                            T.C. Summary Opinion 2014-27



                            UNITED STATES TAX COURT



STEPHANIE LYNN CHRISTIE, a.k.a. STEPHANIE LYNN FORAN, Petitioner,
    AND JOHN FORAN, a.k.a. ARTHUR J. MAURELLO, Intervenor v.
      COMMISSIONER OF INTERNAL REVENUE, Respondent



      Docket No. 24515-12S.                          Filed March 26, 2014.



      Stephanie Lynn Christie, a.k.a. Stephanie Lynn Foran, pro se.

      John Foran, a.k.a. Arthur J. Maurello, pro se.

      John Schmittdiel and Melissa J. Hedtke, for respondent.



                                 SUMMARY OPINION


      HALPERN, Judge: This case was heard pursuant to the provisions of

section 74631 of the Internal Revenue Code in effect when the petition was filed.


      1
          Unless otherwise indicated, all section references are to the Internal
                                                                           (continued...)
                                         -2-

Pursuant to section 7463(b), the decision to be entered is not reviewable by any

other court, and this opinion shall not be treated as precedent for any other case.

Petitioner and her ex-husband, Arthur J. Maurello (intervenor), made a joint

Federal income tax return for 2008. The resulting tax has not been paid, and

petitioner requested from respondent relief from the joint and several liability for

that tax imposed on joint return filers by section 6013(d)(3). See sec. 6015.

Respondent determined that petitioner did not provide him with information

sufficient to show that she met the requirements set forth in section 6015 for relief

from joint and several liability, and he denied her request. Petitioner appealed that

determination to this Court. We have jurisdiction to determine the appropriate

relief to petitioner under section 6015. See sec. 6015(e)(1). Intervenor has the

right to intervene in this case, see sec. 6015(e)(4); Rules 320-325, and he did so by

filing a notice of intervention (notice). By the notice, he invokes the affirmative

defense of collateral estoppel, averring that, on account of a prior State court

decision, petitioner is estopped from seeking review of respondent's determination

denying her any section 6015 relief. He moved for summary adjudication in his

favor (motion) on the ground that a State court judgment bars consideration of

      1
       (...continued)
Revenue Code, as amended and in effect at all relevant times, and all Rule
references are to the Tax Court Rules of Practice and Procedure.
                                        -3-

"[the] responsibility between petitioner and intervenor for their 2008 federal

income tax liability."

      We may grant summary judgment with respect to all or any part of the legal

issues in controversy "if the pleadings, answers to interrogatories, depositions,

admissions, and any other acceptable materials, together with the affidavits or

declarations, if any, show that there is no genuine dispute as to any material fact

and that a decision may be rendered as a matter of law." Rule 121(a) and (b). We

ordered petitioner and respondent to respond to the motion. Petitioner did not

respond. Nevertheless, we deem her to object to the motion since intervenor failed

to state in the motion whether she objected. See Rule 50(a); Dehaai v.

Commissioner, T.C. Memo. 1989-127 n.3. Respondent objects. Intervenor

requested a hearing on the motion, but we think no hearing is necessary given the

principally legal nature of the questions before us and the extensive legal

argument made by intervenor. See Rule 50(b). Before addressing the motion, we

address intervenor's standing to make the motion.

                                      Standing

      We have not previously determined whether an individual intervening in a

case pursuant to section 6015(e)(4) and our Rules has standing to move for

summary judgment. We decide that he does. Rule 24(a)(1) of the Federal Rules
                                        -4-

of Civil Procedure provides that, on timely motion, anyone who is given an

unconditional right to intervene by a Federal statute must be permitted to

intervene. Federal District Courts have held that, under rule 24 of the Federal

Rules of Civil Procedure, an intervenor in an action or proceeding is, for all intents

and purposes, an original party. See, e.g., United States ex rel. Ward Constr.

Serv., Inc. v. United States Fid. & Guar. Co., 26 F.R.D. 568 (E.D. Ky. 1960); In re

Raabe, Glissman & Co., 71 F. Supp. 678 (S.D.N.Y. 1947). In United States v.

City of Hialeah, 899 F. Supp. 603, 608 (S.D. Fla. 1994), aff'd, 140 F.3d 968 (11th

Cir. 1998), the Federal District Court held that pursuant to rule 24 of the Federal

Rules of Civil Procedure intervenors have the same rights as the original parties.

Section 6015(e)(4) confers on a nonelecting spouse an unconditional statutory

right to intervene within the meaning of rule 24(a)(1) of the Federal Rules of Civil

Procedure. E.g., Van Arsdalen v. Commissioner, 123 T.C. 135, 142-143 (2004).

Section 6015(e)(4) directs the Court to "establish rules which provide the

individual filing a joint return but not making the election * * * with adequate

notice and an opportunity to become a party to a proceeding". The statute does

not authorize the Court to impose any significant substantive conditions with

respect to the nonelecting spouse's right to intervene. Van Arsdalen v.

Commissioner, 123 T.C. at 143. Consequently, the Court prescribed the
                                        -5-

procedures for intervention within Rule 325 and did so without imposing any

substantive conditions on the nonelecting spouse--intervenor. Thus, intervenor, as

a party to this action, has the right to file a motion for summary judgment.

                                    Background

      Petitioner and intervenor were divorced pursuant to a judgment and decree

of divorce (judgment) entered by the Circuit Court, Third Judicial Circuit,

Kingsbury County, South Dakota (State court), on April 1, 2011. Previously,

petitioner and intervenor had appeared by telephone at a hearing (hearing) before

the State court to recite the terms of a stipulation and settlement agreement

(agreement) resolving all of the issues to be resolved in the divorce action. The

agreement provides in relevant part that:

      There is a tax return filed by the parties for the year 2008 that the IRS
      is alleging there is an amount due on. It's agreed between the parties
      that they will leave the disposition of that matter up to the Internal
      Revenue Service and they will each pay their part of any
      responsibility that's imposed upon them by the Internal Revenue
      Service.

Petitioner stated during the hearing that she had already applied for section 6015

relief. Petitioner and intervenor then had the following exchange:

      THE DEFENDANT [intervenor]: And also on the question of taxes,
      Stephanie will not--the IRS will decide whatever it decides.
      Stephanie will not subsequently claim that she is a victim if found to
      be jointly and severally liable on the tax claim * * *
                                        -6-

      THE PLAINTIFF [petitioner]: If they [IRS] say it needs to be paid, I
      will pay half of the tax bill.

      THE DEFENDANT: I understand that.

      THE PLAINTIFF: If they find me to be held accountable.

      MR. WIECZOREK [petitoner's counsel]: That's the 2008 Internal
      Revenue bill, right?

      THE DEFENDANT: Right.

      THE COURT: All right. * * *

Reflecting petitioner's and intervenor's agreement as to 2008 taxes, the judgment

provides:

             IT IS FURTHER ORDERED, ADJUDGED AND DECREED
      that as to any claim being made by the Internal Revenue Service for
      unpaid income taxes or penalty therefor concerning the parties' 2008
      federal income tax return, pursuant to the parties' agreement each
      shall pay that amount as their liability is determined pursuant to the
      proceedings before the Internal Revenue Service. Defendant shall be
      entitled to a copy of any paper work filed by Plaintiff claiming
      innocent spouse status concerning the parties' 2008 federal income
      tax return.

                                     Discussion

      Intervenor argues: "[P]etitioner is collaterally estopped from raising the

sole issue she seeks to advance herein--the division of relative responsibility

between her and her former husband for 2008 federal income tax liability--said
                                         -7-

issue having been finally adjudicated between the same two litigants in the earlier

proceeding."

      Respondent argues:

             Whether Petitioner is collaterally estopped from claiming that
      she is entitled to relief under I.R.C. § 6015 is an issue for which there
      is no genuine dispute as to any material fact because interpreting the
      State Court judgment and decree of divorce (judgment) is irrelevant
      to this case. Indeed, the Court may determine as a matter of law that
      Petitioner is not collaterally estopped even though the meaning of the
      judgment is an unresolved factual dispute.

      We agree with respondent that the meaning of the above-quoted paragraph

from the judgment presents an unresolved factual dispute (e.g., Does the

expression "the proceedings before the Internal Revenue Service" include the Tax

Court review procedures provided for in section 6015(e)?). We also agree with

respondent that we need not decide whether there is a genuine dispute as to a

material fact because interpreting the judgment is irrelevant to this case.

      Petitioner is not estopped from asking us to determine the appropriate relief

available to her under section 6015 because the petition does not raise an issue

identical to an issue decided by the State court. Collateral estoppel requires that

the issue in the second suit be identical in all respects to the one decided in the

first suit. Peck v. Commissioner, 90 T.C. 162, 166-167 (1988), aff'd, 904 F.2d 525

(9th Cir. 1990). The State court decreed that petitioner was divorced from
                                         -8-

intervenor; it further decreed (incorporating in the judgment petitioner and

intervenor's agreement) that they would pay their 2008 Federal tax liability "as

their liability is determined pursuant to the proceedings before the Internal

Revenue Service."2 This proceeding is brought pursuant to section 6015(e), and

our authority is to determine the appropriate relief available to an individual who,

(1) having elected to have section 6015(b) or (c) apply or (2) having requested

equitable relief under section 6015(f), is denied by the Commissioner the relief

requested. Although the facts relevant to our determination under section 6015

(b), (c), or (f) vary, the State court did not decide an issue identical to whether

petitioner is entitled to relief under any of these provisions. The State court

merely decreed how, as between them, petitioner and intervenor would share the

unpaid 2008 tax liability. It decided nothing (and had no authority to decide

      2
        For collateral estoppel to apply to an issue of law or fact, the parties must
have actually litigated the issue. See 1 Restatement, Judgments 2d, sec. 27 (1982);
see also Peck v. Commissioner, 90 T.C. 162, 167 (1988), aff'd, 904 F.2d 525 (9th
Cir. 1990). Here, of course, we have a judgment incorporating petitioner's and
intervenor's stipulation regarding their 2008 tax liability. According to the
Restatement: "An issue is not actually litigated * * * if it is the subject of a
stipulation between the parties." 1 Restatement, supra, sec. 27 cmt. e. It
continues, however: "A stipulation may * * * be binding in a subsequent action
between the parties if the parties have manifested an intention to that effect." Id.
Since, as stated infra, we determine that the State court did not decide an issue
identical to whether petitioner is entitled to relief under sec. 6015 (a determination
providing a sufficient basis for us to deny the motion), we need not decide whether
the issue was actually litigated.
                                          -9-

anything) relevant to petitioner's liability to respondent for the unpaid 2008 tax.

Had the State court decreed that intervenor was 100% responsible for the unpaid

2008 tax and that petitioner was to bear no responsibility for the tax, that decree

would not foreclose respondent from pursuing petitioner for any portion of the

2008 tax not paid by intervenor, nor would it foreclose petitioner from seeking

relief from us pursuant to section 6015(e)(1). And, if petitioner were to seek that

relief, intervenor would not be collaterally estopped from contending that

petitioner is not entitled to any section 6015 relief.

      Indeed, intervenor recognizes that the judgment binds neither respondent

nor the Court.3 In his response to respondent's objection to the motion, he agrees

that (1) the Commissioner is not bound by a provision in a divorce agreement

allocating liability and (2) the Court is not bound by a divorce court's approval of

a property settlement. He adds: "[Intervenor] does not assert that the divorce

action predicate to the petition herein binds either the respondent or the Court.

Rather, intervenor simply asserts the parties' accord affirmed by the state court

      3
       Respondent was not a party to the proceeding giving rise to the judgment.
We have on numerous occasions held that the Commissioner is not bound by a
provision in a divorce agreement allocating tax liability. See, e.g., Pesch v.
Commissioner, 78 T.C. 100, 129 (1982). Moreover, in Bruner v. Commissioner,
39 T.C. 534 (1962), concerning the allocation of dependency exemptions to
divorced spouses, we held that we are not bound by a community property
settlement approved by the divorce court.
                                       - 10 -

binds the petitioner herein." We need not in disposing of the motion determine

whether intervenor is right on that count (petitioner being bound) or the

consequence if he is.

      Finally, we are unclear as to whether, besides defending on the basis of

collateral estoppel, intervenor defends on the basis of judicial estoppel.4 We have

recently in Peking Inv. Fund, LLC v. Commissioner, T.C. Memo. 2013-288, at

*28-*29, discussed the doctrine of judicial estoppel, quoting Huddleston v.

Commissioner, 100 T.C. 17, 26 (1993), as follows: "'Judicial estoppel is an

equitable doctrine that prevents parties in subsequent judicial proceedings from

asserting positions contradictory to those they previously have affirmatively

persuaded a court to accept.'" We see no application of the doctrine here. We

decide only the extent (if any) to which petitoner should be relieved of joint and

several liability to respondent for the unpaid 2008 tax, not whether she should

reimburse intervenor for any unpaid 2008 tax that respondent collects from him.

We have quoted petitioner's statement at the hearing that, if the IRS determined

she had to pay one half of the 2008 tax bill, she would. That is not inconsistent

      4
        He does not claim judicial estoppel in the notice, nor does he address it in
the motion or discuss it in his memorandum in support of the motion. He does,
however, in his affidavit in support of the motion state: "The factual basis for the
relief sought here arguably might also fit the * * * concept known as judicial
estoppel".
                                        - 11 -

with what we understand to be her position in this case. In the petition, she states:

"I petition the court to separate the tax debt that is shared by myself and my ex-

husband."

      We will deny the motion.


                                                 An appropriate order will be issued.
