Nield and Linda Montgomery v. Commissioner of Internal Revenue

Summary

The Tax Court, adopting the opinion of Chief Special Trial Judge Panuthos, denied the Commissioner's motion for summary judgment and held that section 6330(c)(2)(B) permits taxpayers to challenge the existence or amount of a tax liability they reported on their original return where they received no statutory notice of deficiency and had no other prior opportunity to dispute it. Applying the plain meaning of the statute, the court reasoned that 'underlying tax liability' encompasses amounts assessed under section 6201(a)(1) and that the Commissioner's contrary reading would add terms and conditions inconsistent with the statutory text; it also rejected his sovereign-immunity and legislative-history arguments. Seven judges wrote separately: Judges Gerber and Chiechi dissented (Gerber would exclude admitted self-assessed liabilities; Chiechi would rest on the Secretary's regulations), while Chief Judge Wells and Judges Laro, Gale, Marvel, and Goeke concurred on narrower or complementary grounds.