WILLIAM FOOTE and ELIZABETH FOOTE v. Commissioner of Internal Revenue

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
WILLIAM FOOTE and ELIZABETH
FOOTE,
Petitioners - Appellants,
v.
COMMISSIONER OF INTERNAL
REVENUE,
Respondent - Appellee.
No. 14-70668
Tax Ct. No. 12271-12
MEMORANDUM*
Appeal from a Decision of the
Tax Court
Submitted February 12, 2016**
Pasadena, California
Before: BERZON and OWENS, Circuit Judges, and MARBLEY,*** District Judge.
FILED
FEB 23 2016
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
* This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
** The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
*** The Honorable Algenon L. Marbley, District Judge for the U.S.
District Court for the Southern District of Ohio, sitting by designation.

-- 1 of 3 --

Petitioners William and Elizabeth Foote appeal from the tax court’s
summary judgment in favor of the Commissioner. The tax court held that the
Footes were not entitled to an award of administrative costs and litigation expenses
incurred during their audit and deficiency proceedings. We have jurisdiction under
26 U.S.C. § 7482(a)(1). We affirm.
The Footes were subject to auditing and deficiency proceedings from 1996
to 2011. The five actions against them were ultimately resolved through
stipulations entered by the tax court, none of which referenced administrative or
litigation costs. The Footes did not file a motion seeking an award of costs under
26 U.S.C. § 7430, nor did they move to vacate the decisions. See 26 C.F.R.
§ 301.7430-2(b)(2); Tax Court Rules 230-33.
As the Footes did not properly petition the tax court for administrative and
litigation costs before the stipulated decisions became final, their current action for
costs is barred by res judicata. See Gustafson v. Comm’r, 97 T.C. 85, 93 (1991);
see also W. Radio Servs. Co. v. Glickman, 123 F.3d 1189, 1192 (9th Cir. 1997)
(listing the requirements for res judicata to apply). The Footes’ request to the
Internal Revenue Service for administrative costs is immaterial, because a
prevailing taxpayer may only recover costs from the IRS if “[t]he underlying
substantive issues . . . are not, and have never been, before any court of the United
2

-- 2 of 3 --

States.” § 301.7430-2(b)(1)(i). Here, the Footes’ liability was determined by the
tax court by way of stipulation. As such, any request for costs made to the IRS
was procedurally improper.
AFFIRMED.
3

-- 3 of 3 --