Jeremy Edwin Porter
3544-21
Tax Ct.Mar 28, 2022Background
- IRS opened examination of Jeremy Porter’s (and spouse’s) 2011–2012 joint returns in October 2013; a Power of Attorney for Charlotte Ogorek was filed November 26, 2013.
- Examiner requested substantiating records; Ogorek failed to provide them by agreed deadline and the examination was closed April 24, 2014; notice of deficiency issued May 13, 2014.
- Porter petitioned the Tax Court (Porter I) in July 2014; the case experienced multiple continuances, discovery disputes, and a reassignment, but ultimately settled by stipulated decision on May 29, 2019.
- Porter paid the stipulated deficiencies’ interest in 2019–2020 and filed Forms 843 (Oct. 19, 2019) seeking abatement of interest from Nov. 30, 2013 to June 28, 2019, alleging IRS error/delay (no response to letter, unresponsiveness/continuances, unanswered settlement offer).
- IRS denied the abatement (Sept. 15, 2020), explaining delays were attributable in significant part to the taxpayers (failure to produce records) and to agreed continuances; Porter challenged the denial in Tax Court and proceeded to trial.
Issues
| Issue | Porter’s Argument | Commissioner’s Argument | Held |
|---|---|---|---|
| Whether IRS abused its discretion in denying abatement under §6404(e)(1) | IRS errors and delays caused prolonged accrual of interest; abatement warranted | Delays were largely attributable to taxpayer (failure to produce records; agreed continuances); no ministerial/managerial IRS error warranting abatement | Denial affirmed: no abuse of discretion — significant aspects of delay attributable to taxpayer or due to litigation time not chargeable to IRS |
| Whether burden of proof shifts to Commissioner under §7491 | Burden should shift to IRS to prove denial was proper | §7491 does not apply to interest-abatement claims because it addresses liability issues under subtitles A or B | Motion to shift burden denied — §7491 inapplicable to interest (§6601 not in subtitles A or B) |
| Whether post-June 28, 2019 processing delays by IRS are relevant | Any delay in processing Forms 843 by IRS is evidence of IRS delay | Porter sought abatement only through June 28, 2019; later processing delays not at issue | Court held post-June 28, 2019 delays irrelevant to the abatement claim |
| Whether equitable relief (beyond statutory abatement) is available | Court should grant equitable relief to abate interest | Tax Court is a court of law and cannot grant nonstatutory equitable relief here | Equitable relief denied — taxpayer failed to show statutory abuse of discretion and Tax Court lacks equitable authority in this context |
Key Cases Cited
- Lee v. Commissioner, 113 T.C. 145 (1999) (delay/ error considered only if no significant aspect attributable to taxpayer)
- Woodral v. Commissioner, 112 T.C. 19 (1999) (Tax Court reviews denial of abatement for abuse of discretion)
- King v. Fleming, 899 F.3d 1140 (10th Cir. 2018) (abuse-of-discretion standard; denial upheld unless legally or factually erroneous)
- Cooter & Gell v. Hartmarx Corp., 496 U.S. 384 (1990) (standards for abuse of discretion review)
- SEC v. Chenery Corp., 332 U.S. 194 (1947) (agency must articulate the grounds it relied on for its decision)
- Kasper v. Commissioner, 150 T.C. 8 (2018) (Chenery doctrine applies to Tax Court review of IRS discretionary rulings)
- Magana v. Commissioner, 118 T.C. 488 (2002) (Court limits review to arguments presented to the IRS in abatement proceedings)
- Stovall v. Commissioner, 101 T.C. 140 (1993) (Tax Court is a court of law, not equity)