T.C. Memo. 2000-74
UNITED STATES TAX COURT
LEGAL-EASE, A TRUST, JAMES R. SLAGLE &
RUSSELL BUCHANAN, CO-TRUSTEES, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 564-99. Filed March 3, 2000.
James R. Slagle and Russell W. Buchanan, for petitioner.
Richard A. Rappazzo, for respondent.
MEMORANDUM OPINION
CHIECHI, Judge: This case is before the Court on
respondent's motion to dismiss for lack of jurisdiction
(respondent’s motion). We shall grant respondent’s motion.
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Background
For purposes of respondent’s motion, the parties do not
dispute the following factual allegations that are part of the
record. At all relevant times, the mailing address for peti-
tioner was in Arizona.
Petitioner filed a Federal income tax return for estates and
trusts, Form 1041 (return), for taxable year 1994. Although the
portion of the first page of that return requesting petitioner to
identify the “Name and title of fiduciary” was left blank, that
return was signed by Dennis H. Lawrence as “fiduciary or officer
representing” trust. Petitioner’s 1994 return was also signed by
R.W. Buchanan as paid return preparer. In the Schedule K-1
attached to the 1994 return filed by petitioner, the beneficiary
was identified as “BULL HOLDINGS A TRUST”, but no fiduciary was
identified as required by that schedule.
Upon commencement of the examination of petitioner’s taxable
year 1994, respondent requested complete copies of the trust
documents relating to petitioner as well as other items of
substantiation. Petitioner refused to provide respondent with
the trust documents and other information requested.
On March 4, 1998, petitioner filed with the Internal Revenue
Service Form 2848, Power of Attorney and Declaration of Represen-
tative. That form, which pertained to petitioner’s taxable years
1994, 1995, and 1996, was signed by James R. Slagle (Mr. Slagle)
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as trustee and by Russell W. Buchanan (Mr. Buchanan) as trustee.
Attached to the Form 2848 filed by petitioner were two Forms 56,
Notice Concerning Fiduciary Relationship, and two documents
entitled “ACCEPTANCE OF THE TRUST BY THE TRUSTEE”. One of those
Forms 56 identified Russell W. Buchanan as the fiduciary for
petitioner and was signed by him as trustee. The other Form 56
identified James R. Slagle as the fiduciary for petitioner and
was signed by him as trustee.
One of the two documents entitled “ACCEPTANCE OF THE TRUST
BY THE TRUSTEE” that were attached to the Form 2848 filed by
petitioner with respect to its taxable years 1994, 1995, and 1996
stated in pertinent part:
I/We, DENNIS H. LAWRENCE & MELISSA R. LAWRENCE, the
Grantor(s) of LEGAL-EASE, A TRUST, do hereby select and
appoint JAMES R. SLAGLE * * * as the trustee on the
1ST day of JANUARY , 19 94 .
* * * * * * *
I, JAMES R. SLAGLE, * * * do hereby accept the
position as a trustee of LEGAL-EASE, A TRUST, * * *
The foregoing document contains signatures that purport to be the
signatures of Dennis H. Lawrence, Melissa R. Lawrence, and James
R. Slagle.
The other document entitled “ACCEPTANCE OF THE TRUST BY THE
TRUSTEE” stated in pertinent part:
I, James R. Slagle , the Trustee of LEGAL-EASE, A
TRUST, do hereby select and appoint:
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Russell W. Buchanan
Name of New Trustee
* * * * * * *
as a trustee of LEGAL-EASE, A TRUST, on the 1st day
of February , 19 94 .
* * * * * * *
I, Russell W. Buchanan , * * * do hereby accept the
position as a trustee of LEGAL-EASE, A TRUST * * *
The foregoing document contains signatures that purport to be the
signatures of James R. Slagle and Russell W. Buchanan.
The notice of deficiency issued to petitioner was addressed
as follows:
Legal-Ease, A Trust
James R. Slagle, Trustee
2256 E. Jaeger St.
Mesa, Arizona 85213-2933
Petitioner filed a petition in this Court which was signed
on its behalf by Mr. Slagle as “Trustee” and by Mr. Buchanan as
“Trustee”.
Respondent’s motion contends in pertinent part:
8. * * * Upon information and belief, the peti-
tioner trust is an Arizona trust, and the law in Ari-
zona, therefore, controls who has the capacity to bring
the instant suit.
9. Arizona law provides that the trustee has the
capacity to institute court proceedings on behalf of
the trust. Ariz. Rev. Stat. Ann. § 14-7233 C. 25.
* * * * * * *
13. To date, petitioner has not provided respon-
dent with any trust document or any other sort of
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documentary evidence regarding who was the first ap-
pointed trustee of the petitioner trust. Without the
trust document, it is impossible to determine whether
subsequent appointments of successor trustees are legal
and/or valid.
14. There is absolutely no evidence from which
the Court can adduce that the documents referred to
* * * above [the two Forms 56 and the two documents
entitled “ACCEPTANCE OF THE TRUST BY THE TRUSTEE” that
were attached to the Form 2848 filed by petitioner],
create a legal assignment to either James R. Slagle
and/or Russell Buchanan as trustees. These documents
appear to be self-serving and created solely in re-
sponse to respondent’s audit examination.
15. Petitioner has provided no evidence that said
assignments are valid or authorized under the terms of
the trust indenture (assuming one exists).
16. * * * petitioner has failed to demonstrate
that either James R. Slagle or Russell Buchanan were
[sic] legally appointed as trustees and therefore, [is]
authorized to act on behalf of the petitioner trust and
bring the instant case before this Court. See T.C.
Rule 60(c).
Petitioner filed a notice of objection to respondent’s
motion in which it asks the Court to deny that motion. That
notice of objection asserts in pertinent part:
1. On October 7, 1998, respondent sent a Notice
of Deficiency to petitioner. In that Notice of Defi-
ciency, respondent identified James R. Slagle & Russell
W. Buchanan as the Trustees for petitioner, Legal-Ease,
A Trust.
2. Petitioner has filed the appropriate Form 56
in which James R. Slagle and Russell W. Buchanan have
identified themselves as trustees of the said trust and
attached as supporting documentation the Acceptance of
the Trust by the Trustee. These documents show that
each was appointed as a trustee of Legal-Ease, A Trust,
and that each signed acknowledging their acceptance of
said appointment.
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3. Upon commencement of the examination, respon-
dent requested a copy of all documents relating to the
trust. Petitioner requested that respondent first
proves [sic] jurisdiction over a Pure Trust in order to
make such a request. Respondent has failed on all
requests to present to the petitioner any documents or
proof that respondent has authority to examine the
records or documentation of Legal-Ease, A Trust.
Respondent is now using the Motion to Dismiss for Lack
of Jurisdiction in an effort to force petitioner to
hand over to respondent, records and documents it is
not entitled to have.
4. Respondent has recognized James R. Slagle as a
Trustee of Legal-Ease, A Trust for many years.
Respondent routinely addresses all correspondence to
“Legal-Ease, A Trust; James R. Slagle, Trustee”. * * *
The Court held a hearing on respondent’s motion, at which
Mr. Slagle and Mr. Buchanan appeared on behalf of petitioner.1
Respondent introduced into evidence the 1994 return filed by
petitioner. Petitioner proffered no evidence, and the parties
presented no new arguments, at that hearing.
Discussion
Rule 602 provides in pertinent part:
(a) Petitioner: (1) Deficiency or Liability
Actions: A case shall be brought by and in the name of
the person against whom the Commissioner determined the
deficiency (in the case of a notice of deficiency)
* * * or by and with the full descriptive name of the
fiduciary entitled to institute a case on behalf of
1
At the hearing, the Court informed Mr. Slagle and Mr.
Buchanan that its allowing them to appear at the hearing as the
alleged trustees of petitioner did not mean that the Court agreed
that they in fact were petitioner’s duly appointed and authorized
trustees.
2
All Rule references are to the Tax Court Rules of Practice
and Procedure.
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such person. See Rule 23(a)(1). A case timely brought
shall not be dismissed on the ground that it is not
properly brought on behalf of a party until a reason-
able time has been allowed after objection for ratifi-
cation by such party of the bringing of the case; and
such ratification shall have the same effect as if the
case had been properly brought by such party. * * *
* * * * * * *
(c) Capacity: * * * The capacity of a fiduciary
or other representative to litigate in the Court shall
be determined in accordance with the law of the juris-
diction from which such person's authority is derived.
Petitioner does not dispute respondent’s statement in
respondent’s motion that it is a trust organized under the laws
of the State of Arizona. Under Arizona law, see Rule 60(c), a
trustee has the power to commence litigation on behalf of a
trust. See Ariz. Rev. Stat. Ann. sec. 14-7233.C.25. (West 1995).
In the instant case, petitioner has the burden of proving that
this Court has jurisdiction, see Fehrs v. Commissioner, 65 T.C.
346, 348 (1975); National Comm. to Secure Justice in the
Rosenberg Case v. Commissioner, 27 T.C. 837, 839 (1957), by
establishing affirmatively all facts giving rise to our jurisdic-
tion, see Wheeler's Peachtree Pharmacy, Inc. v. Commissioner, 35
T.C. 177, 180 (1960); Consolidated Cos., Inc. v. Commissioner, 15
B.T.A. 645, 651 (1929). In order to meet that burden, petitioner
must provide evidence establishing that Mr. Slagle and Mr.
Buchanan have authority to act on its behalf. See National Comm.
to Secure Justice in the Rosenberg Case v. Commissioner, supra at
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839-840; Coca-Cola Bottling Co. v. Commissioner, 22 B.T.A. 686,
700 (1931).
We are not persuaded by the various documents that are part
of the record, including the documents entitled “ACCEPTANCE OF
THE TRUST BY THE TRUSTEE”, that Mr. Slagle and Mr. Buchanan are
the duly appointed and authorized trustees of petitioner. In
this connection, it is significant that petitioner has not made
part of the record the complete trust documents for petitioner
(assuming such documents exist).3 Without such documents, we are
unable to determine whether the appointment of one or more
trustees is valid. On the record before us, we find that
petitioner has failed to establish that either Mr. Slagle or Mr.
Buchanan is authorized to act on its behalf.4
To reflect the foregoing,
An order of dismissal for lack
of jurisdiction granting respon-
dent’s motion will be entered.
3
Nor has petitioner introduced into the record any other
documentary evidence establishing who the first appointed trustee
of petitioner was.
4
We have considered all of the contentions and arguments of
petitioner that are not discussed herein, and we find them to be
without merit and/or irrelevant.