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because petitioner’s powers, rights, and privileges are suspended
by the State in which it was organized. Respondent asserts that
he has a burden of production under section 7491(c) as to the
additions to tax and accuracy-related penalties, and that he has
met this burden. For the reasons stated below, we shall dismiss
this case in full and enter a decision for respondent in the
amounts determined by respondent.
Background
On November 24, 1997, petitioner was organized as a
corporation under California law. On August 1, 2005, pursuant to
Cal. Rev. & Tax. Code secs. 23301 and 23302 (West 2004), the
California Franchise Tax Board suspended petitioner’s corporate
powers, rights, and privileges for failing to pay State income
tax. On September 30, 2005, the California secretary of state
certified petitioner’s suspension and further certified that
petitioner remained suspended as of the date of certification.
On December 2, 2005, in response to the motion at hand, the Court
ordered petitioner to file a statement showing cause why it has
the capacity to prosecute this case. In its statement, filed on
December 12, 2005, the same day that this case was called for
trial, petitioner stated that it was active when it petitioned
the Court and that it had ceased doing business. Petitioner also
stated that it lacked sufficient assets to pay its State tax and
that it had filed for bankruptcy on December 6, 2005.
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