Tax Court In Brief | Sander v. Comm'r | Standing To Contest Deficiency Of Another

• Published date: 11 October 2022
• Subject Matter: Litigation, Mediation & Arbitration, Tax, Trials & Appeals & Compensation, Tax Authorities
• Law Firm: Freeman Law
• Author: Freeman Law

Tax Litigation: The Week of October 3rd, 2022, through October 7th, 2022

• Scheizer v. Comm'r, T.C. Memo 2022-102 | October 6, 2022 | Lauber, J. | Dkt. No 3679-18

Sander v. Comm'r, T.C. Memo. 2022-103 | October 6, 2022 | Morrison, J. | Dkt. No. 22472-16

Opinion

Short Summary: Sandra Sander ("Petitioner") established a trust'the Sandra E. Sander Lifetime Trust'on October 25, 2014. According to the trust instrument, Petitioner and her daughter, Leda, were to serve as co-trustees. Additionally, the trust instrument, governed by Florida law, described the various powers of the trustee, including the payment and distribution of certain trust assets, the payment or ability to compromise claims of the trust, and the payment of expenses, taxes, penalties, or other charges.

On July 4, 2016, Petitioner died in Florida. Petitioner's will nominated Leda as personal representative. Moreover, the terms of the trust instrument provided that Leda became sole trustee of the trust, and three new trusts were created for each of Petitioner's daughters. Petitioner's will was never probated.

On July 15, 2016, the Internal Revenue Service ("IRS") issued a notice of deficiency to Petitioner for tax years 2013 and 2014. Leda, a resident of Missouri, filed a Petition for redetermination of the deficiencies in Petitioner's name. Leda later moved to substitute parties and change the caption of the case to reflect Leda, as trustee of the trust, as the petitioner. The IRS filed a Motion to Dismiss for Lack of Jurisdiction, arguing that the petition was not filed by a personal representative of Petitioner's estate or by some other fiduciary.

Key Issues:

(1) Whether Petitioner's daughter has the authority under state law to litigate the Tax Court case on Petitioner's behalf; and

(2) Whether the Tax Court has jurisdiction.

Primary Holdings:

(1) Petitioner does not currently have authority under state law to litigate the Tax Court case on Petitioner's behalf; and

(2) The Tax Court deferred ruling on this issue to allow time for a probate action to be commenced for Petitioner's estate and a personal representative appointed.

Key Points of Law:

A case shall be brought by and in the name of the person against whom the IRS determined the deficiency (in the case of a notice of deficiency) or liability (in the case of a notice of liability), or by and with the full descriptive name of the fiduciary entitled to institute a case on behalf of such person. See Rule 60(a); 23(a)(1).

A case timely...