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cases that come within our jurisdiction.” Berkey v.
Commissioner, 90 T.C. 259, 270 (1988) (Hamblen, J.,
concurring). [Fn. refs. omitted.23]
When a Tax Court decision becomes final and there is no
jurisdiction in any other Federal Court, the Internal Revenue
Service (IRS) does not shy away from arguing that lack of
jurisdiction trumps equity. For example, in United States v.
Dalm, 494 U.S. 596 (1990), the taxpayer who had been the
administratrix of her former employer’s estate received
substantial payments from the deceased employer’s brother. Those
payments were reported on a Federal gift tax return, and the gift
tax was paid by the taxpayer. Subsequently, the IRS examined the
taxpayer’s income tax return for the year in which she received
the payments and determined that the payments were taxable income
rather than a gift. The taxpayer petitioned this Court, and we
decided that the payments were taxable income. Subsequently, the
taxpayer filed a claim for refund of the gift tax. The IRS
denied the claim. In a subsequent litigation over the
erroneously paid gift tax, the United States Supreme Court held
that the statute deprived the District Court of jurisdiction over
the action for refund of the gift tax. The Court distinguished
23In Commissioner v. McCoy, 484 U.S. 3, 6 (1987), the
Supreme Court held that in an appeal of a Tax Court decision, the
appellate court’s authority was restricted to review those
matters over which the Tax Court had jurisdiction and that the
Court of Appeals could not expand its own jurisdiction because
the Court of Appeals believed it was necessary “in order to
achieve a fair and just result.”
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