The undergrowth of TEFRA bedevils IRS and petitioners to the end. Fears Drive Henry 58, LLC, Fears Drive Manager, LLC, Tax Matters Partner, Docket No. 13235-21, filed 7/26/23, incorporated in GA (where else?) 12/15/17. Should’a waited the two weeks, guys. When the FPAA hit, and FDM petitioned, FDM had already been dissolved by GA DoS.

So Judge Travis A. (“Tag”) Greaves has to bash through the boondocks of GA corporate law to find if Henry 58 or somebody else can ratify FDM’s petition.

You’d expect a David Dung Le here, and IRS doesn’t disappoint. For the backstory, see my blogpost “Being and Nothingness,” 5/7/13.

FDM tries the nunc pro tunc reinstatement language GA DoS used when they revived FDM 309 days late, saying FDM was reinstated back to the day of dissolution. IRS has GA caselaw that says that doesn’t help, but FDM has a GA case that says it does.

Judge Tag Greaves has the right view; though State law governs capacity to sue (or petition), Rule 60(a) allows for ratification when the wrong party sues on behalf of another. There’s a three-step process: “(1) the person who attempted to file the petition thought he was authorized, and (2) those who ratified were authorized to file or approve the filing of the petition, and (3) ratification was expressly attempted or possible.” Order, at p. 6.

This is extremely fact-bound, so let FDM or Henry 85 or whoever show who, if anyone, ratified, and when, if ever. Remember the now-extinct Section 6226(b)(1) notice partners and five-percenters.

Taishoff says it’s a toughie, as if the notice partners and five-percenters were unaware that FDM was dead (a) when the 90-day door slammed on the TMP, and (b) when the 150-day door slammed on them, what could they have done to ratify? Should the notice partners and five-percenters have filed their own petitions, even if they didn’t know FDM was dead? Offside petitioners get bounced. See my blogpost “Tax Smatterer,” 3/12/15.

Practice tip- When representing an entity, make sure it still exists. Representing a lender, I found two (count ’em, two) mortgagors who had ceased to exist, and saved their counsel from malpractice by having them get straight with NY DoS and the tax people.