Lead Opinion
OPINION
By notice of deficiency mailed to petitioner on March 14, 1973, respondent determined deficiencies in petitioner’s income taxes for the years 1966 and 1969 in the amounts of $1,342.64 and $69,557.91, respeсtively. The petition herein was filed June 8,1973, in which it was alleged, inter alia, that inasmuch as petitioner was dissolved February 17, 1970, respondent was without jurisdiction to determine a tax deficiency against рetitioner on March 14, 1973. Respondent’s answer having been filed, the parties were notified on February 26, 1975, that the case was set for trial in Milwaukee, Wis., on June 2,1975.
On March 13, 1975, petitioner filed a Motion Fоr Summary Judgment on the ground that the “Commissioner was without jurisdiction to assess a deficiency against the Petitioner and was barred from assessing such a deficiency when the Commissioner issued his 90-day Notice of Deficiency by Wisconsin Statutes sec. 180.787.” The parties on April 25, 1975, filed a joint motion to continue the trial of the case and to submit the motion for summary judgment on a stipulation of facts. On May 19, 1975, respоndent filed a Motion To Dismiss For Lack of Jurisdiction on the grounds that pursuant to Rule 60(c) of the Rules of Practice and Procedure, United States Tax Court, and Wisconsin Statutes Annotated section 180.787, the petitioner lacked the capacity to commence this litigation when the petition was filed.
On June 2, 1975, the Court took both motions under advisement on the stipulation of facts filed by the parties and
The stipulated facts in pertinent part are as follows:
Dillman Bros. Asphalt Co., Inc. (hereinafter petitioner), was a Wisconsin corporation having its principal office at Lancaster, Wis. It filed its corporate income tax return for 1966 with thе District Director of Internal Revenue at Milwaukee, Wis., on March 16, 1967, and its corporate income tax return for 1969 with the Director of the Internal Revenue Service Center at Kansas City, Mo., on March 19,1970.
On February 11, 1970, petitioner filed articles of dissolution with the secretary of state of Wisconsin and a certificate of dissolution was issued the same day, both of which were forthwith filed with the register of deeds of Crawford County, Wis., on February 17,1970.
Petitioner was dissolved and ceased its corporate existence on February 17, 1970. All of its assets, greater in value than the proposed income tаx deficiencies asserted against it, were distributed on a pro rata basis on or before February 11,1970, to Bruce Dillman and Blair Dillman, each of whom held 50 percent of the outstanding stock of рetitioner. As a result of the distribution Bruce and Blair Dillman each received over $70,900.55.
By a statutory notice of deficiency sent petitioner on March 14, 1973, respondent determined deficienсies in petitioner’s corporate income tax for the years 1966 and 1969, in the amounts of $1,342.64 and $69,557.91, respectively.
On February 16, 1973, petitioner and respondent executed a Special Consent Fixing Period of Limitation Uрon Assessment of Income Tax for 1969. No other such special consents were executed.
In its brief in opposition to respondent’s motion to dismiss for lack of jurisdiction, petitioner argues that because that motion was filed subsequent to petitioner’s motion for summary judgment, petitionеr’s motion should be decided before the motion to dismiss is heard because if the motion for summary judgment is granted, there will be no need to consider respondent’s motion to dismiss. We disagree. The Tax Court, being a court of limited jurisdiction, must first determine whether jurisdiction exists. Wheeler’s Peachtree Pharmacy, Inc.,
The petition in this case was filed more than 2 years after petitioner was dissolved. Rule 60(c), Tax Court Rules of Practice and Proсedure, provides: “Capacity: * * * The capacity of a corporation to engage in such litigation [in this Court] shall be determined by the law under which it was organized.” Rule 60(c) merely codified the existing practice of this Court. See Great Falls Bonding Agency, Inc.,
Petitioner was created and dissolved under Wisconsin law. Section 180.787 of the Wisconsin Statutes
The identical issue presented in this case was very recently considered by this Court in Great Falls Bonding Agency, Inc., supra. We granted respondent’s motion to dismiss for lack of jurisdiction because the corporate рetitioner which had been created under Illinois law had been dissolved more than 2 years before the petition was filed and lacked the capacity to institute any legal procеeding. The Illinois statute there involved is very similar to the Wisconsin statute here involved.
Petitioner argues that Great Falls Bonding Agency, Inc., supra, was wrongly decided because it failed to take into аccount the due process rights of the corporation involved, citing Pierce v. Society of Sisters,
First, at this stage of this proceeding we are not concerned with the validity of the notice of deficiency issued to petitioner. We are concerned only with petitioner’s capacity to institute this litigation. And, as we pointed out in Great Falls Bonding Agency, Inc., supra, dismissal of this case for lack of jurisdiction will not be the occasion for entry of a decision that petitioner is liable for the determined deficiencies. Notiсes of transferee liability have been sent to petitioner’s two former stockholders and they have filed petitions in this Court in docket Nos. 3587-74 and 3594-74.
Respondent’s motion to dismiss for lack of jurisdiction will be granted. Petitioner’s motion for summary judgment need not be considered.
An appropriate order will be entered.
Notes
Notices of transferee liability were also issued to Bruce Dillman and Blair Dillman, eaсh a 50-percent stockholder of petitioner at the time of dissolution, and they filed separate petitions in this Court, which were assigned docket Nos. 3587-74 and 3594-74, respectively. Both of those petitioners filed motions for summary judgment which were consolidated on May 20,1975, and were taken under advisement by the Court on June 2, 1975. Disposition of those motions is made in a separate opinion filеd on even date herewith.
The 1966 deficiency results from disallowance of a tentative refund made to petitioner upon its application for a net operating loss carrybaсk from 1969 to 1966.
Wis. Stat. Ann. sec. 180.787 (1959):
The dissolution of a corporation shall not take away or impair any remedy available to or against such corporation, its directors, officers or shareholders, for any right or claim existing or any liability incurred, prior to such dissolution if action or other proceeding thereon is commenced within 2 years after the date of such dissolution. Any such action or рroceeding by or against the corporation may be prosecuted or defended by the corporation in its corporate name. The shareholders, directors and officеrs shall have power to take such corporate or other action as is appropriate to protect such remedy, right or claim. If such corporation was dissolved by thе expiration of its period of duration, such corporation may amend its articles of incorporation at any time during such period of 2 years so as to extend its period of duration.
The Special Consent Fixing Period of Limitation Upon Assessment of Income Tax for 1969 executed by the parties on Feb. 19, 1973, did not constitute the commencement of any “action or other proceeding.” Wheeler’s Peachtree Pharmacy, Inc.,