Interpretation of Section 6015(e)(7)(B): “Newly Discovered or Previously Unavailable Evidence”

Thomas v. Comm’r, 160 T.C. No. 4| February 13, 2023 | Toro, J. | Dkt. No. 12982-20

Summary: This is a case of first impression concerning the meaning of “newly discovered or previously unavailable evidence” as contemplated by I.R.C. § 6015(e)(7)(B): “Any review of a determination made under this section shall be reviewed de novo by the Tax Court and shall be based upon—(A) the administrative record established at the time of the determination, and (B) any additional newly discovered or previously unavailable evidence.”

Sydney Ann Chaney Thomas (Ms. Thomas) and her husband filed joint federal income tax returns for 2012, 2013, and 2014, but did not pay the full amounts of tax shown on those returns. After her husband’s death, Ms. Thomas sought relief from joint and several liability pursuant to I.R.C. § 6015(f) (innocent spouse relief. The IRS denied the request, and Ms. Chaney petitioned the Tax Court seeking a determination under I.R.C. § 6015(e) (relief from joint and several liability on joint return). At trial, the IRS proposed to introduce into evidence certain posts from Ms. Thomas’s personal blog that reflected information about Ms. Thomas’s assets, lifestyle, business, and her relationship with her husband. But, the posts were not part of the administrative record. The IRS learned of the posts only after Ms. Thomas filed her petition with the Tax Court. She objected to the admission of the posts and ultimately moved to strike them from the record wherein the posts were conditionally admitted, pending further review. Ms. Thomas contended that the posts were not “newly discovered or previously unavailable evidence” as contemplated by I.R.C. § 6015(e)(7)(B). The IRS opposed the motion, arguing that the blog posts were “newly discovered” and “previously unavailable evidence” under I.R.C. § 6015(e)(7)(B).

Key Issues: Under I.R.C. § 6015(e)(7)(B), were Ms. Thomas’s blog posts “newly discovered or previously unavailable evidence” when the posts existed before the closing of the administrative record but not discovered by the IRS until the administrative record had closed?

Primary Holdings: The posts are “newly discovered” evidence within the meaning of I.R.C. § 6015(e)(7)(B) and as such were properly admitted. Motion to strike denied. The meaning of “newly discovered” as of 2019 (when section 6015(e)(7) was enacted) was “recently obtained sight or knowledge of for the first time.” The evidence in issue met that definition.
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