                          T.C. Memo. 1997-543



                        UNITED STATES TAX COURT



             BLAIR R. LAING & DONNA R. LAING, Petitioners v.
              COMMISSIONER OF INTERNAL REVENUE, Respondent




        Docket No. 13135-97.                   Filed December 9, 1997.



        F. Pen Cosby, for petitioners.

        Jordan Musen and Angela J. Kennedy, for respondent.



                          MEMORANDUM OPINION


        ARMEN, Special Trial Judge:   This case was assigned pursuant

to the provisions of section 7443A(b)(3) and Rules 180, 181, and

182.1

1
   Unless otherwise indicated, all section references are to the
Internal Revenue Code, as amended, and all Rule references are to
                                                   (continued...)
                               - 2 -


      This case is before the Court on petitioners' Motion for

Leave to Amend Petition, as Supplemented, filed pursuant to Rule

41.   Petitioners contend that justice requires that they be

permitted to file an amended petition in order to place in issue

an additional taxable year.   Respondent contends that

petitioners' motion seeks to confer jurisdiction over a taxable

year which otherwise would not come within the Court's

jurisdiction under the petition as on file and in respect of

which the 90-day period for petitioning the Court expired before

the motion was filed.

Background

      At the time that the petition was filed with the Court,

petitioners resided in Brownsburg, Indiana.

      On March 21, 1997, respondent mailed two separate joint

notices of deficiency to petitioners.   The first notice

determined deficiencies in income taxes, together with accuracy-

related penalties, for the taxable years 1993 and 1994.    The

second notice determined a deficiency in income tax, together

with an accuracy-related penalty, for the taxable year 1995.2




(...continued)
the Tax Court Rules of Practice and Procedure.
      2
        Both notices were mailed to petitioners at 1012 South
Green Street, Brownsburg, Indiana 46112-1808. Petitioners do not
dispute that this is their correct address.
                                        - 3 -


     The amounts of the deficiencies and accuracy-related

penalties that were determined by respondent in the two notices

of deficiency are as follows:

                                        Accuracy-related penalty
     Year          Deficiency                 Sec. 6662(a)

     1993            $3,806                       $761.20
     1994             3,285                        657.00
     1995             4,470                        894.00

     The adjustments to income that gave rise to the deficiencies

that were determined by respondent in the two notices of

deficiency were as follows:

   Adjustment                    1993            1994       1995

   "1120S flow thru1"           $23,474         $18,300      ---
   Itemized deductions            1,234           ---        ---
   Earned income credit           ---               540     $2,081
   Unreported income1             ---             ---       19,242
      1
            The adjustments for "1120S flow thru" and "unreported
          income" relate to an indirect method of reconstructing
          income and are attributable principally to personal
          living expenses.

     Respondent issued two separate notices of deficiency because

petitioners had previously filed a power of attorney with

respondent naming an accountant, Harold Marley (Mr. Marley), as

their attorney-in-fact for the taxable years 1993 and 1994.          In

addition to issuing the notice of deficiency for 1993 and 1994 to

petitioners, respondent mailed a copy of the notice to Mr.

Marley.     On the other hand, because petitioners did not file a

power of attorney with respondent in respect of the taxable year
                                 - 4 -


1995, respondent mailed a single copy of the notice of deficiency

for 1995 to petitioners.

     The notices of deficiency that were mailed to petitioners

were returned to respondent undelivered and marked "unclaimed".

However, the copy of the notice of deficiency for 1993 and 1994

that was mailed to Mr. Marley was received by him and was

furnished to petitioners.

     On June 23, 1997, petitioners filed a timely petition (the

petition) with the Court.   Paragraph 3 of the petition states

that petitioners dispute the deficiencies determined by

respondent for the taxable years 1993 and 1994.    Petitioners

attached to the petition a complete copy of the notice of

deficiency for the taxable years 1993 and 1994.    Petitioners did

not attach to the petition a copy of the notice of deficiency for

the taxable year 1995, nor did petitioners place in dispute such

taxable year in the petition.    In fact, neither the taxable year

1995 nor the deficiency or accuracy-related penalty determined by

respondent for that year is discussed or even mentioned in the

petition.

     On September 23, 1997, petitioners filed their Motion for

Leave to Amend Petition and lodged an amended petition (the

amended petition).   The amended petition seeks to place in

dispute the taxable year 1995.    In this regard, the amended

petition expressly mentions the taxable year 1995 and expressly
                               - 5 -


disputes the deficiency and accuracy-related penalty determined

by respondent for that year.

     Respondent objects to the granting of petitioners' motion

because, in respondent's view, to do so would confer jurisdiction

over a taxable year that otherwise would not come within the

Court's jurisdiction under the petition as on file and in respect

of which the statutory period for petitioning the Court expired

before the motion was filed.

Discussion

     We begin our analysis with Rule 41(a), which governs

amendments to pleadings.   As relevant herein, Rule 41(a) provides

as follows:

     A party may amend a pleading * * * only by leave of
     Court * * * and leave shall be given freely when
     justice so requires. No amendment shall be allowed
     after expiration of the time for filing the petition,
     however, which would involve conferring jurisdiction on
     the Court over a matter which otherwise would not come
     within its jurisdiction under the petition as then on
     file.* * *

     This Court has been liberal in granting taxpayers leave to

amend in order to correct technical defects related to the

requirements prescribed by our Rules governing the form and

content of petitions.   O'Neil v. Commissioner, 66 T.C. 105, 107-

108 (1976).   However, we may not permit a petition to be amended

if the amendment seeks to place in dispute an additional taxable

year in respect of which the statutory period for filing a

petition has expired.   InverWorld, Ltd. v. Commissioner, 98 T.C.
                               - 6 -


70, 75 (1992), affd. 979 F.2d 868 (D.C. Cir. 1992); Normac, Inc.

v. Commissioner, 90 T.C. 142, 149 (1988); O'Neil v. Commissioner,

supra.

     We apply an objective test in order to distinguish between

an amendment seeking to correct a technical defect and an

amendment seeking to place an additional taxable year in dispute.

Thus, a petition must contain objective facts indicating that a

deficiency for a particular taxable year is being contested

before such petition will be treated as a petition for that

particular taxable year.    InverWorld, Ltd. v. Commissioner,

supra at 75; Normac, Inc. v. Commissioner, supra at 147-148;

O'Neil v. Commissioner, supra at 107; see Hill v. Commissioner,

T.C. Memo. 1988-198; Franks v. Commissioner, T.C. Memo. 1986-470,

affd. without published opinion 828 F.2d 23 (9th Cir. 1987).

     In the present case there are no objective facts appearing

in the petition even to suggest that the taxable year 1995 is

being contested.   Rather, the objective facts appearing in the

petition demonstrate that only the taxable years 1993 and 1994

are being contested.   Thus, the petition refers to 1993 and 1994

as the only taxable years in dispute.   Moreover, only the notice

of deficiency for 1993 and 1994 is attached to the petition as an

exhibit.   Finally, only the amounts of the deficiencies and

penalties for 1993 and 1994 are identified in the petition as in

dispute.   Indeed, there is nothing within the four corners of the
                               - 7 -


petition to indicate that respondent even determined a deficiency

for 1995, much less that petitioners are disputing such

deficiency.

     In view of the foregoing, we hold that the petition was

filed only in respect of the taxable years 1993 and 1994.

Accordingly, we analyze petitioners' motion for leave as one

seeking to amend the petition to place an additional taxable year

in issue.   We therefore turn to the scope of this Court's

jurisdiction.

     The Tax Court is a court of limited jurisdiction, and we

have only such jurisdiction as the Congress has chosen to confer

upon us by statute.   Sec. 7442; Commissioner v. Gooch Milling &

Elevator Co., 320 U.S. 418, 420-422 (1943); Medeiros v.

Commissioner, 77 T.C. 1255, 1259 (1981).     In a deficiency action,

our jurisdiction depends on the issuance of a valid notice of

deficiency and a timely filed petition.    Rule 13(a), (c); Monge

v. Commissioner, 93 T.C. 22, 27 (1989); Normac, Inc. v.

Commissioner, supra at 147.

     Petitioners argue that they were not aware that the 1995 tax

year was under examination and that respondent should have issued

a single notice for 1993, 1994, and 1995.3    However, petitioners


     3
        We note, however, that the hearing record includes a copy
of a letter dated Nov. 4, 1996, from the examining revenue agent
stating, in part, that "the 1995 return will need to be examined
and included with the 1993 and 1994 audit."
                               - 8 -


cite no rule of law, and we know of none, requiring respondent to

issue a single notice when determining deficiencies for more than

one taxable year.   See sec. 6212(a); see also Franks v.

Commissioner, supra (involving essentially similar notices for

two different taxable years), affd. without published opinion 828

F.2d 23 (9th Cir. 1987).   Further, respondent issued one notice

for 1993 and 1994 and a separate notice of deficiency for 1995

because of the filing of petitioners' power of attorney for 1993

and 1994.   Simply stated, if respondent had issued a combined

notice of deficiency for 1993, 1994, and 1995, and provided a

copy of the same to petitioners' attorney-in-fact, respondent

might have made an unauthorized disclosure of petitioners' tax

return information within the meaning of section 6103.     Under the

circumstances, we are satisfied that it was appropriate to issue

one notice of deficiency for 1993 and 1994 and a separate notice

of deficiency for 1995.

     Further, we are satisfied that the notice of deficiency for

the taxable year 1995 was sent on March 21, 1997.4   Accordingly,

a petition contesting that year was required to be filed within

90 days thereafter.   Secs. 6213(a), 7502.   However, petitioners

did not file their Motion for Leave to Amend Petition until


     4
        Respondent offered Postal Service Form 3877, a copy of
the notice of deficiency for 1995, and a copy of the envelope in
which the notice of deficiency was mailed to prove the date of
mailing.
                               - 9 -


September 23, 1997, a date well after the expiration of the

critical 90-day period.   Accordingly, we lack jurisdiction over

the taxable year 1995.

     In view of the foregoing, we will not grant petitioners'

Motion for Leave to Amend Petition because such action "would

involve conferring jurisdiction on the Court over a matter which

otherwise would not come within its jurisdiction under the

petition as then on file."   Rule 41(a).

     Petitioners seek to overcome the foregoing analysis by

arguing that the adjustments giving rise to the deficiency for

1995 fall in the same categories as those giving rise to the

deficiencies for 1993 and 1994.    Essentially the same argument

was addressed, and rejected, in Franks v. Commissioner, supra.

     In Franks v. Commissioner, supra, the Commissioner issued

two notices of deficiency, one for the taxable year 1980 and the

other for the taxable year 1981.    Both notices made adjustments

primarily related to the same investments of the taxpayer.

Thereafter, the taxpayer filed a petition that referenced only

the taxable year 1981; further, the taxpayer only attached as an

exhibit to his petition a copy of the notice for 1981.    In

contrast, the taxpayer did not mention the taxable year 1980 in

his petition, nor did the taxpayer attach a copy of the notice

for 1980.   Subsequently, the taxpayer moved to amend his petition

to include the taxable year 1980.    The Court ultimately concluded
                              - 10 -


that jurisdiction was lacking as to the taxable year 1980 and

dismissed the case as to that year because the petition failed to

place that year in issue and the taxpayer's motion for leave to

amend the petition was filed more than 90 days after the notice

of deficiency for 1980 was issued.

     Petitioners further contend that equitable considerations

support the granting of their motion.   However, because equitable

considerations do not afford any basis for us to assume

jurisdiction over a taxable year in the absence of a timely filed

petition as to that year, we are constrained to deny petitioners'

motion.   Sec. 7442; Hesse v. Commissioner, T.C. Memo. 1997-333,

and cases cited therein at note 6.

Conclusion

     We lack jurisdiction over the taxable year 1995.

Accordingly, petitioners' Motion for Leave to Amend Petition, As

Supplemented, will be denied.5

     To give effect to the foregoing,




     5
        We note that although petitioners cannot pursue a case in
this Court as to the taxable year 1995, petitioners are not
without a judicial remedy. Thus, petitioners may pay the tax,
file a claim for refund with the Internal Revenue Service, and,
if the claim is denied, sue for a refund in the appropriate
Federal District Court or the United States Court of Federal
Claims. McCormick v. Commissioner, 55 T.C. 138, 142 (1970).
- 11 -


     An order denying petitioners'

motion as supplemented will be

issued.
