Niazmand v. Commissioner

Opinion

USCA1 Opinion

          February 24, 1994     [NOT FOR PUBLICATION]

                            UNITED STATES COURT OF APPEALS
                                FOR THE FIRST CIRCUIT

                                 ___________________

No. 93-1398

RAHMAT A. NIAZMAND, M.D.,

                                     Petitioner,

                                          v.

                          COMMISSIONER OF INTERNAL REVENUE,

                                     Respondent.

__________________

                       APPEAL FROM THE UNITED STATES TAX COURT

                       [Hon. Joel Gerber, U.S. Tax Court Judge]
                                          ____________________

                                 ___________________

                                        Before

                                Cyr, Boudin and Stahl,
                                   Circuit Judges.
                                   ______________

                                 ___________________

Rahmat A. Niazmand, M.D., on brief pro se.
               ________________________
               Michael l. Paup, Acting Assistant  Attorney General, Gary R.
               _______________                                      _______
          Allen, Charles  E. Brookhart and S. Robert  Lyons, Attorneys, Tax
          _____  _____________________     ________________
          Division, Department of Justice, on brief for appellee.

__________________

                                  __________________

Per  Curiam.     Rahmat  A.  Niazmand  is appealing
                      ___________

            certain  adverse rulings  by the  Tax Court,  rendered in  an

            opinion which had otherwise found in his favor (i.e., that he

            did not owe income taxes for certain tax years).  We affirm.

                      In 1991, the Internal Revenue Service sent Niazmand

            a notice of deficiency stating  that he owed income taxes and

            additions  to tax for  the years  1979-83 and  1985-86, which

            were years  in which Niazmand  had neither filed  tax returns

            nor paid any  income tax.   Niazmand filed a petition  in Tax

            Court, challenging the IRS's determination and  claiming that

            the IRS owed  him a refund since  he had overpaid his  income

            tax in 1978.   He later amended his  petition to seek refunds

            for previous  years because  of losses  incurred in  1978 and

            1979, which he sought to have carried back  to years in which

            he had paid  income taxes.  Thereafter, Niazmand  and the IRS

            entered into  a  stipulation that  Niazmand did  not owe  any

            income tax  for the years  1979-83 and 1985-86 as  claimed in

            the   deficiency   notice.      Niazmand,   however,   sought

            adjudication of two other issues:  whether he was entitled to

            refunds for  the 1975-78 tax  years, and what the  amount and

            nature was of  a loss he had  incurred in 1979.   Evidence on

            those issues was presented at trial.  In addition, with court

            approval,  Niazmand  introduced evidence   to  substantiate a

            claim he intended  to make for  litigation costs,   although,

            under Tax  Court Rule 231,  Niazmand could not file  a motion

-2-

for litigation  costs until  after the court  had served  its

            written opinion.   Soon  after the  trial, however,  Niazmand

            filed  a motion  seeking  permission  to  file a  motion  for

            litigation costs early,  which the Tax Court  denied the same

            day as it served its written opinion.  

                      The  Tax Court found  that Niazmand owed  no income

            tax or  additions to tax  for the years 1979-83  and 1985-86.

            It  also  found  that it  had  no  jurisdiction  to determine

            whether  Niazmand  had made  overpayments (and  thus deserved

            refunds) for the taxable years 1975-78, since the IRS had not

            determined that there  were any deficiencies in  tax paid for

            those  years.  Concerning  Niazmand's claims relating  to the

            1979 loss, the court essentially  said that the only question

            properly  before it  was  whether Niazmand  owed the  IRS any

            income  tax for the years 1979-83 and 1985-86, as the IRS had

            originally claimed.  Since Niazmand had not filed any returns

            or paid any  taxes for those years, however,  the question of

            overpayments  by Niazmand  for  those years  (which  included

            1979) did  not arise.   Moreover, since Niazmand did  not owe

            any income  tax for 1979, the court  concluded that it had no

            need to decide  whether Niazmand had suffered a  loss in 1979

            greater  than  the amount  conceded  by  the IRS,  i.e.,  the

            conceded amount sufficed to show that Niazmand owed no income

            tax for 1979.   (In a  footnote, the court  said that it  was

            "most unlikely" that Niazmand's alleged losses could  qualify

-3-

for   ordinary  loss  treatment  under  26  U.S.C.     1244.)

            Finally, the  court concluded that  it would be  premature to

            decide whether to  award Niazmand his litigation  costs since

            Tax Court Rule 231 required  a motion for litigation costs to

            be  filed  after  service  of  the written  opinion.    In  a

            footnote, the court  indicated that Niazmand was  unlikely to

            prevail on any such motion in any event.  

                      On  appeal,  Niazmand  argues that  the  Tax  Court

            should have determined whether the  IRS owed him a refund for

            pre-1979 tax  years and what  the precise amount of  his loss

            for 1979 was, but he cites no supporting authority.  Niazmand

            also says that the Tax Court ignored an alleged concession by

            the IRS at  trial that Niazmand's litigation  costs should be

            awarded to  him,  and that  he  had had  to file  his  motion

            seeking leave to  file an early  motion for litigation  costs

            because  a  family medical  emergency required  his departure

            from this country.   For the following reasons,  we find that

            his arguments are not persuasive.  

                      First,  it is well  settled that the  Tax Court has

            jurisdiction to  determine a  deficiency or overpayment  only

            for tax  years for  which the  IRS has  sent  the taxpayer  a

            notice of  deficiency, and  that it  may consider  facts from

            other  tax years only  as necessary to  correctly redetermine

            the  taxpayer's liability for the  years for which the notice

            of deficiency  was  sent.   See  Harris v.  Commissioner,  29
                                        ___  ______     ____________

-4-

T.C.M.  (CCH) 1510, 1511 (1970), aff'd, 73-1 U.S.T.C. (CCH)  
                                             _____

            9205 (9th  Cir. 1972);  Crawford v.  Commissioner, 28  T.C.M.
                                    ________     ____________

            (CCH) 909, 910-11 (1969); see  also 26 U.S.C.   6214(b) ("The
                                      ___  ____

            Tax Court in redetermining a deficiency of income tax for any

            taxable year . . . shall consider such facts with relation to

            the  taxes for  other years  or calendar  quarters as  may be

            necessary  correctly  to  redetermine   the  amount  of  such

            deficiency,  but in  so doing  shall have no  jurisdiction to

            determine  whether or  not  the  tax for  any  other year  or

            calendar   quarter  has   been   overpaid  or   underpaid.").

            Therefore, the  Tax Court  had no  jurisdiction to  determine

            that the IRS owed Niazmand  a refund for pre-1979 years since

            the IRS  had not  determined that  Niazmand's income  tax was

            deficient in those years.  

                      Second, if Niazmand  had paid income tax in 1979, a

            year for which the IRS originally asserted a deficiency, then

            it might have been important to determine the exact amount of

            Niazmand's  loss  in  that year  in  order  to determine  his

            taxable income and  the extent of his alleged  overpayment of

            taxes.  But Niazmand did not  pay income tax in 1979, and  so

            he could not  have overpaid his taxes  in that year,  and the

            Tax Court  correctly found that  it had no need  to determine

            the  precise amount of  Niazmand's losses.   Furthermore, the

            IRS had  conceded  that  there was  no  deficiency  in  1979,

            Niazmand had stipulated to the zero deficiency for that year,

-5-

and  the Tax  Court had  accepted  the parties'  stipulation.

            Accordingly, the Tax Court's determination that Niazmand owed

            no income  tax vindicated Niazmand fully with  respect to his

            tax position  in 1979, and  its determination would  not have

            been further aided  by fixing the precise amount  of the 1979

            operating   loss.     At  trial,   Niazmand   suggested  that

            calculating  the operating  loss  was  important because  the

            amount of the  loss could affect his tax  treatment in future

            tax  years.    The  court's   refusal  to  do  so  under  the

            circumstances was  completely  appropriate.   Had  the  court

            fixed the  amount of  the operating  loss, its  determination

            would  not have  affected issues then  before the  court, but

            would essentially  have been an "advisory opinion declarative

            of the deduction petitioner may be able to use in some future

            years."   See  LTV Corporation  v.  Commissioner of  Internal
                      ___  _______________      _________________________

            Revenue, 64 T.C. 589, 593-96  (1975) (the Tax Court  declined
            _______

            to determine  the precise amount of an alleged operating loss

            in part because  the IRS  had conceded  sufficient losses  to

            offset  any deficiencies in  petitioner's income tax  for the

            tax years  before the  court and  the alleged  operating loss

            would  at  most  affect  tax  years  not  before  the court).

            Niazmand remains free to raise  the question of the amount of

            the 1979 operating  loss in litigation concerning  future tax

            years if necessary.  See Chevron Corporation v. Commissioner,
                                 ___ ___________________    ____________

            98  T.C.  590,  592-93  (1992)  (the  Tax Court  declined  to

-6-

reclassify  petitioners'  income  where doing  so  would  not

            affect the taxable years in question and the doctrines of res

            judicata  and collateral estoppel  would not  bar petitioners

            from raising  questions about the  correct classification  of

            the income in future litigation).1

                      Finally,  the IRS  agreed  to  permit  Niazmand  to

            testify at trial  as to his alleged litigation  costs only in

            order to  establish a record on  which he could base  a later

            filed motion  for litigation costs.  The  IRS did not say, as

            Niazmand now  contends, that  an award of  costs to  Niazmand

            should  be  made.    Furthermore, at  trial  the  court  told

            Niazmand  explicitly that Tax Court Rule 231 required motions

            for  litigation costs  to  be filed  only  during the  30-day

            period beginning on the date the Tax Court's  written opinion

____________________

            1.  On appeal, Niazmand claims that his pre-1980 losses would
            affect the amount  of losses for the years  1980-83 and 1985-
            86,  which  were  before  the   court.    His  contention  is
            unavailing  under the  circumstances  present  here.   Before
            trial,  Niazmand   entered  into  a   stipulation  with   the
            government  in which he  agreed that he  had negative taxable
            income for the years in question, in the specific amounts set
            out  in the  stipulation.   He and  the government  submitted
            their stipulation as evidence to  be considered by the  court
            in arriving at its decision.  Niazmand's contention on appeal
            amounts to an attempt to  retract that stipulation, and so we
            reject it.   For the same reason, we  deny Niazmand's request
            to consider his 1986 tax return on appeal (which the clerk of
            this court treated as a  letter motion to expand the record).
            The return was prepared and filed more than a year  after the
            trial in this case, and shows a negative taxable income in an
            amount  different than the amount originally stipulated to by
            Niazmand.

                                         -7-

is  served, and  Niazmand indicated  that  he understood  the

            requirements of the rule.  

                      Niazmand  has not shown that the Tax Court's denial

            of his motion  to file a motion  for costs in advance  of the

            date  the  written  opinion  was  served  was  an   abuse  of

            discretion.   See, e.g.,  Estate of  Shafer v.  Commissioner,
                          ___  ___    _________________     ____________

            749 F.2d 1216, 1218 (6th Cir. 1984) (holding that Tax Court's

            application of its procedural rules are reviewed for abuse of

            discretion).  The  Tax Court routinely requires  taxpayers to

            conform to  the time  requirements of Rule  231.   See, e.g.,
                                                               __________

            Groetzinger  v.   Commissioner,  87  T.C.   533,  548  (1986)
            ___________       ____________

            (rejecting as premature  a motion for litigation  costs filed

            at   the  date  of   the  evidentiary  hearing);   Heller  v.
                                                               ______

            Commissioner, 53 T.C.M. (CCH) 1486, 1490 (1987) (rejecting as
            ____________

            premature   a  motion   for  litigation   costs  filed   with

            petitioner's brief).   

                      Affirmed.
                      _________

-8-