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In a prior opinion issued in this case, we held that
petitioner was liable as a transferee for Federal income tax owed
for the year ending September 30, 1986, by Napa Investment Corp.
(Napa). Merriam v. Commissioner, T.C. Memo. 1995-432, affd.
without published opinion 107 F.3d 877 (9th Cir. 1997).
Petitioner was president and sole shareholder of Napa. James
Merriam, petitioner’s then-husband, ran Napa. He signed
petitioner’s name to many Napa documents. Petitioner personally
signed many other Napa documents including a consent to action
which stated that she, as sole director, approved Napa’s lending
substantial sums to her, a promissory note stating that she
borrowed substantial sums from Napa, and Napa checks including
checks payable to her.
James Merriam arranged for his son from a prior marriage,
Ted Merriam, to represent petitioner in that proceeding. The
case was fully stipulated under Rule 122. Petitioner contends
that (1) the stipulation erroneously overstated her role in Napa,
which caused the Court to decide erroneously that she was liable
as a transferee; (2) she had no knowledge of the existence of the
case until after decision was entered; and (3) these
circumstances constitute fraud on the Court.
The sole issue for decision is whether fraud on the Court
occurred in this case. We hold that it did not.
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