40 T.C. 275">*275 OPINION

The present proceedings in these consolidated cases are pursuant to Rule 50 and involve petitioners' objections to the proposed computations for entry of decision filed herein by respondent, and certain proposed alternative computations filed by petitioners.

The issues which were decided in these cases involved questions as to the existence of certain transferee liabilities which had been determined, and the amounts thereof. Our Findings of Fact and Opinion 40 T.C. 275">*276 are reported at 37 T.C. 945">37 T.C. 945. We found transferee liability to exist in each case and ordered decisions entered under Rule 50.

Pursuant thereto respondent filed computations for entry of decision in each docket number, petitioners filed objections accompanied by alternative computations in Docket Nos. 69931 and 69932, and hearing was held.

Docket No. 69931 involves the liability of petitioner as transferee1963 U.S. Tax Ct. LEXIS 126">*128 of the Estate of Esther M. Stein as transferee of National Thread Co., Inc. (hereinafter referred to as NTC), for unpaid deficiencies of said corporation; Docket No. 69932 involves the liability of petitioner as transferee of NTC for the same unpaid deficiencies of said corporation. In 37 T.C. 945">37 T.C. 945, we found such liabilities to exist.

Petitioner has raised one objection to respondent's computation in Docket No. 69931 and three objections to respondent's computation in Docket No. 69932, one of the objections in the latter case being identical to the sole objection in the former.

1. Petitioners object in both docket numbers to the fact that respondent's computations allow no credit under section 1341(b)(1) of the Code. ² The relevant provisions of section 1341 ³ provide an income tax adjustment for the taxpayer who has included an item in gross income for tax purposes and who subsequently discovers that he did not have an unrestricted right to such item. The appropriateness of such relief provisions is exemplified by the facts involved in Docket No. 69932, wherein it has been determined that the Commissioner is entitled to recover from the estate of an1963 U.S. Tax Ct. LEXIS 126">*129 individual the full 40 T.C. 275">*277 amount of certain dividend payments made to him by a corporation, the recovery to be applied against the unpaid tax liabilities of the corporation, and where the individual had paid income taxes in respect of his receipt of those dividends under the supposition that his right to retain them was not open to challenge.

1963 U.S. Tax Ct. LEXIS 126">*130 We do not have jurisdiction in these cases, however, to determine what relief section 1341 may afford petitioners as a result of the facts before us, for the dual reasons that this objection involves both years and a taxpayer or taxpayers not before us.

The deduction or credit provided for by section 1341 is applicable, by that section's terms, to that taxable year in which occurs the restoration to another of an item previously included in gross income. We are here concerned with petitioners' liabilities as transferees for the unpaid taxes, plus additions thereto, of NTC for the years 1943, 1944, and 1945. Any restoration of transferred assets resulting from the establishment of such liabilities in these cases must of necessity occur after the years before us. We must consequently decline to consider this objection, for section 6214(b) provides that we "shall have no jurisdiction to determine whether or not the tax for any other year has been overpaid or underpaid."

Furthermore, in a case involving transferee liability we are concerned with the secondary liabiilty of a transferee for the taxes of another, and we lack jurisdiction to consider the personal tax status of the transferee1963 U.S. Tax Ct. LEXIS 126">*131 with regard to his own primary liability as a taxpayer for any year, unless an asserted deficiency in such personal taxes is also properly before us. J. V. Vandenberge, 3 T.C. 321">3 T.C. 321 (1944), affd. 147 F.2d 167 (C.A. 5, 1945), certiorari denied 325 U.S. 875">325 U.S. 875 (1945). The liabilities of individuals as transferees are distinct from their liabilities as taxpayers. See Estate of John T. Eversole, 39 T.C. 1113">39 T.C. 1113 (1963). The cases before us present only the question of petitioners' liabilities as transferees. ⁴

1963 U.S. Tax Ct. LEXIS 126">*132 40 T.C. 275">*278 Thus it was a matter of our jurisdiction of which we spoke, as reported at 37 T.C. 958">37 T.C. 958, when we said that "The question of what relief may be afforded petitioner under section 1341(b)(1) is not before us in this case."

2. Petitioner objects in Docket No. 69932 that respondent has failed to give credit or to account for certain accounts receivable of NTC, the only transferor in this case, which were seized on May 9, 1957, on which date the district director of internal revenue for the district of Lower Manhattan levied against the assets of the transferor for nonpayment of the taxes and additions thereto involved herein. Petitioner contends that accounts receivable in the face amount of $ 19,231.23 were seized by respondent under said levy, that respondent assumed the responsibility for the collection thereof, that the accounts became the property of respondent, that neither petitioner nor the transferor thereafter had any right to the collection of the same nor to see that the same were collected and that payments thereon were credited to the transferor's account in respect of its unpaid deficiencies, that respondent has failed to give credit 1963 U.S. Tax Ct. LEXIS 126">*133 for $ 12,986.43 of the accounts seized, that respondent has given no explanation for the large proportion of the accounts remaining uncollected or uncredited to the transferor at this late date, and that the full amount of the seized accounts receivable should be credited to the transferor's account in respect of its unpaid deficiencies under these Rule 50 proceedings, or in the alternative that petitioner should be given the opportunity to show in these proceedings that the transferor's account should be credited with a larger amount in respect of the seized receivables than the amount for which credit has been given.

The concept of this Court considering the diligence of the Commissioner in realizing upon assets seized from a delinquent taxpayer is novel. It may be that we have jurisdiction in a transferee liability case to determine, in an appropriate manner and at an appropriate time, the amount remaining unpaid of the taxes of a transferor for which the Commissioner seeks to hold a transferee liable. In transferee cases where it is shown that the full amount of the deficiency of the transferor has been paid, we hold that the liability of the transferee is extinguished. ⁵ See1963 U.S. Tax Ct. LEXIS 126">*134 Sara E. Carpenter, 16 B.T.A. 98">16 B.T.A. 98 (1929); J. P. Quirk, 15 T.C. 709">15 T.C. 709 (1950), affd. 196 F.2d 1022 (C.A. 5, 1952). Similarly, where it is shown that a part of the transferor's deficiency has been paid without protest, the amount that can be collected from a petitioning transferee is reduced accordingly. J. Warren Leach, 21 T.C. 70">21 T.C. 70, 21 T.C. 70">79 (1953); see also A. D. Saenger, 38 B.T.A. 1295">38 B.T.A. 1295 (1938).

40 T.C. 275">*279 In this case we had before us the issue of the remaining unpaid amount of the transferor's taxes and additions thereto. This necessarily included the question of the amount paid in1963 U.S. Tax Ct. LEXIS 126">*135 respect of the seized accounts receivable. Burden of proof as to this question was at all times petitioner's, by virtue of section 6902(a). ⁶⁷

1963 U.S. Tax Ct. LEXIS 126">*136 This case was submitted to us solely upon a stipulation of facts filed by the parties. With regard to this matter the stipulation reads:

Of the various deficiencies determined against NTC, the following amounts, without considering interest as provided by law, remain unpaid as per the records of the District Director of Mahattan:

There was no showing or attempted showing prior to the filing of our report (37 T.C. 945">37 T.C. 945) that the unpaid balance of the transferor's liability was other than as indicated by the records of the district director; ⁸1963 U.S. Tax Ct. LEXIS 126">*137 consequently we held, as reported at 37 T.C. 959">37 T.C. 959, that said remaining liability was $ 125,627.83 (exclusive of interest). ⁹

We are thus faced with the question of whether we may consider petitioner's objection in these proceedings under Rule 50. It is clear that we may not.

40 T.C. 275">*280 Rule 50(c) provides:

(c) Limits on argument under this Rule. -- Any argument under this Rule will be confined strictly to the consideration of the correct computation of the deficiency or overpayment resulting from the report already made, and no argument will be heard upon or consideration given to the issues or matters already disposed of by such report or of any new issues. This Rule is not to be regarded as affording an opportunity for retrial or reconsideration.

Rule 50 is a valid exercise of the Court's power to regulate practice in the proceedings before it. Bankers Coal Co. v. Burnet, 287 U.S. 308">287 U.S. 308 (1932). Regardless of whether petitioner's objection is viewed as a new issue or as a matter already disposed of in our1963 U.S. Tax Ct. LEXIS 126">*138 report by virtue of the rules of burden of proof, we may not consider it here. Commissioner v. Sussman, 102 F.2d 919 (C.A. 2, 1939); Great Northern Railway Co., 10 B.T.A. 1347">10 B.T.A. 1347, 10 B.T.A. 1347">1356 (1928).

3. Petitioner's last objection to the computation filed by respondent in Docket No. 69932 is that this transferee cannot be liable for those liabilities of the transferor which accrued in years prior to the year in which the transferee became a stockholder of the transferor. This issue was not raised by petitioner prior to these proceedings, and as a new issue it could not be considered by us even if it were correct. Commissioner v. Sussman, supra.

Accordingly, petitioners' objections to the computations filed by respondent in Docket Nos. 69931 and 69932 are overruled.

As reported, we have held that petitioners are liable in Docket Nos. 69931 and 69932 on account of the unpaid taxes and additions thereto of NTC, in the total amount of $ 131,146.57 (excluding interest). We found that the amount of NTC's unpaid deficiencies had been reduced to $ 125,627.83 (excluding interest), and said at page1963 U.S. Tax Ct. LEXIS 126">*139 959 of our prior report that proper adjustment of the remaining liability for the deficiencies of NTC, as between Docket Nos. 69931 and 69932, would be made in the Rule 50 computation.

Respondent, in his computations filed under Rule 50 in these two docket numbers, has admitted that the total of NTC's unpaid taxes and additions thereto has been further reduced to $ 116,356.71 (excluding interest); however, respondent's computations in these two cases contain no adjustments in the nature of that referred to at 37 T.C. 959">37 T.C. 959.

Respondent seeks decisions in the total amount of $ 131,146.57 plus interest at the per annum rate of 6 percent, the rate determined by us to be appropriate, on the various amounts comprising that total from the respective dates on which we found such amounts to have been transferred to petitioners' decedent. ¹⁰

1963 U.S. Tax Ct. LEXIS 126">*140 Petitioners have not objected to this aspect of respondent's computations in these two docket numbers.

40 T.C. 275">*281 We have calculated the amount of the unpaid liability of NTC for taxes and the additions thereto, including interest to date, and have found this to be in excess of the total amount, including interest to date, for which respondent has asked decision in these two docket numbers. We therefore find that respondent's Rule 50 computations in these cases are proper, and we hold that decision should be entered in accordance with the computations filed by respondent in Docket Nos. 69931 and 69932.

These docket numbers involve the liabilities of petitioner as transferee of the estate of Esther M. Stein for certain unpaid deficiencies in income taxes and additions thereto determined against said estate. We found such liabilities to exist.

No objections to respondent's computations, and no alternative computations, were filed by petitioner in these cases prior to the hearing under Rule 50. In such a circumstance we are authorized by Rule 50(b) ¹¹ to enter our decision in accordance with the computations filed by respondent.

1963 U.S. Tax Ct. LEXIS 126">*141 At the hearing under Rule 50, petitioner stated that there was no objection to respondent's computations in these two cases. A ruling on a motion for judgment in these docket numbers was reserved by us in order that briefs might be filed and that any bearing upon the proper resolution of these cases that might be implicit in the decisions to be entered in Docket Nos. 69931 and 69932 might be considered herein.

In the brief filed by petitioner under these Rule 50 proceedings, petitioner has for the first time raised an objection to the computations filed by respondent in these two cases. The objection is unrelated to the computations made in Docket Nos. 69931 and 69932. Petitioner's contention is that interest should be computed in Docket Nos. 70277 and 78991 from the date of respondent's demand on the transferee for payment rather than from the date of the transferee's receipt of the assets giving rise to his transferee liability. The contention is that the transfers involve, at most, constructive fraud as opposed to actual fraud.

40 T.C. 275">*282 This issue has already been disposed of by us. As reported at 37 T.C. 956">37 T.C. 956, we found actual fraud to exist in all1963 U.S. Tax Ct. LEXIS 126">*142 docket numbers and ordered, as reported at 37 T.C. 962">37 T.C. 962, that interest run from the date of transfer in each.

Consequently, respondent's motion that decision be entered according to the computations filed by him in Docket Nos. 70277 and 78991 is hereby granted.

Decisions will be entered in all docket numbers in accordance with the computations filed by respondent.