127 T.C. No. 8



                UNITED STATES TAX COURT



           WILLIAM A. STEWART, Petitioner v.
     COMMISSIONER OF INTERNAL REVENUE, Respondent



Docket No. 22510-05.                    Filed October 3, 2006.



     On Mar. 13, 2006, the Court entered an order of
dismissal for lack of jurisdiction because of P’s
failure to file a proper amended petition and pay the
filing fee as previously ordered. On June 8, 2006, 87
days after the Court’s order was entered, P mailed a
document to the Court requesting an order to vacate the
order of dismissal. On June 13, 2006, 92 days after
the Court’s order of dismissal was entered, the Court
received and filed P’s document as a motion for leave
to file motion to vacate embodying motion to vacate.
The Court also received P’s amended petition and filing
fee on June 13, 2006.

     Held: Absent the filing of a notice of appeal or
a motion to vacate, the Court’s order of dismissal for
lack of jurisdiction would become final after the 90-
day period for appeal. See secs. 7481(a), 7483,
I.R.C.; Fed. R. App. P. 13(a). Our jurisdiction to
                               - 2 -


     consider the substantive merits of P’s motion for leave
     depends on whether it is deemed to have been filed
     within the 90-day appeal period following the Court’s
     order of dismissal.

          Held, further: Whether P’s motion for leave was
     filed within the 90-day appeal period depends on
     whether the timely-mailing/timely-filing provisions of
     sec. 7502, I.R.C., apply to P’s motion for leave. In
     Manchester Group v. Commissioner, T.C. Memo. 1994-604,
     revd. 

 (9th Cir. 1997), we held that the
     timely-mailing/timely-filing provisions of sec. 7502,
     I.R.C., did not apply to a motion for leave to file a
     motion to vacate. Upon reconsideration, we now hold
     that sec. 7502, I.R.C., applies to P’s motion for
     leave. P’s motion for leave is deemed filed on June 8,
     2006, the date it was mailed, which was before the date
     on which the order of dismissal would otherwise have
     become final.

          Held, further: P’s motion for leave to file a
     motion to vacate the Court’s order of dismissal will be
     granted. As a result, P’s motion to vacate the order
     of dismissal also will be deemed filed on June 8, 2006.
     P’s motion to vacate will be granted. P’s amended
     petition will be filed, and we continue to have
     jurisdiction in this case.


     William A. Stewart, pro se.

     Edward F. Peduzzi, Jr., for respondent.



                              OPINION


     RUWE, Judge:   This case is before the Court on petitioner’s

motion for leave to file a motion to vacate the Court’s order of

dismissal for lack of jurisdiction.     At all relevant times,

petitioner resided in Fayette City, Pennsylvania.
                                - 3 -


                             Background

     The primary issue we must decide is whether this Court has

jurisdiction to consider the substantive merits of petitioner’s

motion for leave to file his motion to vacate the Court’s order

of dismissal.

     On September 6, 2005, respondent sent to petitioner a notice

of deficiency for the taxable year ending December 31, 2003.     On

November 22, 2005, petitioner mailed to the Court a document in

which he stated:

     Tax Court,

     Please consider this my petitioning the amounts
     assessed against me in the included letter. I have
     contacted the Dept. of Reconsideration and my
     congressman in regards to this matter. I have NAV’s
     and stock purchase prices that I have sent to the IRS
     twice now. Again please consider this my petitioning
     you as the letter said I must do before Dec. 5, 2005.

Attached to this document was a copy of the notice of deficiency.

Petitioner’s document was received by the Court on November 28,

2005.    The document failed to comply with the Rules of the Court1

as to the form and content of a proper petition.    Petitioner also

failed to submit the required filing fee.    Nevertheless, the

Court filed petitioner’s document as an imperfect petition.




     1
       Unless otherwise indicated, all Rule references are to the
Tax Court Rules of Practice and Procedure, and all section
references are to the Internal Revenue Code.
                                - 4 -


     By order dated December 1, 2005, the Court directed

petitioner to file a proper amended petition and to pay the

filing fee on or before January 17, 2006.   The order stated that

if an amended petition and the filing fee were not received on or

before January 17, 2006, the case would be dismissed.

     On March 13, 2006, the Court entered an order of dismissal

for lack of jurisdiction (order of dismissal) because petitioner

failed to respond to the December 1, 2005, order.   Ninety-two

days later, on June 13, 2006, the Court received a document from

petitioner which stated:

     United States Tax Court,

     I am requesting an order vacating the order of
     dismissal dated March 13, 2006 of case assigned Docket
     Number 22510-05, and ask that it be REINSTATED. The
     case was ordered closed through correspondence dated
     March 13, 2006 (also enclosed). I have enclosed a
     petition form and form designating place of trial.

The Court filed petitioner’s document as a motion for leave to

file motion to vacate embodying motion to vacate order of

dismissal for lack of jurisdiction (motion for leave).2    The

envelope that contained petitioner’s motion for leave was

postmarked June 8, 2006, 87 days after the Court entered its




     2
       Except in limited circumstances that do not apply here,
Rule 54 generally requires motions to be separately stated and
not joined together. We allowed the document to be filed here in
the interest of judicial administration but do not purport to
sanction the filing of joint motions in future cases.
                                 - 5 -


order of dismissal.     The envelope also contained petitioner’s

amended petition and a check for the filing fee.

                              Discussion

I.   Motion To Vacate

     An order of dismissal for lack of jurisdiction is treated as

the Court’s decision.     Hazim v. Commissioner, 

, 476

(1984).   Section 7459(c) provides, in relevant part:

          SEC. 7459(c). Date of Decision.–- * * *. * * *
     if the Tax Court dismisses a proceeding for lack of
     jurisdiction, an order to that effect shall be entered
     in the records of the Tax Court, and the decision of
     the Tax Court shall be held to be rendered upon the
     date of such entry.

The word “decision” refers to decisions determining a deficiency

and orders of dismissal for lack of jurisdiction.      Ryan v.

Commissioner, 

, 16 (7th Cir. 1975); Commissioner v. S.

Frieder & Sons Co., 

, 480 (3d Cir. 1955).

     Rule 162 provides that “Any motion to vacate or revise a

decision, with or without a new or further trial, shall be filed

within 30 days after the decision has been entered, unless the

Court shall otherwise permit.”     (Emphasis added.)   Petitioner did

not file a motion to vacate or revise within 30 days after the

Court’s order of dismissal was entered.     Therefore, in order for

his motion to vacate to be considered timely filed, Rule 162

required petitioner to file a motion for leave to file a motion

to vacate or revise, the granting of which lies within the sound
                               - 6 -


discretion of the Court.   See Rule 162; Heim v. Commissioner, 

, 246 (8th Cir. 1989), affg. T.C. Memo. 1987-1; Brookes

v. Commissioner, 

, 7 (1997).

II.   Jurisdiction

      This Court can proceed in a case only if it has

jurisdiction, and either party, or the Court sua sponte, can

question jurisdiction at any time.     Estate of Young v.

Commissioner, 

, 880-881 (1983).    We have jurisdiction

to determine whether we have jurisdiction.     Brannon’s of Shawnee,

Inc. v. Commissioner, 

, 1002 (1978).    As we stated in

Wheeler’s Peachtree Pharmacy, Inc. v. Commissioner, 

,

179 (1960):   “[Q]uestions of jurisdiction are fundamental and

whenever it appears that this Court may not have jurisdiction to

entertain the proceeding that question must be decided.”

      In order for us to consider the substantive merits of

petitioner’s motion for leave, we must still have jurisdiction.

Except for very limited exceptions, none of which applies here,3


      3
       After a decision becomes final, the Court may grant a
motion for leave to consider: (1) Whether the Court had
jurisdiction to enter the decision in the first instance,
Billingsley v. Commissioner, 

, 1084-1085 (9th Cir.
1989), or (2) whether the decision entered was the result of
fraud on the Court, Abatti v. Commissioner, 

, 118
(9th Cir. 1988), affg. 

 (1986). Where the Court is
without jurisdiction in the first instance or there was fraud on
the Court, the decision could be viewed as a legal nullity. See
Billingsley v. Commissioner, supra at 1084-1085. We have also
vacated a final decision where a clerical error was discovered.
                                                   (continued...)
                                  - 7 -


this Court lacks jurisdiction once a decision becomes final

within the meaning of section 7481.       Abatti v. Commissioner, 

, 117-118 (9th Cir. 1988), affg. 

 (1986);

Lasky v. Commissioner, 

, 98 (9th Cir. 1956), affd. 

 (1957).    As relevant here, a decision of the Tax Court

becomes final “Upon the expiration of the time allowed for filing

a notice of appeal, if no such notice has been duly filed within

such time”.    Sec. 7481(a)(1).   Section 7483 provides that a

notice of appeal may be filed within 90 days after a decision is

entered.    As previously explained, an order of dismissal for lack

of jurisdiction is treated as the Court’s decision.

     Pursuant to rule 13(a) of the Federal Rules of Appellate

Procedure, if under the Tax Court’s Rules a party makes a timely

motion to vacate or revise a decision, “the time to file a notice

of appeal runs from the entry of the order disposing of the

motion or from the entry of a new decision, whichever is later.”4


     3
      (...continued)
Michaels v. Commissioner, 

 (7th Cir. 1998), affg.
T.C. Memo. 1995-294. The Court of Appeals for the Fifth Circuit
has indicated that we also have jurisdiction to vacate a decision
that was the result of mutual mistake. La Floridienne J.
Buttgenbach & Co. v. Commissioner, 

, 631 (5th Cir.
1933).
     4
         Fed. R. App. P. 13(a) provides:

     Rule 13. Review of a Decision of the Tax Court.

     (a) How Obtained; Time for Filing Notice of Appeal.
                                                   (continued...)
                               - 8 -


The Court entered the order of dismissal on March 13, 2006, and

petitioner did not file a notice of appeal within the time

prescribed by section 7483.   Unless petitioner is deemed to have

filed a timely motion for leave and a timely motion to vacate

that terminated the running of time for appeal pursuant to rule

13(a) of the Federal Rules of Appellate Procedure, the Court’s

order of dismissal became final on June 12, 2006, 91 days after

the Court entered it.5

     The Court received and filed petitioner’s motion for leave

on June 13, 2006, 92 days after the Court entered its order of

dismissal.   The envelope that contained petitioner’s motion for


     4
      (...continued)
     (1) Review of a decision of the United States Tax Court
     is commenced by filing a notice of appeal with the Tax
     Court clerk within 90 days after the entry of the Tax
     Court’s decision. At the time of filing, the appellant
     must furnish the clerk with enough copies of the notice
     to enable the clerk to comply with Rule 3(d). If one
     party files a timely notice of appeal, any other party
     may file a notice of appeal within 120 days after the
     Tax Court’s decision is entered. (2) If, under Tax
     Court rules, a party makes a timely motion to vacate or
     revise the Tax Court’s decision, the time to file a
     notice of appeal runs from the entry of the order
     disposing of the motion or from the entry of a new
     decision, whichever is later.

     5
       June 11, 2006, the 90th day after the Court entered the
order of dismissal, fell on a Sunday. Pursuant to sec. 7503
petitioner had until June 12, 2006, the following Monday, to file
a notice of appeal. See also Fed. R. App. P. 26(a)(3). While we
recognize this extension of time to file a notice of appeal, we
continue to refer to the period after we entered the order of
dismissal as the 90-day period.
                                 - 9 -


leave was postmarked on June 8, 2006, 87 days after the Court

entered its order of dismissal.     Accordingly, we would have

jurisdiction to consider the merits of petitioner’s motion for

leave only if it were deemed to have been filed on the date it

was mailed, which was within the 90–day appeal period.     If we

grant petitioner’s motion for leave, then petitioner’s motion to

vacate would also have to be deemed timely filed within that 90-

day period in order to terminate the running of time for appeal

pursuant to rule 13(a) of the Federal Rules of Appellate

Procedure.

III.    Section 7502

       Section 7502(a), the so-called timely-mailing/timely-filing

rule, provides, in relevant part:

            SEC. 7502(a).   General Rule.--

            (1) Date of delivery.–-If any return, claim,
       statement, or other document required to be filed * * *
       within a prescribed period or on or before a prescribed
       date under authority of any provision of the internal
       revenue laws is, after such period or such date,
       delivered by United States mail to the agency, officer,
       or office with which such return, claim, statement, or
       other document is required to be filed, * * * the date
       of the United States postmark stamped on the cover in
       which such return, claim, statement, or other document
       * * * is mailed shall be deemed to be the date of
       delivery * * *

            (2) Mailing requirements.--This subsection shall
       apply only if--

                 (A) the postmark date falls within the
            prescribed period or on or before the
            prescribed date--
                               - 10 -


                      (i) for the filing (including any
                extension granted for such filing) of the
                return, claim, statement, or other document,
                * * *

                     (ii) * * * and

                (B) the return, claim, statement, or other
           document * * * was, within the time prescribed in
           subparagraph (A), deposited in the mail in the
           United States in an envelope or other appropriate
           wrapper, postage prepaid, properly addressed to
           the agency, officer, or office with which the
           return, claim, statement, or other document is
           required to be filed * * *

      To determine whether section 7502 applies to petitioner’s

motion for leave, we must ascertain whether the time between when

the Court enters a decision and when that decision becomes final

creates a “prescribed period” for filing a motion for leave

within the meaning of section 7502.

IV.   Manchester Group

      This Court has only once before examined the issue of

whether section 7502 applies to a motion for leave to file a

motion to vacate that was mailed and postmarked before, but

received by the Court after, the date on which the decision would

have otherwise become final.   See Manchester Group v.

Commissioner, T.C. Memo. 1994-604, revd. 

 (9th Cir.

1997).   In Manchester Group, we held that the period within which

a party may file a motion for leave is not a “prescribed period”

and that “because section 7502 applies only to those documents

required to be filed in the Tax Court within a prescribed period
                               - 11 -


or on or before a prescribed date, section 7502 does not apply to

motions for leave.”   Id.   The Court of Appeals for the Ninth

Circuit reversed, holding that “The combined effect of § 7481(a)

and § 7483 of the Internal Revenue Code and of Federal Rule of

Appellate Procedure 13(a) is to create a ninety-day period to

file a notice of appeal or a motion for leave.   This ninety-day

period is a ‘prescribed period’ within the meaning of §

7502(a)(1).”   Manchester Group v. Commissioner, 113 F.3d at

1089.6

     The instant case provides an occasion to reconsider our

Memorandum Opinion in Manchester Group.    In Lawrence v.

Commissioner, 

, 716 (1957), revd. 

 (9th

Cir. 1958), we stated:

          One of the difficult problems which confronted the
     Tax Court, soon after it was created in 1926 as the
     Board of Tax Appeals, was what to do when an issue came
     before it again after a Court of Appeals had reversed
     its prior decision on that point. Clearly, it must
     thoroughly reconsider the problem in the light of the
     reasoning of the reversing appellate court and, if




     6
       The Court of Appeals for the Ninth Circuit further
reasoned that the mere existence of limited exceptions in which
the Tax Court can grant a motion for leave after the decision
becomes final, e.g., lack of jurisdiction to have entered the
decision in the first place or fraud on the court, does not mean
there is not a prescribed period. Manchester Group v.
Commissioner, 

, 1089 n.2 (9th Cir. 1997), revg. T.C.
Memo. 1994-604.
                              - 12 -


      convinced thereby, the obvious procedure is to follow
      the higher court.[7] * * *

V.   Application of Section 7502 to a Motion for Leave

      To mitigate what they recognize as harsh inequities

resulting from a literal adherence to filing requirements, courts

have, where circumstances permit, generally and wisely managed to

avoid denying a taxpayer his day in court.   Wells Marine, Inc. v.

Renegotiation Bd., 

, 1192 (1970).   The purpose of

section 7502 is to correct hardships caused by the failure of the

mails to function normally.   Manchester Group v. Commissioner,

113 F.3d at 1089; see also Bloch v. Commissioner, 

,

278-279 (9th Cir. 1958).   We have historically interpreted

section 7502 so as to adhere to the intentions of Congress.     In

Wells Marine, Inc. v. Renegotiation Bd., supra at 1193, we

stated:

      We think it is a permissible interpretation of section
      7502 that there is included within the meaning of the
      phrase ‘any * * * document required to be filed * * *
      within a prescribed period * * * under any authority or
      provision of the internal revenue laws,’ as used in
      section 7502, any such document which is required to be
      filed in the Tax Court. * * *



      7
       Where upon reconsideration of an issue we have adhered to
our position but reversal would appear inevitable because of a
contrary position, squarely on point, of the Court of Appeals to
which an appeal would lie, we have followed the position of that
Court of Appeals. Golsen v. Commissioner, 

, 757
(1970), affd. 

 (10th Cir. 1971). The instant case is
likely appealable to the Court of Appeals for the Third Circuit,
which has not addressed the issue presented in Manchester Group.
                               - 13 -


     The Court of Appeals for the Ninth Circuit in Manchester

Group v. Commissioner, 113 F.3d at 1089, concluded that the

combined effect of sections 7481(a) and 7483, together with rule

13(a) of the Federal Rules of Appellate Procedure, was to create

a 90-day prescribed period to file a notice of appeal or a motion

for leave.    Upon reflection, we agree.    A decision of the Tax

Court becomes final “Upon the expiration of the time allowed for

filing a notice of appeal, if no such notice has been duly filed

within such time”.    Sec. 7481(a)(1).    Section 7483 provides that

a notice of appeal may be filed within 90 days after a decision

is entered.    Pursuant to rule 13(a) of the Federal Rules of

Appellate Procedure, which governs review of Tax Court decisions,

if a timely motion to vacate is made, the time for appeal “runs

from the entry of the order disposing of the motion or from the

entry of a new decision, whichever is later.”      Together these

provisions can reasonably be read to create a 90-day period

prescribed under the authority of the internal revenue laws in

which a taxpayer could file a motion for leave to file a motion

to vacate a decision.    We conclude that the reasoning of the

Court of Appeals for the Ninth Circuit in Manchester Group with

regard to the application of section 7502 to motions for leave is

persuasive and should be followed.      Accordingly, we will no

longer follow our prior Memorandum Opinion in Manchester Group v.

Commissioner, T.C. Memo. 1994-604.
                                - 14 -


      We hold that petitioner’s motion for leave to file his

motion to vacate the Court’s order of dismissal will, pursuant to

section 7502, be deemed filed on June 8, 2006, the date it was

mailed.     Therefore, petitioner’s motion for leave was filed

before the expiration of the 90-day appeal period.

VI.   Effect of the Motion for Leave To File Motion To Vacate

      Whether the Court retains jurisdiction over petitioner’s

case depends on whether the Court grants leave to file

petitioner’s motion to vacate.     If the motion for leave to file a

motion to vacate is filed before the decision becomes final and

the Court grants the motion for leave, then the time for appeal

is extended.     Manchester Group v. Commissioner, 113 F.3d at 1088;

Nordvik v. Commissioner, 

, 1492 (9th Cir. 1995),

affg. T.C. Memo. 1992-731.     Petitioner’s motion to vacate was

treated as embodied in the motion for leave.     In Simon v.

Commissioner, 

, 232 (2d Cir. 1949), affg. a

Memorandum Opinion of this Court, the Court of Appeals for the

Second Circuit held that when a party files a motion for leave to

file a motion for reconsideration together with the motion for

reconsideration before the end of the 90-day period, and the

motion for leave is granted, the motions extend the time for

appeal and the date of finality.8    In Nordvik v. Commissioner,


      8
          Simon v. Commissioner, 

 (2d Cir. 1949), affg.
                                                      (continued...)
                                - 15 -


supra at 1492, the Court of Appeals for the Ninth Circuit stated

it was irrelevant that the taxpayers filed the motion for leave

to file a motion to vacate without the substantive motion to

vacate.    The Court of Appeals held that so long as the motion for

leave is filed within the 90-day period and the Tax Court grants

the motion for leave and thereafter makes a decision on the

merits of the motion to vacate, then the time for appeal is

extended.

     If the Court does not grant the motion for leave, then the

motion to vacate could not be filed and the decision would become

final.    Id.   Unlike the filing of a motion to vacate, the filing

of a taxpayer’s motion for leave to file a motion to vacate would

not affect the time for appeal unless the Court granted the

motion for leave and considered the merits of the motion to

vacate.    Id.; Haley v. Commissioner, 

, 836 (E.D.




     8
      (...continued)
a Memorandum Opinion of this Court, rejects the Court of Appeals
for the First Circuit’s opinion in Denholm & McKay Co. v.
Commissioner, 

, 248 (1st Cir. 1942), affg. 

 (1939), holding that the Tax Court retains jurisdiction to
consider a motion for reconsideration only if the Court acts on
the motion before the end of the 90-day period at which the
original decision becomes final. The Court of Appeals for the
Second Circuit reasoned that the ability to seek review should
not depend on the Tax Court’s docket. Simon v. Commissioner,
supra at 232; Nordvik v. Commissioner, 

, 1492 (9th
Cir. 1995), affg. T.C. Memo. 1992-731.
                                  - 16 -


Cal. 1992), affd. without published opinion 

 (9th Cir.

1993).9

       We hold that when a motion for leave to file a motion to

vacate is filed before the Court’s decision becomes final, and

the motion for leave is granted, the motion to vacate will be

deemed to have been timely filed at the same time as the motion

for leave.       This will terminate the running of the 90-day appeal

period and postpone the finality of any decision.

VII.       Action on Petitioner’s Motion

       In the exercise of our discretion, we will grant

petitioner’s motion for leave to file his motion to vacate.         The

granting of petitioner’s motion for leave and the filing of his

motion to vacate terminate the running of time to file a notice

of appeal.       This, in turn, will prevent the Court’s order of

dismissal from becoming final and will allow the Court to retain

jurisdiction to determine whether to grant petitioner’s motion to

vacate.

       Petitioner’s proper amended petition and filing fee were

received on June 13, 2006.       Considering the particular facts in

this case, we believe that there is a reasonable basis to grant



       9
       In Nordvik v. Commissioner, supra at 1492 n.2, the Court
of Appeals for the Ninth Circuit expressly adopted the reasoning
of the District Court in Haley v. Commissioner, 

(E.D. Cal. 1992), affd. without published opinion 

 (9th
Cir. 1993).
                              - 17 -


petitioner’s motion to vacate the Court’s order of dismissal.

See Estate of Egger v. Commissioner, 

, 1084 (1989)

(finding the interest of justice to be enough to grant a motion

to vacate).   We will grant petitioner’s motion to vacate the

Court’s order of dismissal and will allow his amended petition to

be filed.


                                         An appropriate order will

                                    be issued.


     Reviewed by the Court.

     COLVIN, COHEN, SWIFT, WELLS, HALPERN, CHIECHI, LARO, FOLEY,
VASQUEZ, GALE, THORNTON, MARVEL, HAINES, GOEKE, WHERRY, KROUPA,
and HOLMES, JJ., agree with this opinion.