Seven W. Enters., Inc. v. Comm'r of Internal Revenue, No. 12-2099 (7th Cir. 2013)
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In 2008, the taxpayers filed petitions for redetermination based on IRS notices of deficiency. The cases were consolidated for trial. With respect to Seven W, a calendar-year taxpayer, the Tax Court rejected a deficiency for calendar year 2000, but affirmed deficiencies for the years 2001 through 2003. With respect to Highland, a fiscal-year taxpayer, the court affirmed deficiencies for the fiscal years ending on April 30, 2003, and April 30, 2004. Although the opinions correctly identified the taxpayer with its respective tax liability, the decisions, entered in 2011, incorrectly stated that Seven W was responsible for deficiencies in fiscal years ending in April 2003, and April 2004, and that Highland was responsible for deficiencies for calendar years 2001 through 2003. The Commissioner discovered the error and sought to vacate the decisions. The Taxpayers did not object to correcting the errors, but did object to vacatur of the original decisions. The Tax Court vacated its decisions and entered new decisions correctly setting forth the respective deficiencies of Seven W and Highland. The Seventh Circuit vacated, with instructions to reinstate and correct the original decisions. Absent fraud that infected the Tax Court’s decision, the Tax Court cannot vacate a decision that has become final.
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