T.C. Memo. 1997-211

UNITED STATES TAX COURT

SHARON E. BACKSTROM, HAROLD J. and ZELMA G. BARBRET, VIRGINIA

BOLAND, JOHN A. and THERESA A. CISLAGHI, ESTATE OF ROGER W.

DORNBROCK, DECEASED, MARYN J. DORNBROCK, PERSONAL REPRESENTATIVE,

MARYN J. DORNBROCK, GARY E. and BEVERLY G. ENGEL, HERMANN K. and

HELEN W. ENZMANN, DON and MARY EVERETT, KENNETH B. and MARY J.

FAUST, ESTATE OF HAROLD E. FRAZER, DECEASED, ELIZABETH FRAZER,

PERSONAL REPRESENTATIVE, CHARLOTTE V. FRAZER, WILLIAM M. and

MARTHA J. GOODMAN, PAUL W. and KATHLEEN M. HAMMER, JOHN and RITA

C. HARVEY, WILLIAM R. and ETHEL KELLEY, EDWARD and ARLES

KOGELMAN, TERRENCE L. LABADIE, FRANCES ENG LEE, GEORGE R.

MARTELL, CRAIG A. and CYNTHIA M. PELTIER, MYRA JOAN RODGERS,

WILLIAM H. and SHIRLEY M. SHAW, KARL L. and SUI TI A. SIEBERT,

JOHN M. and SANDRA SOPER, PAUL J. and NANCY L. SPINDLER, GERARD

W. J. and MADELINE TREMBLAY, RICHARD R. and MONICA J. RIDDLE,

CAROL T. JAKUBOWSKI, and ARTHUR MILLER Petitioners v.

COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 5904-88. Filed May 6, 1997.

Andrew W. Mychalowych, for petitioners Maryn J. Dornbrock

 and the Estate of Roger W. Dornbrock, Deceased.
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1 Unless otherwise indicated, all section references are to

the Internal Revenue Code in effect for the years at issue. All

Rule references are to the Tax Court Rules of Practice and

Procedure.

2 As discussed later in greater detail, this motion was filed

by petitioner, Maryn J. Dornbrock, individually on her own

behalf, and on behalf of the Estate of Roger W. Dornbrock,

Deceased, in her capacity as personal representative of such

estate.

Karen J. Goheen, for respondent.

MEMORANDUM OPINION

DAWSON, Judge: This case was assigned to Special Trial

Judge D. Irvin Couvillion pursuant to section 7443A(b)(4)and

Rules 180, 181, and 183.1 The Court agrees with and adopts the

opinion of the Special Trial Judge, which is set forth below.

OPINION OF THE SPECIAL TRIAL JUDGE

COUVILLION, Special Trial Judge: Petitioner Maryn J.

Dornbrock (Mrs. Dornbrock) has before the Court a motion for

leave to file a motion to vacate or revise the decision that was

entered in this case.2 This case is one of a group of cases that

constituted a national litigation project identified by

respondent as "IG-Phonomasters" and involved investors in a

master recording leasing program. A joint petition was filed in

this case on July 11, 1985, on behalf of numerous investors in

this program, which included Roger W. Dornbrock and his wife,
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3 Under the circumstances herein, the motion for leave to file

the motion to vacate or revise is a prerequisite to filing the

motion to vacate or revise. In deciding whether to grant or deny

a motion for leave to file a motion to vacate or revise, the

Court may consider the merits of the underlying motion to vacate

or revise to determine whether further proceedings are

appropriate. Brannon's of Shawnee, Inc. v. Commissioner, 69 T.C.

999 (1978). Accordingly, the Court here considers the merits of

Mrs. Dornbrock's motion to vacate or revise, even though the

motion before the Court is a motion for leave to file the motion

to vacate or revise.

Maryn J. Dornbrock. The decision is a stipulated decision,

signed by counsel for the parties, and was entered by the Court

on December 23, 1993. Mrs. Dornbrock's motion for leave to file

the motion to vacate or revise the decision was filed on April

15, 1996, over 2 years after the decision was entered. No other

motions, such as a motion to vacate, or a notice of appeal, have

ever been filed in this case. Concurrent with Mrs. Dornbrock's

motion for leave to file is a motion to vacate or revise, which

has been lodged with the Court. Mrs. Dornbrock's motion for

leave to file was calendared for hearing and was heard at this

Court's Detroit, Michigan, trial session at which evidence was

adduced.3

This case arises out of Roger W. Dornbrock's (Mr. Dornbrock)

participation in a 1981 master recording leasing program known as

the Pop Phonomasters Leasing Program (Pop Phonomasters program). 

Mr. Dornbrock participated in the leasing program in 1981 by

signing an "Offer to Participate in the Co-tenancy and Operating

Agreement and Phonomasters Lease" (Offer). Mr. and Mrs.
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4 Although adjustments were made in the notice of deficiency

to the Dornbrocks' income for 1981, no deficiency was determined

for that year.

Dornbrock claimed a Schedule E partnership loss and an investment

tax credit on their joint 1981 Federal income tax return from the

Pop Phonomasters program. They also filed amended joint Federal

income tax returns for 1978, 1979, and 1980, claiming investment

tax credit carrybacks for those years arising out of the Pop

Phonomasters program. The investment tax credits resulted in

Federal income tax refunds for each of these years. On April 12,

1985, a notice of deficiency was issued to Roger W. Dornbrock and

Maryn J. Dornbrock, husband and wife, for all years involving the

Pop Phonomasters program. In the notice of deficiency,

respondent determined the following deficiencies in Federal

income taxes and additions to tax:

 Additions to Tax 

 Sec. Sec.

 Year Deficiency 6653(a) 6659

1978 $3,273.50 $163.68 $982.05

 1979 9,818.00 490.90 2,945.40

 1980 3,081.00 154.05 924.30

These deficiencies arose solely from Roger W. Dornbrock's

participation in the Pop Phonomasters program.4

On July 11, 1985, a joint petition was filed on behalf of

approximately 35 petitioners who received notices of deficiency

as a result of their participation in the Pop Phonomasters
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5 For purposes of simplicity in numbers, the Court counts

husbands and wives who filed joint returns and received joint

notices of deficiency as "one" petitioner. 

6 The petition was signed by Mr. Young as counsel for

petitioners. A petition in the Tax Court need not be signed by

the taxpayers and may be signed by their counsel. Rules

23(a)(3), 24(a).

program, including Mr. and Mrs. Dornbrock.5 The timely petition

in this case was filed on behalf of petitioners by Hallison H.

Young (Mr. Young), an attorney who is admitted to practice 

before this Court.6 At the time the petition was filed, Mr. and

Mrs. Dornbrock were legal residents of the State of Michigan. On

July 19, 1987, Mr. Dornbrock died, and Mrs. Dornbrock was

subsequently appointed as personal representative of his estate

by the Probate Court of Wayne County, Michigan. At the time the

subject motion was filed, Mrs. Dornbrock continued to be a legal

resident of the State of Michigan.

Due to the large number of participants in the Pop

Phonomasters program who had filed the joint petition, several

petitioners representing various versions of the program were

selected as "lead cases" that were tried first, and the remainder

of petitioners were severed from the lead cases and assigned a

separate docket number (i.e., this case). The Court then

continued this case pending the outcome of the lead cases. Roger

W. Dornbrock and Maryn J. Dornbrock were among petitioners who
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were severed from the lead cases and assigned to this case. In

due course, a notice was issued calendaring this case for trial.

The lead cases in the program that were tried were decided

by this Court in Donahue v. Commissioner, T.C. Memo. 1991-181,

affd. without published opinion 959 F.2d 234 (6th Cir. 1992),

affd. sub nom. Pasternak v. Commissioner, 990 F.2d 893 (6th Cir.

1993). In Donahue v. Commissioner, supra, this Court found that

the Pop Phonomasters program lacked economic substance. The

decision in the Donahue case was affirmed in the two cited

appeals. Subsequent to the conclusion of the final appeal in the

Donahue case and the expiration of time for filing a petition for

certiorari with the U.S. Supreme Court, counsel for the parties

in this case, which included the Dornbrocks, entered into a

stipulated decision with respect to the Pop Phonomasters issues

based on the decisions in the Donahue case.

In the stipulated decision entered in this case, the parties

agreed to deficiencies in Federal income taxes and additions to

tax with regard to Mr. and Mrs. Dornbrock in the amounts set out

in the notice of deficiency. The stipulated decision document

was lodged with the Court when the case was called for trial on

November 1, 1993, and the decision was entered by the Court on

December 23, 1993. Concurrent with the filing of the

stipulation, the parties filed a Motion to Substitute Parties and

to Change Caption with respect to petitioner Roger W. Dornbrock,
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who passed away in July 1987. Pursuant to Rule 63(a), this Court

ordered that "Estate of Roger W. Dornbrock, Deceased, Maryn J.

Dornbrock, Personal Representative" be substituted for "Roger W.

Dornbrock" as a petitioner in this case.

Throughout the entire process just described, the attorney,

Mr. Young, represented the taxpayers in the lead cases that were

tried, and he continued as attorney for the taxpayers in this

case, which had been severed from the lead cases. Mr. Young was

in direct contact with only one of the program participants,

Frank C. Pasternak (Mr. Pasternak). Mr. Pasternak was a

certified public accountant whose clients included one of the

organizers of the Pop Phonomasters program. Mr. Pasternak had

accepted the responsibility of acting as "Co-tenancy Operator"

(CTO) for the Pop Phonomasters program. By signing the

aforementioned Offer, each Pop Phonomasters participant,

including Mr. Dornbrock, appointed Mr. Pasternak as his or her

attorney in fact and authorized him to execute, on behalf of each

participant, the Co-tenancy and Operating Agreement, the

Phonomasters Lease Agreement, and the Phonomasters Marketing

Agency Agreement. Each participant also authorized Mr. Pasternak

to execute any documents required under section 48(d) and section

1.48-4(g), Income Tax Regs., to pass through investment tax

credits from the lessor to the lessees. In his capacity as CTO,

Mr. Pasternak was given, subject to the other participants'
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instructions, the exclusive right and duty to conduct the

operations of the Pop Phonomasters program. More specifically,

Mr. Pasternak was authorized to maintain books and records and to

pay all ordinary and necessary expenditures without consulting

other participants.

As Pop Phonomasters participants began receiving notices of

deficiency regarding their investments, some of them contacted

Mr. Pasternak about the matter. In response to their inquiries,

and in his capacity as CTO, Mr. Pasternak mailed a form letter to

each of the Pop Phonomasters participants regarding the notices

of deficiency received by them. The form letter was drafted by

Mr. Young's law firm; however, the letters were signed by Mr.

Pasternak and were printed on "Phonorecords Phonomaster Leasing"

letterhead and stated:

Dear Co-tenant:

As you are aware, the Internal Revenue Service has been

conducting an investigation into the tax liabilities of

certain co-tenants participation in Pop Phonomaster

Leasing Program. We were recently informed that certain cotenants have received Statutory Notices of Deficiency.

It appears that certain of these investigations by the

IRS involve substantial and controlling common questions of

law or fact.

Accordingly, if you wish to join in a consolidated

effort (joint Tax Court Petition) return an executed copy of

the enclosed Consent Form by June 24, 1985 since your

petition will very probably have to be filed with the United

States Tax Court, Washington, D.C., by July 11, 1985.

To help me and/or my representative prepare the

petition, promptly deliver to me all available information
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which substantiates all adjustments reflected on IRS Form

5278 Statement of Income Tax changes attached to your Notice

of Deficiency by June 24, 1985.

Thank you for your cooperation.

Very truly yours,

Frank Pasternak

Co-tenant Operator

The consent form attached to the letter read as follows:

The undersigned hereby desire(s) to contest the attached

Notice of Deficiency and authorize Frank Pasternak or his

representative to file a joint/consolidated petition with

the United States Tax Court for a redetermination of the

deficiency.

The undersigned hereby enclose(s) a copy of his/her

Statutory Notice of Deficiency.

Upon receiving signed consent forms from each of the Pop

Phonomasters participants, Mr. Pasternak forwarded the consent

forms and notices of deficiency to Mr. Young, the attorney. The

participants who responded to the letter also made payments for

instituting litigation in this Court in the form of checks made

payable to Mr. Pasternak. Mr. Pasternak, in turn, deposited the

checks into a bank account he held as agent for Pop Phonomasters

and then issued a check from such account to Mr. Young

representing total payment from all petitioners.

At the hearing on the subject motion, Mrs. Dornbrock

testified that, although she was not aware of the details

surrounding the Pop Phonomasters program, her husband had told

her about his investment in Pop Phonomasters and that she had
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7 At this time, Mr. Dornbrock had become aware that he was

terminally ill and was taking steps to prepare his wife to handle

financial matters after he had passed away. His efforts included

providing his wife with much financial information of which she

had previously, by her own admission, been intentionally unaware.

raised no objections. Further, she admitted that her husband had

told her, prior to his death in 1987, that a tax problem had

arisen with the investment.7 He directed her to call Mr.

Pasternak if she had any questions regarding the investment or

the tax problems associated therewith. After her husband's

death, Mrs. Dornbrock called Mr. Pasternak to inform him of her

husband's death, but she did not discuss the Pop Phonomasters

program with him.

After the stipulated decision in this case became final, the

Internal Revenue Service (IRS) assessed the various deficiencies

and additions to tax in accordance with the decision. In March

1994, Mrs. Dornbrock received a letter from the IRS informing her

that she owed $17,267.81 for the tax year 1978. Believing that

this amount represented all of her tax liabilities, she paid this

amount in full. Shortly thereafter she received further

correspondence from the IRS informing her that she owed

$51,790.34 for 1979 and $15,043.26 for 1980. Upon receipt of the

correspondence referencing 1979 and 1980, Mrs. Dornbrock sought

the advice of a certified public accountant, who referred her to

an attorney. This series of events gave rise to the motion filed

on her behalf and that is presently before the Court.
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8 Mrs. Dornbrock's changed position appears to have resulted

from the Court's observation that, if Mr. Young never had

authority to represent her, this Court never had jurisdiction

over her, and respondent would have been free to assess her for

the amounts determined in the notice of deficiency. This result

would complicate the legal process in that presumably Mrs.

Dornbrock would be required to continue the action in this Court

for a determination that there was no jurisdiction and commence a

separate legal proceeding in U.S. District Court for a refund. 

This latter proceeding, however, would require a prior payment in

full of the assessments. 

In her motion for leave to file, in which Mrs. Dornbrock is

represented by attorney Andrew W. Mychalowych (Mr. Mychalowych),

she alleges "fraud on the Court" because Mr. Young lacked

authority to represent her in this case. In further filings,

Mrs. Dornbrock alleges that this Court lacked jurisdiction over

both her and the estate of her deceased husband. At the hearing,

Mrs. Dornbrock modified her position to contend that Mr. Young's

lack of authority to represent her originated only at the time of

her husband's death.8 She further alleges that any authority Mr.

Young may have had to represent her husband terminated upon Mr.

Dornbrock's death, and that Mr. Young had no authority to

represent her as personal representative of her husband's estate. 

Mrs. Dornbrock asserts that Mr. Young had no authority to execute

the stipulated decision document on her behalf and on behalf of

the estate of her deceased husband, and, therefore, the decision

should be vacated. Respondent objects to petitioner's motion.

With regard to the argument that Mr. Young lacked authority

to represent her, Mrs. Dornbrock contends that she had no
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9 Mrs. Dornbrock's position on this argument is not clear as

to whether the Court's purported loss of jurisdiction over her

husband's estate reverted back to the date of the filing of the

petition or the date her husband died.

knowledge of this litigation and she did not personally authorize

Mr. Young to represent her in this case. Mrs. Dornbrock contends

further that, if Mr. Young had the authority to represent her in

filing the joint petition, he was acting as her subagent (by and

through her agent, Mr. Dornbrock) rather than as her agent. 

Accordingly, she argues that, under common law principles of

agency, Mr. Young's status as subagent for her terminated upon

the death of Mr. Dornbrock, her agent. Thus, Mrs. Dornbrock

contends that Mr. Young's authority to represent her as a

subagent terminated upon the death of her husband.

With regard to her argument that Mr. Young lacked authority

to represent her husband's estate, Mrs. Dornbrock contends that,

under Michigan law, Mr. Young's authority to represent Mr.

Dornbrock terminated upon Mr. Dornbrock's death. She contends

that Mr. Young never obtained her permission, as personal

representative of her husband's estate, to substitute parties as

he did in this case. She argues further that her husband's

estate was closed in 1988; yet, the estate was not substituted as

a party until 1993. Therefore, she contends, this Court never

obtained jurisdiction over the estate of her deceased husband.9
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In support of her motion, Mrs. Dornbrock asserts that she

(1) had no specific knowledge of the tax deficiencies at issue

herein, (2) did not sign the petition, (3) did not know Mr.

Young, (4) did not personally authorize Mr. Young to file a

petition on her behalf, (5) never received any communication from

Mr. Young regarding this case, (6) never received a bill from Mr.

Young for services rendered in this case, and (7) did not

personally authorize Mr. Young to enter into a settlement

agreement on her behalf or on behalf of her husband's estate.

Rule 162 provides that a motion to vacate shall be filed

within 30 days after a decision has been entered, unless the

Court shall otherwise permit. Sections 7481 and 7483 provide

generally that a decision of this Court becomes final, in the

absence of a timely filed notice of appeal, 90 days from the date

the decision is entered. As a general rule, this Court is

without jurisdiction to vacate a decision after the decision

becomes final. Toscano v. Commissioner, 441 F.2d 930, 932 (9th

Cir. 1971), vacating 52 T.C. 295 (1969). However, a decision

entered in a case where this Court never acquired jurisdiction

over a taxpayer is a legal nullity and is, therefore, not a

decision as to that taxpayer. Billingsley v. Commissioner, 868

F.2d 1081, 1085 (9th Cir. 1989). Accordingly, a judgment void

for lack of jurisdiction may be vacated at any time. Billingsley

v. Commissioner, supra at 1084; Brannon's of Shawnee, Inc. v.
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10 In Reo Motors, Inc. v. Commissioner, 219 F.2d 610 (6th Cir.

1955), the circuit to which this case would be appealed, the

Court of Appeals for the Sixth Circuit indicated that the Tax

Court also has the power in its discretion, in extraordinary

circumstances, to vacate and revise a final decision where it is

based upon a mutual mistake of fact. However, in Harbold v.

Commissioner, 51 F.3d 618, 619 (6th Cir. 1995), the Sixth Circuit

held that the case of Reo Motors, Inc. v. Commissioner, supra, is

no longer binding in that circuit and the case is considered to

have been overruled by Lasky v. Commissioner, 352 U.S. 1027

(1957).

Commissioner, 71 T.C. 108, 111-112 (1978). The Court may also

vacate a decision after the decision becomes final if there has

been a fraud on the Court. Abatti v. Commissioner, 859 F.2d 115

(9th Cir. 1988), affg. 86 T.C. 1319 (1986); Senate Realty Corp.

v. Commissioner, 511 F.2d 929, 931 (2d Cir. 1975); Stickler v.

Commissioner, 464 F.2d 368, 370 (3d Cir. 1972). Mrs. Dornbrock's

motion alleges lack of jurisdiction as well as fraud on the

Court.10

The jurisdiction of this Court is based on a timely filed

petition. Levitt v. Commissioner, 97 T.C. 437, 441 (1991). When

a taxpayer files a timely petition, this Court's jurisdiction is

invoked and remains unimpaired until the controversy is decided. 

Dorl v. Commissioner, 57 T.C. 720, 722 (1972); Main-Hammond Land

Trust v. Commissioner, 17 T.C. 942, 956 (1951), affd. 200 F.2d

308 (6th Cir. 1952). However, when an individual fails to sign

the petition or to ratify the petition and does not intend to

become a party to the litigation, this Court acquires no

jurisdiction over that individual. Levitt v. Commissioner, supra
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at 441. Ratification requires a showing of proper authorization

by the signing party to act on behalf of the nonsigning party. 

Id.

When a petition is filed by an attorney on behalf of a

taxpayer, the question is whether that taxpayer authorized the

attorney to act on his or her behalf. This is a factual question

to be decided based on common law principles of agency. Adams v.

Commissioner, 85 T.C. 359, 369-372 (1985); Casey v. Commissioner,

T.C. Memo. 1992-672. Under common law rules of agency, authority

may be granted by express statements or may be derived by

implication from the principal's words or deeds. John Arnold

Executrak Sys., Inc. v. Commissioner, T.C. Memo. 1990-6 (citing 1

Restatement, Agency 2d, sec. 26 (1957)).

In Casey v. Commissioner, supra, this Court held that the

taxpayer's practice of routinely allowing her spouse to handle

income tax matters and to open correspondence received from the

Commissioner constituted an implied grant of authority to her

spouse that allowed him to represent her with respect to their

joint income tax matters. That grant of authority was sufficient

to allow the taxpayer's spouse to hire an attorney to file a

joint petition with this Court. This Court held that it had

jurisdiction over the taxpayer even though she never signed the

petition because she impliedly authorized it through her spouse.
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The record establishes that Mrs. Dornbrock habitually turned

over the responsibility of dealing with the couple's business and

financial matters, including their Federal income tax matters, to

her husband. Mrs. Dornbrock trusted her husband completely and

signed their joint Federal income tax returns without even

reviewing them. Furthermore, Mrs. Dornbrock never opened any

mail that appeared to be financially or tax related, even though

it may have been addressed jointly to her and her husband. Mrs.

Dornbrock was aware of correspondence received from the IRS;

however, she allowed Mr. Dornbrock to deal with such matters

without question. This conduct impliedly authorized Mr.

Dornbrock to represent Mrs. Dornbrock with respect to their

Federal income tax matters. Mr. Dornbrock acted within the scope

of this authority when he retained Mr. Young, by and through Mr.

Pasternak, to file a petition with this Court. Mr. Young acted

pursuant to the authority granted to him by Mr. Dornbrock on Mr.

and Mrs. Dornbrock's behalf when he filed the joint petition in

this case. "Even if * * * [the taxpayer] was not aware of the

dispute with the IRS, her own admitted delegation of authority to

her husband cannot now be revoked because she is unhappy with the

outcome of her case. 'Deficiencies ex post do not detract from

authority ex ante.'" DiSanza v. Commissioner, T.C. Memo. 1993-

142, affd. without published opinion 9 F.3d 1538 (2d Cir. 1993). 
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Mrs. Dornbrock, therefore, has not convinced this Court that it

lacked jurisdiction over her in this case.

Mrs. Dornbrock further contends that this Court lacked

jurisdiction over her husband's estate at the time the decision

was entered. The petition was filed timely on July 11, 1985, and

Mr. Dornbrock died in 1987 while this case was pending. Prior to

entry of the decision, the Court ordered, pursuant to Rule 63(a),

that the estate of her husband, through Mrs. Dornbrock as

personal representative, be substituted as a petitioner in this

case.

It is well settled that a petitioner's death does not divest

this Court of jurisdiction over the income tax liability of such

petitioner for years at issue. Nordstrom v. Commissioner, 50

T.C. 30 (1968); Yeoman v. Commissioner, 25 T.C. 589 (1955). This

Court's jurisdiction is based on the petition, which here was

timely filed on Mr. Dornbrock's behalf while he was alive and

which he authorized. Sec. 6213(a); Rule 13. Once this Court has

jurisdiction, the case does not abate upon petitioner's death. 

Duggan v. Commissioner, 18 B.T.A. 608 (1930).

When a petitioner dies, the Court generally will order that

a representative or successor be substituted as the proper party. 

Rule 63(a). The legal capacity in this Court of a representative

is controlled by Rule 60(c). This Court applies local law to

determine who may represent the decedent's estate in this Court. 
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Fehrs v. Commissioner, 65 T.C. 346 (1975). Under Michigan law,

"an estate is not a proper party to a lawsuit but rather the

administrator or executor is the proper party plaintiff or

defendant." Wright v. Estate of Treichel, 36 Mich. App. 33, 35,

193 N.W.2d 394, 395 (1971); see also Cinnamon v. Abner A. Wolf,

Inc., 215 F. Supp. 833 (E.D. Mich. 1963) (stating that the death

of the plaintiff during the pendency of a private antitrust suit

in Federal court sitting in Michigan did not abate the action,

and the executor of the deceased plaintiff's estate could be

substituted as party plaintiff). Mrs. Dornbrock was appointed

personal representative of her husband's estate by the Probate

Court of Wayne County, Michigan, which clearly qualifies her as

the proper party to continue the prosecution of Mr. Dornbrock's

action before this Court. This Court ordered that Mr.

Dornbrock's estate and Mrs. Dornbrock, as personal representative

of that estate, be substituted for her deceased husband as a

petitioner in this case. This substitution was in compliance

with both the rules of this Court and Michigan law. Mrs.

Dornbrock, therefore, has not convinced this Court that we lack

jurisdiction over the estate of her deceased husband in this

case.

As was noted in Nordstrom v. Commissioner, supra at 32:

The foregoing makes it clear that the Court's

jurisdiction over a case continues unimpaired by the death

of a petitioner and even * * * [in the event that] there is

no personal representative appointed to act in the place and
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stead of the decedent. And if our jurisdiction continues,

then there must be a procedural means to bring the case to a

close.

In the event that no representative of a decedent comes forward

to prosecute the decedent's case before this Court, the

procedural means for bringing the case to a close is respondent's

filing of a motion to dismiss for failure to properly prosecute. 

Nordstrom v. Commissioner, supra; see also Wyler v. Commissioner,

T.C. Memo. 1990-285. Consequently, if this Court were to hold

that the aforementioned substitution of Mr. Dornbrock's estate

and Mrs. Dornbrock as personal representative of that estate was

improper, respondent would then be in the position to file a

motion to dismiss this case as to Mr. Dornbrock for failure to

properly prosecute. If this Court were to grant such a motion,

Mrs. Dornbrock and the estate of her deceased husband would be in

the same position she finds herself in at this time because

respondent could assess the taxes based upon an order of

dismissal and decision. This Court does not believe that Mrs.

Dornbrock desires such an inevitable result in this case.

Mrs. Dornbrock contends that the substitution of parties in

this matter was improper or invalid because her husband's estate

had been closed some 5 years prior to the substitution. Her

argument in this regard is misplaced. The Supreme Court of

Michigan has held:

probate and closing of an estate should not bar an action

that may yet, within the applicable statute of limitation,
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be commenced directly against the personal representative of

the decedent. Just as the failure of heirs to probate a

decedent's estate does not preclude the commencement of an

action, neither should the closing of an estate preclude the

commencement of an action which otherwise is authorized.

Williams v. Grossman, 409 Mich. 67, 83-84, 293 N.W.2d 315, 320

(1980). Furthermore:

Although the probate of an estate has been completed and the

estate closed, where a person has an action which by statute

may be commenced directly against the personal

representative of the decedent without first filing a claim

against his probate estate, the administration of the estate

is "incomplete" within the meaning of the statute and upon

petition the estate may be reopened to provide a suable

person so that the action can be commenced. * * * [Fn. ref.

omitted.]

Id. at 77-78, 293 N.W.2d at 317. The Court believes that this

rule is particularly applicable to this case since the proceeding

in this Court commenced prior to Mr. Dornbrock's death and was

still pending at the time of his death and throughout the

administration of his estate. "A presentation of a claim is not

required in matters claimed in proceedings against the decedent

that were pending at the time of death." Mich. Comp. Laws Ann.,

sec. 700.712 (West 1995). Moreover, "a judgment in a proceeding

in another court against a personal representative to enforce a

claim against a decedent's estate constitutes an allowance of the

claim." Id. sec. 700.717. Mrs. Dornbrock failed to show that

the closing of her husband's estate prior to the time of the

substitution of parties in this case would have the effect of

invalidating the substitution of parties. What she has shown,
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instead, is that she failed in her duties as personal

representative of her husband's estate to fully administer the

estate before petitioning the Probate Court to close the estate

and discharge her as personal representative.

Since the Court concludes that the decision entered in this

case was not void as to Mrs. Dornbrock and her husband's estate

for lack of jurisdiction, the Court next addresses the contention

that there was "fraud on the Court". This Court has jurisdiction

to set aside a decision that has become final where there is a

fraud on the Court. Senate Realty Corp. v. Commissioner, 511

F.2d 929 (2d Cir. 1975); Abatti v. Commissioner, 86 T.C. 1319

(1986), affd. 859 F.2d 115 (9th Cir. 1988). In order to succeed,

Mrs. Dornbrock must establish that there was fraud on the Court

in the entry of the decision on December 23, 1993, based on Mr.

Young's alleged lack of authority to represent Mrs. Dornbrock and

her husband's estate following the death of Mr. Dornbrock in July

1987. The burden of proof is on the party filing the motion to

vacate, and such burden must be carried by clear and convincing

evidence. Kraasch v. Commissioner, 70 T.C. 623, 626 (1978).

This Court, in Abatti v. Commissioner, 86 T.C. at 1325, has

described the term "fraud on the Court" as follows:

Fraud on the court is "only that species of fraud which

does, or attempts to, defile the court itself, or is a fraud

perpetrated by officers of the court so that the judicial

machinery cannot perform in the usual manner its impartial

task of adjud[g]ing cases that are presented for

adjudication. Fraud, inter partes, without more, should not
- 22 -

be a fraud upon the court." Toscano v. Commissioner, 441

F.2d at 933, quoting 7 J. Moore, Federal Practice, par.

60.33 (2d ed. 1970). To prove such fraud, petitioners must

show that an intentional plan of deception designed to

improperly influence the Court in its decision has had such

an effect on the Court. * * *

The Court must examine all of the evidence in light of the

foregoing definition to determine whether the record establishes

fraud on the Court.

The first consideration is Mr. Young's purported

representation of all petitioners in the original joint petition. 

The practice of a few attorneys, or even one attorney,

representing a large group of investors who were engaged in a

single transaction is commonplace and is not by its nature a

cause for suspicion. Also, it is not unusual in such

circumstances for such attorney or attorneys to have direct

contact with only a few, or even one, of the investors appointed

to represent the others. The practice of such attorney or

attorneys maintaining continuous and direct contact with each

individual investor could prove to be impractical,

overburdensome, and could cause severe delays in the litigation

of a case.

Next, it is necessary to consider Mr. Dornbrock's

authorization of Mr. Young to represent Mr. and Mrs. Dornbrock in

this case. Mr. Young testified that he would not have included

an individual's name on the original joint petition unless he had

received from the individual a consent form and a copy of their
- 23 -

11 In fact, Mr. Young testified, and the record reflects, that

he represented most, but not all, of the Pop Phonomasters

investors.

notice of deficiency.11 Indeed, Mrs. Dornbrock failed to show

how Mr. Young could have obtained the correct amounts of

deficiencies and additions to tax, to include in the joint

petition, unless her husband had indeed forwarded their notice of

deficiency to Mr. Young through Mr. Pasternak. On the entire

record, this Court is convinced that Mr. Young was given the

authority, by Mr. Dornbrock, to represent both Mr. and Mrs.

Dornbrock in the filing of the joint petition in this case on

their behalf.

The joint petition was timely filed and Mr. Young thereby

became counsel of record for Mr. and Mrs. Dornbrock in this case. 

It is notable that the appearance of an attorney on behalf of an

individual creates a presumption that the attorney has the

authority to represent that individual. Osborn v. Bank of United

States, 22 U.S. (9 Wheat.) 738, 830 (1824); Gray v. Commissioner,

73 T.C. 639, 646 (1980). No motion to remove or cause the

withdrawal of Mr. Young as counsel for Mr. Dornbrock, Mrs.

Dornbrock, or Mr. Dornbrock's estate was filed until after Mrs.

Dornbrock filed the subject motion seeking to vacate or revise

the decision, nor, for that matter, have any of the other

petitioners in this case filed any motion to remove Mr. Young or

to vacate the decision entered against them. Thus, it appears at
- 24 -

first blush that on or about November 1, 1993, when Mr. Young and

counsel for respondent signed the stipulated decision document,

Mr. Young was duly authorized to represent Mrs. Dornbrock and the

estate of her deceased husband. Moreover, the evidence is clear

that neither Mr. Young nor counsel for respondent received any

notice or had knowledge that Mr. Young no longer had the

authority to represent Mrs. Dornbrock or her husband's estate.

Mrs. Dornbrock contends that Mr. Young represented her as a

subagent, who had been appointed by and through her agent, Mr.

Dornbrock. She alleges further that, under common law principles

of agency, a subagency terminates upon the death of the agent. 

Therefore, she argues, Mr. Young's authority to represent her

terminated with the death of her husband. In support of this

proposition Mrs. Dornbrock cites several excerpts from the

Restatement (Second) of Agency and a case decided in the Probate

Court of Cuyahoga County, Ohio. See Bowman v. Bowman, 3 Ohio

Misc. 161, 210 N.E.2d 920 (1965) (stating that the death of the

agent terminates the authority of the subagent to act for the

principal).

The Court agrees with the general proposition that, in a

true subagency relationship, the death of the agent terminates

the relationship between the principal and the subagent. Even if

there was a subagency relationship that terminated upon the death

of Mr. Dornbrock, Mrs. Dornbrock failed to show that Mr. Young's
- 25 -

continued representation of her subsequent to her husband's death

amounted to fraud on the Court. Mr. Young was never notified

that he was representing Mrs. Dornbrock as her subagent rather

than as her agent; therefore, he could not have been expected to

assume that the death of Mr. Dornbrock would terminate his

authority to represent Mrs. Dornbrock. Mr. Young's continued

representation of Mrs. Dornbrock was clearly in her best interest

since she claims she had no knowledge of the proceedings and,

therefore, would not have had the opportunity to appoint new

counsel to represent her in this case. Mr. Young had a duty to

represent Mrs. Dornbrock to the best of his ability until he was

notified otherwise, a duty which he aptly fulfilled. On this

record, the Court is satisfied that Mr. Young filed the petition

as agent for both Mr. and Mrs. Dornbrock. There is no evidence

to support the contention that Mr. Dornbrock employed Mr. Young

to represent him alone and that Mr. Young represented Mrs.

Dornbrock in a subagency capacity. There were some 35 husbands

and wives who were joint petitioners in this case and to hold

that, as to this one couple, Mr. and Mrs. Dornbrock, there was

this special agent and subagent relationship, is simply

incredible. The Court does not buy that argument.

Mrs. Dornbrock contends that, under Michigan law, an

attorney-client relationship terminates upon the death of the

client, and the authority of the attorney to represent the
- 26 -

deceased client is revoked. Therefore, she contends, Mr. Young's

authority to represent her husband terminated upon Mr.

Dornbrock's death. Mrs. Dornbrock's aforementioned statement of

Michigan law is accurate. Indeed, 

The rule in Michigan is that the authority of an attorney is

revoked and the attorney-client relationship is terminated

when the client dies. Doty v. Dexter (1886), 61 Mich. 348,

28 N.W. 123; Courser v. Jackson (1909), 159 Mich. 119, 123

N.W. 604. See generally, 7 C.J.S. Attorney and Client §

113, p.945.

Wright v. Estate of Treichel, 36 Mich. App. at 36, 193 N.W.2d at

395 (1971); see also Henritzy v. General Electric Co., 182 Mich.

App. 1, 451 N.W.2d 558 (1990). For purposes of this discussion,

this Court assumes that Mr. Young's authority to represent Mr.

Dornbrock terminated with his death in July 1987.

Nevertheless, Mrs. Dornbrock has failed to show that any of

Mr. Young's actions subsequent to Mr. Dornbrock's death amounted

to fraud on the Court. Mr. Young is an attorney; however, he

does not possess the ability to read the minds of his clients. 

Mr. Young was notified of Mr. Dornbrock's death; however, he was

not instructed to discontinue his representation of Mr.

Dornbrock. When Mr. Young was made aware of the death of Mr.

Dornbrock, he took the appropriate action of moving this Court to

substitute parties, as provided for in Nordstrom v. Commissioner,

50 T.C. 30 (1968), to protect the interest of Mr. Dornbrock in

this case. Mr. Young's substitution of parties, prior to signing

the stipulated decision in this case, was in the best interest of
- 27 -

Mr. Dornbrock and his estate in the closing of this case. If Mr.

Young had not pursued this course of action, which is explicitly

prescribed for such situations by prior decisions of this Court,

respondent would likely have properly filed a motion to dismiss

for lack of prosecution as to Mr. Dornbrock. Mr. Young had a

duty to represent Mr. Dornbrock to the best of his ability until

he was notified otherwise. Mr. Young's actions in this case

reflect a fulfillment of such duty rather than some type of

sinister attempt to deceive this Court.

Mrs. Dornbrock's assertions that she could not have

contacted Mr. Young regarding these matters because she had no

knowledge of the Pop Phonomasters program or of the handling of

any tax problems associated therewith carry very little weight

with the Court. The evidence shows that Mrs. Dornbrock knew of

the Pop Phonomasters program and was advised by her husband,

prior to his death, of a potential tax problem with the

investment. She was fully aware that Mr. Pasternak was the

contact person for further information regarding such matters,

and that any tax problem would be a joint liability of hers and

Mr. Dornbrock's. Mrs. Dornbrock telephoned Mr. Pasternak to

notify him of her husband's death. She had no other reason to

contact Mr. Pasternak except for her husband's investment in the

Pop Phonomasters program and to afford Mr. Pasternak the

opportunity to act accordingly with respect to that program as it
- 28 -

was affected by her husband's death. Under these circumstances,

Mrs. Dornbrock cannot now claim ignorance and expect this Court

to vacate a final decision based on such claims. A taxpayer's

lack of diligence does not amount to fraud on the Court.

Finally, Mrs. Dornbrock contends that, due to fraud on the

Court, she was denied the right to assert the defense of

"innocent spouse" under section 6013(e). The evidence does not

show that any person gave Mr. Young any reason to believe that

there was an innocent spouse issue in this case. Further, there

is no reason to believe that such issue was not raised in the

petition because of any collusion or fraud. Even if this Court

were to conclude that Mrs. Dornbrock was entitled to innocent

spouse relief, the decision should not be vacated because of the

failure of Mr. Young to raise that issue. See Slavin v.

Commissioner, 932 F.2d 598, 601 (7th Cir. 1991), revg. on another

ground T.C. Memo. 1990-44, involving failure to raise an innocent

spouse argument:

There is no principle of effective assistance of counsel in

civil cases. Shortcomings by counsel may be addressed in

malpractice actions; they do not authorize the loser to

litigate from scratch against the original adversary.

[Citations omitted.]

The argument of innocent spouse relief for Mrs. Dornbrock may

have been omitted through error or oversight or lack of

communication or because counsel considered, correctly or

incorrectly, that the argument was invalid, but the record here
- 29 -

12 Mrs. Dornbrock's claim of innocent spouse is undermined by

the fact that she paid in full, without question, the first bill

she received from respondent after the decision was entered with

respect to the 1978 tax year.

does not establish that such argument was omitted for reasons

amounting to fraud on the Court.12

There is no suggestion of fraud on the Court in Mr. Young's

actions. Mr. Young, who testified at the hearing, admitted that

he had never met Mr. and Mrs. Dornbrock or had any direct contact

with them, nor did he have any direct contact with any of the Pop

Phonomasters investors, except for Mr. Pasternak, and that it was

understood that this was the manner in which the Pop Phonomasters

litigation would be handled. If Mr. or Mrs. Dornbrock were not

kept sufficiently informed about the progress of this case, that

was a result of either their own inattentiveness or an

inadvertent failure of communication on the part of Mr.

Pasternak. However, as this Court stated in DiSanza v.

Commissioner, T.C. Memo. 1993-142, affd. without published

opinion 9 F.3d 1538 (2d Cir. 1993):

even if we were to conclude that * * * [counsel] was

negligent in this matter [his representation of the

Dornbrocks], such conduct would not constitute fraud on the

Court. See Kenner v. Commissioner, 387 F.2d 689, 692 (7th

Cir. 1968), affg. an unreported order of this Court; see

also Dominquez v. United States, 583 F.2d 615, 617 (2d Cir.

1978).

Moreover, even "Gross neglect on the part of a taxpayer's counsel

does not constitute 'fraud on the Court'". Gazdak v.
- 30 -

Commissioner, T.C. Memo. 1993-381; see also Heim v. Commissioner,

872 F.2d 245, 249 (8th Cir. 1989), affg. an order of the Court;

Toscano v. Commissioner, 441 F.2d at 933; Kenner v. Commissioner,

supra at 691-692; DiSanza v. Commissioner, supra; Pulitzer v.

Commissioner, T.C. Memo. 1987-408.

The Court is satisfied that neither Mr. Young, Mr.

Pasternak, nor any other party involved in the Pop Phonomasters

litigation, made any deliberate attempt to deny Mr. or Mrs.

Dornbrock or the Estate of Roger W. Dornbrock, deceased, Maryn J.

Dornbrock, personal representative, their right to be heard by

this Court. Mrs. Dornbrock has failed to show that any of Mr.

Young's actions in this case involved the "evil intent, deceit or

collusion which have marked those cases where final verdicts have

been set aside." See Senate Realty Corp. v. Commissioner, 511

F.2d at 933. Mrs. Dornbrock has not convinced us that a fraud

was perpetrated on this Court in the entry of the decision of

this case on December 23, 1993, as to Maryn J. Dornbrock or the

Estate of Roger W. Dornbrock, deceased, Maryn J. Dornbrock,

personal representative. Therefore, Mrs. Dornbrock's motion for

leave to file a motion to vacate or revise decision will be

denied.

 An appropriate order

 will be issued.