Jones v. Commissioner
2011 U.S. App. LEXIS 11968
| 4th Cir. | 2011Background
- Octavia and Robert Jones filed a 2000 joint tax return and later separated; IRS audited the return and assessed a deficiency.
- Robert entered an installment agreement to pay, but defaulted, triggering IRS collection efforts against both spouses.
- Octavia filed Form 8857 for innocent spouse relief under I.R.C. § 6015(f) in January 2008; relief denied due to a two-year collection-activity limitation in § 1.6015-5(b)(1).
- Tax Court initially held § 1.6015-5(b)(1) invalid, relying on Lantz I (2009), and granted Octavia relief to the extent of liability over $450.
- Commissioner appealed; Fourth Circuit ultimately held § 1.6015-5(b)(1) valid under Chevron step-two, remanding for further proceedings.
- The court also remanded to determine whether an extension under 301.9100-3 or equitable tolling applies.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Validity of § 1.6015-5(b)(1) | Jones: regulation invalid because § 6015(f) is ambiguous and no two-year limit should apply. | Jones: regulation is permissible to fill the gap in § 6015 and provide predictability. | Regulation valid; two-year limit permissible |
| Chevron step-one: ambiguity of § 6015 | § 6015 omits a deadline, implying no limitations period. | silence is ambiguous; agency may fill gap with procedures and limits. | Statute ambiguous; agency interpretation evaluated under Chevron step-two |
| Chevron step-two: reasonableness of the regulation | Regulation narrows Congress’s discretionary relief under § 6015(f). | Two-year limit reduces uncertainty and aligns with § 6015(b)/(c) timing. | Secretary's interpretation reasonable; regulation valid |
| Extension under 301.9100-3 | Regulatory extension should be available if warranted. | Issue not resolved because § 1.6015-5(b) validity first. | Case remanded to assess entitlement to extension under 301.9100-3 |
| Equitable tolling | Jones argues for tolling due to inequitable delay. | Issue raised too late; waived on appeal. | Waived; not reached on appeal |
Key Cases Cited
- Lantz v. Commissioner, 132 T.C. 131 (Tax Court 2009) (initial invalidation of § 1.6015-5(b)(1) under Chevron)
- Lantz v. Commissioner, 607 F.3d 479 (7th Cir. 2010) (reversal upholding regulation as valid under Chevron)
- Mannella v. Commissioner, 631 F.3d 115 (3d Cir. 2011) (followed Lantz II; upheld § 1.6015-5(b) validity)
- Snowa v. Commissioner, 123 F.3d 190 (4th Cir. 1997) (agency allowed to impose limitations period in absence of statute)
- Withey v. Perales, 920 F.2d 156 (2d Cir. 1990) (discussion of limitations periods in federal rights)
- Lopez v. Davis, 531 U.S. 230 (U.S. 2001) (agency rulemaking can resolve general issues of applicability)
- Rush v. United States, 464 U.S. 16 (1983) (Russello principle on omission indicating intentional exclusion)