1 All section references are to the Internal Revenue Code

in effect for the year in issue, unless otherwise indicated. All

Rule references are to the Tax Court Rules of Practice and

(continued...)

T.C. Memo. 1996-322

UNITED STATES TAX COURT

B. JOE ROSA, JR., AN ACCOUNTANCY CORPORATION, Petitioner

v. COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 22753-95. Filed July 16, 1996.

B. Joe Rosa, Jr., pro se.

Peter Reilly and Thomas M. Rohall, for respondent.

MEMORANDUM OPINION

DAWSON, Judge: This case was assigned to Chief Special

Trial Judge Peter J. Panuthos pursuant to the provisions of

section 7443A(b)(4) and Rules 180, 181, and 183.1 The Court
- 2 -

(...continued)

Procedure.

agrees with and adopts the opinion of the Special Trial Judge,

which is set forth below.

OPINION OF THE SPECIAL TRIAL JUDGE

PANUTHOS, Chief Special Trial Judge: This matter is before

the Court on respondent's Motion to Dismiss For Lack of

Jurisdiction. The issue for decision is whether petitioner has

the capacity to file a petition for redetermination with this

Court.

Background

On May 10, 1995, respondent issued three separate notices of

deficiency to B. Joe Rosa, Jr., An Accountancy Corporation

(petitioner), determining deficiencies in, additions to, and

penalties in respect of its Federal income taxes as follows:

Tax Additions to Tax and Penalties 

Year Sec. Sec. Sec. Sec.

Ended Deficiency 6653(b)(1)(A) 6653(b)(1)(B) 6653(b)(1) 6663(a)

6/30/87 $30,092 $23,176 50% of the in- --- ---

 terest due on

 the deficiency

12/31/87 9,163 --- --- $6,872 ---

12/31/88 30,414 --- --- 22,811 ---

12/31/89 37,630 --- --- --- $28,223

12/31/90 41,595 --- --- --- 31,196

12/31/91 38,502 --- --- --- 28,881

On November 3, 1995, B. Joe Rosa, Jr., filed a petition on behalf

of petitioner contesting the notices of deficiency described

above. The first paragraph of the petition states that

petitioner is a "defunct Professional Corporation".
- 3 -

In response to the petition, respondent filed a Motion to

Dismiss for Lack of Jurisdiction asserting that the petition

should be dismissed on the ground that the petition was not filed

within the 90-day period prescribed in section 6213(a). 

Petitioner filed an objection to respondent's motion to dismiss

asserting that the petition was timely filed pursuant to section

6213(f), which suspends the period for filing a petition with

this Court for the period during which a taxpayer/debtor is

prohibited by reason of bankruptcy from filing a petition and for

60 days thereafter. Petitioner's objection includes a statement

that petitioner was dissolved under California State law prior to

filing for bankruptcy. Respondent filed a reply to petitioner's

objection asserting that: (1) Petitioner did not file a

bankruptcy petition, and, thus, is not entitled to rely on

section 6213(f); and (2) petitioner's purported dissolution under

California State law would not preclude petitioner from filing a

petition with this Court.

A hearing was conducted in this case in Washington, D.C. 

Counsel for respondent appeared at the hearing and presented a

new theory in support of respondent's motion to dismiss. In

particular, respondent offered evidence indicating that, rather

than being dissolved, petitioner's corporate charter was

suspended by the State of California as of May 3, 1993, for

failure to pay State franchise taxes. Relying on Cal. Rev. & Tax

Code sec. 23301(b) (West 1992), and Condo v. Commissioner, 69
- 4 -

T.C. 149 (1977), respondent now contends that this case should be

dismissed on the ground that petitioner lacks the requisite

capacity to file a petition with this Court. See Rule 60(c).

The evidence submitted by respondent at the hearing

regarding the suspension of petitioner's corporate powers was

characterized by counsel for respondent as a computer "printout

of Westlaw". The document in question includes the following

statement: “THIS DATA IS FOR INFORMATIONAL PURPOSES ONLY. 

CERTIFICATION CAN ONLY BE OBTAINED THROUGH THE SACRAMENTO OFFICE

OF THE CALIFORNIA SECRETARY OF STATE.” Following the hearing, we

directed respondent to file a report with the Court attaching

thereto a certification from the California Secretary of State

(as described in Cal. Rev. & Tax Code sec. 23302(c) (West 1992))

establishing the date of petitioner's corporate suspension under

California State law. Respondent complied with our order and

filed a report with the Court with attached exhibits. Exhibit A

to respondent's report is a Certificate of Filing and Suspension

issued by the California Secretary of State on May 29, 1996,

stating that petitioner's corporate powers, rights, and

privileges were suspended on May 3, 1993. Exhibit B to

respondent's report is a bankruptcy discharge order issued by the

United States Bankruptcy Court for the Eastern District of

California on June 17, 1995, in regard to the bankruptcy petition

of B. Joe Rosa, Jr., and Osanna M. Rosa. Respondent offered the

latter exhibit in support of her earlier contention that
- 5 -

 

2 There is some evidence that B. Joe Rosa, Jr., and Osanna M. Rosa,

individually, were in bankruptcy, but there is no evidence that

petitioner/corporation was in bankruptcy.

petitioner did not file a bankruptcy petition, and, therefore,

petitioner cannot rely on section 6213(f) as a basis for its

assertion that its petition was timely filed.

 Although the record tends to show that petitioner did not

file a bankruptcy petition,2 and that the petition was not timely

filed under section 6213(a), we will decide respondent's motion

to dismiss by focusing on the question of petitioner's capacity

to invoke this Court's jurisdiction.

Discussion

Rule 60(c) states that the capacity of a corporation to

engage in litigation in this Court shall be determined by the law

under which the corporation was organized. Brannon's of Shawnee,

Inc. v. Commissioner, 71 T.C. 108, 111 (1978); Condo v.

Commissioner, supra at 151; Great Falls Bonding Agency, Inc. v.

Commissioner, 63 T.C. 304, 305 (1974). Because petitioner was

organized in the State of California, we look to the law of that

State to determine whether petitioner possesses the requisite

capacity to invoke this Court's jurisdiction.

Cal. Rev. & Tax Code sec. 23301(b) (West 1992) provides

(with exceptions not applicable here) that the corporate powers,

rights, and privileges of a domestic taxpayer may be suspended if

any tax due and payable upon notice and demand from the Franchise
- 6 -

Tax Board is not paid. Cal. Rev. & Tax Code sec. 23302(c) (West

1992) provides that the Franchise Tax Board shall transmit the

names of suspended taxpayers to the California Secretary of State

and the certificate of the Secretary of State shall be prima

facie evidence of a taxpayer's suspension or forfeiture.

In Condo v. Commissioner, supra, a case involving facts

virtually identical to those presented here, we analyzed

California State law, including the statutory provisions cited

above, and concluded that, because the corporate taxpayer lacked

the capacity to both sue and defend against a suit in a State

court, it likewise did not possess the capacity to litigate in

this Court under Rule 60(c). For similar holdings, see Vahlco

Corp. v. Commissioner, 97 T.C. 428 (1991) (petition filed by

corporation suspended pursuant to Texas State law dismissed for

lack of jurisdiction); Padre Island Thunderbird, Inc. v.

Commissioner, 72 T.C. 391 (1979) (petition filed by corporation

suspended pursuant to Illinois State law dismissed for lack of

jurisdiction).

The record in this case establishes that petitioner's

powers, rights, and privileges as a California corporation were

suspended by the California Secretary of State pursuant to Cal.

Rev. & Tax Code secs. 23301(b) and 23302(c) (West 1992) as of May 

3, 1993. Petitioner has offered no evidence that its corporate

powers have been reinstated. Consistent with Condo v.

Commissioner, supra, we will grant respondent's Motion to Dismiss
- 7 -

 

3 We note that petitioner's tax liabilities may still be

litigated on the merits in this Court in the event respondent

later issues notice of transferee liability to the appropriate

persons. Sec. 6901; Great Falls Bonding Agency, Inc. v.

Commissioner, 63 T.C. 304, 307 (1974).

for Lack of Jurisdiction on the ground that petitioner lacks the

capacity under Rule 60(c) to invoke this Court's jurisdiction.3

To reflect the foregoing,

 An order granting

 respondent's Motion to Dismiss

 for Lack of Jurisdiction will be

 entered.