Tax Court In Brief | Mazzei v. Commissioner | Law Of The Case, Prevailing Party, And "Substantially Justified"

• Published date: 09 May 2022
• Subject Matter: Litigation, Mediation & Arbitration, Tax, Trials & Appeals & Compensation, Tax Authorities
• Law Firm: Freeman Law
• Author: Freeman Law

The Tax Court in Brief - May 2nd - May 6th, 2022

Freeman Law's "The Tax Court in Brief" covers every substantive Tax Court opinion, providing a weekly brief of its decisions in clear, concise prose.

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Tax Litigation: The Week of May 2nd, 2022, through May 6th, 2022

• DelPonte v. Comm'r, 158 T.C. No. 7 | May 5, 2022 | Holmes, J. | Dkt. Nos. 1144-05, 1334-06, 20679-09 20680-09, 20681-09
• Mighty v. Comm'r, TC Memo. 2022-44| May 4, 2022 | Lauber, J. | Dkt. No. 19064-21L
• Podlucky v. Commissioner, TC Memo. 2022-45| May 5, 2022 | Lauber, J. | Dkt. No. 453-17
• Wolfson v. Comm'r, T.C. Memo. 2022-46 | May 5, 2022 | Lauber, Judge | Docket No 21343-21L

Mazzei v. Comm'r, T.C. Memo 2022-43 | May 2, 2022 | Thornton, J. | Dkt. No. 16702-09.

Opinion

Short Summary: Celia Mazzei, the taxpayer, appealed a Tax Court decision to the U.S. Court of Appeals for the Ninth Circuit. Originally, the Tax Court found Mazzei liable for excise taxes on excess contributions to her Roth IRA. The Ninth Circuit reversed and entered judgment for Mazzei. Then, and pursuant to 26 U.S.C. ' 7430, Mazzei filed a motion in the Ninth Circuit for litigation expenses associated with underlying Tax Court litigation. The IRS argued that it was substantially justified in its position in the underlying tax proceeding and thus, Mazzei's request for fees should be denied or, alternatively, remanded to the Tax Court. The Ninth Circuit summarily denied Mazzei's motion. Mazzei then filed with the Tax Court, a Motion for Leave to File Out of Time a Motion for Litigation Expenses and concurrently submitted a Motion for Litigation Expenses. Both parties advanced essentially the same arguments as were presented to the Ninth Circuit.

Key Issues:

• Does the Tax Court have authority to consider and decide Mazzei's motion for litigation expenses?
• Assuming the Tax Court has authority to consider and decide on the motion, is Mazzei entitled to the relief requested in the form of litigation expenses?

Primary Holdings:

• The "law of the case" doctrine requires that on remand a lower court follow the appellate court's resolution of a legal issue in all later proceedings in the same case. This applies to explicit decisions as well as those issues decided by implication. Because the Ninth Circuit denied the very relief she sought at the lower Tax Court level, the Tax Court was deprived of...