T.C. Memo. 1998-77

UNITED STATES TAX COURT

 HOYT AND SONS RANCH PROPERTIES, LTD., A NEVADA LIMITED

PARTNERSHIP, WALTER J. HOYT, III, TAX MATTERS PARTNER, Petitioner

v. COMMISSIONER OF INTERNAL REVENUE, Respondent

 Docket No. 15578-97. Filed February 23, 1998.

 Walter J. Hoyt III, pro se. 

 Ronald L. Buch, Jr., and Ann M. Murphy, for respondent.

MEMORANDUM OPINION

COHEN, Chief Judge: This case was assigned to Special Trial

Judge Robert N. Armen, Jr., pursuant to the provisions of section

7443A(b)(4) of the Internal Revenue Code of 1986, as amended, and

Rules 180, 181, and 183. (Unless otherwise indicated, all section

references are to the Internal Revenue Code, as amended, and all

Rule references are to the Tax Court Rules of Practice and
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Procedure.) The Court agrees with and adopts the Opinion of the

Special Trial Judge, which is set forth below.

OPINION OF THE SPECIAL TRIAL JUDGE

ARMEN, Special Trial Judge: This case is before the Court

on respondent's Motion to Dismiss for Lack of Jurisdiction. The

issue to be decided is whether the petition for readjustment was

filed within the period prescribed in section 6226.

Background

On May 17, 1995, Hoyt and Sons Ranch Properties, Ltd. (the

partnership) filed a bankruptcy petition with the U.S. Bankruptcy

Court for the District of Oregon. 

On July 17, 1996, respondent issued a notice of final

partnership administrative adjustment (FPAA) to Walter J. Hoyt,

III (Mr. Hoyt or petitioner), the partnership's tax matters

partner (TMP), determining adjustments to the partnership's

return (Form 1065) for the taxable year 1992. On April 2, 1997,

respondent issued an FPAA to Mr. Hoyt, determining adjustments to

the partnership's return (Form 1065) for the taxable year 1993. 

In addition to serving as the partnership's TMP, Mr. Hoyt is a

notice partner of the partnership within the meaning of section

6231(a)(8). 

On June 18, 1997, the bankruptcy court issued an order

granting Mr. Hoyt's motion for an order to release the so-called

bankruptcy automatic stay (imposed under 11 U.S.C. sec. 362(a)(8)
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(1988)) to permit the filing of a petition for readjustment with

this Court. The order states in pertinent part as follows:

The Court considered the Motion for Order for

Release of Stay to File Tax Court Petition filed by

Walter J. Hoyt III in connection with the Motion to

Limit Trustee's Duties or, in the alternative, for

Instructions Regarding IRS Notice.

Based upon the record herein and the Court being

otherwise duly advised, it is, to the extent an order

is necessary, the Motion for an Order to Release of

Stay to File Tax Court Petition [sic], filed by Walter

J. Hoyt III, be and hereby is granted.

 On July 21, 1997, petitioner filed a petition for

readjustment with the Court contesting the FPAA's described

above. At the time that the petition was filed, the partnership

maintained its principal place of business at Burns, Oregon.

Respondent subsequently filed a Motion to Dismiss for Lack

of Jurisdiction on the ground that the petition for readjustment

was not timely filed. Petitioner filed an objection to

respondent's motion asserting that the petition for readjustment

was timely filed within the period prescribed in section 6213(f)

following the issuance of the bankruptcy court's order lifting

the automatic stay. In response to petitioner's objection,

respondent maintains that the petition is untimely with respect

to the FPAA for 1992, despite the partnership's bankruptcy case,

on the ground that the automatic stay did not serve as a bar to

filing of a petition for readjustment for that year. On the

other hand, respondent now concedes that the petition for

readjustment is timely with respect to the FPAA for 1993 because
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the petition was filed by petitioner, who is also a notice

partner, within the 60-day period prescribed in section

6226(b)(1). See Barbados #6 Ltd. v. Commissioner, 85 T.C. 900,

904 (1985). (Consistent with this concession, we shall deny

respondent's Motion to Dismiss for Lack of Jurisdiction insofar

as the taxable year 1993 is concerned.)

On November 5, 1997, the Court issued an order calendaring

respondent's motion to dismiss for hearing on December 3, 1997. 

The order included a reminder to the parties of the applicability

of Rule 50(c). On November 19, 1997, petitioner filed a motion

to continue the hearing. On November 21, 1997, the Court granted

petitioner's motion and continued the hearing of this matter to

December 17, 1997. The Court again reminded the parties of the

applicability of Rule 50(c). On December 5, 1997, petitioner

filed a second motion to continue the hearing. Petitioner's

motion was denied on December 10, 1997.

This matter was called for hearing at the Court's motions

session in Washington, D.C., on December 17, 1997. Counsel for

respondent appeared at the hearing and presented argument in

support of respondent's motion to dismiss the taxable year 1992. 

No appearance was made by or on behalf of petitioner, nor did

petitioner file a statement with the Court pursuant to Rule

50(c).
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Discussion

The issue for decision by the Court is whether the petition

for readjustment is timely with respect to the taxable year 1992.

This partnership case is subject to the unified partnership audit

and litigation procedures set forth in sections 6221 through

6234. Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA),

Pub. L. 97-248, sec. 402(a), 96 Stat. 324, 648. The TEFRA

procedures apply with respect to all taxable years of a

partnership beginning after September 3, 1982. Sparks v.

Commissioner, 87 T.C. 1279, 1284 (1986); Maxwell v. Commissioner,

87 T.C. 783, 789 (1986).

Section 6223 provides that the Commissioner shall furnish to

each partner whose name and address is supplied to the

Commissioner, notice of the beginning of an administrative

proceeding at the partnership level and notice of the final

partnership administrative adjustment resulting from such

proceeding. Section 6226(a)(1) provides that the TMP may file a

petition for readjustment with the Court within 90 days of the

mailing of the FPAA. Section 6226(b) provides that, if the TMP

does not file a petition, a notice partner or any 5-percent group

may file a petition within the 60-day period following the

expiration of the 90-day period prescribed in section 6226(a).

 As previously discussed, respondent mailed an FPAA for the

taxable year 1992 to petitioner on July 17, 1996. However, the

petition for readjustment was not filed with the Court until July
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21, 1997, more than a year after the mailing of the FPAA. 

Petitioner contends that the petition is timely under section

6213(f) because the partnership was in bankruptcy at the time

that the FPAA was issued and the bankruptcy court did not lift

the automatic stay until June 18, 1997. Respondent, relying on

1983 Western Reserve Oil & Gas Co. v. Commissioner, 95 T.C. 51

(1990), affd. without published opinion 995 F.2d 235 (9th Cir.

1993) (WROG), contends that the automatic stay did not act as a

bar to the filing of a timely petition for readjustment in this

case.

 In a deficiency case, section 6213(f) provides an exception

to the normal 90-day period for filing a timely petition for

redetermination with the Court under section 6213(a). 

Specifically, in a case where a taxpayer has filed a petition for

relief under the Bankruptcy Code, section 6213(f) provides that

the normal 90-day filing period is extended during the period

that the taxpayer is precluded from filing a petition by the

automatic stay and for 60 days thereafter.

The automatic stay, as applicable to proceedings in this

Court, is codified at 11 U.S.C. sec. 362(a)(8) (1988). That

section generally provides that the filing of a bankruptcy

petition operates as a stay of the commencement or continuation

of a proceeding before the United States Tax Court concerning the

debtor. See Kieu v. Commissioner, 105 T.C. 387, 391 (1995).

Unless relief from the automatic stay is granted by order of the
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bankruptcy court, see 11 U.S.C. sec. 362(d) (1988), the automatic

stay generally remains in effect until the earliest of the

closing of the case, dismissal of the case, or the granting or

denial of a discharge. 11 U.S.C. sec. 362(c)(2) (1988); Allison

v. Commissioner, 97 T.C. 544, 545 (1991).

We agree with respondent that the WROG case serves as

controlling precedent with respect to the issue presented. In

WROG, two partnerships were the debtors in involuntary bankruptcy

proceedings at the time that the Commissioner issued FPAA's to

the partnerships for the taxable year 1983. After various

individuals and groups filed petitions for readjustment with the

Court, the Court received a number of jurisdictional motions,

including motions to dismiss for lack of jurisdiction filed by

members of 5-percent groups asserting that the petitions were

filed in violation of the bankruptcy automatic stay.

 In rejecting the contention that the petitions were filed in

violation of the automatic stay, we agreed with the Commissioner

that, because a TEFRA partnership itself has no tax liability,

the filing of a petition for readjustment of partnership items

with the Court does not constitute a "proceeding before the

United States Tax Court concerning the debtor" within the meaning

of 11 U.S.C. sec. 362(a)(8) (1988). 1983 Western Reserve Oil &

Gas Co. v. Commissioner, 95 T.C. at 56-57; see Third

Dividend/Dardanos Associates v. Commissioner, 88 F.3d 821, 823

(9th Cir. 1996), revg. and remanding T.C. Memo. 1994-412; Chef's
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Choice Produce, Ltd. v. Commissioner, 95 T.C. 388, 394 (1990). 

Stated differently, because a TEFRA partnership proceeding

ultimately concerns the tax liability of the partnership's

individual partners, and recognizing that a partnership in

bankruptcy is an entity separate and distinct from its partners,

we concluded that a partnership level proceeding may be commenced

and concluded in this Court without violating the automatic stay. 

1983 Western Reserve Oil & Gas Co. v. Commissioner, 95 T.C. at

56-57. Finally, we made the dual observations that section

6213(f), which applies in deficiency proceedings, would not be

applicable to extend the period for filing a petition for

readjustment under section 6226 in a TEFRA partnership

proceeding, and that there is no provision similar to section

6213(f) under the TEFRA partnership provisions. Id. at 59.

Consistent with the WROG case, we hold that the automatic

stay imposed under 11 U.S.C. sec. 362(a)(8) (1988) did not bar

the filing of the petition for readjustment in this case. In

this regard, petitioner's reliance on the bankruptcy court's

order lifting the automatic stay for purposes of filing the

petition for readjustment is misplaced. In the first instance,

to the extent that the bankruptcy court's order can be read as an

affirmation that the automatic stay barred the filing of the

petition in this case, the order lacks any analysis of the issue

and, as such, does not persuade us of the need to reexamine our

holding in WROG. On the other hand, the bankruptcy court's order
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is sufficiently qualified by the inclusion of the phrase "to the

extent necessary" that it is reasonable to view the order as

nothing more than the bankruptcy court's attempt to accommodate

petitioner. From either perspective, the bankruptcy court's

order does not affect our analysis.

Petitioner further contends that we should conclude that the

automatic stay was in effect in this case until the issuance of

the bankruptcy court's order on June 18, 1997, by virtue of an

argument raised by counsel for the Government during the

bankruptcy proceedings that the partnership should be treated as

petitioner's alter ego. We disagree. Notwithstanding that such

an argument was raised in the bankruptcy court, the record does

not indicate that petitioner ever filed a petition in bankruptcy,

nor was he ever named as a debtor in a bankruptcy proceeding. 

Moreover, even if petitioner were named as debtor in a bankruptcy

proceeding, such event would require the partnership to appoint a

replacement TMP and would not serve to extend the period for

filing a timely petition for readjustment with the Court. See

Tempest Associates, Ltd. v. Commissioner, 94 T.C. 794, 801-802

(1990).

Consistent with the foregoing, we shall grant respondent's

motion to dismiss insofar as the taxable year 1992 is concerned. 
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To reflect the foregoing,

An order will be issued

granting respondent's motion to

dismiss the taxable year 1992,

denying respondent's motion to

dismiss the taxable year 1993.