In Uncategorized on 10/05/2017 at 16:00

But You’re Not Dismissed

That pawky humorist George Schussel is back, with a novel question: can a petitioner successfully move to dismiss a Section 6901 transferee liability petition?

Remember George? No? Then see my blogpost “An Unexpected Vein of Pawky Humor,”1/31/13. George has finally settled everything with IRS, he says, as well as other unspecified claims, and wants to pack them all up and go away.

So here’s George Schussel, Transferee of Driftwood Massachusetts Business Trust, f.k.a. Digital Consulting, Inc., 149 T. C. 16, filed 10/5/17.

Not so fast, says Judge Ashford. East meets West in Ming v. Wagner, and Ming wins. Ming is the classic case that says you can’t dismiss a petition from a SNOD except for want of jurisdiction; Tax Court must enter judgment for IRS in the full amount of the deficiency as stated in the SNOD. So if you want out, stipulate with IRS and move for entry of decision.

Wagner is the dismiss-petition-from-CDP case, where there is no decision required, because no Section 7459. Likewise one can move to dismiss a petition from innocent spousery or whistleblowing, as there’s no dollar amount to enter or statute preventing dismissal.

The key to the Wagnerian cases is FRCP 41(2), which allows dismissal if no prejudice to the other side other than the prospect of another lawsuit. Remember, no statute mandates entry of decision for IRS in any Wagnerian.

But Section 6901 and the Regs say “…regardless of the nature of a transferee’s liability under section 6901(a)(1) (i.e., whether it is for income, estate, or gift tax self-assessed by the taxpayer-transferor or a deficiency in income, estate, or gift tax determined by the Commissioner), it shall be ‘assessed’ against the transferee ‘and paid and collected in the same manner and subject to the same provisions and limitations as in the case of a deficiency in the tax with respect to which such liability is incurred’.  Sec. 301.6901-1(a)(1), Proced. & Admin. Regs. (emphasis added).  Paragraph (a) of the regulation further provides that in the case of transferee liability for the income, estate or gift tax of the taxpayer-transferor, the Internal Revenue Code provisions made applicable by section 6901(a) include those relating to “the filing of a petition with the Tax Court of the United States and the filing of a petition for review of the Tax Court’s decision.”  Sec. 301.6901-1(a)(3)(iv), Proced. & Admin. Regs.” 149 T. C. 15, at pp. 8-9. (Footnote omitted).

Note it’s the same as a deficiency, not as if, Judge Lauber.

Anyway, though George wanted dismissal with prejudice and Ming wanted dismissal without, mox nix, says Judge Ashford. The SOL has run on any further attempts to litigate George’s delictions, so any dismissal must be with prejudice, as any new proceeding will fail.

That George’s transferee beef is mixed in with other, different points of contention doesn’t help him.

“Finally, also ill-conceived is petitioner’s contention that because we are not privy to the parties’ comprehensive settlement and therefore cannot glean from the record the agreed amount of his transferee liability, we are relieved of having to enter an order and decision specifying the amount of the liability (as is provided in section 7459(d)).  The amount of petitioner’s liability, albeit as determined by respondent, is very clear from the record as it is stated in respondent’s notice of liability, which is attached to petitioner’s petition.  Because the parties have apparently agreed on a different amount for which petitioner is liable, it is incumbent upon them to stipulate a decision reflecting that amount.” 149 T. C. 16, at p. 12.


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