The opinion of the court was delivered by: SWEET
Plaintiff Marcia Schulman instituted this suit seeking a refund of federal income tax payments. The Government has moved for summary judgment pursuant to Rule 56 of the Fed. R. Civ. P. For the reasons set forth below the motion is granted.
On or about June 15, 1967 Marcia Schulman and her husband filed a joint Federal Income Tax Return for the tax year 1966. This return showed a joint tax liability of $1,669.55 which was paid in full by the taxpayers. On January 11, 1973 the Internal Revenue Service issued to the Schulmans a Notice of Deficiency concerning their federal income tax liabilities for 1966. On April 4, 1973 the Schulmans commenced an action in the United States Tax Court challenging the Notice of Deficiency. By judgment entered June 29, 1977, pursuant to an agreement by the parties, the Tax Court determined that the Schulmans were liable for the tax year 1966 in the amount of $2,630.23.
Subsequently, the Secretary of Treasury made an assessment of $4,812.78 against the Schulmans for additional tax and interest based on the Tax Court judgment, with additions and interest continuing to accrue thereafter. That assessment was paid by Marcia Schulman in 1979. On January 29, 1980 Mrs. Schulman filed a timely claim for a refund with the Commissioner of the I.R.S. claiming a refund of the $4,812.72 deficiency payment. The basis for her claim was that her husband had allegedly omitted a portion of his gross personal income from their joint tax return for the tax year 1966 and that as an "innocent spouse" under I.R.C. § 6013(e)
she was relieved of joint tax liability for the deficiency. On January 21, 1981 the claim was denied.
On June 8, 1982 Mrs. Schulman commenced this action seeking a refund of the deficiency payment for 1966, plus interest and costs.
The Government opposes this suit asserting that Mrs. Schulman's tax liability was finally determined in 1977 by the Tax Court decision to which she was a party. The Government argues that under I.R.C. § 6512(a)
this court lacks jurisdiction to reach the merits of this case, and that in any event, principles of res judicata bar consideration of this matter. Mrs. Schulman submits that the Tax Court determination does not bar the instant action because she is not contesting its assessment of the deficiency but rather is challenging her personal liability for the deficiency in light of the "innocent spouse" provision, I.R.C. § 6013(e). That provision was enacted to mitigate the harshness of joint and several liability for joint tax returns in cases where persons are unaware of their spouses' unreported income and have not received a benefit from such income.
The facts in this case are practically on all fours with those in Stetson v. United States, 77-2 USTC P 9663 (W.D.N.Y. 1977). In Stetson, the Honorable John T. Curtin declined to grant the relief that Mrs. Schulman seeks here. Although he concluded that under I.R.C. § 6512(a) the court had no jurisdiction to consider the matter, para. 9663 at 88,237, Judge Curtin went on to provide a full examination of the res judicata issue, i.e. whether a final Tax Court judgment concerning a closed tax year bars subsequent relief under I.R.C. § 6013(e). Congress in section 2114 of the Tax Reform Act of 1976
considered this issue and chose to limit retroactive relief to adjudicated cases under section 6013(e) to those tax years within ten years prior to the enactment of section 6013(e) in 1971. Section 2114 granted relief under the "innocent spouse" provision "to certain taxpayers, who but for the res judicata effect of adverse judicial decisions prior to the provision's enactment, would have been relieved of liability for unreported income."
This limited retroactive relief was available only during the calendar year following the enactment of the Tax Reform Act of 1976.
The result here is harsh indeed. Yet as Judge Curtin observed, "The relief [provided by section 6013(e)] was a matter of legislative grace which did not exist until, and only to the extent that, Congress created it by legislation . . . Congress chose to make the relief partially retroactive, as evidenced by the bill's legislative history." para. 9663 at 88,238. Congress has spoken on res judicata and section 6013(e), and it is not for this court to deviate from that congressional mandate.
Thus, I agree with Judge Curtin's decision in Stetson that even if the court had jurisdiction to reach the merits of this case, res judicata would bar its consideration. The Government's motion for summary judgment is therefore granted and the Clerk is directed to enter judgment dismissing Mrs. Schulman's complaint.