                       T.C. Memo. 1996-344



                     UNITED STATES TAX COURT


   TRANSPAC DRILLING VENTURE 1982-08, ALBERT D. & LUELLA L.
 ESHELMAN, A PARTNER OTHER THAN THE TAX MATTERS PARTNER,
  Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent


     Docket No. 18511-90.                    Filed July 30, 1996.


     Charles Haydon, for petitioners.

     William A. Heard III, for respondent.


                       MEMORANDUM OPINION


     ARMEN, Special Trial Judge:   This matter is before the Court

on participating partner Milton Chwasky's Motion for Leave to

File Motion to Vacate Decision filed pursuant to Rule 162.1

     The issue for decision is whether grounds exist in this case

for vacating what is otherwise a final decision.

     1
       Unless otherwise indicated, all section references are to
the Internal Revenue Code, as amended, and all Rule references
are to the Tax Court Rules of Practice and Procedure.
Background

     Transpac Drilling Venture 1982-08 (Transpac) is a

partnership subject to the unified partnership audit and

litigation procedures set forth in sections 6221 through 6233.

Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA), Pub. L.

97-248, sec. 402(a), 96 Stat. 648.

     On March 23, 1990, respondent issued three separate notices

of final partnership administrative adjustment (FPAA) to

Transpac's tax matters partner (TMP) setting forth adjustments to

Transpac's partnership items for 1982, 1983, and 1984.    On April

10, 1990, respondent mailed copies of the FPAA's described above

to Transpac partners Albert D. and Luella L. Eshelman

(petitioners).

     On August 17, 1990, Charles Haydon, Esq. (Mr. Haydon) filed

a timely petition for readjustment on behalf of petitioners, as

partners other than the TMP, contesting the FPAA's described

above.2   Sec. 6226(b).   Paragraph 7 of the petition states:   "The

name and address of the tax matters partner, so far as known, are


     2
       The petition includes an allegation that Transpac's
principal place of business is Scarsdale, N.Y. Respondent's
answer to the petition includes a denial of this allegation for
lack of sufficient information. Sec. 7482(b)(1)(E) provides that
an appeal in this case will lie with the Court of Appeals for the
circuit in which the partnership's principal place of business is
located. Considering the limited circumstances under which this
Court may vacate a final decision (as more fully discussed
below), we do not find it necessary to determine Transpac's
principal place of business in order to rule on the pending
motion.
                               - 3 -


Churchhill Oil & Gas Company, Inc., a Texas Corporation, 2435

Faber Place, Suite 200, Palo Alto, California 94303."    On October

15, 1990, respondent filed an answer to the petition.

     On October 19, 1990, Mr. Haydon filed a Notice of Election

to Participate on behalf of the following Transpac partners:

Milton and Claire Chwasky, Donald A. and Maureen S. Cryan,

Herbert and Hartwig Koenig, Murray A. and Adrienne Meltzer, and

Murray and Doris Dichek.   Sec. 6226(c)(2); Rule 245(b).

     On January 11, 1991, the Court issued an order assigning

this case to Judge Charles E. Clapp for trial or other

disposition.   A copy of this order was mailed to the TMP at the

address provided in the petition but was returned to the Court by

the U.S. Postal Service marked "RETURN TO SENDER NO FORWARD ORDER

ON FILE UNABLE TO FORWARD".

     On April 20, 1992, petitioners filed a Motion for Summary

Judgment on the ground that respondent had failed to issue the

disputed FPAA's within the applicable period of limitations.

Petitioners' Motion for Summary Judgment was denied.    See

Transpac Drilling Venture 1982-16 v. Commissioner, T.C. Memo.

1994-26.

     On May 11, 1994, the Court issued an order advising

petitioners and the participating partners that documents served

on the TMP were returned to the Court as undeliverable by the

U.S. Postal Service.   The order, which includes a citation to
                                - 4 -


Computer Programs Lambda, Ltd. v. Commissioner, 90 T.C. 1124,

1126 (1988), for the proposition that a viable TMP is necessary

to ensure the fair, efficient, and consistent disposition of

TEFRA partnership proceedings, directs the petitioners and the

participating partners to select a successor TMP and notify the

Court in writing, on or before June 20, 1994, of the name and

address of the successor TMP.

     The Court did not receive a response to its order dated May

11, 1994.   Accordingly, on August 19, 1994, the Court issued an

order directing petitioners and the participating partners to

show cause, on or before September 23, 1994, why the case should

not be dismissed for failure to properly prosecute.

     Once again, the Court did not receive a response to its

order.   Consequently, on October 26, 1994, the Court entered an

Order of Dismissal and Decision in which it (1) made its order to

show cause dated August 19, 1994, absolute, (2) dismissed this

case for failure to properly prosecute, and (3) entered a

decision sustaining respondent's adjustments to Transpac's

partnership items for 1982, 1983, and 1984.

     The Court's Order dated May 11, 1994, the Court's Order to

Show Cause dated August 19, 1994, and the Court's Order of

Dismissal and Decision entered October 26, 1994, were all served

on Mr. Haydon as counsel of record for petitioners and the
                                 - 5 -


participating partners, specifically including participating

partner Milton Chwasky.     Rules 246(b), 247, 21(b)(2).

     As previously stated, on April 17, 1996, participating

partner Milton Chwasky filed a Motion for Leave to File Motion to

Vacate Decision and lodged a Motion to Vacate Decision with the

Court.     Attached to such motion for leave is an affidavit

executed by Milton Chwasky which states that petitioners and the

participating partners failed to respond to the Court's orders

dated May 11, 1994, and August 19, 1994, due to a breakdown in

the lines of communication between Mr. Haydon and Transpac's

accountant, Mr. Bernard J. Pitkoff.      Mr. Chwasky's Motion for

Leave to File Motion to Vacate Decision includes an allegation

that respondent does not object to the motion.

     This matter was called for hearing in Washington, D.C., on

May 22, 1996.     Counsel for respondent appeared at the hearing and

explained that, contrary to representations made to Mr. Haydon

prior to the filing of the Motion for Leave to File Motion to

Vacate Decision, respondent intended to oppose the pending

motion.3    In particular, counsel for respondent asserted that

Milton Chwasky's motion should be denied because the standards

required to support a motion to vacate a final decision had not

been satisfied.

     3
       Counsel for respondent advised the Court that he notified
Mr. Haydon the day before the hearing that respondent would
oppose Mr. Chwasky's motion at the hearing.
                               - 6 -


     Mr. Haydon did not appear at the hearing.   However, in light

of respondent's belated decision to oppose Mr. Chwasky's motion,

the Court offered Mr. Haydon the opportunity for a second hearing

or to file a written statement with the Court.   Mr. Haydon

elected the second option and filed a written statement with the

Court on May 28, 1996.

     Mr. Haydon's written statement contains a discussion of the

circumstances surrounding Mr. Haydon's communications with

respondent's North Atlantic Regional Counsel's office leading up

to the filing of Mr. Chwasky's Motion for Leave to File Motion to

Vacate Decision.   In sum, Mr. Haydon contends that Regional

Counsel's decision not to object to the motion for leave was

based on equitable considerations; i.e., that Transpac's general

partner has defrauded the limited partners and that the latter

deserved their day in court.   In this regard, Mr. Haydon argues

that respondent should be bound by Regional Counsel's decision

not to object to the pending motion.

Discussion

     The question presented is whether grounds exist in this case

for vacating what is otherwise a final decision.   As explained in

greater detail below, we shall deny Mr. Chwasky's Motion for

Leave to File Motion to Vacate Decision.

     The decision in this case was entered on October 26, 1994.

Sec. 7459(c).   A decision of this Court becomes final upon
                                 - 7 -


expiration of the time to file a notice of appeal with respect to

such decision.   Sec. 7481(a)(1).   Generally, a notice of appeal

must be filed within 90 days after the decision is entered by

this Court.   Sec. 7483; Fed. R. App. P. 13(a).    The 90-day appeal

period may be extended with the timely filing of a motion to

vacate or revise the decision.    Fed. R. App. P. 13(a).     Absent

special leave of the Court, such a motion must be filed within 30

days after the decision has been entered.     Rule 162.   The

disposition of a motion for leave to file a motion to vacate or

revise a decision lies within the sound discretion of the Court.

Heim v. Commissioner, 872 F.2d 245, 246 (8th Cir. 1989), affg.

T.C. Memo. 1987-1.

     In the instant case, neither petitioners nor the

participating partners filed a notice of appeal or a timely

motion to vacate or revise the decision entered October 26, 1994.

Thus, the decision became final on Tuesday, January 24, 1995, 90

days after the decision was entered.     Sec. 7481(a)(1).

     Once a decision of this Court becomes final, we may vacate

the decision only in certain narrowly circumscribed situations.

Helvering v. Northern Coal Co., 293 U.S. 191 (1934).        For

instance, some courts have ruled that this Court may vacate a

final decision if that decision is shown to be void, or a legal

nullity, for lack of jurisdiction over either the subject matter

or the party, see Billingsley v. Commissioner, 868 F.2d 1081 (9th
                               - 8 -


Cir. 1989); Abeles v. Commissioner, 90 T.C. 103, 105-106 (1988);

Brannon's of Shawnee, Inc. v. Commissioner, 71 T.C. 108, 111-112

(1978), or if the decision was obtained through fraud upon the

Court; see Abatti v. Commissioner, 859 F.2d 115 (9th Cir. 1988),

affg. 86 T.C. 1319 (1986); Senate Realty Corp. v. Commissioner,

511 F.2d 929, 931 (2d Cir. 1975); Stickler v. Commissioner, 464

F.2d 368, 370 (3d Cir. 1972); Casey v. Commissioner, T.C. Memo.

1992-672.   In addition, some courts have indicated that the Tax

Court has the power in its discretion, in extraordinary

circumstances, to vacate and correct a final decision where it is

based upon a mutual mistake of fact, see La Floridienne J.

Buttgenbach & Co. v. Commissioner, 63 F.2d 630 (5th Cir. 1933).4

On the other hand, the Court of Appeals for the Eighth Circuit

has adopted the more restrictive view that the Tax Court lacks

general equitable powers, and, therefore, that this Court lacks

the authority to vacate or revise an otherwise final decision.

See Webbe v. Commissioner, 902 F.2d 688, 689 (8th Cir. 1990),

affg. T.C. Memo. 1987-426; see also Heim v. Commissioner, supra

at 249 (Lay, C.J., concurring).


     4
       Although the U.S. Court of Appeals for the Sixth Circuit
cited mutual mistake of fact as a grounds for vacating a final
decision of this Court in Reo Motors, Inc. v. Commissioner, 219
F.2d 610 (6th Cir. 1955), the Sixth Circuit recently concluded
that Reo Motors, Inc. was effectively overruled by virtue of the
Supreme Court's affirmance of Lasky v. Commissioner, 235 F.2d 97
(9th Cir. 1956), affd. per curiam 352 U.S. 1027 (1957). See
Harbold v. Commissioner, 51 F.3d 618, 621-622 (6th Cir. 1995).
                                - 9 -


     As previously discussed, the record does not establish

Transpac's principal place of business.    Accordingly, there is

uncertainty regarding the appropriate venue of an appeal in this

case.   Sec. 7482(b)(1)(E).   However, we do not find the question

of appellate venue to be critical to the disposition of the

pending motion.   Applying the law to the facts presented, we

shall deny Mr. Chwasky's motion on the ground that we lack

authority to vacate the decision.

     In the present case, there is no allegation that the Court

lacked jurisdiction to enter the decision of October 26, 1994, or

that the decision arose from either a fraud upon the Court or

mutual mistake.   As indicated, Mr. Chwasky's motion for leave is

based solely on the equitable consideration that Transpac's

limited partners be given their day in court.

     The Court entered its decision in this case after giving the

petitioners and the participating partners ample opportunity to

appoint a successor TMP.   See Computer Programs Lambda, Ltd. v.

Commissioner, 90 T.C. 1124, 1126 (1988).    Although the apparent

lack of communication between petitioners and the participating

partners and their counsel is unfortunate, the fact remains that

the decision entered in this case is now final.    Consistent with

the cases discussed above, we are obliged to respect the finality

of that decision.   Consequently, we shall deny Mr. Chwasky's

Motion for Leave to File Motion to Vacate Decision.
                        - 10 -


To reflect the foregoing,



                             An order denying Milton

                             Chwasky's Motion for Leave to

                             File Motion to Vacate Decision

                             will be issued.
