Ming v. Commissioner, 61 T. C. 527 (1974)

Once a taxpayer files a petition in Tax Court, they cannot withdraw it without prejudice to pursue a refund suit in another court.

Summary

In Ming v. Commissioner, the Tax Court addressed whether taxpayers could withdraw their petition without prejudice after filing it in response to a notice of deficiency. The taxpayers sought to withdraw to pursue a refund suit in a U. S. District Court, claiming they were unaware of the Commissioner’s alternative claims for tax additions. The court denied the motion, emphasizing that filing a petition in Tax Court grants it exclusive jurisdiction over the matter, and withdrawal without prejudice would undermine this jurisdiction. The decision reinforces the principle that once Tax Court jurisdiction is invoked, taxpayers cannot unilaterally oust the court from that jurisdiction.

Facts

The Commissioner determined deficiencies in the taxpayers’ income taxes for 1964-1966 and issued a notice of deficiency. The taxpayers filed a timely petition in the Tax Court. After multiple continuances and the death of one taxpayer, the Commissioner amended his answer to include alternative claims for tax additions. The taxpayers then moved to withdraw their petition without prejudice, citing the Commissioner’s amended claims and their desire for a jury trial.

Procedural History

The taxpayers filed their petition in the Tax Court in 1971. The case was set for trial multiple times, with continuances granted. In 1974, the Commissioner amended his answer to include alternative claims for tax additions. The taxpayers moved to withdraw their petition without prejudice, which the Tax Court denied in the decision at hand.

Issue(s)

1. Whether taxpayers may withdraw their petition without prejudice from the Tax Court after filing it in response to a notice of deficiency?

Holding

1. No, because once a taxpayer files a petition in Tax Court, it has exclusive jurisdiction over the matter, and withdrawal without prejudice would undermine this jurisdiction.

Court’s Reasoning

The court’s decision was grounded in the principle that filing a petition in Tax Court grants it exclusive jurisdiction over the matter. The court cited Emma R. Dorl, 57 T. C. 720 (1972), which held that a taxpayer cannot remove a case to another court after invoking Tax Court jurisdiction. The court also relied on legislative history indicating that the Tax Court’s jurisdiction, once invoked, remains unimpaired until it decides the controversy. The court noted that granting the taxpayers’ motion would require it to enter a decision finding the deficiencies as determined by the Commissioner, which would negate the purpose of the withdrawal. The court emphasized that the taxpayers’ remedy, if any, would be to object to the Commissioner’s amended answer, not to withdraw the petition without prejudice.

Practical Implications

This decision has significant implications for taxpayers and tax practitioners. It clarifies that once a petition is filed in Tax Court, taxpayers cannot unilaterally withdraw it to pursue a refund suit in another court. Practitioners must carefully consider whether to file a petition in Tax Court, as it commits the case to that jurisdiction. The decision also highlights the importance of objecting to amendments to the Commissioner’s answer rather than seeking withdrawal. Subsequent cases have consistently applied this principle, reinforcing the exclusive jurisdiction of the Tax Court once a petition is filed.