Wheeler's Peachtree Pharmacy, Inc. v. Comm'r of Internal Revenue
| Decision Date | 31 October 1960 |
| Docket Number | Docket No. 76627. |
| Parties | WHEELER'S PEACHTREE PHARMACY, INC., PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT. |
| Court | U.S. Tax Court |
OPINION TEXT STARTS HERE
1. Held, petitioner corporation was dissolved in 1952.
2. Held, the filing of successive consents extending the statute of limitations does not constitute the beginning of a suit by or against the corporation so as to extend the life of the corporation beyond the 3 years provided by Georgia law for winding up the affairs of a dissolved corporation.
3. Held, petitioner corporation was nonexistent and no one was authorized to act for it in filing a petition in this Court in 1958, and the petition must be dismissed for lack of jurisdiction. L. Eugene McNatt, Esq., and Max M. Cuba, Esq., for the petitioner.
James R. Harper, Jr., Esq., for the respondent.
Respondent determined deficiencies in petitioner's income tax and additions to tax under section 293(b), I.R.C. 1939, for the years 1948, 1949, and 1950. The matter is before us now on petitioner's motion to dismiss for lack of jurisdiction.
Petitioner was a Georgia corporation with its principal offices in Atlanta, Georgia, and filed its income tax returns for the years 1948, 1949, and 1950 with the collector of internal revenue for the district of Georgia.
Petitioner was incorporated under the name of Peachtree Pharmacy, Inc., under the laws of the State of Georgia in 1933. In August 1946, R. G. Wheeler and C. B. Wheeler purchased all of the stock of the corporation.
The 1946 income tax return for the corporation was filed in the name of ‘WHEELER'S PEACHTREE PHARMACY, Inc., Successors to Peachtree Pharmacy, Inc.,’ and indicated that the taxpayer had been incorporated in the State of Georgia in 1933, and that it had filed its returns for the preceding year in Atlanta, Georgia. The corporation filed returns for the years 1947 through 1951 in the name of ‘Wheeler's Peachtree Pharmacy, Inc.,‘ giving the same information with respect to the date of its incorporation. The address of the corporation was the same on all of the above returns, being 557 Peachtree Street, NE. Atlanta, Georgia. The balance sheet figures on each of the above returns for the end of one year were the same as the balance sheet figures for the beginning of the next year.
Consents were filed in the name of Wheeler's Peachtree Pharmacy, Inc., extending the statute of limitations for assessment and collection of deficiencies and additions to tax for the taxable year 1948, as follows:
+-----------------------------------------------+
¦Date agreement ¦Extending period ¦
+----------------+------------------------------¦
¦executed ¦for assessment to June 30— ¦
+----------------+------------------------------¦
¦Jan. 29, 1952 ¦1953 ¦
+----------------+------------------------------¦
¦June 15, 1953 ¦1954 ¦
+----------------+------------------------------¦
¦Feb. 23, 1954 ¦1955 ¦
+----------------+------------------------------¦
¦May 19, 1955 ¦1956 ¦
+----------------+------------------------------¦
¦May 7, 1956 ¦1957 ¦
+----------------+------------------------------¦
¦Apr. 26, 1957 ¦1958 ¦
+-----------------------------------------------+
No consent extending the statute of limitations for assessment and collection of deficiencies and additions to tax was filed in the name of Wheeler's Peachtree Pharmacy, Inc., for the taxable year 1949.
Consents were filed in the name of Wheeler's Peachtree Pharmacy, Inc., extending the statute of limitations for assessment and collection of deficiencies and additions to tax for the taxable year 1950, as follows:
+-----------------------------------------------+
¦Date agreement ¦Extending period ¦
+----------------+------------------------------¦
¦executed ¦for assessment to June 30— ¦
+----------------+------------------------------¦
¦Mar. 8, 1954 ¦1955 ¦
+----------------+------------------------------¦
¦June 1, 1955 ¦1956 ¦
+----------------+------------------------------¦
¦May 7, 1956 ¦1957 ¦
+----------------+------------------------------¦
¦Apr. 26, 1957 ¦1958 ¦
+-----------------------------------------------+
Upon petition for dissolution filed by Peachtree Pharmacy, Inc., in the Superior Court of Fulton County, Georgia, pursuant to resolutions adopted by the directors and stockholders of that corporation, an order was entered by that court on March 26, 1952, dissolving such corporation and surrendering its charter. Attached to the petition was a publisher's affidavit that notice had been published once a week for 4 weeks of the surrender of the charter of Peachtree Pharmacy, Inc.
A representative of respondent's began an examination of the returns of Wheeler's Peachtree Pharmacy, Inc., at 557 Peachtree Street, NE, Atlanta, Georgia, on January 7, 1952. The agent worked on the audit approximately 12 days and filed his preliminary report with his superiors on September 12, 1952. A notice of deficiency was issued to Wheeler's Peachtree Pharmacy, Inc., 557 Peachtree Street, NE, Atlanta, Georgia, determining deficiencies in tax and additions to tax for the years 1948, 1949, and 1950 under date of June 27, 1958.
Attached to the 1951 income tax return for Wheeler's Peachtree Pharmacy, Inc., is a letter dated June 30, 1952, from the collector of internal revenue, Atlanta, Georgia, addressed to Peachtree Pharmacy, Inc., 557 Peachtree Street, NE. Atlanta, Georgia, advising that the addressee's application for extension of time within which to file its corporate tax return could not be granted.
Peachtree Pharmacy, inc., and Wheeler's Peachtree Pharmacy, Inc., were one and the same corporation. That corporation was formally dissolved under the laws of the State of Georgia on March 26, 1952.
OPINION.Petitioner moved to dismiss its own petition for lack of jurisdiction in this Court on the grounds that the corporation was nonexistent, having been dissolved in 1952, and there was no one authorized to act for it when this petition was filed. This Court being a court of limited jurisdiction, questions of jurisdiction are fundamental and whenever it appears that this Court may not have jurisdiction to entertain the proceeding that question must be decided. National Committee To Secure Justice, Etc., 27 T.C. 837, First Nat. Bank of Wichita Falls, Trustee, 3 T.C. 203. Consequently, both parties were given the opportunity to submit any evidence they desired relevant to this motion at the hearing on the motion.
The petition, which alleges that petitioner was liquidated in 1952, was filed on September 15, 1958, and was verified by R. G. Wheeler, who averred only that he was president of petitioner prior to its liquidation and if there is any person authorized to verify the petition he is that person.
(T)he Tax Court has no jurisdiction to entertain a proceeding purporting to be brought by a nonexistent party, S. Hirsch Distilling Co., 14 B.T.A. 1073; nor by a person whose authority is not shown, Coca-Cola Bottling Co., 22 B.T.A. 686. * * * (National Committee To Secure Justice, Etc., supra at 839.)
Respondent opposes petitioner's motion on two grounds: (1) That there was no formal dissolution of the corporation in conformity with the laws of Georgia, so the corporation must be regarded as still in existence for purposes of this action; and (2) that even if the corporation was dissolved in 1952, the filing of—
consents extending the statute of limitations for the years 1948 and 1950 constitute the commencement of a proceeding which was an essential element of winding up the corporate affairs. * * *
The evidence presented at the hearing on the motion refutes respondent's first argument, and we have found as a fact that petitioner was formally dissolved under the laws of Georgia on March 26, 1952. It is true that the certificate of dissolution was issued in the name of ‘Peachtree Pharmacy, Inc.,‘ rather than ‘Wheeler's Peachtree Pharmacy, Inc.,‘ the name in which the returns were filed, the notice of deficiency was issued, and the petition was filed. However, it is clear from the tax returns and other evidence that petitioner was incorporated in 1933 under the name ‘Peachtree Pharmacy, Inc.’; that when the Wheelers bought the stock of the corporation in 1946, the name ‘Wheeler's' was simply added in front of the name without a formal change in name, and the return filed for the year 1946 indicated that ‘Wheeler's Peachtree Pharmacy, Inc.,‘ was successor to ‘Peachtree ...
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