Tax Court In Brief | Kechijian v. Comm'r | Innocent Spouse Relief, Res Judicata, And "Meaningful Participation" Exception Of Section 6015

• Jurisdiction: United States,Federal
• Law Firm: Freeman Law
• Subject Matter: Tax, Income Tax
• Author: Freeman Law
• Published date: 06 January 2023

The Tax Court in Brief - December 26th - December 30th, 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 December 26th, 2022, through December 30th, 2022

• Smith v. Comm'r, 159 T.C. No. 3 August 25, 2022| Toro, J. | Dkt. No. 5191-20
• Intan N. Ismail & Mohd Razu Abd Rahim v. Comm'r, T.C. Memo 2022-113 November 29, 2022| Paris, J. | Dkt. No. 16366-16, 13297-18
• Luu v. Comm'r, T.C. Memo. 2022-126| December 28, 2022 | Weiler, J. | Dkt. No. 714-20W

Kechijian v. Comm'r, T.C. Memo. 2022-127| December 28, 2022 | Gustafson, J. | Dkt. No. 3430-20

Short Summary: Petitioner Susan Kechijian sought the Tax Court's review, under section 6015(e), of the denial by the IRS of her request for innocent spouse relief from joint and several liability for a federal income tax liability for 2004, a year for which she filed a joint return with her late husband. For that return, the IRS determined that Mr. Kechijian and his business partner failed to report income they had received related to S corporation stock that they owned. In that deficiency case (2010), the Kechijians and the business partner petitioned the Tax Court for redetermination. All taxpayer parties, including Ms. Kechijian, were represented by the same attorney. During the proceeding, Mr. Kechijian died. At Ms. Kechijian's request, the Court substituted for Mr. Kechijian, the personal representatives of the estate, one of whom was Ms. Kechijian. Discovery ensured, and a trial took place. Ms. Kechijian did not participate in the IRS Appeals process; she did not participate in any pretrial meetings; she did not participate in settlement negotiations; she did not sign any court documents; and she did not otherwise participate at trial except sitting in the courtroom during trial. The other co-executor assumed sole responsibility for communicating with their shared counsel about the litigation. The Tax Court issued its opinion, determining deficiencies for 2004. Ms. Kechijian, individually, and the representatives of the Estate appealed the decision to the U.S. Court of Appeals for the Fourth Circuit. The same attorney as before represented all appealing taxpayers. In June 2020 the Fourth Circuit upheld the Tax Court's judgment. See Est. of Kechijian v. Commissioner, 962 F.3d 800, 802 (4th Cir. 2020).

Innocent spouse relief for Ms. Kechijian under section 6015 was not an issue raised in the deficiency case'neither in the Tax Court nor in the appeal. In June 2019 Ms. Kechijian filed with the IRS Form 8857, "Request for Innocent Spouse Relief"...