                       T.C. Memo. 2011-96



                     UNITED STATES TAX COURT



     SANDRA K. SHOCKLEY, TRANSFEREE, ET AL.,1 Petitioners v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket Nos. 28207-08, 28208-08,   Filed May 2, 2011.
                 28210-08.



     Ziemowit T. Smulkowski, Jenny Louise Johnson,

Aharon S. Kaye, and Alexander S. Vesselinovitch, for petitioners.

     Lyle Press, Steven N. Balahtsis, and Gail Campbell, for

respondent.




     1
      Cases of the following petitioners are consolidated
herewith: Terry K. Shockley, Transferee, docket No. 28208-08;
and Shockley Holdings, Limited Partnership, Transferee, docket
No. 28210-08.
                                 - 2 -

                MEMORANDUM FINDINGS OF FACT AND OPINION


     COHEN, Judge:     Pursuant to three separate notices dated

August 21, 2008, respondent determined that Sandra K. Shockley

(Mrs. Shockley), Terry K. Shockley (Mr. Shockley), and Shockley

Holdings Ltd. Partnership (Shockley Holdings) (collectively,

petitioners) are liable as transferees for the Federal income tax

liability, additions to tax, and an accuracy-related penalty of

Shockley Communications Corp. (SCC) for its short tax year ending

May 31, 2001.    Based on respondent’s determination as to the

value of the assets transferred to petitioners, respondent

determined that the amounts of transferee liability of each

petitioner relating to SCC’s outstanding liabilities are as

follows, plus interest as provided by law:    (1) $11,244,084.42

for Mrs. Shockley; (2) $10,975,059.03 for Mr. Shockley; and (3)

$4,053,709.13 for Shockley Holdings.     Unless otherwise indicated,

all section references are to the Internal Revenue Code in effect

for the year in issue, and all Rule references are to the Tax

Court Rules of Practice and Procedure.

     The issues for decision are:    (1) Whether the period of

limitations under section 6901(c) precludes respondent from

assessing transferee liability against petitioners for SCC’s tax

year ending May 31, 2001; and, if it is determined that the

notices were timely, (2) whether petitioners are liable as

transferees for their respective portions of the unpaid
                                - 3 -

determined and assessed deficiency, addition to tax, penalty, and

interest with respect to SCC’s corporate income tax for 2001; and

(3) whether SCC is liable for the determined and assessed

deficiency in tax, addition to tax, penalty, and interest for

SCC’s short tax year ending May 31, 2001.

                          FINDINGS OF FACT

       Some of the facts have been stipulated, and the stipulated

facts are incorporated in our findings by this reference.    Mr.

and Mrs. Shockley (the Shockleys) resided in Florida at the time

their petitions were filed.    Shockley Holdings is a partnership

organized under the laws of the State of Wisconsin, and its

principal place of business was Florida at the time its petition

was filed.

       SCC was incorporated in March 1985 under the laws of the

State of Wisconsin.    SCC owned and operated five television

stations and a radio station in Wisconsin, a television station

and several radio stations in Minnesota, and a video production

company in Wisconsin.    Before May 31, 2001, petitioners each

owned shares in SCC as minority shareholders along with 26 other

shareholders.    Mr. Shockley owned 10.18879 percent of SCC’s

common stock and served as president, treasurer, and a director

of SCC.    Mrs. Shockley owned 10.18879 percent of SCC’s common

stock and served as vice president, secretary, and a director of

SCC.    Shockley Holdings owned 3.52508 percent of SCC’s common
                                - 4 -

stock.    Shockley Holdings is owned by the Shockleys, who are

general partners, and their adult children, who are limited

partners.

     On May 31, 2001, pursuant to a stock purchase agreement,

petitioners sold their shares of SCC to Northern Communications

Acquisitions Corp. (NCAC), a Delaware corporation.    The Shockleys

resigned from all of their positions in SCC as of that date, and

at no time after the sale was either an officer, director, or

shareholder of SCC.

     Also on May 31, 2001, following the acquisition of the SCC

stock by NCAC, NCAC caused SCC to merge with and into Shockley

Delaware Corp. (SDC), a Delaware corporation and subsidiary of

NCAC.    SDC was the surviving entity in the merger and converted

to a Delaware limited liability company named Shockley

Communications Acquisition, L.L.C. (SCA LLC).    SCA LLC

immediately sold some of the assets that SCC had owned to Quincy

Newspapers, Inc.

     Petitioners timely filed Federal income tax returns for

calendar year 2001 reporting gains from the May 31, 2001, SCC

stock sale.

     On or about February 24, 2002, the Internal Revenue Service

(IRS) received SCC’s Form 1120, U.S. Corporation Income Tax

Return, for the short tax year of January 1, 2001, through May
                               - 5 -

31, 2001.   That form reported a Washington, D.C., mailing address

for SCC.

     By letter dated September 17, 2004, an attorney representing

the Shockleys responded on their behalf to correspondence from an

IRS examiner requesting that the Shockleys execute a Form 872,

Consent to Extend the Time to Assess Tax, with respect to the tax

return filed by SCC for its 2001 tax year.   The letter stated:

     You sent the Form 872 to the Shockleys as
     “officer/shareholder” of SCC.

          As you are aware, the Shockleys are not officers
     or shareholder’s of SCC. They have not been officers
     or shareholders for more than three years. * * *

          I understand that Northern Communications
     Acquisition Corporation * * *, the company that
     purchased the SCC shares, is successor in interest to
     SCC and capable of executing a Form 872 for SCC. * * *

     The letter supplied contact information for an attorney

representing NCAC and suggested that the IRS examiner contact the

representative.   A copy of this letter was sent to the attorney

representing NCAC.

     On February 18, 2005, the IRS issued multiple notices of

deficiency relating to SCC’s short tax year ending May 31, 2001.

A U.S. Postal Service Form 3877 indicated the notices were sent

by certified mail on February 18, 2005.

     The IRS sent one notice of deficiency to NCAC, determining a

deficiency of $42,950,336 in tax and a penalty under section 6662

of $8,590,067 with respect to gain allegedly realized by NCAC
                               - 6 -

from the sale of the assets that SCA LLC acquired after the

conversion of SDC into SCA LLC.   A copy of this notice was sent

to NCAC’s authorized representative (the same attorney identified

in the September 17, 2004, letter from the Shockleys’ attorney to

the IRS examiner).   Attached to this copy of the notice was a

letter addressed to the representative that stated:    “We are

sending the enclosed material under the provisions of your power

of attorney or other authorization we have on file.    For your

convenience, we have listed the name of the taxpayer to whom this

material relates in the heading above.”   The heading identified

the taxpayer name as “Northern Communications Acq. Corp.”    No

petition was filed in this Court in response to the NCAC notice

or the copy sent to the representative.

     The IRS also sent a notice of deficiency to “Shockley

Communications Corporation” at the Washington, D.C., address

reported on the 2001 Form 1120, determining a deficiency in tax

of $41,566,515, a penalty under section 6662 of $8,313,303, and

an addition to tax under section 6651(a)(1) of $2,078,276.    The

IRS calculated the determined deficiency and the penalty with

respect to gain allegedly realized by SCC as a result of the sale

of assets acquired and later sold by SCA LLC.   This notice was

returned to the IRS as undeliverable.   No petition was filed in

this Court in response to this notice of deficiency.
                               - 7 -

     On February 18, 2005, the IRS also sent a notice of

deficiency to “Shockley Communications Corporation, Terry K &

Sandra K Shockley, Officers & Shareholders” at the then home

address of the Shockleys in Madison, Wisconsin (the Madison

notice).   In this notice, the IRS determined a deficiency of

$41,566,515, an addition to tax under section 6651(a)(1) of

$2,078,276, and a penalty under section 6662 of $8,313,303.     The

notice stated:

          We have determined that you owe additional tax or
     other amounts, or both, for the tax year(s) identified
     above. This letter is your NOTICE OF DEFICIENCY, as
     required by law. The enclosed statement shows how we
     figured the deficiency.
          If you want to contest this determination in court
     before making any payment, you have 90 days from the
     date of this letter (150 days if this letter is
     addressed to you outside of the United States) to file
     a petition with the United States Tax Court for a
     redetermination of the deficiency.

Attached to the notice was an examination report that identified

SCC as the taxpayer (the same examination report was attached to

the notice sent to SCC at the Washington, D.C., address).      (The

Form 3877 identified the addressee as “Shockley Communications

Corporation c/o Terry K & Sandra K Shockley”).

     On May 25, 2005, a petition was filed in response to the

Madison notice at docket No. 9699-05.    The petition stated that

it was “filed on behalf of Petitioner subject to the invalidity

of the Notice of Deficiency and the failure to properly serve the

corporation as required by statute.    Without conceding the
                                 - 8 -

jurisdiction of this Court, the Petitioner hereby submits this

Limited and Special Petition.”    A letter dated May 18, 2005, from

the Shockleys to the Clerk of the Court was also attached and was

served on the Commissioner with the petition.   In the letter, the

Shockleys noted concern that the notice was addressed to both SCC

and the Shockleys as officers and shareholders and was mailed to

their then home address, which had never been SCC’s address.    The

Shockleys also expressed concern that the notice might be

directed at them in an individual or some representative

capacity.

     In an answer filed July 29, 2005, the Commissioner admitted

that the Madison notice was sent to the personal residence of the

Shockleys but alleged that this was a courtesy copy and that a

copy of the notice of deficiency was also sent to the last known

address of SCC at the Washington, D.C., address.

     On April 26, 2007, the case at docket No. 9699-05 was

dismissed for lack of jurisdiction because SCC lacked legal

capacity to proceed in the case through the Shockleys.   The order

of dismissal for lack of jurisdiction stated that the parties

agreed that the case should be dismissed on this ground and thus

the Court did not determine the validity of the notice of

deficiency.

     The IRS also sent two separate notices of deficiency to Mr.

and Mrs. Shockley at their then home address in Madison,
                                - 9 -

Wisconsin, determining a deficiency of $9,868,051 and a penalty

of $1,973,610.20 with respect to their jointly filed 2001

individual income tax return on February 18, 2005.    The Shockleys

filed a petition at docket No. 9700-05 in response to these

notices.    The parties agreed to settle the case with no

deficiency or penalty due from the Shockleys for 2001.

Accordingly, a stipulated decision was entered in docket No.

9700-05 on August 23, 2007.

     On September 6, 2007, the IRS assessed the following amounts

against SCC for the tax year ending May 31, 2001:    (1) Corporate

income tax of $41,566,515; (2) an addition to tax under section

6651 of $2,078,276; (3) an accuracy-related penalty under section

6662 of $8,313,303; and (4) interest of $26,953,309.60.

     Thereafter, the IRS undertook transferee examinations of

eight of the largest SCC shareholders who sold their SCC shares

to NCAC on May 31, 2001, including petitioners.     On August 21,

2008, the IRS sent notices to each petitioner as a transferee.

Each notice was erroneously titled “Notice of Deficiency”.

                               OPINION

     Section 6901(a) is a procedural statute authorizing the

assessment of transferee liability in the same manner and subject

to the same provisions and limitations as in the case of the

taxes with respect to which the transferee liability was

incurred.   Section 6901(a) does not create or define a
                              - 10 -

substantive liability but merely provides the Commissioner a

remedy for enforcing and collecting from the transferee of the

property the transferor’s existing liability.   See Coca-Cola

Bottling Co. of Tucson v. Commissioner, 334 F.2d 875, 877 (9th

Cir. 1964), affg. 37 T.C. 1006 (1962).

     Section 6901(c) provides that the period of limitations for

assessment of transferee liability with respect to an initial

transferee is within 1 year after the expiration of the period of

limitation for assessment against the transferor.   Petitioners

argue that respondent is precluded from assessing transferee

liability under section 6901 because the notices issued on August

21, 2008, were barred by the statute of limitations.

     As a general rule, section 6501(a) provides that the amount

of any tax “shall be assessed within 3 years after the return was

filed * * * and no proceeding in court without assessment for the

collection of such tax shall be begun after the expiration of

such period.”   The running of the section 6501(a) period of

limitations on assessment:

     shall (after the mailing of a notice under section
     6212(a)) be suspended for the period during which the
     Secretary is prohibited from making the assessment
     * * * (and in any event, if a proceeding in respect of
     the deficiency is placed on the docket of the Tax
     Court, until the decision of the Tax Court becomes
     final), and for 60 days thereafter.

Sec. 6503(a)(1).   Under section 7481(a)(1) a decision of this

Court becomes final after the period for appeal has elapsed.     A
                              - 11 -

decision of the Tax Court may be appealed to a U.S. Court of

Appeals within 90 days after the decision is entered.    Sec. 7483.

     Petitioners contend that because SCC mailed its final tax

return for the year ended May 31, 2001, no later than February

19, 2002, the usual period of limitations for assessment against

SCC would have expired no later than February 19, 2005.    The

limitations period was suspended for 90 days because the notice

of deficiency was mailed to SCC’s last known address and for

another 60 days thereafter.   Secs. 6503(a)(1), 6213(a).

Accordingly, petitioners assert that the period of limitations

against SCC with respect to its tax year ended May 31, 2001,

expired no later than July 18, 2005, and the period of

limitations for assessment against petitioners as transferees

pursuant to section 6901 expired no later than July 18, 2006.

Petitioners assert that the period of limitations for assessment

against SCC was not suspended beyond July 18, 2005, because no

petition was filed in this Court with respect to a deficiency

from a valid notice of deficiency.

     Respondent counters that the notices sent to petitioners

were timely because the period of limitations was suspended after

a valid statutory notice was issued to SCC and thereafter a

proceeding in respect of the deficiency was placed on the docket

of this Court to further suspend the limitations period.    Thus,

respondent argues that after the order of dismissal in docket No.
                              - 12 -

9699-05 was entered on April 26, 2007, the period of limitations

for assessment against SCC was tolled for 90 days and another 60

days thereafter, and that the notices sent to petitioners as

transferees on August 21, 2008, were within 1 year after the

expiration--no earlier than September 6, 2008--of the period of

limitation for assessment against the transferor.

Validity of the Madison Notice of Deficiency

     Section 6212(a) authorizes the Commissioner, after

determining a deficiency, to send a notice of deficiency to the

taxpayer by certified or registered mail.   The taxpayer then has

90 days, or 150 days if the notice is addressed to a person

outside the United States, from the date the notice of deficiency

is mailed to file a petition in this Court for a redetermination

of the deficiency.   Sec. 6213(a).

     A notice of deficiency serves the purpose of the statutory

scheme if (1) it provides notice to the taxpayer that the

Commissioner has determined a deficiency against the taxpayer,

and (2) it is received by the taxpayer in sufficient time to

petition this Court to redetermine the deficiency.   See, e.g.,

Pugsley v. Commissioner, 749 F.2d 691, 692-693 (11th Cir. 1985);

Mulvania v. Commissioner, 81 T.C. 65, 67 (1983); Frieling v.

Commissioner, 81 T.C. 42, 52-53 (1983) (holding notice effective

if received without prejudicial delay by the taxpayer).   However,

actual notice is not required.   Section 6212(b)(1) provides that
                               - 13 -

a notice of deficiency in respect of an income tax shall be

sufficient if it is mailed to the taxpayer at the taxpayer’s last

known address.   See Pietanza v. Commissioner, 92 T.C. 729, 735-

736 (1989), affd. without published opinion 935 F.2d 1282 (3d

Cir. 1991).   A taxpayer’s last known address is generally the

address that appears on the most recently filed and properly

processed Federal income tax return, unless the IRS is given

clear and concise notification of a different address.     See sec.

301.6212-2(a), Proced. & Admin. Regs.; see also Abeles v.

Commissioner, 91 T.C. 1019, 1035 (1988).

     The parties agree that the notice of deficiency sent to SCC

at the Washington, D.C., address was valid because it was sent to

SCC’s last known address even though it was returned undelivered.

See sec. 6212(a) and (b).   SCC did not file a petition in

response to that notice.

     Respondent argues that the Madison notice is also a valid

notice of deficiency to SCC and that the petition filed at docket

No. 9699-05 suspended the period of limitations under section

6503(a).    Respondent maintains that a notice of deficiency sent

to an address other than the taxpayer’s last known address is

effective if it is actually received with ample time to file a

petition.   See, e.g., St. Joseph Lease Capital Corp. v.

Commissioner, 235 F.3d 886, 888-889 (4th Cir. 2000), affg. T.C.
                              - 14 -

Memo. 1996-256; Sicker v. Commissioner, 815 F.2d 1400, 1401 (11th

Cir. 1987); Frieling v. Commissioner, supra at 57.

     Petitioners argue that actual receipt of the Madison notice

by the Shockleys did not give notice to SCC because the Shockleys

were not officers, directors, or agents of SCC in any capacity at

the time the notice was mailed to them.    The petition filed in

response to the Madison notice in this Court was dismissed for

lack of jurisdiction because SCC lacked legal capacity to proceed

in the case through the Shockleys.

     The Madison notice was addressed to “Shockley Communications

Corporation, Terry K & Sandra K Shockley, Officers &

Shareholders” as compared to the notice mailed to SCC’s last

known address that was addressed to “Shockley Communications

Corporation”.   Generally defects in the mailing of a notice of

deficiency are inconsequential when the taxpayer receives actual

notice in time to file a petition for redetermination in the Tax

Court.   See Sicker v. Commissioner, supra at 1401 (stating the

Court of Appeals for the Eleventh Circuit’s position that when

the IRS “erroneously sends a notice of deficiency to an address

other than the taxpayer’s ‘last known address,’ the notice is

deemed to be effective when mailed, provided the notice is

actually received by the taxpayer with ample time to file a

petition for redetermination”); see also St. Joseph Lease Capital

Corp. v. Commissioner, supra at 888-889.
                               - 15 -

     The purpose of the statutory requirement for issuing the

notice of deficiency is to inform the taxpayer of the determined

tax deficiency and provide the taxpayer with the opportunity to

file a petition in this Court before being required to make the

payment.    See Gray v. Commissioner, 73 T.C. 639, 645 (1980).

     At the time the two notices were sent, the IRS had been

informed that the Shockleys were no longer officers or

shareholders of SCC and that they did not have authority to sign

a Form 872 for SCC.   There can be only one last known address

within the meaning of section 6212(b) with respect to any one

taxpayer on the date that a notice of deficiency is issued.      See

Abeles v. Commissioner, supra at 1030.     Thus only the notice sent

to SCC in Washington, D.C., was valid.     The notice sent to the

residence of the Shockleys was a nullity as to SCC.

Proceeding in Respect of a Deficiency

     As relevant here, within 90 days after the notice of

deficiency is mailed, “the taxpayer may file a petition with the

Tax Court for a redetermination of the deficiency”, and no

assessment of a deficiency in respect of income tax shall be made

until the expiration of such 90-day period “nor, if a petition

has been filed with the Tax Court, until the decision of the Tax

Court has become final.”   Sec. 6213(a).    Section 6503(a)(1)

provides:

     The running of the period of limitations provided in
     section 6501 * * * on the making of assessments * * *
                             - 16 -

     in respect of any deficiency * * * shall (after the
     mailing of a notice under section 6212(a)) be suspended
     for the period during which the Secretary is prohibited
     from making the assessment * * * (and in any event, if
     a proceeding in respect of the deficiency is placed on
     the docket of the Tax Court, until the decision of the
     Tax Court becomes final), and for 60 days thereafter.

     Respondent argues that even if the Madison notice of

deficiency is invalid, there was a proceeding in respect of a

deficiency on the docket of the Tax Court that suspended the

running of the period of limitations under section 6503(a).

Petitioners counter that no proceeding was placed on the docket

of the Tax Court in respect of a deficiency of SCC for SCC’s tax

year ending May 31, 2001.

     Respondent asserts that section 6503(a)(1) suspends the

running of the period of limitations whenever a proceeding in

respect of a deficiency is placed on the docket of the Tax Court

regardless of the events that lead to the filing of a petition.

Respondent relies in part on Martin v. Commissioner, 436 F.3d

1216 (10th Cir. 2006) (and cases cited therein), affg. T.C. Memo.

2003-288, supplemented by T.C. Memo. 2004-14.   In Martin, the IRS

determined a deficiency with respect to the joint tax return of

the taxpayer, Martin, and his then wife.   Because the couple had

divorced, the IRS sent one notice of deficiency to Martin’s last

known address and another notice to his ex-wife at her address;

each notice referenced their joint return.   The notice sent to

Martin was returned as undeliverable.   A petition was filed by an
                               - 17 -

attorney on behalf of Martin and his ex-wife, with the notice

sent to Martin’s ex-wife attached.      Although Martin did not

authorize the petition to be filed, there was no reason for the

IRS to assume that the petition was invalid given the strong

presumption of authority afforded to counsel filing a petition in

the Tax Court.   Id. at 1224; see Rules 23(a)(3), 33(b); Gray v.

Commissioner, supra at 646.    Moreover, the attorney who filed the

petition and Martin corresponded referencing the docketed case

multiple times (including Martin’s sending a partial payment to

the attorney for the joint tax liability) before Martin filed a

motion to dismiss for lack of jurisdiction asserting that he had

not filed or ratified the petition.      The Court of Appeals for the

Tenth Circuit held that the filing of the petition and resulting

Tax Court proceeding suspended the running of the period of

limitations for the IRS to assess income tax.      Martin v.

Commissioner, supra at 1226.

     One of the cases analyzed in Martin was Eversole v.

Commissioner, 46 T.C. 56, 64 (1966), where this Court held that

the running of the period of limitations under former section

277, the predecessor to section 6503(a)(1), is suspended when a

proceeding “is placed” on the docket of the Tax Court, rather

than when “the taxpayer places” such a proceeding on the docket.

This Court determined that the petition as filed was “in respect

of the deficiency” when the widow signed the petition in her
                              - 18 -

individual capacity rather than as administrator of the estate.

The Court of Appeals for the Tenth Circuit in Martin cited cases

that stand for the proposition that “the placing of a proceeding

on the docket of the tax court, not the manner in which such a

proceeding is resolved, is key to tolling the running of the

statute of limitations.”   Martin v. Commissioner, supra at 1224;

see O’Neill v. United States, 44 F.3d 803 (9th Cir. 1995); United

States v. Shahadi, 340 F.2d 56 (3d Cir. 1965); Am. Equitable

Assurance Co. of N.Y. v. Helvering, 68 F.2d 46 (2d Cir. 1933),

affg. 27 B.T.A. 247 (1932).   However, in each of these cases

there was no question with respect to the taxpayer identified in

the respective notices and petitions.

     Petitioners argue that the petition filed at docket No.

9699-05 was not “in respect of the deficiency” asserted against

the taxpayer at issue according to section 6503(a)(1).

Petitioners maintain that respondent’s reliance on Martin v.

Commissioner, supra, is misplaced because, unlike the petition

here, the petition filed in Martin was, “on its face,” filed on

Martin’s behalf by his attorney, making it reasonable for the IRS

to presume that the petition was valid.

     Unlike cases where a petition was filed by one other than

the taxpayers, but who had authority--or appeared to have

authority--to act on the taxpayers’ behalf, the Shockleys did not

purport to file the petition in docket No. 9699-05 in this
                              - 19 -

manner.   The Shockleys asserted that the Madison notice was

invalid in that it was addressed to both SCC and the Shockleys as

SCC’s officers and shareholders.   The specific circumstances here

show that respondent knew before sending the purported duplicate

notices of deficiency on February 18, 2005, that the Shockleys

were not a proper party and that they did not have authority to

act on behalf of SCC with respect to SCC’s determined deficiency

for 2001.

     The period of limitations is suspended only after the

mailing of a notice under section 6212(a).   Sec. 6503(a)(1).   A

statutory notice that is determined to be invalid is invalid for

other purposes as well.   See, e.g., Coffey v. Commissioner, 96

T.C. 161, 166-167 (1991) (holding that a misaddressed notice of

deficiency does not terminate a consent agreement in a Form 872-

A, Special Consent to Extend the Time to Assess Tax, nor does an

assessment based on an invalid notice of deficiency terminate a

Form 872-A agreement); Carnahan v. Commissioner, T.C. Memo. 1991-

168 (holding that section 6212(c) applies to bar the Commissioner

from issuing a notice of deficiency only if the taxpayer has

already filed a petition in response to a valid notice of

deficiency--a petition for redetermination filed in response to

an invalid notice of deficiency does not trigger the bar of

section 6212(c)(1)).   An invalid notice of deficiency does not

suspend the running of the period of limitations for assessment.
                              - 20 -

See Welch v. Schweitzer, 106 F.2d 885, 888 (9th Cir. 1939);

Reddock v. Commissioner, 72 T.C. 21, 26 (1979); Rogers v.

Commissioner, 57 T.C. 711, 713 (1972).

     In Greve v. Commissioner, 42 B.T.A. 142 (1940), the Board of

Tax Appeals held that there was no suspension of the period of

limitations upon assessment when the IRS sent a notice that was

not proper under former section 272, the predecessor of section

6212, that had prompted the taxpayer to file a petition in a

prior case.   In the petition with respect to the initial case,

the taxpayer had sought dismissal of the proceeding for lack of

jurisdiction because of the absence of any proper notice.     See

Greve v. Commissioner, 37 B.T.A. 450 (1938).   After the case was

dismissed for lack of jurisdiction, the Commissioner mailed a

notice to the taxpayer.   In response, the taxpayer filed a

petition and asserted that this notice was time barred.     Greve v.

Commissioner, 42 B.T.A. at 142.   The Board of Tax Appeals agreed

and stated that the decision of the earlier case, that there was

no valid notice, did not suspend the running of the period of

limitations until 60 days after the decision of the Board at the

earlier docket number became final according to the statute then

in effect.

Conclusion

     The Madison notice was not sent to SCC’s last known address

and was not a valid notice of deficiency.   The petition filed at
                             - 21 -

docket No. 9699-05 was not filed on behalf of SCC in form or in

effect, was not in respect of a deficiency, and did not prohibit

assessment for purposes of section 6503(a)(1).   That petition,

therefore, did not extend the period of limitations as to SCC.

The notices sent to petitioners as transferees were not timely.

     In view of our conclusion, it is not necessary to reach the

other issues or arguments of the parties.   To reflect the

foregoing,


                                        Decisions will be entered

                                   for petitioners.
