                         T.C. Memo. 1997-119



                       UNITED STATES TAX COURT



    LEE M. BENTLEY AND AMSOUTH BANK OF FLORIDA, (f.k.a. FIRST
  NATIONAL BANK OF CLEARWATER), CO-TRUSTEES OF THE SEYMOUR C.
MICKLER TRUST, FBO LAURA M. BENTLEY, Petitioners v.
           COMMISSIONER OF INTERNAL REVENUE, Respondent

PATRICIA M. DAWSON AND AMSOUTH BANK OF FLORIDA,(f.k.a. FIRST
   NATIONAL BANK OF CLEARWATER), CO-TRUSTEES OF THE SEYMOUR C.
MICKLER TRUST, FBO PATRICIA DAWSON, Petitioners v.
           COMMISSIONER OF INTERNAL REVENUE, Respondent


     Docket Nos. 16067-95, 16070-95.           Filed March 10, 1997.



     David M. Boggs, for petitioners.

     Stephen R. Takeuchi, for respondent.



                         MEMORANDUM OPINION


     WRIGHT, Judge:    The above cases were consolidated on

December 29, 1995.    This matter is before the Court on
                                   - 2 -

petitioners' Motion for Partial Summary Judgment pursuant to Rule

121.1       The issue presented is whether the decision entered by the

Court in Estate of Mickler v. Commissioner, docket No. 15954-94

(occasionally docket No. 15954-94), that no estate tax deficiency

exists, precludes petitioners from being liable as transferees

under the principles of transferee liability.

        Each petitioner's mailing address was in Clearwater,

Florida, when the respective petitions were filed.       Seymour C.

Mickler (decedent) died on March 9, 1990.       Petitioners served as

co-personal representatives of decedent's estate and are

currently cotrustees of two testamentary trusts that were created

pursuant to decedent's will.

        On June 10, 1991, decedent's estate (the estate) filed a

timely Federal estate tax return.       Respondent subsequently

determined an estate tax deficiency of $2,826,779 (the estate tax

deficiency) and issued a notice of deficiency to the estate on

June 13, 1994.       Hence, the notice of deficiency was issued 3

years and 3 days after the estate filed its Federal estate tax

return.

        On September 6, 1994, the estate filed a timely petition

with the Court.       On April 21, 1995, the Court entered its

decision in docket No. 15954-94.       The decision sets forth that,


        1
      Unless otherwise indicated, all section references are to
the Internal Revenue Code, and all Rule references are to the Tax
Court Rules of Practice and Procedure.
                               - 3 -

pursuant to section 7459(e), there is no deficiency in the estate

tax due from the estate because the statute of limitations under

section 6501(a) precludes assessment and collection of any such

deficiency.   Neither party appealed that decision, and it became

final on July 20, 1995, pursuant to sections 7481(a) and 7483.

     Subsequent to the entry of the Court's decision in docket

No. 15954-94, respondent determined that petitioners are liable

as transferees of the estate for the estate tax deficiency.

Accordingly, on June 9, 1995, and in accordance with section

6901(c)(1), respondent issued a notice of transferee liability to

each petitioner.   On August 21, 1995, petitioners filed timely

petitions with the Court.

     Under Rule 121(b), summary judgment is appropriate "if the

pleadings, answers to interrogatories, depositions, admissions,

and any other acceptable materials, together with the affidavits,

if any, show that there is no genuine issue as to any material

fact and that a decision may be rendered as a matter of law."

Preece v. Commissioner, 95 T.C. 594 (1990); Zaentz v.

Commissioner, 90 T.C. 753, 754 (1988); Naftel v. Commissioner, 85

T.C. 527, 529 (1985).   The moving party has the burden of showing

that no genuine issue exists as to any material fact and that he

or she is entitled to judgment as a matter of law.   Espinoza v.

Commissioner, 78 T.C. 412, 416 (1982).   In deciding whether to

grant summary judgment, we view facts, and inferences drawn
                               - 4 -

therefrom, in the light most favorable to the opposing party.

Naftel v. Commissioner, supra at 529.

     In their above-referenced motion for partial summary

judgment, petitioners advance two arguments.   They first contend

that the Court's decision in docket No. 15954-94 is dispositive

on the issue of estate tax liability not only with respect to the

estate but also with respect to them as transferees.   In short,

petitioners argue that they cannot be liable for the estate tax

deficiency because the estate was found not liable for such

deficiency.

     This argument is without merit and must be rejected.    A

finding that a statute of limitation precludes collection of a

tax does not equate to an abatement of such tax.   Campbell v.

Holt, 115 U.S. 620 (1885); Lucia v. United States, 474 F.2d 565

(5th Cir. 1973); City Natl. Bank v. Commissioner, 55 F.2d 1073

(5th Cir 1932); Dillman v. Commissioner, 64 T.C. 797, 802 (1975).

In other words, it is the remedy for collecting a tax, not the

right to collect such tax, that is destroyed by a statute of

limitation.   Once a remedy has been destroyed by operation of

law, however, the right remains enforceable if there is an

alternative remedy.   The principles of transferee liability

provide respondent with such alternative remedy.   Stated simply,

the Court's holding in Estate of Mickler v. Commissioner, docket

No. 15954-94, did nothing more than preclude respondent's attempt

to collect a tax deficiency from the estate on grounds that the
                                   - 5 -

period of limitation for collection of such deficiency had

expired.    Respondent's right to collect that deficiency

continued, however, and she is now attempting to enforce that

right using the remedy Congress provided when it codified the

principles of transferee liability.

     Petitioners also contend that the doctrine of res judicata

precludes respondent from collecting the estate tax deficiency

from them.    Specifically, petitioners argue that the doctrine of

res judicata prevents respondent from relitigating the Court's

decision in docket No. 15954-94 that no estate tax deficiency

exists.    Respondent disagrees.    We hold for respondent.

     The doctrine of res judicata is applicable in the field of

Federal taxation.    United States v. International Bldg. Co., 345

U.S. 502, 506 (1953); Commissioner v. Sunnen, 333 U.S. 591, 598

(1948); Krueger v. Commissioner, 48 T.C. 824 (1967).      It rests on

principles of judicial economy and public policy favoring

finality of litigation and certainty in legal relations.

Commissioner v. Sunnen, supra.       In Sunnen, the Supreme Court

stated that the "judgment puts an end to the cause of action,

which cannot again be brought into litigation between the parties

upon any ground whatever, absent fraud or some other factor

invalidating the judgment."    Id. at 597.

     For the doctrine of res judicata to apply, three

requirements must be satisfied:      (1) The parties in the

subsequent action must be the same as or in privity with the
                               - 6 -

parties to the prior action; (2) the claims in the subsequent

litigation must be in substance the same as those in the prior

litigation; and (3) the earlier litigation must have resulted in

a final judgment on the merits.   Nevada v. United States, 463

U.S. 110, 130 (1983); Commissioner v. Sunnen, supra at 597.

      Pursuant to section 6901(h), petitioners, as trustees, are

considered transferees of the estate.   For purposes of res

judicata, a transferee of property is in privity with a

transferor of such property.   Estate of Egan v. Commissioner, 28

T.C. 998, 999 (1957), affd. 260 F.2d 779 (8th Cir. 1958).     In

addition, the Court's determination that the period of

limitations had expired with respect to the estate is a final

decision on the merits.   Sec. 7459(e); Saso v. Commissioner, 93

T.C. 730, 734 (1989); Badger Materials, Inc. v. Commissioner, 40

T.C. 1061, 1063 (1963); United Business Corp. of Am. v.

Commissioner, 19 B.T.A. 809, 832 (1930), affd. 62 F.2d 754 (2d

Cir. 1933).

      Petitioners' argument must be rejected, however, because the

claim presented in the instant case is not the same as the claim

presented in Estate of Mickler v. Commissioner, docket No. 15954-

94.   See Gulf States Steel Co. v. United States, 287 U.S. 32, 44

(1932); American S.S. Co. v. Wickwire Spencer Steel Co., 8 F.

Supp. 562, 566 (S.D.N.Y. 1934); cf. Estate of Hunt v. United

States, 309 F.2d 146, 148 (5th Cir. 1962).   While petitioners

contend that the tax respondent seeks to collect in the instant
                                   - 7 -

case is the same tax she sought to collect in docket No. 15954-

94, they fail to recognize that the decision by the Court in

docket No. 15954-94 was based on the fact that collection of tax

from the estate was barred by the statute of limitations.

Accordingly, petitioners' reliance on Baptiste v. Commissioner,

29 F.3d 1533, 1541 (11th Cir. 1994), affg. T.C. Memo. 1992-198,

is misplaced.    When confronted with an issue, in some respects

analogous to this one, the Supreme Court explained that "The

effective scope of the decision rendered is no broader than the

issue, opinion, and findings."       Gulf States Steel Co. v. United

States, supra at 44.    In the instant case, respondent seeks to

collect tax under a theory of transferee liability within the

statutory period applicable to petitioners as initial

transferees.    See sec. 6901(c)(1).       The doctrine of res judicata

does not prevent her from doing so.

     Section 6901 permits the Commissioner to proceed against a

transferee of property of a decedent in order to collect unpaid

estate taxes.    Sec. 6901(a)(1)(A)(ii).      The period of limitations

for assessment of a transferee's liability ends 1 year after the

expiration of the period of limitation for assessment against the

transferor.2    Sec. 6901(c)(1).    Respondent mailed the notices of

transferee liability to petitioners 1 day prior to the running of


     2
      The flush language of sec. 6901(c) provides an exception to
the additional-1-year rule, but that exception is not relevant in
the instant case.
                                 - 8 -

the applicable limitation period.     Accordingly, such notices were

timely.

         In light of the foregoing, we hold that the decision

entered by the Court in Estate of Mickler       v. Commissioner,

docket No. 15954-94, is not dispositive as to petitioners'

transferee liability for the estate tax deficiency.        For the

reasons stated herein, petitioners' motion for partial summary

judgment is denied.3



                                              An appropriate order

                                         denying petitioners' Motion

                                         for Partial Summary Judgment

                                         will be issued.




     3
      The facts of the instant case are virtually identical to
those in Estate of King v. Commissioner, T.C. Memo. 1991-151.
The two cases, however, are technically distinguishable in one
major respect. In Estate of King v. Commissioner, supra,
respondent conceded that the technical elements of res judicata
had been satisfied. This concession contributed to a decision in
the taxpayer's favor. In contrast, respondent makes no such
concession in the instant case.
