Transferee Not Entitled to Dismiss His Petition Without Liability Decision (Schussel, TC)

A transferee was not entitled to have his petition for redetermination dismissed without a decision on the amount of his liability. A taxpayer who petitions the Tax Court for redetermination of a deficiency may not withdraw his petition in order to avoid a decision. Moreover, since the parties had agreed to the transferee’s liability, they were required to file a stipulated decision reflecting that amount.

Request to Dismiss

The transferee asked the court to dismiss his petition with prejudice when the case was called for trial. He stated that he had reached an agreement with the IRS regarding his liability. However, the IRS argued that the petition could not be dismissed with or without prejudice. Either the individual agreed to a stipulated decision or the court entered an order stating the amount of the transferee’s liability.

Deficiency Case

Contrary to the individual’s assertion, transferee liability cases are treated procedurally in the same manner as deficiency cases. The taxpayer’s attempt to distinguish Estate of Ming was unconvincing. The fact that the Ming taxpayers asked for their case to be dismissed without prejudice was meaningless because filing the petition vested the court with exclusive jurisdiction for the tax years covered by the petition and the limitations period had expired. Therefore, dismissal was effectively with prejudice.

Liability Determination Required

Further, the individual’s contention that the court could not determine his transferee liability because it was not privy to his agreement with the IRS was also rejected. The IRS’s determination of the transferee’s liability was stated in the notice of liability, which was attached to his petition. Therefore, the transferee’s motion to dismiss was denied and the parties required to submit a stipulated decision.

Estate of Ming, 62 TC 519, Dec. 32,686, followed.

G. Schussel, 149 TC —, No. 16, Dec. 61,039

 

 

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CCHTaxGroup

All stories by: CCHTaxGroup