Tae M. & Young J. Kim, Petitioner

T. C. Memo. 2002-49 UNITED STATES TAX COURT TAE M. KIM AND YOUNG J. KIM, Petitioners y. COMMISSIONER OF INTERNAL REVENUE, Respondent Docket No. 1448-01.

Filed February 21, 2002.

Tae M. Kim and Young J. Kim, pro sese.

Roger W. Bracken, for respondent.

MEMORANDUM OPINION

CHIECHI, Judge: This case is before the Court on respon- dent's motion for summary judgment (respondent's motion).

We shall grant respondent's motion.

Background Petitioners resided in Bowie, Maryland, at the time they filed the petition in this case.

SERVED

FEB 2 1 2002

On May 8, 1997, respondent issued to petitioners a notice of deficiency (notice) determining a deficiency in, and an accuracy- related penalty under section 6662(a)¹ on, their Federal income tax for each of the years 1993 and 1994. Petitioners timely filed a petition with respect to that notice (Kim I), and a trial was held in Kim v. Commissioner, docket No. 15447-97.

On August 4, 1999, the Court filed its opinion in Kim I.

Kim v. Commis- sioner, T.C. Memo. 1999-261.

Thereafter, petitioners did not file a motion in Kim I claiming reasonable administrative and/or litigation costs.

On December 1, 1999, the Court entered a decision in Kim I.

In February 2000, petitioners appealed the decision of the Court in Kim I to the United States Court of Appeals for the Fourth Circuit (Court of Appeals).

On March 23, 2000, respondent issued to petitioners two separate notices, entitled "Notice of Tax Due on Federal Tax Return", one of which pertained to petitioners' taxable year 1993 and one of which pertained to petitioners' taxable year 1994.

On June 2, 2000, in an unpublished opinion the Court of Appeals affirmed the Court's decision in Kim I.

Kim v. Commis- sioner, 215 F.3d 1319 (4th Cir. 2000), affg. per curiam without published opinion T.C. Memo. 1999-261.

¹All section references are to the Internal Revenue Code in effect at all relevant Court Rules of Practice and Procedure.

times. All Rule references are to the Tax On June 12, 2000, petitioners sent a letter (petitioners' June 12, 2000 letter) to the Internal Revenue Service (IRS) in which they requested "the recovery of administrative/litigation costs incurred after Appeals through the Tax Court hearing in the determination of the amount of taxes" for 1993 and 1994, as follows:

Claimed Nature of Administrative/Litigation Costs Studies, consulting, research, parking, Claimed Amount of Costs $2,548.00 transportation, and others Document production and copying Delivery and mailing Legal consultation and assistance Telephone Document filing Attorney representation Total Amount of Claimed Costs 562.50 74.00 3,450.00 138.10 60.00 400.00 $7,232.60 On August 31, 2000, Kim v. Commissioner, 215 F.3d 1319 (4th Cir. 2000), became final.

On November 20, 2000, respondent sent a letter (respondent's November 20, 2000 letter) to petitioners in response to petition- ers' June 12, 2000 letter and to a letter from petitioners dated July 31, 2000, that is not part of the instant record.

In respondent's November 20, 2000 letter, respondent stated in part:

Under I.R.C.

§ 7430, the prevailing party in a court proceeding may be awarded a judgment or settle- ment for reasonable administrative and litigation costs. Under I.R.C. finally determined by a court, determination of who is the prevailing party for pur- poses of determining the award of administrative and litigation costs.

[§] 7430(c)(4)(C), when a case is that court must make the § 301.7430-2(b)(2) Treas. Reg.

states that where the underlying substantive issues were before any court of the Tax Court, obtaining an award of reasonable administrative costs is from the court.

the taxpayer's only possibility of the United States, including issued its opinion in your case, Docket Tax Court Rule 231 sets forth the requirements for making a claim for litigation and administrative costs. Under this rule, when a case is unagreed concerning the parties claim for such costs, a claim shall be made by motion filed within 30 days after the service of a written opinion determining the issues in the case. The Tax Court No. 15447-97, on August 4, 1999. served upon respondent if you have filed any motion requesting an award of reasonable administrative or litigation cost case. days of case, your claim is untimely and can not be allowed. Your letters of June 12, 2000, and July 31, 2000, do not constitute an appropriate request for recovery of reasonable administrative and litigation costs as required by I.R.C.

If you have not made such a motion within 30 the Tax Court's opinion in your [§] 7430 and Tax Court Rule 231.

That opinion was the service of We are unaware that same day.

in this * * * * * * * This letter constitutes the respondent's response to your letters.

* * * On December 12, 2000, petitioners sent a letter (petition- ers' December 12, 2000 letter) to respondent in response to respondent's November 20, 2000 letter.

In petitioners' December 12, 2000 letter, petitioners stated in part:

We find that paragraphs of We received the IRS denial notice dated November 20, 2000. Publication 5, and others, litigation or administrative costs, were not considered in IRS notice of denial.

in relation to recovering IRS Publication 556, Our understandings from the review of cations are not consistent with the basis of notice of denial.

these IRS Publi- the IRS On December 27, 2000, respondent sent a letter (respondent's December 27, 2000 letter) to petitioners in response to petition- ers' December 12, 2000 letter.

In respondent's December 27, 2000 letter, respondent stated:

We received your letter of December 12, 2000.

You IRS Publication 5 and 556 (and others) were assert that not considered when denying your claim for recovering administrative and litigation costs. are for information purposes; * The Internal Revenue Code and Treasury Regulation sections described in our letter to you, dated November 20, 2000, are the controlling law in this area.

IRS publications they are not law.

* * Additionally, we reviewed the publications men- We found nothing in those publications that tioned. was inconsistent with the law that controls the award of administrative and litigation costs in your case.

On January 18, 2001, petitioners filed a petition for administrative costs under section 7430(f)(2) in which they seek to recover $7,232.60.2 Discussion The Court may grant summary judgment where there is no genuine issue of material fact and a decision may be rendered as to the IRS for $7,232.60 as "a request in petitioners' June 12, 2000 letter petitioners 2Although petitioners filed a petition for administrative costs under sec. 7430(f)(2) seeking administrative costs totaling $7,232.60, described their request for the recovery of administrative/litigation costs incurred after Appeals through the Tax Court hearing". petitioners may have included not only administrative costs but also litigation costs in their claim for $7,232.60 in their petition for administrative costs under sec. 7430(f)(2). ing arguendo that petitioners did include litigation costs as well as administrative costs in their petition for administrative costs under sec. 7430(f)(2), to our resolution of respondent's motion for summary judgment.

fact would be immaterial It appears that Assum- that a matter of law. Rule 121(b); Naftel v. Commissioner, 85 T.C.

527, 529 (1985); Jacklin v. Commissioner, 79 T.C. 340, 344 (1982).

We conclude that there is no genuine issue of material fact precluding us from resolving the question raised in respon- dent's motion.

In respondent's motion, respondent argues that, under Gustafson v. Commissioner, 97 T.C. 85 (1991), "The doctrine of res iudicata bars an action for administrative costs under section 7430(f)(2) 31 to the extent the recovery of such costs could have been pursued in a prior deficiency case."4 Petition- ers counter that the doctrine of res judicata is irrelevant to their claim under section 7430(f)(2).

3Sec. 7430(a) authorizes an award to the prevailing party of reasonable administrative costs incurred in any administrative proceeding with the IRS and of reasonable litigation costs incurred in any civil tax litigation. 7430(f)(2) provides:

As pertinent here, sec.

SEC. 7430.

AWARDING OF COSTS AND CERTAIN FEES.

(f) Right of Appeal.-- * * * * * * * (2) Administrative proceedings.-- A decision granting or denying (in whole or in part) an award for reasonable administrative costs under subsection (a) by the Internal Revenue Service shall be subject filing of a petition for review with the Tax Court under rules similar to the rules under section 7463 (without regard to the amount in dispute).

to the * * * 4Respondent raised the doctrine of res judicata as an affir- mative defense in respondent's answer to petitioners' petition.

The Supreme Court described the doctrine of res judicata as follows:

judicial It rests time and The rule provides that when a jurisdiction has entered a final The general rule of rgs iudicata applies to repetitious suits involving the same cause of action. upon considerations of economy of public policy favoring the establishment of certainty in legal relations. court of competent judgment on the merits of a cause of action, ties to the suit and their privies are thereafter bound "not only as to every matter which was offered and received to sustain or defeat as to any other admissible matter which might have been The judgment puts an end to offered for that purpose." the cause of action, which cannot again be brought into litigation between the parties upon any ground what- fraud or some other factor invalidating ever, absent the judgment. [Commissioner v. Sunnen, 333 U.S. 591, 597 (1948); citations omitted.]

the claim or demand, but the par- In Gustafson v. Commissioner, supra, the Court held on facts substantially the same as those involved in the instant case "that the doctrine of res judicata bars an action for administra- tive costs under section 7430(f)(2) to the extent that the recovery of such costs could have been pursued in a prior defi- ciency, liability, revocation, or partnership case." Gustafson v.

Commissioner, supra at 93.

We conclude that Gustafson is con- trolling here.

We hold that the doctrine of res judicata bars petitioners from litigating in the instant case their claim for administrative costs under section 7430(f)(2).

We shall grant respondent's motion.

We have considered all of the contentions and arguments of petitioners that are not discussed herein, and we find them to be without merit and/or irrelevant.

To reflect the foregoing, An appropriate order and deci- sion will be entered.