                              T.C. Memo. 2016-102



                         UNITED STATES TAX COURT



              ALLIED TRANSPORTATION, INC., Petitioner v.
           COMMISSIONER OF INTERNAL REVENUE, Respondent



      Docket No. 24348-14.                         Filed May 25, 2016.



      Scott A. Hovey, for respondent.



                           MEMORANDUM OPINION


      LAUBER, Judge: Currently before the Court is a motion by the Internal

Revenue Service (IRS or respondent) to dismiss this case for lack of jurisdiction

on the ground that petitioner, its corporate charter having been revoked, lacked

legal capacity to prosecute the case. We will grant the motion.
                                          -2-

[*2]                                  Background

       The following facts are derived from respondent’s motion, the exhibits at-

tached thereto, and publicly available records of the State of Maryland. Allied

Transportation, Inc. (Allied) had a corporate address in Maryland at the time the

petition was filed.

       Allied was incorporated in Maryland on August 23, 2001. Sukhjeet Singh

Gill was listed as its incorporator. Allied was assigned a taxpayer identification

number by the Maryland Department of Assessments and Taxation, Corporate

Charter Division (department).

       On October 8, 2004, the department revoked and annulled Allied’s corpor-

ate charter pursuant to section 3-503 of the Corporations and Associations article

of the Maryland Code for failing to file a required tax return. The department’s

official records indicate “the entity was forfeited for failure to file [a] property

[tax] return for 2003.” On February 12, 2007, Mr. Gill filed articles of revival on

behalf of Allied, but the articles were declared “void for non-payment” on March

6, 2007, leaving the status of Allied as forfeited.

       On August 14, 2014, the IRS mailed to Allied a notice of deficiency de-

termining for the taxable year 2010 a Federal income tax deficiency of $79,812

and additions to tax exceeding $18,000 under sections 6651(a)(1) and (2) and
                                         -3-

[*3] 6655.1 On October 14, 2014, Allied filed with this Court a petition for

redetermination signed by Mr. Gill.

      On October 14, 2015, the IRS filed a motion to dismiss for lack of juris-

diction, contending that the petition was not filed by a party with capacity to sue

under Rule 60(c). Counsel for respondent represented in his motion that he had

discussed the motion with Mr. Gill, who stated that he no longer had any involve-

ment with Allied and that he did not intend to prosecute this case further. By

order dated October 20, 2015, we directed Allied to respond to the motion to dis-

miss on or before November 23, 2015. Allied has not responded to that order or to

the motion to dismiss.

                                      Discussion

      Rule 60(c) provides that the capacity of a corporation to engage in litigation

in this Court “shall be determined by the law under which it was organized.” See

NT, Inc. v. Commissioner, 126 T.C. 191 (2006); David Dung Le, M.D., Inc. v.

Commissioner, 114 T.C. 268, 270-271 (2000), aff’d, 22 F. App’x 837 (9th Cir.

2001). Here, the relevant law is that of Maryland. Allied bears the burden of af-


      1
       Unless otherwise indicated, all statutory references are to the Internal
Revenue Code in effect for the tax year at issue, and all Rule references are to the
Tax Court Rules of Practice and Procedure. We round all monetary amounts to
the nearest dollar.
                                         -4-

[*4] firmatively establishing all facts giving rise to the Court’s jurisdiction. See

David Dung Le, M.D., Inc., 114 T.C. at 270; Harold Patz Trust v. Commissioner,

69 T.C. 497, 503 (1977); Asbury v. Commissioner, T.C. Memo. 2007-53, 93

T.C.M. (CCH) 974, 975.

      In Maryland, when a corporation forfeits its charter, “the powers conferred

by law on the corporation[] are inoperative, null, and void as of the date of the

proclamation [of forfeiture].” Md. Code Ann., Corps. & Ass’ns sec. 3-503(d)

(LexisNexis 2014). Thus, “all powers * * * , including the power to sue or be

sued,” are extinguished as of and during the forfeiture period. Dual Inc. v. Lock-

heed Martin Corp., 857 A.2d 1095, 1101 (Md. 2004). Nevertheless, Maryland law

does “make[] it clear that a corporation continues to exist, at least for some limited

purposes, beyond forfeiture or dissolution of its charter.” Thomas v. Rowhouses,

Inc., 47 A.3d 625, 630 (Md. Ct. Spec. App. 2012) (discussing Md. Code Ann.,

Corps. & Ass’ns sec. 3-515 (LexisNexis 2014)).

      Under Maryland law, a director of a forfeited corporation may bring suit in

its name if there is a “rational relationship” between the suit and a legitimate

“winding up” activity of the corporation. Md. Code Ann., Corps. & Ass’ns sec.

3-515(c); Dual Inc., 857 A.2d at 1102. But this power pertains only to the com-

pletion of corporate business that existed at the time of the forfeiture. Patten v.
                                           -5-

[*5] Bd. of Liquor License Comm’rs, 667 A.2d 940, 945 (Md. Ct. Spec. App.

1995). The greater the period between forfeiture and commencement of the

lawsuit, the less likely it is that the litigation is part of any “winding up” activity.

Ibid.

        Allied filed the petition in this case more than ten years after its corporate

charter was revoked. For a corporation of Allied’s modest scale, we find that ten

years would be an excessive period within which to conduct “winding up” acti-

vity.2 Moreover, the petition in this case concerns an alleged tax liability for 2010.

The notice of deficiency determined, on the basis of a bank deposits analysis, that

Allied had unreported gross receipts of $247,595 for that year. Given that Allied

had forfeited its charter six years previously, it seems unlikely that it (as opposed

to a related party) could have earned those gross receipts. In any event, litigation

concerning income that arose in 2010 would not seem to have a “rational relation-

ship” to the winding up of corporate business that existed in 2004. See Dual Inc.,

857 A.2d at 1102; Patten, 667 A.2d at 945. Finally, Mr. Gill’s reluctance to prose-

        2
        Some States have a fixed time limit for winding up, but others do not.
Compare Tex. Bus. Orgs. Code Ann. sec. 11.356 (West 2012) (providing a three-
year period for purposes of prosecuting or defending in the terminated entity’s
name) with Mich. Comp. Laws Serv. sec. 450.1833 (LexisNexis 2014) (providing
that dissolved corporations shall continue in existence for the purpose of winding
up). Reviewing courts generally allow a reasonable period. See, e.g., Flint Cold
Storage v. Dep’t of Treasury, 776 N.W.2d 387, 395-396 (Mich. Ct. App. 2009).
                                         -6-

[*6] cute the case establishes that this litigation cannot properly be regarded as

related to any “winding up” of Allied’s business affairs.

      To reflect the foregoing,


                                               An order will be entered granting

                                       respondent’s motion to dismiss for lack of

                                       jurisdiction.
