The opinion of the court was delivered by: JUDD
In this action for refund of personal income taxes for 1961, 1962, and 1963, the defendants have moved to dismiss the complaint for lack of jurisdiction. Plaintiffs have moved to amend their complaint to include claims for set-off and recoupment as well as for a refund.
The original complaint asserted that a stipulation settling a Tax Court case was entered by plaintiffs' attorney without prior consultation with them, that an important witness had not been available when the case was set for trial, and that the Tax Court had erred in denying a motion to vacate the stipulation.
The amended complaint recites that plaintiffs paid taxes for 1961, 1962, and 1963 in amounts in excess of the income tax deficiencies assessed against them by the United States Tax Court; that plaintiffs expended over $40,000 during 1961 and 1962 and other amounts in 1963 in connection with mining of tantalite in Brazil and processing of the ore; that they seek judgment "by way of set-offs, recoupment and refund * * * for the years 1961, 1962, and 1963."
In the Tax Court proceeding, instituted December 3, 1968, the plaintiffs sought review of deficiencies and penalties determined by the Commissioner of Internal Revenue for 1961, 1962, and 1963 totaling $15,053.29 of taxes, $3,528.20 of penalties under Section 6651 (a) of the Internal Revenue Code (for negligence), and $752.66 of penalties under Section 6653 (a) (for delinquency). By agreement dated October 20, 1970 between the plaintiffs and the Commissioner, the deficiencies and penalties were fixed at a total of $13,243.67 of income taxes, $3,308.06 of penalties under Section 6651 (a), and $661.61 of penalties under Section 6653 (a). The original underpayment, according to the deficiency letter from the Commissioner dated September 6, 1968, was attributed primarily to disallowance of Schedule C expenses and other deductions.
The Internal Revenue Code gives the taxpayer an option to review tax determinations either by a suit for refund or by a petition in the Tax Court, but not by both procedures for the same taxes for the same years. I.R.C., § 6512 (a) provides that
. . . if the taxpayer files a petition with the Tax Court within the time prescribed . . . no suit by the taxpayer for the recovery of any part of the tax shall be instituted in any court except --
(2) As to any amount collected in excess of an amount computed in accordance with the decision of the Tax Court which has become final; . . .
Tax court determinations in contested matters can be reviewed only in the Courts of Appeals. I.R.C. § 7482 (a) states:
The United States Courts of Appeals shall have exclusive jurisdiction to review the decisions of the Tax Court. . . .
Having elected to have their deficiencies reviewed in the Tax Court of the United States, the plaintiffs cannot review the same taxes for the same years in a United States District Court. By virtue of I.R.C. § 6512 (a), this court is without jurisdiction in the matter. Elbert v. Johnson, 164 F.2d 421 (2d Cir. 1947); Empire Trust ...