United States Tax Court

United States Tax Court

158 T.C. No. 7

MICHELLE DELPONTE,

Petitioner

v.

COMMISSIONER OF INTERNAL REVENUE,

Respondent

—————

Docket Nos.

1144-05, 1334-06,

20679-09, 20680-09,

20681-09.

—————

Filed May 5, 2022.

P raised innocent-spouse relief as an affirmative

defense in a deficiency proceeding.

Following IRS

procedure, R’s counsel referred the request to its

Cincinnati Centralized Innocent Spouse Operation

(CCISO). CCISO concluded that P was entitled to relief

under I.R.C. § 6015(c). CCISO communicated this to R’s

counsel, who asked P for more information to make a final

determination. P instead moved for entry of decision

granting her relief.

Held: Where innocent-spouse relief is raised as an

affirmative defense for the first time in a petition that

invokes our deficiency jurisdiction, R’s counsel has final

authority to concede or settle the issue with P.

Held, further, P’s motion for entry of decision will be

denied.

—————

Served 05/05/22

2

Alvah Lavar Taylor, Jonathan T. Amitrano, and Lisa O. Nelson, for

petitioner.

Benjamin R. Poor and Paul Colleran, for respondent.

OPINION

HOLMES, Judge: Michelle DelPonte separated from her exhusband, William Goddard, in 2000. She is still, more than twenty years

later, trying to untangle his affairs from her own. What concerns us is

her effort to be relieved of her liability on the joint tax returns she filed

with Goddard while they were married. The part of the IRS bureaucracy

that usually handles these sorts of requests thinks she’s entitled to

relief. The IRS’s lawyer disagrees. We must decide who speaks for the

IRS.

Background

During his marriage to DelPonte, 1 Goddard was a lawyer who

sold exceptionally aggressive tax-avoidance strategies with his business

partner David Greenberg and became very wealthy in the process. He

tried to shelter his income from selling shelters by using the same

shelter strategy he sold, but the IRS soon caught on and issued notices

of deficiency for tax years 1999, 2000, and 2001. Most of the facts

surrounding Goddard’s and Greenberg’s schemes—and the audit that

led to their notices of deficiency—are irrelevant to these cases. We have

already described them in detail in Greenberg v. Commissioner, 115

T.C.M. (CCH) 1403 (2018), aff’d, 10 F.4th 1136 (11th Cir. 2021), and

aff’d sub nom. Goddard v. Commissioner, No. 20-73023, 2021 WL

5985581 (9th Cir. Dec. 17, 2021).

What is relevant, though, is the fact that Goddard filed joint

returns with DelPonte for each of those three years. That means she is

jointly and severally liable with Goddard for the several millions of

1 DelPonte’s name during the marriage was “Michelle Goddard,” and her

petitions were filed under that name. She has since remarried and legally changed

her name to “Michelle DelPonte,” and we have amended the captions in these cases to

reflect that change.

3

dollars in tax that we found were owed to the IRS. See § 6013(d)(3). 2 So

when the first notice of deficiency arrived in late 2004, it was addressed

to “William A. and Michelle Goddard.” But DelPonte was kept in the

dark about this notice. It had been sent to Goddard’s law firm, and

Goddard—who had by that time been living apart from DelPonte for a

few years—never told her. He instead filed a petition on her behalf

asserting that she was an “innocent spouse” under section 6015,

apparently recognizing that he was solely responsible for the profits he

had accumulated over the years and that it was only fair that he should

be solely responsible for any large tax bill that might result.

The IRS sent another notice of deficiency to Goddard’s law firm

in 2005 and three more in 2009. In response to each notice, Goddard

filed a petition in which he asserted innocent-spouse relief on DelPonte’s

behalf without telling her. It wasn’t until November 2010 that DelPonte

first became aware of the deficiencies asserted against her and the

ongoing litigation before us. 3 She promptly hired her own lawyer and

ratified the petitions Goddard had filed.

In April 2011 the Office of Chief Counsel referred DelPonte’s

claim for innocent-spouse relief to the IRS’s Cincinnati Centralized

Innocent Spouse Operation (CCISO) “to make a determination

regarding [DelPonte’s] entitlement to such relief.” CCISO is the IRS

unit that receives and processes most requests for innocent-spouse

relief. Internal Revenue Manual (IRM) 25.15.3.3 (Dec. 12, 2016). 4 Its

determination letters are generally binding on the Commissioner and

the spouse asking for relief, see IRM 25.15.18.1.1(2) (Mar. 20, 2019), but

the referral letter that accompanied DelPonte’s request asked CCISO to

not issue a determination letter but instead “provide the results of [its]

consideration directly to [the Office of Chief Counsel].” Having received

the referral, CCISO reached out to DelPonte directly and instructed her

to fill out and return a Form 8857, Request for Innocent Spouse Relief.

2 Unless otherwise indicated, all statutory references are to the Internal

Revenue Code, Title 26 U.S.C., in effect at all relevant times, all regulation references

are to the Code of Federal Regulations, Title 26 (Treas. Reg.), in effect at all relevant

times, and all Rule references are to the Tax Court Rules of Practice and Procedure.

3 We had in May 2010 already ordered that the litigation should be bifurcated

so that we could first decide the amounts of the liabilities owed and then address the

issue of whether DelPonte qualified for innocent-spouse relief.

4 The IRM doesn’t have the force of law or confer substantive rights on

taxpayers. It does, however, govern the internal affairs and administration of the IRS,

and reliably describes the functions delegated to the different offices within the IRS.

United States v. McKee, 192 F.3d 535, 540 (6th Cir. 1999).

4

DelPonte did just that, and after reviewing her paperwork, CCISO

concluded in December 2011 that she should be granted relief for each

of the years at issue.

CCISO did what the Chief Counsel lawyer had asked. It did not

send a determination letter to DelPonte, but instead sent a letter

explaining its conclusion directly to the Office of Chief Counsel. And

here’s where an already unusual case got even more unusualer. Rather

than accepting CCISO’s conclusion and settling DelPonte’s cases, the

Office of Chief Counsel “decided that more information was needed . . .

to allow [DelPonte] relief under I.R.C. [section] 6015.” So in August

2012 the Office of Chief Counsel invited DelPonte to participate in a

Branerton 5 conference to exchange documents and information “[i]n

order for [CCISO] to properly evaluate [her] claim for relief.” It also

informed her that CCISO had already “rendered its decision in [her

favor], but that [the Office of Chief Counsel] had overridden that

decision.” DelPonte declined the invitation; she argued that additional

information would be superfluous because CCISO had already decided

she was entitled to relief and that its decision was binding on Chief

Counsel.

Aside from some back-and-forth letters between DelPonte and

Chief Counsel in which they argued the point, that’s where things stood

for many years. In the meantime the consolidated deficiency cases

begun by Goddard and Greenberg progressed through discovery, trial,

and briefing. We released our opinion in those cases in May 2018, and

in it we upheld the Commissioner’s determinations of deficiencies in all

respects except where he failed to meet the supervisory-approval

requirement of section 6751(b). Greenberg, 115 T.C.M. (CCH) at 1418.

We ordered the parties to compute the correct amounts of tax owed

under Rule 155, but in cases as complex as these, that task isn’t as

simple as plugging numbers into a calculator and getting a total—the

parties spent more than a year to precisely calculate the deficiencies.

We severed the five cases in which DelPonte was a petitioner in January

2020, and entered decisions in the remaining ten the following April.

Goddard and Greenberg then appealed their cases to the Eleventh

Circuit in August 2020. Goddard’s cases were severed from Greenberg’s

5 Branerton Corp. v. Commissioner, 61 T.C. 691 (1974) (describing Tax Court’s

informal discovery procedure).

5

and transferred to the Ninth Circuit the following October. 6 The

Eleventh Circuit affirmed our holdings in Greenberg’s cases, Greenberg,

10 F.4th 1136, in August 2021 and the Ninth Circuit did likewise in

December, Goddard, 2021 WL 5985581. So nearly fifteen years after

the lowest numbered cases in that group had first been calendared for

trial, they are now final and unappealable.

DelPonte and Chief Counsel resumed their correspondence on the

innocent-spouse issue shortly after we released our opinion in the

deficiency cases. DelPonte hired a new team of lawyers and responded

to the Chief Counsel’s discovery requests, but still insisted that

discovery was unnecessary because CCISO had already granted her

relief. Chief Counsel stood firm in its position that CCISO didn’t speak

for the IRS in her cases. DelPonte then moved for entry of decisions in

her favor because, in her view, Chief Counsel is wrong.

We usually get motions for entry of decision when a party wants

to renege on a settlement or when parties disagree about computations

under Rule 155. In these cases, however, there is no stipulation or

computation to fight about. This motion is really more like one for

partial summary judgment on the issue of whether DelPonte is entitled

to relief under section 6015(c) because the CCISO determined that she

is.

And that is how we will treat it.

Discussion

This is a novel argument, and to analyze it we will begin with an

account of the evolution of the different species of innocent-spouse relief.

Congress has since 1918 allowed married taxpayers to file joint returns,

Revenue Act of 1918, ch. 18, § 223, 40 Stat. 1057, 1074 (1919); see also

Camara v. Commissioner, 149 T.C. 317, 327 (2017), and has since 1938

held spouses jointly and severally liable for the tax shown on those joint

returns, Revenue Act of 1938, ch. 289, § 51(b), 52 Stat. 447, 476; see also

Wilson v. Commissioner, 705 F.3d 980, 982 (9th Cir. 2013), aff’g 99

T.C.M. (CCH) 1552 (2010). A great many couples benefited richly from

the more favorable tax rates available to joint filers, but some were

6 Greenberg lived in Florida when he filed his petitions, so the venue for appeal

of his cases was the Eleventh Circuit. See § 7482(b)(1). Goddard lived in California at

the time, so the venue for appeal in his cases was the Ninth Circuit. See id. Because

DelPonte also lived in California when the petitions in her cases were filed, venue for

appeal of her cases would also be in the Ninth Circuit. See id.

6

burdened by the harsh consequences of joint liability. See Wilson, 705

F.3d at 983. We commented on the harshness of this rule in Scudder v.

Commissioner, 48 T.C. 36 (1967), remanded by 405 F.2d 222 (6th Cir.

1968), when we held a wife liable for tax on the money her husband had

embezzled from the partnership she and her sisters owned and that he

had unsurprisingly failed to report on their joint returns. 7 We found

that the language of the statute was clear, and that “only remedial

legislation can soften the impact of the rule of strict individual liability.”

Id. at 41. 8

In 1971 Congress enacted legislation to allow a spouse relief from

joint and several liability in certain limited situations. Act of January

12, 1971, Pub. L. No. 91-679, 84 Stat. 2063 (codified at § 6013(e)). Relief

got a little easier in 1984, see Deficit Reduction Act of 1984, Pub. L. No.

98-369, § 424, 98 Stat. 494, 801 (codified at § 6013), but it still required

that a spouse seeking relief show that the joint return showed “a

substantial understatement of tax attributable to grossly erroneous

items of [the other] spouse,” that she signed the return without knowing

and without having reason to know of the substantial understatement,

and that it would be inequitable to hold her liable for the deficiency

attributable to the substantial understatement, id. Neither Congress

nor the Secretary wed this substantive liberalization to any special

procedural rules for requesting relief. See Corson v. Commissioner, 114

T.C. 354, 358 (2000); T.D. 7320, 1974-2 C.B. 391. The result was that

spouses glommed their requests for relief onto petitions to redetermine

deficiencies that they filed in our Court or onto complaints for refund

filed in a U.S. district court. See Corson, 114 T.C. at 358.

Congress liberalized the innocent-spouse-relief provisions again

as part of the IRS Restructuring and Reform Act of 1998 (RRA 1998),

Pub. L. No. 105-206, § 3201, 112 Stat. 685, 734 (codified as amended at

§ 6015). Under new section 6015, relief was available even if the

7 On appeal, the Sixth Circuit noted that “‘trickery’ or ‘deliberate deception,’

employed by [a] husband to obtain his wife’s signature to a tax return, will exonerate

the victimized wife.” Scudder, 405 F.2d at 226. It then ordered us to reexamine our

findings while considering whether at least some of the embezzled funds should have

more properly been treated as a nontaxable loan to the husband because that was how

they were recorded in the partnership’s books and because he paid back about half of

what he took soon after his wrongdoing was discovered. See id. at 225.

8 Two exceptions to this strict rule were that a spouse wouldn’t be held jointly

and severally liable if there had been duress, see, e.g., Furnish v. Commissioner, 262

F.2d 727 (9th Cir. 1958), or fraud, see, e.g., Sharwell v. Commissioner, 419 F.2d 1057

(6th Cir. 1969).

7

understatement was not “substantial” or due to “grossly erroneous”

items. Requesting spouses 9 could seek any of three types of relief. The

first requires:

•

an understatement of tax on the joint return that is

attributable to erroneous items of the other spouse;

•

that the requesting spouse didn’t know or have reason to know

of the understatement when she signed the return;

•

that, “taking into account all the facts and circumstances, it

[would be] inequitable to hold [that spouse] liable for the

deficiency . . . attributable to such understatement;” and

•

that the requesting spouse seek relief no later than two years

after the Commissioner began collection activities.

§ 6015(b).

The second requires the requesting spouse to:

•

be legally separated or divorced from the nonrequesting

spouse at the time of election; and

•

have no actual knowledge of any items giving rise to a

deficiency at the time she signed the return.

§ 6015(c).

And then there is the catchall third type that requires proof only

that, “taking into account all the facts and circumstances, it [would be]

inequitable to hold the [requesting spouse] liable for any unpaid tax or

any deficiency,” and that the requesting spouse is not eligible for either

of the other two types of relief. § 6015(f).

These are known by those who have lettered in innocent-spouse

relief as “b”, “c”, and “f” relief. And each of these three letters can be

paired with three paths to Tax Court:

9 Section 6015 speaks of a spouse who “elects” the application of subsections

(b) and (c), and “requests” relief under subsection (f). A spouse seeking relief under

any of the three subsections is nevertheless commonly referred to as a “requesting

spouse.” E.g., Treas. Reg. § 1.6015-5(a).

8

•

as an issue—usually called a “defense” even though raised by

a petitioner—in a deficiency case;

•

in an action to review the IRS’s determination in a collectiondue-process (CDP) case, a new right also created by RRA 1998;

or

•

in a “stand alone” action in which we review the IRS’s

administrative determination made in response to a request

for relief filed by a spouse directly with the IRS.

We’ve already outlined a bit of the history of innocent-spouse

relief in deficiency cases. To place DelPonte’s argument in the proper

context, we need to sketch a bit of background for our expanded

jurisdiction in CDP and stand-alone innocent-spouse cases.

RRA 1998 created CDP procedures to enable taxpayers to

challenge how the Commissioner collected taxes that he assessed. See

RRA 1998 § 3401, 112 Stat. at 746 (codified as amended at §§ 6320,

6330). This new CDP right made for a major change in the way the IRS

used two of its most important collection tools—liens and levies. Once

a taxpayer’s liability has been assessed, the amount of the liability

becomes a lien in favor of the government. § 6321. When that happens,

the Commissioner sends the taxpayer a notice of federal tax lien (NFTL),

informing him that the lien has been filed and, under RRA 1998, of his

right to request a CDP hearing. § 6320. If the Commissioner wishes to

collect tax by seizing a taxpayer’s property he must now also send him

a notice of intent to levy, which, like the NFTL, informs him of his right

to a CDP hearing. § 6330. Congress wedded innocent-spouse relief to

CDP law by specifically providing that a spouse could raise entitlement

to innocent-spouse relief in a CDP hearing. Regulations provide that

when a taxpayer raises innocent-spouse relief in a CDP hearing, the

innocent-spouse issue is “governed in all respects by the provisions

of . . . section 6015 and the regulations and procedures thereunder.”

Treas. Reg. §§ 301.6320-1(e)(2), 301.6330-1(e)(2).

Then there’s our jurisdiction in stand-alone cases. A spouse may

also ask for innocent-spouse relief outside a deficiency case or a CDP

hearing. If she does, and if the Commissioner denies her relief, she may,

“[i]n addition to any other remedy provided by law, . . . petition [us] (and

[we] shall have jurisdiction) to determine the appropriate relief

available” under section 6015. § 6015(e)(1)(A).

9

Congress wanted a requesting spouse to have only one bite from

any of these three legal apples. A requesting spouse is “entitled to only

one final administrative determination of relief” for a given assessment.

Treas. Reg. § 1.6015-5(c)(1). And once we (or a district court) have

rendered a final decision on her eligibility for relief—or if she

“participated meaningfully” in a court proceeding and chose not to raise

a request for relief—then that spouse is barred from relief thereafter.

See § 6015(g)(2).

We can now classify DelPonte’s request with precision. It is for

“c” relief in a deficiency case. But whether it is “b”, “c”, or “f” relief in a

deficiency, CDP, or stand-alone case, a requesting spouse has to

navigate her way through the ever more detailed revenue procedures

and regulations that the Secretary started to issue after section 6015’s

enactment. This journey begins with the Form 8857. T.D. 9003, 20022 C.B. 294. The regulation requires a requesting spouse to file a Form

8857; submit a written statement containing the same information

required by Form 8857; or “submit information in the manner prescribed

by the Treasury and IRS in forms, relevant revenue rulings, revenue

procedures, or other published guidance.” Treas. Reg. § 1.6015-5(a). A

requesting spouse can do this any time after the Commissioner sends

her notice of an audit or a letter that tells her there may be an

outstanding liability, id. para. (b)(5), but no later than two years after

the Commissioner initiates collection activity, id. subpara. (1). 10 A

single claim can simultaneously request relief under section 6015(b), (c),

and (f). Id. para. (a)(2).

But if the Code is now clear that a spouse has these ways to ask

for three kinds of innocent-spouse relief, it is still murky about who gets

to act on those requests and whether that answer differs according to

which of the three ways a spouse chooses.

10 We have held the two-year limitations period is invalid as to requests for

equitable relief under section 6015(f). Pullins v. Commissioner, 136 T.C. 432 (2011).

The Secretary hasn’t revised his regulations, see Treas. Reg. § 1.6015-5(a), and the

limitations period remains valid for elections under section 6015(b) and (c), see Pullins,

136 T.C. at 437. The Seventh Circuit, however, has disagreed with us about the

validity of this two-year limitations period. See Lantz v. Commissioner, 607 F.3d 479,

482 (7th Cir. 2010) (“that Congress designated a deadline in two provisions of the same

statute and not in a third is not a compelling argument that Congress meant to

preclude the Treasury Department from imposing a deadline applicable to cases

governed by that third provision”).

10

We begin with the Code. Section 7803 creates the position of

Commissioner of Internal Revenue, to whom are given broad powers to

“administer, manage, conduct, direct, and supervise the execution and

application of the internal revenue laws or related statutes,” as well as

any other “such duties and powers as the Secretary may prescribe.”

§ 7803(a)(2). Regulations authorize the Secretary of the Treasury to

delegate any function vested in him to the Commissioner, who is in turn

authorized to redelegate that function to an officer or employee under

his direct or indirect supervision and control. Treas. Reg. § 301.77019(b) and (c). The Secretary has of course for decades delegated to the

Commissioner the responsibility of administering and enforcing the

internal revenue laws, I.R.S. Treas. Order 150-10 (Apr. 22, 1982), which

includes making determinations about whether a taxpayer is entitled to

innocent-spouse relief under section 6015, see § 6015(e)(1)(A)(i), (5), (f).

The Commissioner has redelegated the responsibility for processing

most requests for innocent-spouse relief to the CCISO. IRM 25.15.7.1

(Sept. 1, 2006). There are some exceptions: In certain instances, as when

there’s an ongoing audit for the year for which the requesting spouse is

seeking relief, the Field Examination unit conducting the audit has

authority to make the determination. See IRM 25.15.6.1(4) (Mar. 21,

2008). Once CCISO (or the Field Examination unit) has made a

preliminary determination, both the requesting spouse and the

nonrequesting spouse can appeal the determination to the Office of

Appeals. 11 IRS Appeals is responsible for holding an appeals conference,

reviewing the evidence, and issuing a “final determination.” IRM

25.15.6.10.3 (June 19, 2017). Or maybe we should say a final

administrative determination because if Appeals denies her request, a

requesting spouse 12 can petition our Court for a really truly final

determination of her entitlement to relief. § 6015(e). We ourselves can

make a determination of our own if CCISO or the Field Examiner

doesn’t act on a request within six months. § 6015(e)(1)(A).

There is a similarly complicated process when a spouse seeks

relief as part of a CDP hearing. She has to first file a Form 12153,

Request for a Collection Due Process or Equivalent Hearing (or other

written and signed request), with IRS Appeals. IRM 5.19.8.4.2 (Nov. 1,

2007). That form allows her to check a box to claim innocent-spouse

11

Recently renamed the “Independent Office of Appeals.” See Taxpayer First

Act, Pub. L. No. 116-25, § 1001(a), 133 Stat. 981, 983 (2019).

12 But not a nonrequesting spouse. Maier v. Commissioner, 119 T.C. 267

(2002), aff’d, 360 F.3d 361 (2d Cir. 2004).

11

relief and, if she does, instructs her to attach a Form 8857. See Form

12153 (Rev. Nov. 2006). IRS Appeals ordinarily sends the Form 8857 to

CCISO to investigate the claim, see IRM 8.22.1.1.1.5.3 (Oct. 19, 2007),

following the same procedures as it would in a stand-alone innocent

spouse case, see IRM 8.22.2.2.11.3(6) (Jan. 1, 2006). A significant

difference, though, is that Appeals retains jurisdiction over the case

while CCISO investigates the claim. See id. 8.22.2.2.11.3(4). One

consequence of this is that CCISO ordinarily doesn’t make a final

determination on what relief is appropriate. See IRM 8.22.2.2.11.3.1

and .2 (Mar. 11, 2009). CCISO instead recommends a determination to

Appeals, which is itself responsible for making a final determination

about what relief if any a taxpayer should get. Id. 13 A disgruntled

requesting spouse can once again petition us to try again.

§ 6015(e)(1)(A).

These paths are well trod. And they may help us in the unusual

situation in DelPonte’s case: where we have a requesting spouse who

raised innocent-spouse relief as an affirmative defense in deficiency

petitions filed under section 6213(a). DelPonte argues that the

Secretary has delegated authority to make a final determination to the

administrative, not the litigating, side of the IRS. She has a textualist

argument based on the regulations, numerous IRM provisions, the Chief

Counsel’s own written guidance, and even the instructions to the Form

8857. She also argues more purposively that her position is buttressed

by the principles of horizontal equity and fundamental fairness. In

short, she contends that it’s only fair that a requesting spouse raising

innocent-spouse relief for the first time in litigation should have CCISO

make the determination, just as if she had raised it for the first time in

a stand-alone request. According to her CCISO is the decider in chief,

and Chief Counsel’s job is only to defend CCISO’s determination.

The Chief Counsel, on the other hand, argues that his office is

responsible for deciding what positions the IRS takes in litigation, and

that decision about whether to concede innocent-spouse relief is a

litigating position. He of course may ask CCISO for its advice, but he

says he gets the final say.

13 As always seems to be the case in tax law, there is a complication: The CCISO

can itself make a final determination if it concludes the requesting spouse should get

relief and the nonrequesting spouse doesn’t appeal the determination and innocentspouse relief was the only issue raised in the CDP request and the requesting spouse

chooses to withdraw the CDP request and she waives any right to judicial review. See

IRM 8.22.2.2.11.3.1.

12

The Chief Counsel is right that he and his lawyers are responsible

for the IRS’s litigation decisions. Section 7803—the same section that’s

the source of the Commissioner’s authority—also created the position of

Chief Counsel, and authorized him to “perform such duties as may be

prescribed by the Secretary, including the duty . . . to represent the

Commissioner in cases before the Tax Court.” § 7803(b)(2)(D). General

Counsel Order No. 4 delegates to the Chief Counsel authority “in cases

pending in the Tax Court . . . to decide whether and in what manner to

defend, or to prosecute a claim, or to settle, or to abandon a claim or

defense therein.” See IRM 30.2.2–.6 (Aug. 11, 2004). This order also

gives the Chief Counsel the authority to redelegate any of his authority

to “any officer or employee in the Office of the Chief Counsel, and to

authorize further redelegation of such authority.” Id.

The question we must answer, then, is whether DelPonte’s

request for innocent-spouse relief—and CCISO’s consideration of that

request—was like any claim in a case “pending in Tax Court,” or more

like an administrative request for innocent-spouse relief begun by filing

a Form 8857 with CCISO.

This is a question in which a page of history enlightens us more

than a volume of logic. Taxpayers were raising innocent-spouse claims

as affirmative defenses in deficiency proceedings years before today’s

administrative processes for seeking relief even existed.

Our

jurisdiction to rule on those claims is part of our authority under section

6213(a) to redetermine a taxpayer’s deficiency when she’s received a

notice of deficiency. See Corson, 114 T.C. at 363–64 (“In a deficiency

proceeding, we may take into account all facts and circumstances

relevant to ascertaining the correct amount of the deficiency, including

affirmative defenses”). Our power in a deficiency case is not limited to

the issues listed in the notice of deficiency—it includes issues raised in

either the petition or answer or even those tried without objection. See

Ax v. Commissioner, 146 T.C. 153, 160 (2016). Our jurisdiction to decide

an issue in a deficiency case is not dependent on the Commissioner’s

having already made a determination on that issue administratively; all

we need to get jurisdiction to decide is a timely filed petition and a valid

notice of deficiency. Butler v. Commissioner, 114 T.C. 276, 288 (2000)

(citing Naftel v. Commissioner, 85 T.C. 527, 533 (1985)). Once we have

jurisdiction over a case where entitlement to innocent-spouse relief is an

issue, the Commissioner must concede or settle it with a taxpayer if he

doesn’t want to litigate it. Section 7803(b)(2) and related delegation

orders have long delegated those decisions to the Chief Counsel.

13

But the Chief Counsel also has the power to redelegate authority

granted to him. See IRM 30.2.2–.6. DelPonte argues in the alternative

that Chief Counsel Notice CC-2009-021 (June 30, 2009) is just such a

redelegation. That notice instructs attorneys in the Office of Chief

Counsel to request CCISO “to make the determination” with respect to

cases in which a taxpayer raises innocent-spouse relief for the first time

in a deficiency petition. CC-2009-021, at 2. That notice also states: “If

CCISO . . . determines the petitioner is entitled to relief, the case should

be conceded . . . subject to the limitation that a nonrequesting spouse

who is a party to the case must agree” with the determination. Id. at 4.

If the nonrequesting spouse disagrees, then “the grant of relief must be

defended throughout trial and briefing.” Id.

We can dispense with this argument quickly. Chief Counsel has

authority to delegate functions only to an “officer or employee in the

Office of the Chief Counsel,” IRM 30.2.2–.6, and CCISO is not within the

Office of the Chief Counsel, IRM 1.1.13.12.3.3 (Sept. 1, 2005). The plain

language of this order gives the Chief Counsel no authority to delegate

any of his functions to CCISO.

But we can reformulate DelPonte’s contention just a bit: Even

though Chief Counsel has responsibility to respond to requests for relief

raised for the first time in a deficiency case, he has instructed his

lawyers to adhere to CCISO determinations. Are his lawyers going

rogue if they disregard this instruction? This is not an argument based

on powers of delegation, but on what DelPonte identifies as a possible

protection of the Due Process Clause—a requirement that the

government follow the procedures that it establishes even if it didn’t

have to establish them in the first place. DelPonte emphasizes that she

doesn’t raise this issue in her present motion, but we can head off future

motion practice by noting that the Chief Counsel attorneys handling

these cases have been following established procedures.

We first address DelPonte’s argument that CC-2009-021 instructs

Chief Counsel attorneys to refer cases to CCISO for a “determination,”

not a “recommendation.” She relies heavily on the text of CC-2009021—along with the Chief Counsel attorney’s correspondence with her

and CCISO—to argue that “determinations” cannot be disregarded by

Chief Counsel attorneys. We, however, are not convinced that use of the

word “determination” in the Chief Counsel notice or any other guidance

is the same as what the regulation calls a “final administrative

determination.” See Treas. Reg. § 1.6015-5. We have long recognized

that “the name or the label of a document does not control whether the

14

document embodies a determination.” Wilson v. Commissioner, 131 T.C.

47, 53 (2008).

In CC-2009-021, the Chief Counsel repeatedly uses “should” when

instructing his attorneys on how to handle cases where CCISO

determines that relief should be granted, e.g., “[i]f CCISO . . . determines

the petitioner is entitled to relief, the case should be conceded.”

CC-2009-021, at 4 (emphasis added). But he elsewhere uses the

imperative “must” when describing how an attorney should proceed in

different circumstances, e.g., “[i]f the nonrequesting spouse disagrees

with the Service’s determination to grant relief [to the requesting

spouse], then . . . the grant of relief must be defended throughout trial

and briefing.” Id. (emphasis added). If Chief Counsel had wanted all

his attorneys to accept CCISO’s determinations in every case, he could

easily have conveyed that desire by telling them they “must” do so. But

he did not.

CC-2009-021 is, moreover, only one of a series of notices that deal

with requests for innocent-spouse relief raised for the first time in cases

pending before us. CC-2009-021 was itself a supplement to the earlier

Chief Counsel Notice CC-2004-26 (July 12, 2009), id. at 1, which was

issued in response to our holding in Ewing v. Commissioner, 122 T.C. 32

(2004), rev’d and vacated, 439 F.3d 1009 (9th Cir. 2006). We held in

Ewing that, although we reviewed the Commissioner’s denial of

equitable relief under section 6015(f) for abuse of discretion, our review

was not confined to the administrative record. Ewing, 122 T.C.

at 38–39. CC-2004-26 included instructions for how Chief Counsel

attorneys should handle section 6015(f) cases to keep the scope-of-review

issue alive for appeal. CC-2004-026, at 1–2. It also sought to solve the

problem of how to handle requests for equitable relief that were raised

for the first time before us—either in deficiency petitions or after six

months had passed since the taxpayer requested relief—and in such

cases there would be no administrative record to review. His solution

was to have those cases remanded to CCISO for a determination and to

create an administrative record. Id. at 3. The notice told CCISO to

“send all evidence the petitioner presented . . . and its written analysis

to the Chief Counsel attorney handling the docketed case. If CCISO

determines the petitioner is entitled to relief, the Chief Counsel attorney

should consider whether settlement is appropriate.” Id. at 4 (emphasis

added).

CC-2009-021 itself was prompted by our opinions in Porter v.

Commissioner (Porter I), 130 T.C. 115 (2008), and Porter v.

15

Commissioner (Porter II), 132 T.C. 203 (2009), CC-2009-021, at 1, in

which we held that we would conduct trials de novo in innocent-spouse

cases, Porter I, 130 T.C. at 125, and make our own determinations about

relief under section 6015(f) with no deference to the IRS, Porter II, 132

T.C. at 210. Like its predecessor, CC-2009-021 provided guidance to the

Chief Counsel lawyers on how to preserve these issues for appeal.

CC-2009-021, at 2. It also told Chief Counsel attorneys that they should

continue asking CCISO to make determinations in all section 6015

cases, and they should continue to concede cases where CCISO

determined the requesting spouse was entitled to relief. Id. at 2–4.

Chief Counsel Notice CC-2013-011 (June 7, 2013), issued after

Wilson, 705 F.3d 980, confirmed that section 6015(e)(1)(A) provided for

both a de novo standard and scope of review in section 6015(f) cases, and

rendered both these older notices obsolete. 14 This notice was published

after CCISO had already rendered its decision on DelPonte’s request,

but we believe it is still helpful in understanding the Chief Counsel’s

guidance that was in effect. CC-2013-011 again requires that Chief

Counsel attorneys request a determination from CCISO where a

petitioner requests relief under any provision of section 6015.

CC-2013-011, at 1–2. It also clarifies that “the trial attorney should,

except in rare circumstances, follow the determination made by CCISO

that the petitioner is entitled to relief and settle the case in accordance

with CCISO’s determination.” Id. at 3 (emphasis added). The “should”

instead of a “must” means that in this context the CCISO’s decisions are

advisory, and that Chief Counsel attorneys get to make the final decision

about the IRS’s views on any particular request for innocent-spouse

relief when a taxpayer seeks it in a deficiency case.

And let us zoom out to look one last time at the IRM. It says that

if innocent-spouse relief is raised for the first time in a case already

docketed in court, “[j]urisdiction is retained by . . . Counsel, and a

request is sent to CCISO to consider the request for relief.” IRM

25.15.12.25.2(1) (Nov. 9, 2007). It specifies that “Counsel . . . has

functional jurisdiction over the matter and handles the case and request

for relief, and either settles or litigates the issue on its merits, as

appropriate.” Id. 25.15.12.25.2(3).

14 Congress eventually settled the issue when it decided that we should review

the IRS de novo based upon the administrative record and “any additional newly

discovered or previously unavailable evidence.” Taxpayer First Act § 1203(a)(1), 133

Stat. at 988 (codified at § 6015(e)(7)).

16

We therefore hold that the Chief Counsel notices and the IRM all

tell CCISO to provide “assistance,” not to make a final determination,

and that Chief Counsel attorneys retain their discretion to adopt or

reject CCISO’s conclusions.

We finally address DelPonte’s argument that principles of

horizontal equity and “fundamental fairness” require that all taxpayers

be entitled to a final determination of relief from CCISO, regardless of

whether they first request relief in a petition for redetermination of a

deficiency, in a stand-alone petition, or in a CDP hearing. She correctly

points out that taxpayers often have no choice in when they are first able

to request relief—her case is an excellent example. She believes that

adopting the position of the Office of Chief Counsel would put requesting

spouses who first raise innocent-spouse relief in a petition for

redetermination of a deficiency in a materially worse position than all

other requesting spouses because all other requesting spouses have the

opportunity to appeal a denial of relief by CCISO to Appeals before

starting a case with us as a last resort. Is it not unfair that some who

seek relief can have a try at CCISO, Appeals, and Tax Court, but others

get Tax Court alone?

Arguments from fairness are always fragile, and this one breaks

apart for two reasons. The first is its faulty premise—an Appeals officer

who receives a request for innocent-spouse relief in a CDP hearing

forwards the case to CCISO for processing but retains jurisdiction, see

IRM 8.22.2.2.11.3(4), and makes the ultimate decision for the IRS about

whether to grant relief, see IRM 8.22.2.2.11.3.1–.2. In that sense, the

Appeals officer’s role is very similar to that of the Chief Counsel attorney

in deficiency cases—the difference, of course, being that the Appeals

officer can make a final determination granting relief, whereas a Chief

Counsel attorney can only decide not to argue that we should deny relief.

So a requesting spouse who raises an innocent-spouse claim for the first

time in a CDP hearing really gets only two levels of review—Appeals

and us—not three. Requiring CCISO to have the opportunity to issue a

final determination in cases where the requesting spouse raises an

innocent-spouse claim for the first time in a deficiency petition would

therefore not guarantee that all spouses be treated equally regardless of

when they request relief; it would merely make CDP cases the outlier.

The second and more important problem with this argument is

that we have no power to adopt it. Congress gave us exclusive

jurisdiction to redetermine the correct amount of a taxpayer’s deficiency

for a given tax year once the taxpayer receives a valid notice of deficiency

17

and timely files a petition with us. See § 6213(a); Naftel, 85 T.C.

at 532–33. Congress also gave the Chief Counsel the authority to

litigate cases before us. § 7803(b)(2)(D). We cannot undo this statutory

scheme by depriving either ourselves or the Chief Counsel of the powers

it has given to us in the name of fairness.

The Chief Counsel in these cases has considered the

determination of CCISO to grant DelPonte relief and decided not to

adopt it without further investigation. That is his prerogative, and we

will not force him to do otherwise.

An appropriate order will be issued.