Opinion
11776-20
12-02-2022
CANYON AUTO SPA, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER OF DISMISSAL FOR LACK OF JURISDICTION
L. Paige Marvel Judge
On January 10, 2022, respondent filed a Motion to Dismiss for Lack of Jurisdiction on the ground that petitioner lacked capacity to file the petition in this case because petitioner's corporate powers, rights, and privileges were suspended by the California Franchise Tax Board on October 1, 2019. The Court directed petitioner to file a response by February 7, 2022. On February 7, 2022, petitioner filed its Response to Motion to Dismiss for Lack of Jurisdiction. Petitioner concedes in its Response to Motion to Dismiss for Lack of Jurisdiction that its "corporate powers, rights, and privileges were suspended by the . . . [California Franchise Tax Board] when the petition was filed on September 22, 2020, and were not reinstated until January 28, 2022, which was well after the deadline[ ] for filing petitions in these cases."
Whether a corporation may engage in litigation in this Court is determined by applicable State law, which here is California law. Rule 60(c); see David Dung Le, M.D., Inc. v. Commissioner, 114 T.C. 268, 270-71 (2000), aff'd, 22 Fed.Appx. 837 (9th Cir. 2001); Condo v. Commissioner, 69 T.C. 149, 151 (1977). Upon review of California law, in particular California Revenue and Taxation Code sections 23301 and 23302, we conclude that petitioner lacked the capacity to commence this case at any time during the statutory period prescribed by section 6213(a) for filing a petition in this Court and that this case must be dismissed for lack of jurisdiction. § 6213(a); Rules 53, 60(c); see David Dung Le, M.D., Inc., 114 T.C. at 270-72, 274-76; see also Hallmark Rsch. Collective v. Commissioner, No. 21284-21, 159 T.C., slip. op. at 2 (Nov. 29, 2022) (holding that the timely filing of a deficiency petition is a jurisdictional requirement).
Unless otherwise indicated, all statutory references are to the Internal Revenue Code, Title 26 U.S.C., in effect at all relevant times, all regulation references are to the Code of Federal Regulations, Title 26 (Treas. Reg.), in effect at all relevant times, and all Rule references are to the Tax Court Rules of Practice and Procedure.
There may be an argument that even if the 90-day deadline in section 6213(a) were nonjurisdictional, dismissals pursuant to Rule 60 would still be jurisdictional. See Hallmark Rsch. Collective, 159 T.C., slip op. at 23 (discussing argument by taxpayer that dismissals pursuant to Rule 60 would still be jurisdictional even if the 90-day deadline in section 6213(a) for filing a petition in a deficiency case were nonjurisdictional). We do not address this possibility in light of our reasoning in David Dung Le, M.D., Inc. and our holding in Hallmark Rsch. Collective that the 90-day deadline in section 6213(a) is jurisdictional. See David Dung Le, M.D., Inc., 114 T.C. at 270 (premising a dismissal for lack of jurisdiction due to lack of corporate capacity under Rule 60 on the requirement in section 6213(a) of a timely petition).
Petitioner makes three arguments in its Response to Motion to Dismiss for Lack of Jurisdiction, all of which are unavailing. First, petitioner cites a number of California state court cases (all of which pre-date our decision in David Dung Le, M.D., Inc. and none of which are new developments) and argues that California courts routinely provide a continuance to suspended corporations to pay delinquent franchise taxes and allow such corporations to resume litigation once those franchise taxes are paid. However, we have previously rejected the argument that a reinstatement of a suspended California corporation's powers after the statutory period prescribed by section 6213(a) for filing a petition can confer jurisdiction on us. See David Dung Le, M.D., Inc., 114 T.C. at 274-76; see also Cmty. Elec. Serv. of L.A. v. Nat'l Elec. Contractors Ass'n, 869 F.2d 1235, 1239-41 (9th Cir. 1989) (holding that a suspension by the California Franchise Tax Board defeats a plaintiff's capacity to sue in federal district court and that a reinstatement after the statute of limitations has run does not permit a prosecution of the action), overruled on other grounds by Townsend v. Holman Consulting Corp., 929 F.2d 1358 (9th Cir. 1990).
Second, petitioner argues that respondent's alleged violations of the Taxpayer Bill of Rights should estop respondent from asserting that this Court lacks jurisdiction. This argument has no merit because "jurisdictional requirements . . . do not allow for equitable exceptions." Boechler, P.C. v. Commissioner, 142 S.Ct. 1493, 1497 (2022); cf. Moya v. Commissioner, 152 T.C. 182, 197 (2019) (holding that the Taxpayer Bill of Rights did not itself create any new rights or remedies for taxpayers).
Finally, petitioner argues in its Response to Motion to Dismiss for Lack of Jurisdiction that the intervening decision of the Supreme Court of the United States in Citizens United v. FEC, 558 U.S. 310 (2010), "expanded a corporation's fundamental constitutional rights" such that "[r]equiring a corporation to pay delinquent state taxes, and not requiring a person to pay delinquent state taxes, before the corporation may challenge a federal tax after receiving a notice of deficiency, violates the corporation['s] rights to equal protection under the United State[s] Constitution." This argument is wholly without merit because Citizens United did not address the subject of equal protection. In addition, there is no unequal treatment of individuals and corporations under Rule 60(c) because Rule 60(c) determines the capacity of individuals by the law of their domicile and, analogously, determines the capacity of corporations by the law of their jurisdiction of organization. Finally, petitioner's equal protection argument, which is supported only by conclusory statements and a single citation to Citizens United, is highly cursory and we therefore deem it waived. See Smith v. Commissioner, No. 5191-20, 159 T.C., slip op. at 41 (Aug. 25, 2022) (holding argument briefed only in a cursory fashion in motion papers to be waived); see also United States v. Zannino, 895 F.2d 1, 17 (1st Cir. 1990) ("[I]ssues adverted to in a perfunctory manner, unaccompanied by some effort at developed argumentation, are deemed waived.").
Upon due consideration, it is
ORDERED that respondent's Motion to Dismiss for Lack of Jurisdiction is granted, and this case is dismissed for lack of jurisdiction.