The Great Chieftain of The Jersey Boys furnishes me with the latest addition to my “Stealth” collection in Techtron Holding, Inc., T. C. Memo. 2023-29, filed 3/9/22. Judge Vasquez has to decide whether to toss the petition for want of jurisdiction (IRS’ pursuit of Techtron Holding’s successor-by-merger for deficiency and Section 6663 fraud chops goes on), or invalid SNOD (case goes away as SOL runs).

TH merged into its wholly-owned sub, which in turn merged into a BVI Corp. The Jersey Boys and its predecessor firm represented the whole shebang pre-and-post merger. While BVI claimed to take on all of predecessor’s tax liabilities as transferee, IRS says that’s not the same as being fiduciary. BVI claims it is, but neither files notice per Section 6903, and doesn’t undertake to ratify petition prontito. Transferee’s liability extends only to what transferee got from transferor per Section 6901, which may be less than what transferor owes IRS, hence BVI’s reticence to go all-in.

The SNOD was sent to TH at last known address, even though it had previously ceased to exist per local (DE) law. Section 6212(b) says this is OK, absent notice of a fiduciary relationship.

“Although [BVI]’s Form 2045 references the ‘tax liabilities of [petitioner] for 12-31-2000,’ it does not state that [BVI] is acting for petitioner in a fiduciary capacity. Instead it identifies [BVI] as the “Transferee’ of certain assets from Techtron, petitioner’s initial corporate successor. The terms  ‘transferee’ and ‘fiduciary’ are distinct terms under the Code and applicable regulations. Compare § 6901(h) (defining ‘transferee’ to include a ‘donee, heir, legatee, devisee, and distributee’), and Treas. Reg. § 301.6901-1(b) (expanding the definition of ‘transferee’ to include a ‘distributee of an estate of a deceased person, the shareholder of a dissolved corporation, the assignee or donee of an insolvent person, the successor of a corporation, a party to a reorganization as defined in section 368, and all other classes of distributees’), with § 7701(a)(6) (defining ‘fiduciary’ to mean ‘a guardian, trustee, executor, administrator, receiver, conservator, or any person acting in any fiduciary capacity for any person’). Thus, [BVI]’s identifying itself as a ‘transferee’ did not serve as notice to respondent that it was ‘acting for another person in a fiduciary capacity.’ See § 6903(a); see also §§ 6901(h), 7701(a)(6); Treas. Reg. § 301.6901-1(b).” T. C. Memo. 2023-29, at pp. 11-12.

Rule 63 doesn’t help BVI sub in for TH; TH never properly petitioned, as it had ceased to exist by DE law when it was merged. True, Rule 60 allows for timely ratification by proper party seeking to amend caption and join case, but BVI said it wasn’t going to do that until validity of the SNOD was determined. That’s not enough for Judge Vasquez, who wants a clear indication BVI would ratify without delay.

Taishoff says “The Rule says ‘a reasonable time’ must be allowed. Is The Great Chieftain being cute? Or is his objection reasonable? Worth an appeal?”

But at close of play, TH is out as nonexistent, and BVI is timed out.

However, all is not lost. “Dismissal of this case for lack of jurisdiction does not constitute a decision that petitioner is liable for the determined deficiency.” T. C. Memo. 2023-29, at p. 15, footnote 15. (Citations omitted).

Edited to add, 3/9/23: How could I have omitted a Taishoff “Good Try, First Class” for the transferee-fiduciary gambit, and the Rule 60-63 Shuffle? The Great Chieftain is always trying.