Opinion
16373-21
04-25-2022
IRMGARD A. KLEIN, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER
Ronald L. Buch Judge
This case is calendared for trial at the Court's May 23, 2022, Detroit, Michigan trial session. On April 18, 2022, the Commissioner filed a Motion to Dismiss for Lack of Jurisdiction on the grounds that the petition bears neither an original signature of the petitioner nor the signature of someone lawfully authorized to represent the petitioner. For the reasons stated below, we will deny the Commissioner's motion without prejudice.
The Commissioner mailed a notice of deficiency to Irmgard Klein on February 1, 2021. The deadline by which to file a petition from that notice was May 3, 2021. On May 6, 2021, the Court received a petition that had been postmarked on April 30, 2021. If otherwise valid, the petition was timely. See I.R.C. § 6213.
The petition was signed by Werner Klein, not by Irmgard Klein. According to the Commissioner's motion, Mr. Klein is the son of Irmgard Klein, and he had a durable power of attorney at the time he filed the petition on her behalf.
The Commissioner's motion begins with the accurate statement that we do not have jurisdiction unless the petition is filed by the taxpayer or someone lawfully authorized to act on the taxpayer's behalf. The Commissioner then states that the Tax Court does not recognize powers of attorney. That is not quite correct.
Rule 60, Tax Court Rules of Practice and Procedure, governs proper parties and their capacity. It begins with the general rule that a case is brought by and in the name of the person against whom a deficiency is determined. Rule 60(a)(1). The capacity of a some other representative to litigate in the Court, however, is determined in accordance with the law of the jurisdiction from which the person's authority is derived. Rule 60(c). In this case, that would presumably be Michigan. If Mr. Klein, through the durable power of attorney, had the capacity to litigate on behalf of petitioner, he could, for example, be appointed as next friend.
Conveniently, how we sort this out is set forth in the Court's rules. Rule 60(a) (1) provides, "A case timely brought shall not be dismissed on the ground that it is not properly brought on behalf of a party until a reasonable time has been allowed after objection for ratification by such party of the bringing of the case; and such ratification shall have the same effect as if the case had been properly brought by such party." As applied to this case, this would mean that either Ms. Klein could ratify the petition or Mr. Klein could file a motion to represent her as next friend.
But we have another wrinkle. The day after the petition in this case was signed and mailed, Ms. Klein passed away. The Commissioner's motion informs us that Ms. Klein's estate does not have a representative or fiduciary and that no estate will be probated. But we have established procedures for dealing with this. See Nordstrom v. Commissioner, 50 T.C. 30, 32 (1968). The Commissioner or Mr. Klein can simply inform the Court of the heirs at law, and one of them may step into this case to ratify the petition.
And then we have one last wrinkle. In his motion, the Commissioner informs the Court that the parties have reached an agreement that there is no deficiency in tax for the year at issue. According to his motion, after the Court dismisses this case, the parties will process the agreed upon settlement. But again, we have procedures to handle this, as well. Once an heir steps forward in this case, the heir can sign a stipulated decision for no deficiency, which the Court can enter.
Consistent with the foregoing, it is hereby
ORDERED that the Commissioner's Motion to Dismiss for Lack of Jurisdiction filed April 18, 2022, is denied without prejudice. It is further
ORDERED that the caption of this case is amended to read "Irmgard A. Klein, Deceased, Petitioner v. Commissioner of Internal Revenue, Respondent." It is further
ORDERED that the parties, by May 13, 2022, shall file a response to this order either establishing Mr. Klein's authority to file the petition (i.e., attaching the durable power of attorney) and identifying Irmgard Klein's heirs at law.