Rosenberg v. Comm'r of Internal Revenue (In re Estate of Rosenberg)

• Decision Date: 05 March 1980
• Docket Number: Docket No. 12244-79.
• Parties: ESTATE of HARRY ROSENBERG, MARC A. ROSENBERG, EXECUTOR, PETITIONER v. COMMISSIONER of INTERNAL REVENUE, RESPONDENT
• Court: U.S. Tax Court

73 T.C. 1014

ESTATE of HARRY ROSENBERG, MARC A. ROSENBERG, EXECUTOR, PETITIONER

v.COMMISSIONER of INTERNAL REVENUE, RESPONDENT

Docket No. 12244-79.

United States Tax Court

Filed March 5, 1980.

Notice of deficiency issued to petitioner-estate on Sept. 23, 1977. Prior to November 1977, the estate's executor retained attorney “1” to file a petition with this Court. Attorney “1” never at any time filed a petition, although he repeatedly misrepresented to the executor that one had been filed. Attorney “2” for the first time filed a petition with this Court 697 days after issuance of the notice. Held, the nonfeasance of attorney “1” in not filing a petition is not a “fraud on the Court.” Held, further: Sec. 7502, I.R.C. 1954, not applicable since petition was hand-delivered and filed on Aug. 21, 1979. Petition was not timely filed under sec. 6213 because it was received and filed after the statutory period. Respondent's motion to dismiss for lack of jurisdiction granted. Joseph B. Ehrlich, for the petitioner.

Robert E. Langley, for the respondent.

OPINION

DAWSON, Judge:

This case was assigned to Special Trial Judge Francis J. Cantrel for the purpose of conducting the hearing and ruling on petitioner's motion to shorten time within which to file respondent's answer to 30 days and for expeditious hearing on case filed on August 21, 1979, and respondent's motion to dismiss for lack of jurisdiction filed on September 4, 1979. After a review of the record, we agree with and adopt his opinion which is set forth below. ¹

OPINION OF THE SPECIAL TRIAL JUDGE

CANTREL, Special Trial Judge:

On September 23, 1977, respondent mailed to petitioner at its last known address a notice of deficiency which determined therein an estate tax liability of $11,520. Pursuant to section 6213(a),² a taxpayer may file a petition with this Court within 90 days (or 150 days if the notice is addressed to a person outside the United States) after the notice of deficiency is mailed, not counting Saturday, Sunday, or a legal holiday in the District of Columbia as the last day. The last day for timely filing a petition in this case was Thursday, December 22, 1977, which was not a legal holiday in the District of Columbia. On August 21, 1979, 697 days after the mailing of the notice of deficiency, this Court received and filed the petition herein. It is crystal clear that the petition was not received and filed by the Court within the 90-day period prescribed in section 6213(a). Moreover, since the petition was not mailed but rather hand-delivered to the Court where it was filed on August 21, 1979, the timely-mailing, timely-filing provisions of section 7502 are not applicable herein.

Nevertheless, petitioner strongly urges that we consider its petition to have been timely filed by reasoning that the following facts show that a fraud has been practiced upon this Court.

Harry Rosenberg died on July 2, 1973. An estate was opened, and Marc A. Rosenberg (Rosenberg) was appointed the executor thereof. Prior to November 1977, Rosenberg retained Melvyn S. Hacker, Esq. (Hacker), a practicing attorney in the State of New York, for the purpose of having the latter file a petition with this Court. Hacker prepared a “Notice of Appearance” and a petition and transmitted copies thereof to Rosenberg together with a letter dated November 29, 1977, indicating that the originals of those documents had been filed with this Court. They were never at any time filed with this Court.³ Subsequent to November 29, 1977, Rosenberg repeatedly requested information from Hacker concerning the progress of the estate's petition and each time was advised that all papers had been filed with the Tax Court and that Hacker was completely discharging his responsibilities.

Believing Hacker's misrepresentations, Rosenberg asked him to file an order to show cause with the Court. Hacker represented to Rosenberg that he did so in May 1978.⁴ No such order to show cause was ever filed with the Court. On April 27, 1979, Hacker in a letter to Rosenberg advised as follows:

With reference to your father's estate and the proceedings with the Internal Revenue Service and the U.S. Tax Court I have been advised as follows:

(1) A bond is required for the appeal in the sum of Twenty Thousand Dollars. Said bond has been applied for with Continental Assurance Company and should be received within the next couple of days.

(2) Upon receipt of said bond an order will be issued restoring the matter to the calendar of the US Tax Court for June 7, 1979. I was advised last night that the date could be moved up to September without any difficulty.

Immediately upon receipt of any of the above papers I will forward the same to you immediately. I have been further advised that the above matter will be expedited by all parties concerned.⁵

On August 21, 1979, for the first time, a petition based upon the September 23, 1977, notice of deficiency was filed with this Court by petitioner's present counsel of record.

A petition for redetermination of a deficiency must be filed with this Court within 90 days after the notice of deficiency is mailed to a taxpayer. Sec. 6213. Failure to file within the prescribed period requires that the petition be dismissed for lack of jurisdiction. Stone v. Commissioner, 73 T.C. 617 (1980); Cassell v. Commissioner, 72 T.C. 313 (1979); Estate of Moffat v. Commissioner, 46 T.C. 499 (1966).⁶ Since the petition was actually received by the Court and filed on August 21, 1979, which was 697 days after the mailing of the notice of deficiency, the 90-day requirement of section 6213 has not been met. Moreover, since the petition was hand-delivered to the Court on August 21, 1979, the timely-mailing, timely-filing provisions of section 7502 are simply not applicable. Consequently, we are compelled to hold that we do not have jurisdiction with respect to the petition filed herein.

The foregoing notwithstanding, which petitioner and its counsel acknowledge with refreshing candor, petitioner still insists in rapid-fire order that we should determine that we have jurisdiction with respect to the petition filed herein for the following reasons:

(1) Fundamental principles of justice and fairness in American jurisprudence permit a modicum of flexibility to a rigid adherence to any statute where truly exceptional circumstances exist and where rigid adherence thereto would be manifestly unconscionable; therefore, in the circumstances of this case, the Court should invoke equity and determine that it does have jurisdiction over the petition filed herein.

(2) Hacker's conduct constituted a fraud on the Court in that it prevented this Court from actually operating its judicial machinery.⁷

The Tax Court has only such jurisdiction as is conferred upon it by statute. It has no jurisdiction to exercise the broad common law concept of judicial power invested in courts of general jurisdiction by Article III of the Constitution. Burns, Stix Friedman & Co. v. Commissioner, 57 T.C. 392 (1971); secs. 7441 and 7442. Our jurisdiction to grant equitable relief is strictly limited; it exists only to the extent specifically enumerated by statute, and it does not include the power to decide equitable questions. Feistman v. Commissioner, 587 F.2d 941 (9th Cir. 1978). While we are sympathetic to petitioner's plight, we cannot provide it with any equitable relief. In Hays Corp. v. Commissioner, 40 T.C. 436, 442-443 (1963), affd. 331 F.2d 422 (7th Cir. 1964), we stated:

Petitioner argues that such a result would be inequitable as to it. Such an argument cannot be considered by us, however, as we do not have the jurisdiction of a court of equity. Commissioner v. Gooch Co., 320 U.S. 418 (1943); Lorain Avenue Clinic, 31 T.C. 141 (1958). “The Internal Revenue Code, not general equitable principles, is the mainspring of (our) jurisdiction.” Commissioner v. Gooch Co., supra at 422. The proper place for a consideration of petitioner's complaint is the halls of Congress, not here.

It has been stated by the Courts and at least one commentator that fraud upon the Court should embrace only that species of fraud which does, or attempts to, defile the...