                                                            [DO NOT PUBLISH]


             IN THE UNITED STATES COURT OF APPEALS

                    FOR THE ELEVENTH CIRCUIT                     FILED
                      ________________________         U.S. COURT OF APPEALS
                                                         ELEVENTH CIRCUIT
                                                             October 23, 2008
                            No. 08-11594                     THOMAS K. KAHN
                        Non-Argument Calendar                    CLERK
                      ________________________

                          Agency No. 20423-04

ESTATE OF MARVIN E. GREENFIELD, DECEASED,
BARBARA GREENFIELD,
Personal Representative,
BARBARA GREENFIELD,


                                                       Petitioners-Appellants,

                                 versus

COMMISSIONER OF INTERNAL REVENUE,

                                                        Respondent-Appellee.

                      ________________________

                 Petition for Review of a Decision of the
                          United States Tax Court
                      _________________________

                           (October 23, 2008)

Before CARNES, BARKETT and WILSON, Circuit Judges.

PER CURIAM:
      The Estate of Marvin E. Greenfield and Barbara Greenfield (collectively

“Estate”) petition for review of a U.S. Tax Court decision sustaining the

Commissioner of Internal Revenue (“Commissioner”)’s determination as to the

Estate’s income tax deficiency. After carefully reviewing the parties’ briefs, we

deny the Estate’s petition for review.

                                 BACKGROUND

      Marvin E. Greenfield, who died in February 2006, and Barbara Greenfield,

the personal representative of Marvin’s estate, were husband and wife at all times

relevant to this case. The Greenfields timely filed their joint 1982 individual

income tax return. Their return included flow-through loses from various

partnerships known as the Mast Realty Associates Partnership.

      The Internal Revenue Service (IRS) audited the Mast Realty Associates

Partnership and solicited from the Greenfields a Form 872-A, Special Consent to

Extend the Time to Assess Tax, as to their 1982 tax return. Both the IRS and the

Greenfields signed the form. The form provided that the amount of income tax due

on the Greenfield’s 1982 tax return could be assessed on or before the 90th day

after the IRS office considering the case: (1) received from the Greenfields a

Notice of Termination of Special Consent to Extend the Time to Assess Tax (Form

872-T); (2) mailed Form 872-T to the Greenfields; or (3) mailed a notice of

deficiency to the Greenfields for the 1982 tax year, in which case the tax could be
                                          2
assessed within 60 days after the period in which assessment was prohibited. The

Greenfields never submitted a Form 872-T to the IRS as to the 1982 tax year.

      In September 1992, Mr. Greenfield filed a Chapter 11 petition in bankruptcy

court. The Commissioner filed a first proof of claim in the bankruptcy proceeding,

asserting an unsecured priority claim of $27,687.45 for 1983 and 1984 and an

unsecured general claim of $9,506.77 for those same years. Mr. Greenfield

objected to the first proof of claim, claiming that he owed the IRS no money. The

Commissioner consented to disallowing this first proof of claim. The

Commissioner then filed an amended proof of claim, asserting an unsecured

priority claim of $34,150.32 for 1983 and 1984.

      In April 1994, Mr. Greenfield’s Chapter 11 reorganization case became a

Chapter 7 liquidation case. In August 1994, the Commissioner filed a third proof

of claim, asserting an unsecured priority claim of $216,386.49 for 1983, 1984, and

1991 and an unsecured general claim of $19,601.28 for the same years. In

November 1997, the bankruptcy court issued a discharge in Mr. Greenfield’s

bankruptcy case. In July 2000, the bankruptcy trustee paid the Commissioner

$29,683.67 as to the Commissioner’s unsecured priority claim of $216,386.49.

      The IRS later determined that the Greenfields’ distributive share of income

from Mast Realty Associates Partnership should be increased by $62,186.00. In

June 2004, the Commissioner sent the Greenfields a notice of deficiency for the
                                         3
1982 tax year. The notice also indicated that the Greenfields were liable under

I.R.C. § 6621(c) for an increased rate of interest because their investment in Mast

Realty Associates Partnership was a tax-motivated transaction.1

       The Greenfields petitioned the tax court for redetermination of the

deficiency. They did not contest the deficiency amount. They submitted the case

fully stipulated to the tax court for a decision without trial. The tax court found

that the Commissioner timely submitted the notice. The court also sustained the

IRS’ determination as to the Estate’s tax deficiency and liability for interest on that

deficiency. The Estate now petitions for review of the tax court’s decision.

                             STANDARDS OF REVIEW

       “We review the Tax Court’s findings of fact for clear error, even where

those facts are based on stipulations entered into by the parties.” Bone v. Comm’r,

324 F.3d 1289, 1293 (11th Cir. 2003). We review de novo the tax court’s rulings

on the interpretation and application of the Internal Revenue Code. Feldman v.

Comm’r, 20 F.3d 1128, 1132 (11th Cir. 1994).

                                     DISCUSSION

       The Estate raises three issues in this petition. We discuss each in turn.

                                             I.



       1
        The Commissioner subsequently determined that Mrs. Greenfield qualified under I.R.C.
§ 6015 for relief from any joint and several tax liability for 1982.
                                                  4
      The Estate argues that the tax court failed to analyze Form 872-A in light of

Mr. Greenfield’s bankruptcy proceeding. The Estate argues that the tax court

erroneously found that Form 872-A was a unilateral waiver of the three-year

statute of limitations in which to assess a tax after the taxpayer files a return. See

I.R.C. § 6501(a). The Estate suggests that Form 872-A is instead an executory

contract. If Form 872-A were an executory contract, it would be deemed rejected

if “the [bankruptcy] trustee does not assume or reject [it].” 11 U.S.C. § 365(d)(1).

If the executory contract were rejected, then the IRS would be prohibited from

assessing the Estate’s 1982 tax deficiency. I.R.C. § 6501(a).

      “When a taxpayer raises the affirmative defense of the statute of limitations,

the taxpayer bears the burden to prove that defense.” Feldman, 20 F.3d at 1132

(citation omitted). The statute of limitations in which to assess a tax may be

extended by consent between the IRS and the taxpayer. I.R.C. § 6501(c)(4). “A

consent to extend the statute of limitations under section 6501 ‘is essentially a

voluntary, unilateral waiver of a defense by the taxpayer,’ not a contract.”

Feldman, 20 F.3d at 1132 (citing Stange v. United States, 282 U.S. 270, 276, 51 S.

Ct. 145, 147, 75 L. Ed. 335 (1931); Kronish v. Comm’r, 90 T.C. 684, 693 (1988)).

      Although we have acknowledged that “contract principles are useful in

assessing mutual assent” between the taxpayer and the Commissioner, id., we have

declined, like several of our sister circuits, to enforce attempted terminations of
                                            5
Form 872-A extensions unless a party sends to the other a Form 872-T or the IRS

issues a notice of deficiency to the taxpayer. See, e.g., Coggin v. Comm’r, 71 F.3d

855, 861-62 (11th Cir. 1996); Silverman v. Comm’r, 86 F.3d 260, 262-63 (1st Cir.

1996); St. John v. United States, 951 F.2d 232, 235 (9th Cir. 1991). See also Bilski

v. Comm’r, 69 F.3d 64, 68 (5th Cir. 1995) (finding no reason in the context of

bankruptcy to create an exception or to depart from the general rule that a Form

872-A Extension Agreement is an indefinite waiver of the statute of limitations,

not a contract). The Estate has not met its burden in proving the statute of

limitations defense.

                                             II.

       The Estate argues that res judicata precludes the IRS from asserting the 1982

tax deficiency.2 Since the Commissioner could have asserted in the bankruptcy

proceeding the 1982 tax deficiency, but failed to do so, res judicata precludes the

IRS from asserting that deficiency. Res judicata bars claims when: (1) “the prior

judgment . . . was rendered by a court of competent jurisdiction . . .”; (2) the prior

judgment was “final and on the merits”; (3) both cases involve the same parties or

their privies; and, (4) both cases “involve the same cause of action . . . .” In re

Martin, 490 F.3d 1272, 1276 (11th Cir. 2007). “[I]t [also] bars claims that could

       2
       The tax court’s memorandum opinion summarily found that the Estate’s res judicata
argument lacked merit.
                                           6
have been litigated . . . .” In re Atlanta Retail, Inc., 456 F.3d 1277, 1287 (11th Cir.

2006).

         However, when a debtor files a bankruptcy petition, creditors have an

opportunity to file proofs of claim. 11 U.S.C. § 501(a). The bankruptcy court may

determine the amount or legality of any tax, any penalty relating to a tax, or any

addition to the tax, whether or not previously assessed and whether or not paid. §

505(a)(1). A Chapter 7 debtor is generally granted discharge of all debts that arose

before filing the bankruptcy petition “[e]xcept as provided in section 523 of this

title.” § 727(b). Section 523 provides that “[a] discharge under section 727 . . . of

this title does not discharge an individual debtor from any debt . . . for a tax . . . of

the kind and for the periods specified in section . . . 507(a)(8) of this title, whether

or not a claim for such tax was filed or allowed . . . .” § 523(a)(1)(A). Section

507(a)(8) provides priority status for governmental claims for income tax that were

“not assessed before, but assessable, under applicable law or by agreement, after,

the commencement of the case . . . .” § 507(a)(8)(iii).

         Here, the Commissioner’s proof of claim included the tax liabilities only for

tax years 1983, 1984, and 1991. Neither Mr. Greenfield nor a party in interest filed

a proof of claim under § 501(c) to assert a 1982 tax deficiency on behalf of the

Commissioner. Neither party moved under § 505(a) for the bankruptcy court to


                                             7
determine the 1982 tax deficiency. Thus, the Estate’s 1982 tax deficiency was not

at issue in the bankruptcy proceeding. Since the bankruptcy court did not inquire

into the merits of the 1982 tax deficiency, there was no final judgment as to that

deficiency.

      Although the Commissioner failed to assert the 1982 deficiency in Mr.

Greenfield’s bankruptcy proceeding, but could have, that deficiency was not a

dischargeable debt. The 1982 tax deficiency was a priority tax under §

507(a)(8)(iii) because it had not yet been assessed but was still assessable by Mr.

Greenfield’s Form 872-A when he filed for bankruptcy. Cf. In re Blake, 154 B.R.

590, 591 (Bankr. M.D. Ala. 1992) (taxes were assessable at the commencement of

the bankruptcy case, and thus excepted from discharge, because the period for

assessment had been extended by Form 872-A). Accordingly, the Commissioner’s

failure to include the 1982 tax deficiency in a proof of claim did not render the

nondischargeable tax dischargeable and did not preclude the Commissioner from

assessing or collecting that tax after the bankruptcy discharge was granted. See In

re Gurwitch, 794 F.2d 584, 585 (11th Cir. 1986). The Estate’s res judicata

argument is meritless.

                                         III.




                                          8
       The Estate argues that if we find that the Commissioner timely sent the

notice of deficiency and that the IRS may assert the 1982 tax deficiency, we should

find that Form 872-A constitutes a waiver that extends only to the tax deficiency,

not also to the interest on the tax deficiency. Following its position that Form 872-

A is an executory contract, the Estate claims that the IRS should have ensured a

meeting of the minds as to what “tax” meant on the form. Because there was no

bargaining between the parties, the Estate further argues that it would be

unconscionable for the IRS to impose a liability exceeding $350,000 based on the

IRS’ finding of a tax-motivated transaction.

       Tax court case law holds that “tax” in Form 872-A includes penalties and

interest. See, e.g., Pleasanton Gravel Co. v. Comm’r, 85 T.C. 839, 855 (1985)

(citing Picard v. Comm’r, 28 T.C. 955, 961 (1957)). The Estate is thus liable for

interest on “any amount of tax imposed by [the Internal Revenue Code] . . . not

paid on or before the last date prescribed for payment . . . at the underpayment rate

established under section 6621[,]” which establishes special increased interest rates

for underpayments. I.R.C. § 6601(a). That interest “may be assessed and collected

at any time” the IRS may collect the underlying tax. § 6601(g).3 Thus, the tax


       3
         Other circuits have held that the IRS may collect the tax and interest even when it
applies § 6621(c)’s enhanced rate of interest. See, e.g., Field v. United States, 381 F.3d 109, 111
(2d Cir. 2004).

                                                 9
court did not err in finding that Form 872-A constituted a waiver of the statute of

limitations as to both tax and interest. Because we do not find that Form 872-A is

an executory contract, we are unpersuaded by the Estate’s meeting-of-the-minds

and unconscionability arguments.

                                   CONCLUSION

      We agree with the tax court that the Commissioner’s notice of deficiency

was timely. We also agree that the word “tax” in Form 872-A means both the

Estate’s income tax deficiency and the increased interest rate. Finally, we find that

res judicata does not bar the Commissioner from asserting the Estate’s 1982 tax

deficiency. Therefore, we deny the Estate’s petition for review of the tax court’s

decision.

      PETITION DENIED.




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