter 63, jurisdiction on the basis of section 6659(b)(1) could not be asserted in the absence of the mailing of a notice of deficiency under sections 6211 and 6212 asserting the section 6651(a)(1) addition to tax.

Why then, in the hypothetical situation, would jurisdiction over the section 6651(a)(1) addition to tax be proper? It is because of the additional and independent grant of jurisdictional authority which is given to this Court in section 6214 over additions to tax which are not set forth in a notice of deficiency. Thus, it is in spite of, not because of, the provisions of section 6659(b) that this Court would have jurisdiction over the section 6651(a)(1) addition in the above example.

The majority opinion also incorrectly argues that under any interpretation other than the one adopted therein, section 274(e) of the Revenue Act of 1926 would have been unnecessary. I disagree. Section 274(e) was necessary precisely to make it clear that even though section 275 of the Revenue Act of 1924 required notices of deficiency for the two then extant additions to tax, jurisdiction by the Board of Tax Appeals could be asserted over these additions to tax in the absence of notices of deficiency with respect thereto. This was a clear grant of jurisdiction above and beyond (and contrary to the limits of) the jurisdiction granted by section 275.

Accordingly, I would find that the clear language of section 6214 provides this Court with jurisdiction over each of the three additions to tax set forth in section 6651(a)(1), (2), and (3).

For the above reasons, I respectfully dissent.