U.S. Supreme Court
Commissioner v. McCoy, 484 U.S. 3 (1987)
Commissioner v. McCoy
Decided October 19, 1987
484 U.S. 3
After the United States Tax Court sustained the Commissioner of Internal Revenue's determination that there was a deficiency in respondent's federal estate tax, respondent appealed to the Court of Appeals, but did not file the appeal bond required by the Internal Revenue Code to stay the assessment and collection of the deficiency. The Commissioner therefore assessed the deficiency and issued a notice and demand for payment. When the deficiency was not paid within 10 days, an addition to tax accrued under § 6651(a)(3) of the Code. The Court of Appeals ultimately affirmed the Tax Court's decision that there was a deficiency. Shortly thereafter, respondent paid the tax, but filed a petition with the Court of Appeals asking that the court "forgive" interest on the assessment and also the late payment penalty. The court granted the requested relief "in order to achieve a fair and just result."
Held: The Court of Appeals exceeded its jurisdictional authority when it granted the petition to forgive interest and the late payment penalty. Section 7482(a) of the Code gives the courts of appeals jurisdiction to review Tax Court decisions "in the same manner and to the same extent as decisions of the district courts in civil actions tried without a jury," while § 7482(c)(1) provides that "such courts shall have the power to affirm or . . . modify or . . . reverse" the Tax Court's decision. Thus, the Court of Appeals' only jurisdiction here was to review the Tax Court's decision that there was a deficiency and to affirm that decision upon determining that it was correct. It was not empowered to decide other questions relating to interest and a penalty -- questions that were not presented to the Tax Court and that could not have been so presented under §§ 6601(a) and 6651(a)(3) of the Code, which respectively make interest on a deficiency and accrued penalties separate and outside the scope of the petition to the Tax Court, and § 6213(a), which indicates that the deficiency asserted here could be assessed only after the Tax Court had rendered its decision -- or to grant relief that the Tax Court itself, as a court of limited jurisdiction lacking general equitable powers, could not provide.
Certiorari granted; reversed. chanroblesvirtualawlibrary