## Facts

- The IRS assessed the taxpayers’ federal income tax liabilities for 1991 and 1996 and filed a notice of federal tax lien.
- The 1991 liability had been previously litigated and determined in an earlier Tax Court proceeding.
- After receiving the lien notice, the taxpayers requested a Collection Due Process (CDP) hearing and then petitioned the Tax Court for review under I.R.C. § 6320(c).
- The taxpayers asserted they incurred a 1994 net operating loss (NOL) that could be carried back to reduce their 1991 tax liability.
- The Commissioner filed an answer and moved for summary judgment.
- The taxpayers then moved to dismiss their Tax Court CDP case “without prejudice” to pursue their NOL carryback claim in federal district court.
- The parties agreed the Tax Court could dismiss the case as requested.

## Issues

1. Whether the Tax Court may grant a taxpayer’s request to dismiss a CDP lien-review petition under I.R.C. § 6320(c) without prejudice after the court’s jurisdiction has been invoked.
2. Whether the “no-withdrawal” rule applicable in deficiency proceedings (associated with Estate of Ming) controls dismissals in CDP lien-review cases.

## Decision

- The Tax Court granted the taxpayers’ motion and dismissed the CDP case without prejudice.
- The court held that precedent limiting voluntary withdrawal of deficiency petitions did not govern CDP lien-review proceedings.
- The court declined to decide the merits of the claimed NOL carryback and left any such determination to the federal district court.

## Legal Principles

- The restriction on withdrawing deficiency petitions under I.R.C. § 6213 (as reflected in Estate of Ming) is grounded in the structure of deficiency jurisdiction and does not automatically apply to CDP lien-review jurisdiction under I.R.C. §§ 6320 and 6330.
- In a CDP lien-review case, the Tax Court may have discretion to dismiss without prejudice because the proceeding addresses collection actions and may involve liabilities already determined elsewhere.
- A Tax Court filing can implicate I.R.C. § 6512(a)’s bar on district court refund suits for the same tax year; dismissal without prejudice in an appropriate CDP case may avoid an unnecessary merits decision that could affect forum options.

## Conclusion

The Tax Court held that a CDP lien-review petition may be dismissed without prejudice at the taxpayer’s request, distinguishing the stricter rule against withdrawal in deficiency cases and leaving related NOL carryback questions for potential district court litigation.


Wagner v. Commissioner, 118 T.C. 330 (2002)