FINAL BRIEF OF APPELLANTS UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA LISA A. EDWARDS & JOSEPHP. THOMAS,

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1 USCA Case # Document # Filed: 01/20/2015 Page 1 of 49 NO ORAL ARGUMENT HAS BEEN SET FOR MARCH 19, FINAL BRIEF OF APPELLANTS UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA LISA A. EDWARDS & JOSEPHP. THOMAS, v. Appellants, COMMISSIONER OF INTERNAL REVENUE, Appellee. APPEAL OF FINAL INCOME TAX DECISION OF THE U.S. TAX COURT January 19, 2019 BRUCEE.GARDNER,ESQ Counsel for Appellants The Gardner Law Firm, P.C Pennsylvania Ave NW Suite 600 Washington, D.C (202)

2 USCA Case # Document # Filed: 01/20/2015 Page 2 of 49 CERTIFICATE AS TO PARTIES, RULINGS, AND RELATED CASE A. PARTIES AND AMICI 1. The parties who have appeared before the U.S. Tax Court in this case are individuals, Joseph P. Thomas and Lisa A. Edwards, and the Commissioner of the Internal Revenue Service. 2. No intervenors or amici appearances have occurred so far in this case. B. RULINGS UNDER REVIEW On December 16, 2013 Special Trial Judge, Lewis R. Carluzzo, in Lisa A. Edwards & Joseph P. Thomas v. Commissioner of Internal Revenue, Docket # dismissed petitioners' and respondent's motions to dismiss for lack of jurisdiction on the issue of whether deficiency notices were issued to the taxpayers as "moot". The judge's sua sponte dismissal order did not state the grounds for the court's lack of jurisdiction. In addition, the Tax Court failed to accept its jurisdiction under 26 U.S.C. 6330(d)(1) to address the illegal levy part of this case. Furthermore, petitioners' Motion for an A ward of Reasonable Administrative & Litigation Costs was denied on the grounds that they were not the prevailing party in the litigation.

3 USCA Case # Document # Filed: 01/20/2015 Page 3 of 49 It must be noted at the hearing held on May 15,2013, respondent acquiesced to the granting of petitioner's cross motion to dismiss for lack of jurisdiction on the deficiency issue and in an order dated June 13, 2013, Judge Carluzzo "dismissed the case for lack of jurisdiction upon the ground that there has been no showing that a notice of deficiency has been issued to either petitioner for any of the years placed in dispute in the petition." C. RELATED CASES The case for review was not previously before this Court or any other court except the U.S. Tax Court from which it was appealed. I certify that the above information is accurate and correct. January 19, 2015 Is/Bruce E. Gardner Bruce E. Gardner, Esq.

4 USCA Case # Document # Filed: 01/20/2015 Page 4 of 49 TABLE OF CONTENTS I. CERTIFICATE AS TO PARTIES, RULING, & RELATED CASES....i II. TABLE OF AUTHORITIES... vi A. Cases... vi B. Statutes... vii C. Other Authorities... viii D. Glossary... viii III. JURISDICTIONAL STATEMENT... x A. Basis of Tax Court's Subject Matter Jurisdiction... x 1. Redetermine Tax Deficiency... x 2. Enjoin Illegal Tax Assessments & Levies... x 3. Levy Collection Action... x 4. Award of Attorney Fees & Costs... x B. Basis for the Court of Appeal's Jurisdiction... xi C. Filing Dates Establishing Timely Appeal Of Final Order... xii IV. STATEMENT OF ISSUES PRESENTED FORREVIEW...l V. STATEMENT OF THE FACTS... 2 A. Sua Sponte Dismissal Did Not State Grounds For Dismissal B. Procedure History Regarding Tax Deficiency... 3 C. IRS Resumed Illegal Collection Actions... 6

5 USCA Case # Document # Filed: 01/20/2015 Page 5 of 49 D. Award of Attorney Fees & Costs... 8 VI. SUMMARY OF ARGUMENTS... 9 A. Tax Court Has Jurisdiction To Determine Whether Taxpayers' Rights To Access The Court Were Violated By The IRS... 9 B. Litigation Costs Motion Was Based On June 13, VII. ARGUMENT A. Standard ofreview B. Grounds For Jurisdictional Dismissal Must Be Stated By Court Judge Stated Ground For Jurisdictional Dismissal......l3 2. Judge Did Not State Grounds For Jurisdictional Dismissal Appellate & Tax Courts State Grounds For Jurisdictional Dismissals Stating Grounds For Dismissal Fosters Compliance With Tax Laws C. The Limited Motion To Vacate Was Only To Allow The Court To Determine The Attorney Fees Claim D. Tax Court Has Jurisdiction To Review The IRS Appeals Office's Arbitrary Determination Not To Issue A Determination Letter E. Taxpayers Are Entitled To Award Of Litigation Costs The Material Facts In Pietanza Exist In This Case... 24

6 USCA Case # Document # Filed: 01/20/2015 Page 6 of The Commissioner Has Accepted The Law Established by Pietanza Appellants Were The Prevailing Parties In The Tax Court VIII. CONCLUSION CERTIFICATE OF COMPLIANCE WITH RULE 32(a) CERTIFICATE OF SERVICE ADDENDUM 1. Order and Order Of Dismissal For Lack of Jurisdiction Dated, December 16, Order dated August 9, Order of Dismissal, dated June 13,

7 USCA Case # Document # Filed: 01/20/2015 Page 7 of 49 A. Table Cases II. TABLE OF AUTHORITIES Butti v. Commissioner, T.C. Memo Gardner v. United States, 211 F.3d 1305 (D.C. Cir. 2000)....10, 17 Goza v. Commissioner, 114 T.C. 176 (2000) Hebert v. National Academy of the Sciences, 974 F.2d 192 (D.C. Cir. 1992) Hori v. US., 782 F.2d 227 (D.C. Cir.1986) Jones v. Lujar, 883 F.2dc1031 (D.C. Cir. 1989) Koener v. Commissioner, T.C. Memo Monge v. Commissioner, 92 T.C. 22 (1989) * Pietanza v. Commissioner, 92 T.C. 729 (1989), affd. without published opinion, 935 F.2d 1282 (3rd Cir. 1991)... 9, 12, 14, 15, 16, 24, 25, 26, 27, 28 *Pickell v. Commissioner, T.C. Memo , 23 Pyo v. Commissioner, 83 T.C. 626 (1984)... 14, 16 Sego v. Commissioner, 114 T.C. 604 (2000) *Shelton v. Commissioner, 63T.C. 193 (1974)....ix,14, 15, 16 Steel Co v. Citizens for a Better Environment, 583U.S. 83 (1998)... ix, 10 United States v. Zolla, 724 F.2d 808 (9th Cir. 1984) *Welch v. United States, 678 F.3d 1371 (Fed.Cir. 2012)... 15, 16, 24, 25, 27,28 Woodral v. Commissioner, 112 T.C. 19 (1999)... 22

8 USCA Case # Document # Filed: 01/20/2015 Page 8 of 49 Authorities upon which we chiefly rely are marked with asterisks. B. Table of Statutes 26 U.S.C. 6212(a)... 3, 8 26 U.S.C. 6212(b)...3, 4, 12, 13,28 26 U.S.C. 6213(a)...ix, 1, 4, 8, 9, 10, 12, 17, 20, U.S.C. 6214(a)...ix, 9, U.S.C X' 8, U.S.C. 6330(a)... 3, 4, 9, 13, 14, 15, U.S.C. 6330(b) u.s.c. 6330(d) U.S.C. 6330(d)(1)... X, 3,7, 13, U.S.C. 6330(e)(l)... x, 6, u.s.c , 4, 8, 19, U.S.C. 7430(c)(4) U.S.C. 7430(c)(4)(B)...11, U.S.C. 7430(c)(4)(B)(i) U.S.C. 7430(c)(4)(B)(iii)... 12, U.S.C X, 9 26 U.S.C xi

9 USCA Case # Document # Filed: 01/20/2015 Page 9 of 49 C. Table of U.S. Tax Court Rules & Other Authorities Rule 34(b) IRM (2)(A)... 7, 21 IRM (15)... 6 IRM , 26 IRM GLOSSARY D.C.= Washington, D.C. IRC= Internal Revenue Code/ 26 U.S.C. IRS = Internal Revenue Service/Commissioner IRM- Internal Revenue Manual L= lines T.C. =U.S. Tax Court

10 USCA Case # Document # Filed: 01/20/2015 Page 10 of 49 III. JURISDICTIONAL STATEMENT "Every court has judicial power to hear and determine, and inquire into, its own jurisdiction and to decide all questions, the decision of which is necessary to determine the questions of jurisdiction. " Shelton v. Commissioner, 63 T.C. 193, 198 (1974); Steel Co. v. Citizens for a Better Environment, 583 U.S. 83, 96 (1998). Where jurisdiction is lacking because the IRS failed to issue a proper notice of deficiency, the Tax Court will dismiss on that ground. Shelton at 196. A. Basis of Tax Court's Subject Matter Jurisdiction 1. Redetermine Tax Deficiency 26 U.S.C. 6214(a) grants the U.S. Tax Court jurisdiction to redetermine the correct amount of an income tax deficiency. 26 U.S.C. 6213(a), grants the U.S. Tax Court jurisdiction to redetermine the deficiency and determine whether a deficiency notice was mailed to the taxpayer's before the tax deficiency is assessed and assets are levied. 2. Enjoin Illegal Tax Assessments & Levies Section 6213(a) also grants the Tax Court authority to enjoin an

11 USCA Case # Document # Filed: 01/20/2015 Page 11 of 49 IRS assessment or levy that is not preceded by mailing a deficiency notice to the taxpayers. 3. Levy Collection Action. 26 U.S.C. 6330(d)(l) grants the U.S. Tax Court jurisdiction to review cases involving IRS levy actions. 26 U.S.C. 6330(e)(l) grants the Tax Court the authority to enjoin a levy or proceeding when a timely administrative IRS appeal has been filed under (d)( 1) with respect to matters related to an unpaid or proposed levy action. 4. Award of Attorney Fees & Costs 26 U.S.C. 7430(f)(l) provides the court has the authority to award reasonable litigation costs and administrative costs in connection with the determination, collection, or refund of any tax, interest, or penalty to the prevailing party. B. Basis for the Court of Appeal's Jurisdiction 26 U.S.C grants the United States Court of Appeals with exclusive jurisdiction to review the decisions of the Tax Court. 26 U.S.C provides "review of a decision of the Tax Court shall be obtained by filing a notice of appeal with the clerk of the Tax Court within 90 days after the decision of the Tax Court

12 USCA Case # Document # Filed: 01/20/2015 Page 12 of 49 is entered." C. Filing Dates Establishing Timely Appeal Of Final Order. On December 16, 2013, the Tax Court entered a final order in the case of Lisa A. Edwards & Joseph P. Thomas v. Commissioner of Internal Revenue, Docket # Said final order disposed of all the parties' claims. On January 6, 2014 the taxpayers timely filed their notice of appeal.

13 USCA Case # Document # Filed: 01/20/2015 Page 13 of 49 IV. STATEMENT OF ISSUES PRESENTED FOR REVIEW. 1. Whether the judge is required to comply with established precedent set by the Tax Court and state the grounds for the dismissal for lack of jurisdiction since the grounds have legal significance to determine whether the taxpayers were afforded their statutory rights to due process of law and their petition was merely filed late or the IRS' tax assessments and levies are illegal pursuant to IRC 6213(a) because no deficiency notices were ever created or mailed to them. 2. Whether the taxpayers' "limited motion to vacate" the June 13, 2013 order granted by the court on August 9, 2013 allowed the judge to substantially change that order and issue a new order to dismiss for lack of jurisdiction without explanation, thereby mooting the taxpayers' litigation costs claims. 3. Whether the Tax Court had jurisdiction under 26 U.S.C. 6330(d) (1) to review levy actions for the 2008 tax year when an administrative IRS appeal was timely was held but the IRS' Appeals Office intentionally failed to issue a determination letter after the March 19, 2013 collection due process hearing was held.

14 USCA Case # Document # Filed: 01/20/2015 Page 14 of Whether the taxpayers are entitled to an award of litigation costs pursuant to 26 U.S.C when they satisfied all the requirements of the statute and Appellee has conceded the taxpayers are entitled to litigation costs even though the amount to be awarded is contested. V. STATEMENT OF THE FACTS A. Sua Sponte Dismissal Did Not State Grounds For Dismissal. This case involves Judge Carluzzo sua sponte dismissal of this case for lack of jurisdiction. The sua sponte dismissal was made after a limited motion to vacate was filed so the taxpayers' Motion for an Award of Reasonable Administrative & Litigation Costs could be considered. At the August 7, 2013 hearing the judge stated he would not change his June 13, 2013 order when he was reviewing the taxpayer's litigation cost claim. [217,Ll-4]. However, the judge materially changed the grounds for his jurisdictional dismissal. The judge also denied the taxpayers' motion for litigation costs even though they satisfied all the requirements of26 U.S.C and the litigation cost portion of the motion was uncontested by Appellee except as to the amount of the award the taxpayers were entitled to receive. [229, ftn5; 234]

15 USCA Case # Document # Filed: 01/20/2015 Page 15 of 49 B. Procedure History Regarding Tax Deficiency. The procedural history of this case and the facts are clear and basically not in dispute. Appellant, Joseph P. Thomas is a retired detective of the District of Columbia Metropolitan Police Department and his estranged spouse is a medical billing clerk. On September 17, 2012, taxpayers, Lisa A. Edwards and Joseph P. Thomas filed a U.S. Tax Court petition concerning the 2007 and tax years. [1-12] Their joint petition was filed because the IRS violated their rights to due process of law. First, the IRS took the taxpayers' assets prior to mailing them deficiency notices for either the 2007 or 2008 tax years as mandated by IRC 6212(b). The IRS' actions denied the taxpayers an opportunity to be heard prior to the taking of their assets which was prohibited by 6213(a). Second, the IRS seized the taxpayers' income tax refund checks, wages, and bank accounts prior to mailing them a Final Notice of Intent to Levy as required by IRC 6330(a) and 6331(d)(l) for either the 2007 or 2008 tax years. Subsequently, the IRS mailed taxpayer Thomas a Final Notice of Intent To Levy for the 2008 tax year but it never mailed the taxpayers a 2007 levy notice. 1 Only Appellant Thomas petitioned the Tax Court for the 2008 tax year.

16 USCA Case # Document # Filed: 01/20/2015 Page 16 of 49 The relief requested in the taxpayers' petition were authorized by IRC 6213(a) and 6330(a) except the award for attorney fees which was authorized under IRC The taxpayers specifically requested the Tax Court to hold that no deficiency notices for either the 2007 or 2008 tax years had been mailed to them, thereby, voiding the August 16, 2010 tax assessments made by the IRS for those tax years, enjoin the IRS from future collection action against them for said tax years, order the return of the money taken based on the illegal tax assessments, as well as, award attorney fees. [11-12]. The IRS filed a motion to dismiss the taxpayers' petition because it was filed late. The IRS' motion to dismiss alleged deficiency notices were sent to the taxpayers but was silent on its failure to issue Final Notices of Intent To Levy to the taxpayers prior to levying their assets. The taxpayers' opposed the IRS' motion and filed a cross motion to dismiss on the grounds that the IRS never created the deficiency notices for either the 2007 or 2008 tax years and therefore could not have mailed them to the taxpayers, as required by IRC 6212(b). [25-84; ]. The IRS filed an opposition to the taxpayers' cross motion but at the May 15, 2013 hearing acquiesced to the granting of the taxpayers' motion. [168,L3-4]. The IRS' failure to mail Final Notices of Levy was never

17 USCA Case # Document # Filed: 01/20/2015 Page 17 of 49 answered by the government. At the May 15, 2013 hearing, Judge Carluzzo granted the taxpayers' motion to dismiss on the grounds "that there has been no showing that a notice of deficiency has been issued to either petitioner for any of the years placed in dispute in the petition." [ ]. The Order of Dismissal was dated June 13, The issue concerning the IRS' failure to mail the taxpayers a Final Notice of Levy for the 2007 and 2008 remained before the tax court for consideration. [166,L16-21.] On July 11, 2013, the taxpayers filed a timely Motion for an Award of Reasonable Administrative and Litigation Costs. [ ]. The Tax Court required the June 13, 2013 dismissal order be vacated before the tax court would consider the attorney fee award, even though, the fee request was stated in the taxpayers' prayer for relief. [206,L.7-18; ]. On July 11, 2013, the taxpayers also requested "an Order to vacate the Order of Dismissal dated June 13, for the limited purpose of considering their Motion For An Award of Reasonable Administrative & Litigation Costs,..." [emphasis added] [ ]. A hearing was held on August 7, on the motion to vacate and the related attorney fee claim. By order dated August 9, 2013 the Tax Court granted the

18 USCA Case # Document # Filed: 01/20/2015 Page 18 of 49 taxpayers' limited request to vacated the June 13, 2013 order so it could consider the attorney fees motion. [ ]. On December 16, 2013, Judge Carluzzo issued an order denying the taxpayers' motion for attorney fees, dismissing the case sua sponte for lack of jurisdiction without stating why the court lacked jurisdiction, and held the taxpayers' and the IRS' motion to dismiss for lack of jurisdiction was moot. [ ]. Since the judge did not state the grounds for dismissal, the IRS took the position that it was not barred from pursuing collection enforcement actions against the taxpayers and it seized more of the taxpayers' assets. The sua sponte dismissal also dismissed the IRS' failure to issue the taxpayers' Final Notices of Intent to Levy for the 2007 and 2008 tax years which the government never filed a response to. [1] C. IRS Resumed Illegal Collection Actions. On or about June 9, 2014, the IRS seized $5, of Joseph Thomas' 2013 income tax refund despite the fact a Request for a Collection Due Process (CDP) Hearing for the 2008 tax year had been pending since September 21, 2012.[78-79]. Pursuant to 26 U.S.C. 6330(e)(1) and IRM (15) the timely filed CDP hearing request suspended all collection enforcement actions by the IRS until that matter was resolved but that tax law also did not stop the IRS from levying.

19 USCA Case # Document # Filed: 01/20/2015 Page 19 of 49 Even though the IRS Appeals Office held a hearing on that CDP request on March 19, 2013 after the Tax Court petition was filed, no determination letter was ever issued to taxpayer Thomas so he could appeal an unfavorable decision to the Tax Court. [163,L ] On October 25, 2013, the IRS took the position that the CDP proceeding was moot because the 2008 tax year was currently before the tax court. [228]. However, the issue before the tax court had been dismissed on June 13, 2013, yet no determination letter was ever issued by appeals to allow the taxpayer to exercise his rights under IRC 6630(d)(l). [164,168] At the May 15, 2013 hearing, the court was informed of the September 21, 2012 CDP hearing request and it stated that matter may come up down the road when a Notice of Determination for 2008 was issued. [ ]. IRM (2A) states the Appeals Office ensures a prompt conference and prompt decision to accomplish its mission. It has been about 2 years since the CDP hearing request was made by taxpayer Thomas, it has been over 1 year since the hearing was held, and taxpayer Thomas still has not received a decision during that time, while the IRS continued to illegally take his money. When the IRS was contacted about the refund seizure they stated the taking of the taxpayer's 2013 refund was an "offset" that is not

20 USCA Case # Document # Filed: 01/20/2015 Page 20 of 49 considered a collection action barred by IRC Yet the IRS never established a notice of deficiency was ever created and mailed to this taxpayer for the 2008 tax year, as required by IRC 6212(b) & 6213(a), to establish a valid August 16, 2010 tax assessment upon which the IRS could use to seize this taxpayer's tax refund. The judge's sua sponte ruling, was a back door way of approving the IRS' failure to prove it created the deficiency notices that were required to be mailed to the taxpayers. The ruling opened the door for the IRS' illegal collection actions to continue. D. Award of Attorney Fees & Costs The taxpayers satisfied all the requirement of 7430 and based on the June 13, 2013 order and the Pietanza 2 case they were the prevailing party in the litigation. The IRS did not contest the taxpayers' entitlement to litigation costs but contested the amount to be awarded. [229, ftn5]. In response to the taxpayers' attorney fee motion, Judge Carluzzo reversed the position he took in the June 13, 2013 order that no deficiency notices had been sent to the taxpayers and instead dismissed the case sua sponte for lack of jurisdiction without stating why the court 2 Pietanza v. Commissioner, 92 T.C. 729 (1989), ajjid without published opinion, 935 F.2d 1282 (3rd Cir. 1991).

21 USCA Case # Document # Filed: 01/20/2015 Page 21 of 49 lacked jurisdiction. Furthermore, the judge stated the taxpayers' reliance on Pietanza, a case in which the Commissioner has acquiesced and is specifically cited in his Internal Revenue Manual , is misplaced because the IRS' position was "substantially justified". Yet, the IRS never produced the deficiency notices it alleged were mailed to the taxpayers. VI. SUMMARY OF ARGUMENT A. Tax Court Has Jurisdiction To Determine Whether Taxpayers' Rights To Access The Court Were Violated By The IRS. The Tax Court has jurisdiction over cases when the IRS fails to issue taxpayers notices of deficiency to prevent them from seeking redeterminations of the deficiency. 26 U.S.C. 6214(a) ; 26 U.S.C. 6213( a). Similarly the Tax Court has jurisdiction over cases when the IRS levies a taxpayer's assets without first issuing a Final Notice of Intent to Levy to prevent them from appealing the IRS collection action or obtaining a letter of determination. 26 U.S.C. 6330(a),(b),(d). Finally, the Tax Court has jurisdiction over cases when the IRS Appeals Office denies the taxpayer his statutory rights to obtain judicial review ofthe IRS' levy actions by not promptly issuing a letter of determination. Pickell v. Commissioner, T.C. Memo ; 26 U.S. C. 6330( d). All of those situations have occurred

22 USCA Case # Document # Filed: 01/20/2015 Page 22 of 49 in this case but the tax court judge refused to accept subject matter jurisdiction to determine its jurisdiction over any of those matters, which resulted in multiple violations of the taxpayers' statutory and U.S. Constitutional rights to due process of law. It is well settled that subject matter jurisdiction is the power given to the courts to declare the law and when jurisdiction does not exist, the only function remaining for the court is stating the grounds for dismissing the action. Steel Co. v. Citizens for a Better Environment, 583 U.S. 83,94 (1998). In this case, the judge's sua sponte dismissal warranted an explanation of why he decided the court lacked jurisdiction on issues in this case, especially, with regards to the redetermination of the tax deficiency. If no deficiency notices were created to mail to the taxpayers then 6213(a) prohibited the tax assessments and levies against the taxpayers which made the IRS' action unlawful. On the other hand, if the notices were mailed to the taxpayers then their petition would be late and they would have no prepayment redress in Tax Court. Gardner v. US, 211 F.3d 1305, 1312 (D.C. Cir. 2000). So it was important for the judge to state why the court lacked jurisdiction. B. Litigation Costs Motion Was Based On June 13,2013.

23 USCA Case # Document # Filed: 01/20/2015 Page 23 of 49 The taxpayers' motion for attorney fees was based on the Tax Court's June 13, 2013 order that there was no showing the IRS issued notices of deficiency for the 2007 or 2008 tax years. The "limited motion to vacate" the June 13, 2013 order did not allow the judge to change that order but rather to consider the motion for attorney fees and incorporate in it that order. The judge stated he would not change his order. [217,L14, 3-4.] For if the judge was allowed to substantially change the order, as he did, in favor of the IRS then the taxpayers would not be the prevailing party. Furthermore, in light of the fact the taxpayers' prayer for relief requested attorney fees, the judge could have allowed the taxpayers 30 days from the May 15, 2013 hearing date to submit their motion for attorney fees and incorporate both decisions in his June 13, 2013 order but he did not. The IRS agreed that the taxpayers were "the prevailing party" in the litigation based on the June 13, 2013 order and the taxpayers were entitled to attorney fees for litigation costs. [229,ftn5]. The amount of the attorney fees was being negotiated between the parties prior to the judge's December 16, 2013 sua sponte dismissal. The tax court judge stated "respondent established that his position in the proceeding is substantially justified. See sec. 7430(c)(4)(B)". However, the IRS never argued that issue in response to the litigation costs, the IRS

24 USCA Case # Document # Filed: 01/20/2015 Page 24 of 49 asserted only that its administrative position was substantially justified and the taxpayers were not entitled to an award of administrative costs. The Third Circuit's affirmation of the Tax Court's decision in Pietanza and 7430 (c)(4)(b)(iii) support a determination that the IRS' litigation position was not substantially justified. The judge did not reference 7430 (c)(4)(b) (iii) in his order, even though, it appears he disagreed with the precedent set by the Tax Court and approved by the Third Circuit Court of Appeals in Pietanza. VII. ARGUMENT A. Standard of Review Issues of law are reviewed de novo. Jones v. Lujan, 883 F.2d 1031, 1037 (D.C. Cir.1989); Herbert v. National Academy of the Sciences, 974 F.2d 192, 197 (D.C. Cir. 1992); Hori v. US, 782 F.2d 227, 241 (D.C. Cir. 1986); The issues for appellate review involves interpretation and application of the statutes stated in the jurisdictional section of this brief as well as, 26 U.S.C 6212(b), 6630(a); 26 U.S.C. 7430(c)(4) and the due process clause of the U.S. Constitution. B. Grounds For Jurisdictional Dismissal Must Be Stated By Court. The IRS determined the taxpayers owed tax deficiencies of$9, and $12, respectively for the 2007 and 2008 tax years. IRC 6213(a)

25 USCA Case # Document # Filed: 01/20/2015 Page 25 of 49 requires the IRS to mail the taxpayers notices of deficiency or it is prohibited from assessing the tax and levying assets to collect the tax. The deficiency notices allow the taxpayer to contest the IRS' determination without first paying the tax. IRC 6330(a) states no levy can be made unless the IRS has notified the taxpayer of their right to a hearing. The taxpayers never received the deficiency notices or Final Notices of Intent to Levy but the tax was illegally assessed and illegally levied their assets. The taxpayers filed a petition with the Tax Court for a redetermination that no taxes were owed the IRS because the 6212 (b) deficiency notices had not been mailed to them. In addition, the 6330(a) notices had not been mailed to the taxpayers so the IRS was prohibited from taking their assets. The Tax Court had jurisdiction to decide its jurisdiction of the above issues based on 26 U.S.C. 6214(a), 6213(a) and 6330(d)(1). The judge was required to state the grounds for the jurisdictional dismissal in order to prevent the IRS from continuing to violate the tax laws and to comply with the statutory notice requirements. 1. Judge Stated Ground For Jurisdictional Dismissal. The Tax Court has jurisdiction to determine whether it has jurisdiction. Pyo v. Commissioner, 83 T.C. 626, 632 (1984). The Tax Court has jurisdiction to determine the reason why it does not have jurisdiction.

26 USCA Case # Document # Filed: 01/20/2015 Page 26 of 49 Monge v. Commissioner, 92 T.C. 22, 27 (1989). When at any time and in any manner it is presented to the Court that it does not have jurisdiction, the Court must examine and state the grounds for its jurisdiction or lack thereof. Shelton v. Commissioner, 63 T.C. 193, 198 (1974). Judge Carluzzo held a hearing on the tax deficiency motions, adhered to precedent established by the Tax Court and issued an order dated June 13, 2013 in favor of the taxpayers. The order stated the grounds for the jurisdictional dismissal was that the IRS made no showing that deficiency notices for either tax year had been issued to the taxpayers. The grounds for the jurisdictional dismissal had independent legal significance. The results of the June 13, 2013 order meant the IRS' August 16, 2012 tax assessments were invalid, the levy actions were illegal, and the money seized from the taxpayers based on the invalid tax assessments would be returned to them. Shelton at Judge Did Not State Grounds For Jurisdictional Dismissal. In light of the fact the taxpayers prevailed on the most significant litigation issue they sought attorney fees from the IRS. To have the attorney fee claim considered the taxpayers were required to get the June 13, 2013 dismissal order vacated. They submitted a limited request for an order to vacate the dismissal so Judge Carluzzo could consider the attorney fee

27 USCA Case # Document # Filed: 01/20/2015 Page 27 of 49 claim. However, on December 16, 2013, the judge denied the claim and then sua sponte dismissed the entire case for lack of jurisdiction without stating the grounds for either the tax deficiency or section 6330(a) dismissal. The effect of the judge's order validated the IRS' illegal tax assessments and its illegal levy actions by not affecting the validity of deficiency notices the IRS alleged they created and mailed to the taxpayers, which they never proved. Shelton at 197; Pietanza 736. The dismissal also gave the IRS additional time to create deficiency notices where none previously existed. The order did not address why the judge elected not to follow the precedent set by the Tax Court in Pietanza, that the IRS had to produce a copy of the deficiency notice and the date it was mailed to prevail. Id. at 736; Welch v. US. 678 F.3d 1371 (Fed. Cir. 2012). This order did not acknowledge the IRS' acquiesced to the granting the taxpayers' motion to dismiss made at the May 15, 2013 hearing or that the Commissioner cites the Pietanza case in his manual for his employees to follow. [20,L3-4]. The order also does not address the fact that the IRS never alleged they mailed the section 6330(a) notices to the taxpayers prior to taking levy actions against them. 3. Appellate & Tax Courts State Grounds For Jurisdictional Dismissals.

28 USCA Case # Document # Filed: 01/20/2015 Page 28 of 49 The Tax Court and various federal appellate courts who have addressed tax deficiency notice issues have all stated the grounds for the court's lack of subject matter jurisdiction. Pietanza 735; Welch v. US, 678 F.3d 1371 (Fed.Cir.2012); Pyo; Shelton at 195. The Tax Court in Pietanza stated "Our task is to decided whether we lack jurisdiction because no statutory notice of deficiency has been issued or because a valid notice was issued but the petition was not timely." Id at 735; Shelton at 195. "If jurisdiction is lacking because of respondent's failure to issue a valid notice of deficiency, we will dismiss the case on that ground, rather than for lack of a timely filed petition." Id. Thus, it is imperative to state the grounds for lack of jurisdiction to determine the parties rights and whether the IRS has complied with the tax laws. Otherwise, the IRS would not be compelled to comply with the statutory notice requirements which in turn would prevent taxpayers from exercising their due process rights before the Tax Court, where they can resolve tax matters prior to payment. The alternative would require taxpayers to prepaid the tax, if they could, and file refunds claims in the District or Claims Courts because the IRS violated the tax laws. 4. Stating Grounds For Dismissal Fosters Compliance With Tax Laws. In Gardner, this Court has addressed the issue that 6213(a) establishes "the Service's authority and responsibility to send a notice of

29 USCA Case # Document # Filed: 01/20/2015 Page 29 of 49 deficiency to a taxpayer prior to initiating proceedings to assess the deficiency". Gardner v. US., 211 F.3d 1305, 1311 (D.C. Cir. 2000). In Gardner, this Court stated the purpose of 6213(a) is to preserve the taxpayer's right to litigate his tax liability in Tax Court before paying the tax." Id. In addition, 6213(a) flatly prohibits the Service from making an assessment and levying until a notice of deficiency is mailed to the taxpayer. Id "[T]he purpose of the statute which created the Tax Court,... was to provide taxpayers with means of obtaining a judicial determination of their tax liabilities without having to pay the deficiencies first." Shelton at 197. That purpose would be defeated if the grounds for the jurisdictional dismissal is not stated and the taxpayers are forced to seek relief in the District or Claims Court or forfeit the relief because of their inability to pay. Thus, the grounds for jurisdictional dismissals in this case were required to be stated by the judge. C. The Limited Motion To Vacate Was Only To Allow The Court To Determine The Attorney Fees Claim. The taxpayers stated on pages 10, 11, and 12 of their September 17, 2012 petition that they wanted the Court to award them attorney fees if they prevailed in this case. Tax Court Rule 34(b) provides requests for litigation cost are not to be included in the petition.[208,l11-17]. The attorney fee

30 USCA Case # Document # Filed: 01/20/2015 Page 30 of 49 claim was not discussed at the May 15, 2013 hearing and was not mentioned in the court's June 13, 2013 order. On July 11, 2013 the taxpayers filed a motion for an order to vacate the Order of Dismissal dated June 13, 2013 for the limited purpose to have their Motion For An Award of Reasonable Administrative & Litigation Costs considered by the court.[ ]. The IRS did not oppose the motion to vacate and the court held a hearing on that motion on August 7, At the August 7, 2013, hearing the court recognized the petitioners agreed with the court's June 13, 2013 grounds for dismissal but they wanted the court to consider awarding them litigation costs. [206 L 7-11] The court stated mechanically the petitioners had no opportunity to actually make a request for litigation costs because a hearing was held then an Order of Dismissal followed. [206 L 7-1 OJ. The court also stated there was a difference in vacating a judgment in a deficiency case and collection case, where there is an opinion resolving the substantive issues, and in the current case dismissed for lack of jurisdiction. In the current case, the IRS has not produced the deficiency notices they alleged were mailed to the petitioners. [209,L6-25]. Granting the motion to vacate would allow the IRS at least an additional 60 days to find the deficiency notices it claims were lost in the mail by the Memphis Service Center and supplement its motion to dismiss

31 USCA Case # Document # Filed: 01/20/2015 Page 31 of 49 on the grounds the petition was late since no ruling would exists. [21 0, 211,L 3-7]. During the hearing petitioners informed the court they had been discussing the attorney fees issue with the IRS and to date it had not been resolved. [212, L,3-4]. A review of 26 U.S.C and the Tax Court rules do not state a Motion to Vacate has to be filed for the court to consider an award of litigation costs. We submit the attorney fees are collateral issues to the merits that can be addressed separately. Furthermore, the Equal Access to Justice Act, which 26 U.S.C was patterned after, does not require the decision be vacated but rather the attorney fees claim must be submitted within 30 days from the date of the decision. [212,L6-25]. It would be unfair for the IRS to be allowed to revisit the underlying merits of the case while the court is considering the motion for attorney fees. [212,L15-18]. The court should have been able to rule on the motion for attorney fees without having to vacate the underlying ruling like the U.S. District Court does when applying 26 U.S.C However, the court stated it did not see how it could do that. [215L25; 216L23-25]. The motion to vacate was limited to allow the court only to determine attorney fees. The judge stated, " I am not going to revisit what I've already ordered under what has thus far been presented." [217,L 3-4]. The

32 USCA Case # Document # Filed: 01/20/2015 Page 32 of 49 petitioners reasonably relied on the judge's statement in their decision to go forward with their motion to vacate. No new evidence was presented to the judge from the date of the August 7, 2013 hearing through the December 16, 2013 order of dismissal, yet the judge materially changed the substance of his dismissal order by not restating the grounds why the court lacked jurisdiction over petitioners' deficiency and collection cases. The judge should be bound by his statement that he was not going to revisit his June 13th order absent new evidence from the IRS. Accordingly, the June 13th order should be reinstated and supplemented to specifically state "the August 16, 2010 tax assessments for the 2007 and 2008 tax years violate IRC 6213(a) and all money taken from the taxpayers based on those tax assessment must be returned to them." D. Tax Court Has Jurisdiction To Review The IRS Appeals Office's Arbitrary Determination Not To Issue A Determination Letter. Section 6330(d)(1) grants the Tax Court jurisdiction to review determinations made by the Appeals Office in connection with the section 6330 hearings. We submit the Tax Court also has jurisdiction to review cases in which a 6330 hearing occurred and the Appeal Office made a determination not to issue a determination letter to prevent the taxpayer from seeking review of its decision. Sego v. Commissioner, 114 T.C. 604,

33 USCA Case # Document # Filed: 01/20/2015 Page 33 of (2000) [IRS cannot defeat Tax Court review of the determination letter by deliberately refusing to issue it to the taxpayer.] Internal Revenue Manual (2)(A) states the Appeals Office will provide a prompt conference and prompt decision in each case. On April20, 2012, the IRS levied taxpayer Thomas' U.S. Senate Federal Credit Union account. On July 7, 2012, the IRS levied this taxpayer's retirement wages from the District of Columbia Metropolitan Police Depatiment. [161,L17-25]. On August 20, 2012 the taxpayer's counsel called the IRS for an explanation of the levies since no deficiency notice had been issued and no Final Notice of Intent to Levy had been issued. On August 24, 2012, the IRS mailed the taxpayer a Final Notice of Intent to Levy for the 2008 tax year and the same day the IRS took the taxpayer's 2011 tax refund. [76;162 L,7-15]. On September 12, 2012, Appellant Thomas timely filed a request for a collection due process hearing for the 2008 tax year.[78-79]. On March 19, 2013, the CPD hearing was held. Based on conversations with the Settlement Officer months later, he stated no determination letter would be issued while the 2008 tax year matters were pending before the Tax Court. However, the Tax Court case was dismissed on June 13,2013 and no determination letter was ever issued.

34 USCA Case # Document # Filed: 01/20/2015 Page 34 of 49 On October 25, 2013, IRS counsel filed a response to petitioners' motion for attorney fees. Page 7 of that response states Appellant Thomas' CDP proceeding is "moot" because it was filed after the taxpayers September 17, 2012 Tax Court petition was filed. [228] Yet, the Settlement Officer has not issued a determination letter on the pending case and on June 9, 2014 the IRS took Appellant Thomas' 2013 tax refund. Section 6330(e) (1) states levy action will be suspended while the case is in Appeals but the levy action have not been suspended and the Appeal Office deliberately refuses to issue the letter of determination so the taxpayer can exercise his right of Tax Court review. In reviewing the actions of determination letters issued by the IRS Appeals Office, the Tax Court has the authority to review them de nov with respect to the underlying liability and for abuse of discretion with respect to all other determinations. Goza v. Commissioner, 114 T.C. 176, (2000); Sego at 610. The IRS Appeals Office has made an arbitrary, capricious, determination not founded in fact or law to deny Appellant Thomas' a formal determination letter. Woodral v. Commissioner, 112 T.C. 19, 23 (1999). The Appeals Office determination not to issue a determination letter must be reviewable before the Tax Court in the same way the Tax Court can review tax deficiency matters when the IRS fails to issue taxpayers notice of deficiencies. Pickell

35 USCA Case # Document # Filed: 01/20/2015 Page 35 of 49 v. Commissioner, T.C In Pickell, no notice of determination was issued to the taxpayer because he did not respond to the final notice of intent to levy mailed to his last known address. The Tax Court in Pickell held it did not have jurisdiction and stated the grounds for dismissal would allow the IRS to either levy the taxpayer's assets or invalidate the notice of levy. In this case, taxpayer Thomas received the 6330( a) final notice of intent to levy and timely filed a CDP hearing request, as well as, attended the administrative hearing but no determination letter was issued. Accordingly, this Court should hold the 2008 levy on taxpayer Thomas is invalid and all assets taken from him including his tax refunds should be returned to him forthwith. E. Taxpayers Are Entitled To Award Of Litigation Costs. On July 11, 2013 the taxpayers filed a motion for administrative and litigation costs pursuant to IRC The taxpayers satisfied all the IRC 7430 requirements for their attorney fee claim. The IRS filed a response to the taxpayer's motion on October 25, 2013 and agreed the taxpayers were entitled to litigation costs but contested the amount. By order dated December 16, 2013, Judge Carluzzo denied all the taxpayer's claims for attorney fees.

36 USCA Case # Document # Filed: 01/20/2015 Page 36 of 49 The judge did not follow the precedent followed by the Tax Court in Pietanza as his basis for denying the claim. The issue in Pietanza was whether the deficiency notice was ever created. The judge incorrectly relied upon the 9th Circuit decision in Zolla 3 where the issue was did the IRS mail the deficiency notice to the taxpayer's last known address. Like Pietanza, the taxpayers in this case asserted the deficiency notices never existed so the IRS had the burden of both producing a copy of the deficiency notices prepared to be mailed and proving that the notices were actually mailed to the taxpayers' last known address. Pietanza 736; Welch at 1379, The IRS could not produce a copy of the deficiency notice prepared to the taxpayers so there was no presumption that U.S. Postal Form 3877 produced by the IRS was evidence that the deficiency notices were mailed to the taxpayers. Pietanza 736; Welch at 1380 In addition, the Form 3877 submitted by the IRS was defective and therefore unreliable because it was not prepared in accordance with Internal Revenue Manual The IRS manual requires Form 3877 be certified and stamped "Statutory Notice of deficiencies for the year(s) indicated have been sent to the following taxpayers". Pietanza at 747. Thus the Form 3877 produced by the IRS at best indicated nothing more than an envelope was 3 United States v. Zolla, 724 F.2d 808 (9th Cir. 1984)

37 USCA Case # Document # Filed: 01/20/2015 Page 37 of 49 mailed to the taxpayers.jd The Material Facts In Pietanza Exist In This Case. Judge Carluzzo elected not to follow the precedent set by the full Tax Court and approved by the Third Circuit in Pietanza. He stated on page 3 of his order that the holding in Pietanza was limited to "the unusual facts present" in that case. However the material facts present in Pietanza also exist in this case. In Pietanza, as here, the Commissioner : 1. lost the administrative file, 2. had no copies of a notice of deficiency, 3. did not establish a final notice of deficiency ever existed, 4. relied on Postal Service Form 3877, & 5. the taxpayers' counsel received no communications from the IRS prior to filing the petition of the existence of a notice of deficiency despite numerous letters written to the IRS requesting the basis for the collection oftaxes.jd. 747, ; Butti v. Commissioner, T.C. Memo : Welch at The Federal Circuit in Welch also follows the Pietanza case and stated, "Abstract references to office procedures not tied to either an identifiable notice of deficiency or clear evidence of the mailing of the same are insufficient to give rise to a presumption of official regularity." Id at In this case, the IRS provided a declaration from an IRS supervisor

38 USCA Case # Document # Filed: 01/20/2015 Page 38 of 49 in the technical services branch in Baltimore, Maryland to describe how deficiency notices in general are processed but she had no personal knowledge of the existence or creation of the 2007 and 2008 deficiency notice allegedly prepared for Appellants. [19-22] In this case, as in Koerner, no other postal records, such as Postal Service Form 3849, showing the delivery or attempted deliver of the article listed on Form 3877 were presented. Koerner v. Commissioner, T.C ; Welch Thus, there is no material difference between the facts and issues in Pietanza and this case. Accordingly, the judge was required to follow the precedent established by the Tax Court in Pietanza as the basis of his decision and he did not! 2. The Commissioner Has Accepted The Law Established by Pietanza, A review of Internal Revenue Manual shows the Commissioner specifically cites the Pietanza case in this section of his manual. IRM states: "A copy [of the notice of deficiency] is kept in the case file as evidence that the notice of deficiency was sent to the taxpayer. See Pietanza v. Commissioner, 92 T.C. 729 (1989). The file is then retained by the issuing office pending its ultimate disposition." 3. Appellants Were The Prevailing Parties In The Tax Court.

39 USCA Case # Document # Filed: 01/20/2015 Page 39 of 49 Judge Carluzzo states in his order that the taxpayers are not entitled to litigation costs because they are not the prevailing party. He viewed the IRS' position to be substantially justified and cited 7430(c)(4)(B). Section 7430( c)( 4)(B)(i) states: A party shall not be treated as the prevailing party in a proceeding to which subsection (a) applies if the United States establishes that the position of the United States in the proceeding was substantially justified. Subsection (iii) states: In determining for purposes of clause (i) whether the position of the United States was substantially justified, the court shall take into account whether the United States has lost in court of appeal for other circuits on substantially similar issues. On the issue of whether the notice of deficiency ever existed or was created, the IRS lost on that issue in the Third Circuit in Pietanza and the Federal Circuit in Welch. That is the same issue in this case. Even though Judge Carluzzo may not agree with those decisions, the Tax Court follows those decisions, the Commissioner accepts those decisions, and the IRS did not argue its position was substantially justified with regards to the litigation portion of this case. [229 ftn5] Accordingly, the taxpayers are entitled to litigation costs. The amount to be awarded and whether any administrative costs should be awarded have yet to be determined. CONCLUSION

40 USCA Case # Document # Filed: 01/20/2015 Page 40 of 49 This Court should state the grounds for the dismissal of Appellants' Tax Court case was the IRS did not issue them the statutorily required deficiency notice, IRC 6212(b), for either the 2007 or 2008 tax year. Pursuant to 6213(a) the August 16, 2010 tax assessments for the 2007 and 2008 tax years are invalid, as well as, the levies and offsets made pursuant to those tax assessments. Thus all money taken from the taxpayers based on those invalid August 16, 2010 tax assessments must be returned to the Appellants within 90 days from the date of this decision. With regard to the award of litigation cost this Court should hold Appellants were the prevailing party and the IRS' litigation position was not substantially justified in light of the Pietanza and Welch cases. This case should be remanded to the Tax Court with instructions to determine the amount of the litigation costs to be awarded the Appellants and whether any administrative costs should be awarded and, if so, determine the amount of the award. January 20, 2015 Respectfully submitted, Is/Bruce E. Gardner Bruce E. Gardner, Esq. Counsel for Appellants The Gardner Law Firm, P.C Pennsylvania Ave NW 600 Washington, D.C (202)

41 USCA Case # Document # Filed: 01/20/2015 Page 41 of 49 UNITED STATES COURT OF APPEALS For The District of Columbia Circuit LISA A. EDWARDS & } JOSEPH P. THOMAS, } Appellants } Docket No } v. } } COMMISSIONER OF INTERNAL REVENUE, } } Appellee } CERTIFICATE OF COMPLIANCE WITH RULE 32(a) 1. This brief complies with the type-volume limitation of Fed.R.App.P. 32(a)(7)(B) this brief contains 6,219 words, excluding the parts of the brief exempted by Fed.R.App.P.32(a)(7)(B)(iii). 2. This brief complies with the typeface requirements offed.r.app.p. 32(a)(5) and the type style requirements offed.r.app.p. 32(a)(6) because this brief has been prepared in a proportionally spaced type face using Microsoft Word version in 14 point font size in Times Roman. January 20, 2015 Is/ Bruce E. Gardner Bruce E. Gardner, Esq. Counsel for Appellants The Gardner Law Firm, P.C Pennsylvania Ave NW Suite 600 Washington, D.C (202) beegard@gmail.com_