Ballantine v. Comm'r of Internal Revenue
| Decision Date | 04 June 1980 |
| Docket Number | Docket No. 12102-77. |
| Citation | 74 T.C. 516 |
| Parties | INEZ V. BALLANTINE, et al.,1 PETITIONERS v. COMMISSIONER of INTERNAL REVENUE, RESPONDENT |
| Court | U.S. Tax Court |
OPINION TEXT STARTS HERE
Rules 36 and 53, Tax Court Rules of Practice and Procedure.—Respondent mailed a motion to strike to the Tax Court 45 days after a copy of the petition was served on him. On the same day, he also mailed to the former address of petitioners' counsel a copy of the motion filed with the Court, which was returned by the post office. Almost immediately after its return to his office, respondent remailed a copy of his motion with amended certificate of service to petitioners' counsel at his correct address. Held: Despite the inconsequential delay in serving a copy of the motion upon petitioners' counsel, the motion was timely mailed to the Court, and thus, timely filed with the Tax Court as required by sec. 7502, Rules 21, 22, and 36, Tax Court Rules of Practice and Procedure. Furthermore, it is in the complete discretion of the Court to allow pleadings, other than petitions and notices of appeal, to be filed out of time. Petitioners' motion to dismiss the case or, in the alternative, to dismiss respondent's motion to strike, denied.
Rules 40 and 52, Tax Court Rules of Practice and Procedure.—Par. 4(e) of the petition alleged that the Commissioner erred in failing to issue a letter to petitioners in accordance with sec. 7605(b) as requested by petitioners on several occasions. Respondent issued notices of deficiency based upon his available information without further examining petitioners' books. Held: Par. 4(e) of the petition fails to state a claim upon which relief can be granted. Rose v. Commissioner, 70 T.C. 558 (1978); United States Holding Co. v. Commissioner, 44 T.C. 323 (1965), followed. Respondent's motion to strike par. 4(e), granted. Lee N. Koehler and Leslie A. Winter, for the petitioners.
R. Dale Eggleston, for the respondent.
This case was assigned to Special Trial Judge Francis J. Cantrel, pursuant to the provisions of section 7456(c)2 and Rules 180 and 181,3 for the purpose of conducting the hearing and ruling on respondent's motion to strike and petitioners' cross motion to dismiss.4 After a review of the record, we agree with and adopt his opinion which is set forth below.
CANTREL, Special Trial Judge: In his statutory notices, respondent determined Federal income tax deficiencies and additions to tax under section 6651(a) as follows:
On January 30, 1978, respondent filed a “Motion to Strike,” wherein he seeks to have stricken from the petition the assignment of error contained in paragraph 4(e) because it fails to state a claim upon which relief can be granted, pursuant to Rules 40 and 52; respondent also moved, in this same pleading, to strike the allegations of fact contained in paragraphs 5(k-4) through 5(u-4) because they are irrelevant and immaterial. On March 7, 1978, petitioners, pursuant to Rule 53, filed a “Motion to Dismiss” the case or, in the alternative, to dismiss respondent's motion to strike, because respondent failed to timely move with respect to the petition or to file an answer under Rule 36.
On March 15, 1978, a hearing was held on both parties' motions in Baltimore, Md., at which time petitioner filed a “Memorandum in Opposition to Respondent's Motion to Strike.” On May 1, 1978, respondent filed, with the leave of the Court, a “Reply to Petitioners' Memorandum in Opposition to Respondent's Motion to Strike.” In this memorandum, respondent advises that he has no objection to the allegations of paragraphs 5(k-4) through 5(u-4) remaining as part of the petition since those allegations could conceivably have some relevancy with respect to the issue of whether respondent's deficiency determinations are incorrect, arbitrary, and excessive, i.e., they may be relevant in regard to the assignment of errors contained in paragraphs 4(a) through 4(c) of the petition.5 On May 4, 1978, petitioners filed, with the leave of Court, a “Supplemental Memorandum in Opposition to Respondent's Motion to Strike.” On June 1, 1978, respondent filed, with the leave of the Court, a “Reply to Petitioners' Supplemental Memorandum in Opposition to Respondent's Motion to Strike.”
If petitioners' motion to dismiss the case or, in the alternative, dismiss respondent's motion to strike is granted, respondent's motion would become moot. Accordingly, we will first consider the facts and issues pertaining to petitioners' motion to dismiss. The following facts, which are derived from the pleadings and evidence submitted at the hearing, are undisputed.
Petitioners Robert A. Ballantine and Inez V. Ballantine are husband and wife with legal residence at 2814 Fox Hound Road, Ellicott City, Md. Their returns for the periods involved herein were filed with the Internal Revenue Service Center at Philadelphia, Pa. Petitioner Robert A. Ballantine, Inc., is a Maryland corporation with its principal office at Box 393, Route No. 2, Dorsey Road, Hanover, Md. Petitioner B & I Leasing Corp. is a Maryland corporation with its principal office at 2814 Fox Hound Road, Ellicott City, Md. The returns for both corporations for the periods involved herein were filed with the Internal Revenue Service Center at Philadelphia, Pa.
The petition herein was sent by mail postmarked December 8, 1977, received and filed by the Tax Court on December 9, 1977, and a copy thereof was served on respondent by the Clerk of the Court on December 12, 1977. On Thursday, January 26, 1978 (45 days after the petition was served on respondent), counsel for respondent sent by certified mail to the Clerk of the Court the motion to strike accompanied by a certificate of service certifying that a copy of the motion to strike was mailed to counsel for petitioners, Lee N. Koehler, at 305 West Chesapeake Avenue, Suite 420, Towson, Md. 21204. A copy of the motion to strike along with a copy of the hereinbefore-mentioned certificate of service was mailed by respondent on January 26, 1978, to Lee N. Koehler in an envelope addressed to the aforementioned West Chesapeake Avenue address. The motion to strike which was mailed to the Tax Court was received and filed by the Court on Monday, January 30, 1978. The copies of the motion to strike and certificate of service mailed to petitioners' counsel on January 26, 1978, were returned by the post office to respondent on or about January 31, 1978, marked “Return to Sender, No Such Address.” On February 6, 1978, respondent mailed a copy of the motion to strike, a copy of an amended certificate of service, and an explanatory cover letter to petitioners' counsel in an envelope correctly readdressed to 905 Mercantile-Towson Building, 409 Washington Avenue, Towson, Md. 21204. Respondent also mailed on February 6, 1978, an amended certificate of service, a copy of the explanatory letter to petitioners' counsel, and an explanatory letter to the Clerk of the Tax Court.
Petitioners' counsel's correct address at the Mercantile-Towson Building is listed on the petition and on petitioners' “Request for Place of Trial.” The West Chesapeake Avenue address, to which respondent originally mailed a copy of his motion to strike, was the previous address of petitioners' counsel and was listed on the notices of deficiency and the power of attorney attached to petitioners' tax returns.
Petitioners moved, pursuant to Rule 53, to dismiss this case or, in the alternative, dismiss respondent's motion to strike on the grounds that respondent failed to timely move or answer with respect to the petition as required by Rules 36 and 54.6 Rule 36(a) provides that, “The Commissioner shall have 60 days from the date of service of the petition within which to file an answer, or 45 days from that date within which to move with respect to the petition.” Under Rule 22, “Any pleadings or other papers to be filed with the Court must be filed with the Clerk in Washington, D.C.” Rules 21(a) and 50(f) require that all motions be served on each of the parties to the case other than the party who filed it. The manner in which all papers filed with the Court are to be served on the other parties is provided in Rule 21(b) as follows:
RULE 21. SERVICE OF PAPERS
(b) Manner of Service: (1) General: All petitions shall be served by the Clerk. All other papers required to be served on a party shall also be served by the Clerk unless otherwise provided in these Rules or directed by the Court, or unless the original paper is filed with a certificate by a party or his counsel that service of that paper has been made on the party to be served or his counsel. For the form of such certificate of service, see Form 13, Appendix I. Such service may be made by mail directed to the party or his counsel at his last known address. Service by mail is complete upon mailing, and the date of such mailing shall be the date of such service. * * *
In the circumstances here present, respondent was required to move with respect to the petition within 45 days from the service of the petition upon him. Rules 22, 36(a), and 54. Timely mailing of the motion...
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