T.C. Memo. 2011-96
UNITED STATES TAX COURT
SANDRA K. SHOCKLEY, TRANSFEREE, ET AL.,1 Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket Nos. 28207-08, 28208-08, Filed May 2, 2011.
28210-08.
Ziemowit T. Smulkowski, Jenny Louise Johnson,
Aharon S. Kaye, and Alexander S. Vesselinovitch, for petitioners.
Lyle Press, Steven N. Balahtsis, and Gail Campbell, for
respondent.
1
Cases of the following petitioners are consolidated
herewith: Terry K. Shockley, Transferee, docket No. 28208-08;
and Shockley Holdings, Limited Partnership, Transferee, docket
No. 28210-08.
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MEMORANDUM FINDINGS OF FACT AND OPINION
COHEN, Judge: Pursuant to three separate notices dated
August 21, 2008, respondent determined that Sandra K. Shockley
(Mrs. Shockley), Terry K. Shockley (Mr. Shockley), and Shockley
Holdings Ltd. Partnership (Shockley Holdings) (collectively,
petitioners) are liable as transferees for the Federal income tax
liability, additions to tax, and an accuracy-related penalty of
Shockley Communications Corp. (SCC) for its short tax year ending
May 31, 2001. Based on respondent’s determination as to the
value of the assets transferred to petitioners, respondent
determined that the amounts of transferee liability of each
petitioner relating to SCC’s outstanding liabilities are as
follows, plus interest as provided by law: (1) $11,244,084.42
for Mrs. Shockley; (2) $10,975,059.03 for Mr. Shockley; and (3)
$4,053,709.13 for Shockley Holdings. Unless otherwise indicated,
all section references are to the Internal Revenue Code in effect
for the year in issue, and all Rule references are to the Tax
Court Rules of Practice and Procedure.
The issues for decision are: (1) Whether the period of
limitations under section 6901(c) precludes respondent from
assessing transferee liability against petitioners for SCC’s tax
year ending May 31, 2001; and, if it is determined that the
notices were timely, (2) whether petitioners are liable as
transferees for their respective portions of the unpaid
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determined and assessed deficiency, addition to tax, penalty, and
interest with respect to SCC’s corporate income tax for 2001; and
(3) whether SCC is liable for the determined and assessed
deficiency in tax, addition to tax, penalty, and interest for
SCC’s short tax year ending May 31, 2001.
FINDINGS OF FACT
Some of the facts have been stipulated, and the stipulated
facts are incorporated in our findings by this reference. Mr.
and Mrs. Shockley (the Shockleys) resided in Florida at the time
their petitions were filed. Shockley Holdings is a partnership
organized under the laws of the State of Wisconsin, and its
principal place of business was Florida at the time its petition
was filed.
SCC was incorporated in March 1985 under the laws of the
State of Wisconsin. SCC owned and operated five television
stations and a radio station in Wisconsin, a television station
and several radio stations in Minnesota, and a video production
company in Wisconsin. Before May 31, 2001, petitioners each
owned shares in SCC as minority shareholders along with 26 other
shareholders. Mr. Shockley owned 10.18879 percent of SCC’s
common stock and served as president, treasurer, and a director
of SCC. Mrs. Shockley owned 10.18879 percent of SCC’s common
stock and served as vice president, secretary, and a director of
SCC. Shockley Holdings owned 3.52508 percent of SCC’s common
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stock. Shockley Holdings is owned by the Shockleys, who are
general partners, and their adult children, who are limited
partners.
On May 31, 2001, pursuant to a stock purchase agreement,
petitioners sold their shares of SCC to Northern Communications
Acquisitions Corp. (NCAC), a Delaware corporation. The Shockleys
resigned from all of their positions in SCC as of that date, and
at no time after the sale was either an officer, director, or
shareholder of SCC.
Also on May 31, 2001, following the acquisition of the SCC
stock by NCAC, NCAC caused SCC to merge with and into Shockley
Delaware Corp. (SDC), a Delaware corporation and subsidiary of
NCAC. SDC was the surviving entity in the merger and converted
to a Delaware limited liability company named Shockley
Communications Acquisition, L.L.C. (SCA LLC). SCA LLC
immediately sold some of the assets that SCC had owned to Quincy
Newspapers, Inc.
Petitioners timely filed Federal income tax returns for
calendar year 2001 reporting gains from the May 31, 2001, SCC
stock sale.
On or about February 24, 2002, the Internal Revenue Service
(IRS) received SCC’s Form 1120, U.S. Corporation Income Tax
Return, for the short tax year of January 1, 2001, through May
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31, 2001. That form reported a Washington, D.C., mailing address
for SCC.
By letter dated September 17, 2004, an attorney representing
the Shockleys responded on their behalf to correspondence from an
IRS examiner requesting that the Shockleys execute a Form 872,
Consent to Extend the Time to Assess Tax, with respect to the tax
return filed by SCC for its 2001 tax year. The letter stated:
You sent the Form 872 to the Shockleys as
“officer/shareholder” of SCC.
As you are aware, the Shockleys are not officers
or shareholder’s of SCC. They have not been officers
or shareholders for more than three years. * * *
I understand that Northern Communications
Acquisition Corporation * * *, the company that
purchased the SCC shares, is successor in interest to
SCC and capable of executing a Form 872 for SCC. * * *
The letter supplied contact information for an attorney
representing NCAC and suggested that the IRS examiner contact the
representative. A copy of this letter was sent to the attorney
representing NCAC.
On February 18, 2005, the IRS issued multiple notices of
deficiency relating to SCC’s short tax year ending May 31, 2001.
A U.S. Postal Service Form 3877 indicated the notices were sent
by certified mail on February 18, 2005.
The IRS sent one notice of deficiency to NCAC, determining a
deficiency of $42,950,336 in tax and a penalty under section 6662
of $8,590,067 with respect to gain allegedly realized by NCAC
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from the sale of the assets that SCA LLC acquired after the
conversion of SDC into SCA LLC. A copy of this notice was sent
to NCAC’s authorized representative (the same attorney identified
in the September 17, 2004, letter from the Shockleys’ attorney to
the IRS examiner). Attached to this copy of the notice was a
letter addressed to the representative that stated: “We are
sending the enclosed material under the provisions of your power
of attorney or other authorization we have on file. For your
convenience, we have listed the name of the taxpayer to whom this
material relates in the heading above.” The heading identified
the taxpayer name as “Northern Communications Acq. Corp.” No
petition was filed in this Court in response to the NCAC notice
or the copy sent to the representative.
The IRS also sent a notice of deficiency to “Shockley
Communications Corporation” at the Washington, D.C., address
reported on the 2001 Form 1120, determining a deficiency in tax
of $41,566,515, a penalty under section 6662 of $8,313,303, and
an addition to tax under section 6651(a)(1) of $2,078,276. The
IRS calculated the determined deficiency and the penalty with
respect to gain allegedly realized by SCC as a result of the sale
of assets acquired and later sold by SCA LLC. This notice was
returned to the IRS as undeliverable. No petition was filed in
this Court in response to this notice of deficiency.
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On February 18, 2005, the IRS also sent a notice of
deficiency to “Shockley Communications Corporation, Terry K &
Sandra K Shockley, Officers & Shareholders” at the then home
address of the Shockleys in Madison, Wisconsin (the Madison
notice). In this notice, the IRS determined a deficiency of
$41,566,515, an addition to tax under section 6651(a)(1) of
$2,078,276, and a penalty under section 6662 of $8,313,303. The
notice stated:
We have determined that you owe additional tax or
other amounts, or both, for the tax year(s) identified
above. This letter is your NOTICE OF DEFICIENCY, as
required by law. The enclosed statement shows how we
figured the deficiency.
If you want to contest this determination in court
before making any payment, you have 90 days from the
date of this letter (150 days if this letter is
addressed to you outside of the United States) to file
a petition with the United States Tax Court for a
redetermination of the deficiency.
Attached to the notice was an examination report that identified
SCC as the taxpayer (the same examination report was attached to
the notice sent to SCC at the Washington, D.C., address). (The
Form 3877 identified the addressee as “Shockley Communications
Corporation c/o Terry K & Sandra K Shockley”).
On May 25, 2005, a petition was filed in response to the
Madison notice at docket No. 9699-05. The petition stated that
it was “filed on behalf of Petitioner subject to the invalidity
of the Notice of Deficiency and the failure to properly serve the
corporation as required by statute. Without conceding the
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jurisdiction of this Court, the Petitioner hereby submits this
Limited and Special Petition.” A letter dated May 18, 2005, from
the Shockleys to the Clerk of the Court was also attached and was
served on the Commissioner with the petition. In the letter, the
Shockleys noted concern that the notice was addressed to both SCC
and the Shockleys as officers and shareholders and was mailed to
their then home address, which had never been SCC’s address. The
Shockleys also expressed concern that the notice might be
directed at them in an individual or some representative
capacity.
In an answer filed July 29, 2005, the Commissioner admitted
that the Madison notice was sent to the personal residence of the
Shockleys but alleged that this was a courtesy copy and that a
copy of the notice of deficiency was also sent to the last known
address of SCC at the Washington, D.C., address.
On April 26, 2007, the case at docket No. 9699-05 was
dismissed for lack of jurisdiction because SCC lacked legal
capacity to proceed in the case through the Shockleys. The order
of dismissal for lack of jurisdiction stated that the parties
agreed that the case should be dismissed on this ground and thus
the Court did not determine the validity of the notice of
deficiency.
The IRS also sent two separate notices of deficiency to Mr.
and Mrs. Shockley at their then home address in Madison,
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Wisconsin, determining a deficiency of $9,868,051 and a penalty
of $1,973,610.20 with respect to their jointly filed 2001
individual income tax return on February 18, 2005. The Shockleys
filed a petition at docket No. 9700-05 in response to these
notices. The parties agreed to settle the case with no
deficiency or penalty due from the Shockleys for 2001.
Accordingly, a stipulated decision was entered in docket No.
9700-05 on August 23, 2007.
On September 6, 2007, the IRS assessed the following amounts
against SCC for the tax year ending May 31, 2001: (1) Corporate
income tax of $41,566,515; (2) an addition to tax under section
6651 of $2,078,276; (3) an accuracy-related penalty under section
6662 of $8,313,303; and (4) interest of $26,953,309.60.
Thereafter, the IRS undertook transferee examinations of
eight of the largest SCC shareholders who sold their SCC shares
to NCAC on May 31, 2001, including petitioners. On August 21,
2008, the IRS sent notices to each petitioner as a transferee.
Each notice was erroneously titled “Notice of Deficiency”.
OPINION
Section 6901(a) is a procedural statute authorizing the
assessment of transferee liability in the same manner and subject
to the same provisions and limitations as in the case of the
taxes with respect to which the transferee liability was
incurred. Section 6901(a) does not create or define a
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substantive liability but merely provides the Commissioner a
remedy for enforcing and collecting from the transferee of the
property the transferor’s existing liability. See Coca-Cola
Bottling Co. of Tucson v. Commissioner, 334 F.2d 875, 877 (9th
Cir. 1964), affg. 37 T.C. 1006 (1962).
Section 6901(c) provides that the period of limitations for
assessment of transferee liability with respect to an initial
transferee is within 1 year after the expiration of the period of
limitation for assessment against the transferor. Petitioners
argue that respondent is precluded from assessing transferee
liability under section 6901 because the notices issued on August
21, 2008, were barred by the statute of limitations.
As a general rule, section 6501(a) provides that the amount
of any tax “shall be assessed within 3 years after the return was
filed * * * and no proceeding in court without assessment for the
collection of such tax shall be begun after the expiration of
such period.” The running of the section 6501(a) period of
limitations on assessment:
shall (after the mailing of a notice under section
6212(a)) be suspended for the period during which the
Secretary is prohibited from making the assessment
* * * (and in any event, if a proceeding in respect of
the deficiency is placed on the docket of the Tax
Court, until the decision of the Tax Court becomes
final), and for 60 days thereafter.
Sec. 6503(a)(1). Under section 7481(a)(1) a decision of this
Court becomes final after the period for appeal has elapsed. A
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decision of the Tax Court may be appealed to a U.S. Court of
Appeals within 90 days after the decision is entered. Sec. 7483.
Petitioners contend that because SCC mailed its final tax
return for the year ended May 31, 2001, no later than February
19, 2002, the usual period of limitations for assessment against
SCC would have expired no later than February 19, 2005. The
limitations period was suspended for 90 days because the notice
of deficiency was mailed to SCC’s last known address and for
another 60 days thereafter. Secs. 6503(a)(1), 6213(a).
Accordingly, petitioners assert that the period of limitations
against SCC with respect to its tax year ended May 31, 2001,
expired no later than July 18, 2005, and the period of
limitations for assessment against petitioners as transferees
pursuant to section 6901 expired no later than July 18, 2006.
Petitioners assert that the period of limitations for assessment
against SCC was not suspended beyond July 18, 2005, because no
petition was filed in this Court with respect to a deficiency
from a valid notice of deficiency.
Respondent counters that the notices sent to petitioners
were timely because the period of limitations was suspended after
a valid statutory notice was issued to SCC and thereafter a
proceeding in respect of the deficiency was placed on the docket
of this Court to further suspend the limitations period. Thus,
respondent argues that after the order of dismissal in docket No.
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9699-05 was entered on April 26, 2007, the period of limitations
for assessment against SCC was tolled for 90 days and another 60
days thereafter, and that the notices sent to petitioners as
transferees on August 21, 2008, were within 1 year after the
expiration--no earlier than September 6, 2008--of the period of
limitation for assessment against the transferor.
Validity of the Madison Notice of Deficiency
Section 6212(a) authorizes the Commissioner, after
determining a deficiency, to send a notice of deficiency to the
taxpayer by certified or registered mail. The taxpayer then has
90 days, or 150 days if the notice is addressed to a person
outside the United States, from the date the notice of deficiency
is mailed to file a petition in this Court for a redetermination
of the deficiency. Sec. 6213(a).
A notice of deficiency serves the purpose of the statutory
scheme if (1) it provides notice to the taxpayer that the
Commissioner has determined a deficiency against the taxpayer,
and (2) it is received by the taxpayer in sufficient time to
petition this Court to redetermine the deficiency. See, e.g.,
Pugsley v. Commissioner, 749 F.2d 691, 692-693 (11th Cir. 1985);
Mulvania v. Commissioner, 81 T.C. 65, 67 (1983); Frieling v.
Commissioner, 81 T.C. 42, 52-53 (1983) (holding notice effective
if received without prejudicial delay by the taxpayer). However,
actual notice is not required. Section 6212(b)(1) provides that
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a notice of deficiency in respect of an income tax shall be
sufficient if it is mailed to the taxpayer at the taxpayer’s last
known address. See Pietanza v. Commissioner, 92 T.C. 729, 735-
736 (1989), affd. without published opinion 935 F.2d 1282 (3d
Cir. 1991). A taxpayer’s last known address is generally the
address that appears on the most recently filed and properly
processed Federal income tax return, unless the IRS is given
clear and concise notification of a different address. See sec.
301.6212-2(a), Proced. & Admin. Regs.; see also Abeles v.
Commissioner, 91 T.C. 1019, 1035 (1988).
The parties agree that the notice of deficiency sent to SCC
at the Washington, D.C., address was valid because it was sent to
SCC’s last known address even though it was returned undelivered.
See sec. 6212(a) and (b). SCC did not file a petition in
response to that notice.
Respondent argues that the Madison notice is also a valid
notice of deficiency to SCC and that the petition filed at docket
No. 9699-05 suspended the period of limitations under section
6503(a). Respondent maintains that a notice of deficiency sent
to an address other than the taxpayer’s last known address is
effective if it is actually received with ample time to file a
petition. See, e.g., St. Joseph Lease Capital Corp. v.
Commissioner, 235 F.3d 886, 888-889 (4th Cir. 2000), affg. T.C.
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Memo. 1996-256; Sicker v. Commissioner, 815 F.2d 1400, 1401 (11th
Cir. 1987); Frieling v. Commissioner, supra at 57.
Petitioners argue that actual receipt of the Madison notice
by the Shockleys did not give notice to SCC because the Shockleys
were not officers, directors, or agents of SCC in any capacity at
the time the notice was mailed to them. The petition filed in
response to the Madison notice in this Court was dismissed for
lack of jurisdiction because SCC lacked legal capacity to proceed
in the case through the Shockleys.
The Madison notice was addressed to “Shockley Communications
Corporation, Terry K & Sandra K Shockley, Officers &
Shareholders” as compared to the notice mailed to SCC’s last
known address that was addressed to “Shockley Communications
Corporation”. Generally defects in the mailing of a notice of
deficiency are inconsequential when the taxpayer receives actual
notice in time to file a petition for redetermination in the Tax
Court. See Sicker v. Commissioner, supra at 1401 (stating the
Court of Appeals for the Eleventh Circuit’s position that when
the IRS “erroneously sends a notice of deficiency to an address
other than the taxpayer’s ‘last known address,’ the notice is
deemed to be effective when mailed, provided the notice is
actually received by the taxpayer with ample time to file a
petition for redetermination”); see also St. Joseph Lease Capital
Corp. v. Commissioner, supra at 888-889.
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The purpose of the statutory requirement for issuing the
notice of deficiency is to inform the taxpayer of the determined
tax deficiency and provide the taxpayer with the opportunity to
file a petition in this Court before being required to make the
payment. See Gray v. Commissioner, 73 T.C. 639, 645 (1980).
At the time the two notices were sent, the IRS had been
informed that the Shockleys were no longer officers or
shareholders of SCC and that they did not have authority to sign
a Form 872 for SCC. There can be only one last known address
within the meaning of section 6212(b) with respect to any one
taxpayer on the date that a notice of deficiency is issued. See
Abeles v. Commissioner, supra at 1030. Thus only the notice sent
to SCC in Washington, D.C., was valid. The notice sent to the
residence of the Shockleys was a nullity as to SCC.
Proceeding in Respect of a Deficiency
As relevant here, within 90 days after the notice of
deficiency is mailed, “the taxpayer may file a petition with the
Tax Court for a redetermination of the deficiency”, and no
assessment of a deficiency in respect of income tax shall be made
until the expiration of such 90-day period “nor, if a petition
has been filed with the Tax Court, until the decision of the Tax
Court has become final.” Sec. 6213(a). Section 6503(a)(1)
provides:
The running of the period of limitations provided in
section 6501 * * * on the making of assessments * * *
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in respect of any deficiency * * * shall (after the
mailing of a notice under section 6212(a)) be suspended
for the period during which the Secretary is prohibited
from making the assessment * * * (and in any event, if
a proceeding in respect of the deficiency is placed on
the docket of the Tax Court, until the decision of the
Tax Court becomes final), and for 60 days thereafter.
Respondent argues that even if the Madison notice of
deficiency is invalid, there was a proceeding in respect of a
deficiency on the docket of the Tax Court that suspended the
running of the period of limitations under section 6503(a).
Petitioners counter that no proceeding was placed on the docket
of the Tax Court in respect of a deficiency of SCC for SCC’s tax
year ending May 31, 2001.
Respondent asserts that section 6503(a)(1) suspends the
running of the period of limitations whenever a proceeding in
respect of a deficiency is placed on the docket of the Tax Court
regardless of the events that lead to the filing of a petition.
Respondent relies in part on Martin v. Commissioner, 436 F.3d
1216 (10th Cir. 2006) (and cases cited therein), affg. T.C. Memo.
2003-288, supplemented by T.C. Memo. 2004-14. In Martin, the IRS
determined a deficiency with respect to the joint tax return of
the taxpayer, Martin, and his then wife. Because the couple had
divorced, the IRS sent one notice of deficiency to Martin’s last
known address and another notice to his ex-wife at her address;
each notice referenced their joint return. The notice sent to
Martin was returned as undeliverable. A petition was filed by an
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attorney on behalf of Martin and his ex-wife, with the notice
sent to Martin’s ex-wife attached. Although Martin did not
authorize the petition to be filed, there was no reason for the
IRS to assume that the petition was invalid given the strong
presumption of authority afforded to counsel filing a petition in
the Tax Court. Id. at 1224; see Rules 23(a)(3), 33(b); Gray v.
Commissioner, supra at 646. Moreover, the attorney who filed the
petition and Martin corresponded referencing the docketed case
multiple times (including Martin’s sending a partial payment to
the attorney for the joint tax liability) before Martin filed a
motion to dismiss for lack of jurisdiction asserting that he had
not filed or ratified the petition. The Court of Appeals for the
Tenth Circuit held that the filing of the petition and resulting
Tax Court proceeding suspended the running of the period of
limitations for the IRS to assess income tax. Martin v.
Commissioner, supra at 1226.
One of the cases analyzed in Martin was Eversole v.
Commissioner, 46 T.C. 56, 64 (1966), where this Court held that
the running of the period of limitations under former section
277, the predecessor to section 6503(a)(1), is suspended when a
proceeding “is placed” on the docket of the Tax Court, rather
than when “the taxpayer places” such a proceeding on the docket.
This Court determined that the petition as filed was “in respect
of the deficiency” when the widow signed the petition in her
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individual capacity rather than as administrator of the estate.
The Court of Appeals for the Tenth Circuit in Martin cited cases
that stand for the proposition that “the placing of a proceeding
on the docket of the tax court, not the manner in which such a
proceeding is resolved, is key to tolling the running of the
statute of limitations.” Martin v. Commissioner, supra at 1224;
see O’Neill v. United States, 44 F.3d 803 (9th Cir. 1995); United
States v. Shahadi, 340 F.2d 56 (3d Cir. 1965); Am. Equitable
Assurance Co. of N.Y. v. Helvering, 68 F.2d 46 (2d Cir. 1933),
affg. 27 B.T.A. 247 (1932). However, in each of these cases
there was no question with respect to the taxpayer identified in
the respective notices and petitions.
Petitioners argue that the petition filed at docket No.
9699-05 was not “in respect of the deficiency” asserted against
the taxpayer at issue according to section 6503(a)(1).
Petitioners maintain that respondent’s reliance on Martin v.
Commissioner, supra, is misplaced because, unlike the petition
here, the petition filed in Martin was, “on its face,” filed on
Martin’s behalf by his attorney, making it reasonable for the IRS
to presume that the petition was valid.
Unlike cases where a petition was filed by one other than
the taxpayers, but who had authority--or appeared to have
authority--to act on the taxpayers’ behalf, the Shockleys did not
purport to file the petition in docket No. 9699-05 in this
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manner. The Shockleys asserted that the Madison notice was
invalid in that it was addressed to both SCC and the Shockleys as
SCC’s officers and shareholders. The specific circumstances here
show that respondent knew before sending the purported duplicate
notices of deficiency on February 18, 2005, that the Shockleys
were not a proper party and that they did not have authority to
act on behalf of SCC with respect to SCC’s determined deficiency
for 2001.
The period of limitations is suspended only after the
mailing of a notice under section 6212(a). Sec. 6503(a)(1). A
statutory notice that is determined to be invalid is invalid for
other purposes as well. See, e.g., Coffey v. Commissioner, 96
T.C. 161, 166-167 (1991) (holding that a misaddressed notice of
deficiency does not terminate a consent agreement in a Form 872-
A, Special Consent to Extend the Time to Assess Tax, nor does an
assessment based on an invalid notice of deficiency terminate a
Form 872-A agreement); Carnahan v. Commissioner, T.C. Memo. 1991-
168 (holding that section 6212(c) applies to bar the Commissioner
from issuing a notice of deficiency only if the taxpayer has
already filed a petition in response to a valid notice of
deficiency--a petition for redetermination filed in response to
an invalid notice of deficiency does not trigger the bar of
section 6212(c)(1)). An invalid notice of deficiency does not
suspend the running of the period of limitations for assessment.
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See Welch v. Schweitzer, 106 F.2d 885, 888 (9th Cir. 1939);
Reddock v. Commissioner, 72 T.C. 21, 26 (1979); Rogers v.
Commissioner, 57 T.C. 711, 713 (1972).
In Greve v. Commissioner, 42 B.T.A. 142 (1940), the Board of
Tax Appeals held that there was no suspension of the period of
limitations upon assessment when the IRS sent a notice that was
not proper under former section 272, the predecessor of section
6212, that had prompted the taxpayer to file a petition in a
prior case. In the petition with respect to the initial case,
the taxpayer had sought dismissal of the proceeding for lack of
jurisdiction because of the absence of any proper notice. See
Greve v. Commissioner, 37 B.T.A. 450 (1938). After the case was
dismissed for lack of jurisdiction, the Commissioner mailed a
notice to the taxpayer. In response, the taxpayer filed a
petition and asserted that this notice was time barred. Greve v.
Commissioner, 42 B.T.A. at 142. The Board of Tax Appeals agreed
and stated that the decision of the earlier case, that there was
no valid notice, did not suspend the running of the period of
limitations until 60 days after the decision of the Board at the
earlier docket number became final according to the statute then
in effect.
Conclusion
The Madison notice was not sent to SCC’s last known address
and was not a valid notice of deficiency. The petition filed at
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docket No. 9699-05 was not filed on behalf of SCC in form or in
effect, was not in respect of a deficiency, and did not prohibit
assessment for purposes of section 6503(a)(1). That petition,
therefore, did not extend the period of limitations as to SCC.
The notices sent to petitioners as transferees were not timely.
In view of our conclusion, it is not necessary to reach the
other issues or arguments of the parties. To reflect the
foregoing,
Decisions will be entered
for petitioners.