Just like Indian Tax Department, the US tax department has failed to prove that the deficiency notice was properly mailed to assessee, consequently, the US Tax court has dismissed the case.
The court noted that the Commissioner cannot establish proper mailing through documentation that does not explicitly reference the notice of deficiency). Because department failed to carry his burden to show that the notice of deficiency was properly mailed, we must dismiss this case with respect to tax year 2006.
The case was heard pursuant to the provisions of section 7463 of the Internal Revenue Code in effect when the petition was filed. Pursuant to section 7463(b), the decision to be entered is not reviewable by any other court, and this opinion shall not be treated as precedent for any other case.
Pending before the Court is department’s Motion to Dismiss for Lack of Jurisdiction (motion), filed March 28, 2022, and supplemented on September 13, 2022, and July 10, 2023. The department requested that this case be dismissed as it relates to tax year 2006 because the petition was filed more than 90 days after department mailed the notice of deficiency to petitioner. The department requested that the case be dismissed as it relates to tax years 2007 and 2008 on the ground that he did not issue a notice sufficient to confer jurisdiction on this Court.
The court denied the department’s motion with respect to tax year 2006. The court dismissed the case on the ground that the 2006 notice of deficiency is invalid.
Facts
Petitioner did not timely file federal tax returns for tax years 2006 through 2008. Pursuant to section 6020(b), department prepared a substitute for return (SFR) for petitioner’s 2006 tax year. On November 26, 2012, department allegedly mailed petitioner a notice of deficiency based on this SFR at 318 1st Avenue S Apartment 401, Seattle, Washington 98104 (1st Avenue address). In the notice of deficiency, the department determined an income tax deficiency of $40,588, a section 6651(a)(1) addition to tax of $1,190, and a section 6651(a)(2) addition to tax of $1,322.
Petitioner did not file a petition with this Court within 90 days of the Internal Revenue Service (IRS) allegedly mailing the notice, and department assessed the deficiency and additions to tax. Thereafter, department issued to petitioner a notice of intent to levy.3 The notice of intent to levy was returned to the IRS unclaimed, and department levied against petitioner’s Social Security benefits. On May 3, 2019, petitioner filed a tax return for his 2006 tax year. department processed the return and abated the deficiency for 2006 to the amount listed on petitioner’s late filed return.
On January 2, 2020, petitioner filed a tax return for tax year 2007, requesting a refund.
On April 6, 2020, petitioner filed a tax return for tax year 2008, requesting a refund. The address listed on petitioner’s 2006 through 2008 tax returns is 4736 Via Verde Court, Santa Fe, New Mexico 87507 (Via Verde Court address). department represents that he did not take any action regarding petitioner’s income tax liabilities for tax years 2007 and 2008.
On August 9, 2021, petitioner filed a petition with this Court,4 indicating he sought review for tax years 2006, 2007, and 2008. On November 22, 2021, petitioner filed a First Amended Petition. Therein, petitioner indicated that he sought review of a notice of deficiency for tax year 2007. Petitioner referenced his initial petition and continued to make arguments related to tax years 2006, 2007, and 2008. On the basis of his petition and subsequent representations to the Court, we will construe his petition as relating to tax years 2006, 2007, and 2008. See Gray v. Commissioner, 138 T.C. 295, 298 (2012) (“All claims in a petition should be broadly construed so as to do substantial justice, and a petition filed by a pro se litigant should be liberally construed.”).
On March 28, 2022, the department filed the motion. The department argued that petitioner sought review for only tax year 2007 and the department did not issue a notice of deficiency to petitioner for that tax year. department further represented that after a diligent search of records, he had not made any other determination that would permit petitioner to invoke the jurisdiction of this Court.
On August 18, 2022, this Court ordered the department to supplement his motion related to tax years 2006 and 2008. On September 13, 2022, the department filed a First Supplement to Motion to Dismiss for Lack of Jurisdiction. Department attached to his motion a copy of the notice of deficiency for tax year 2006, dated November 26, 2012, which included a U.S. Postal Service (USPS) tracking number and was addressed to the petitioner at the 1st Avenue address. The department argued that we should dismiss this case with respect to tax year 2006 because the petitioner filed his petition after the 90-day deadline provided by section 6213(a). As for tax year 2008, the department represented that after a diligent search of records, there was no indication that a notice of deficiency for tax year 2008 was sent to the petitioner, nor had the department made any other determination sufficient to confer jurisdiction on this Court. On September 19, 2022, petitioner filed a response to the department’s First Supplement, stating that he did not receive a notice of deficiency for tax year 2006 and that the notice was not mailed to his correct address.
On June 8, 2023, this Court ordered the department to provide proof of mailing and the basis for determining petitioner’s last known address for the 2006 notice of deficiency. On July 10, 2023, the department filed a Second Supplement to Motion to Dismiss for Lack of Jurisdiction.
Department did not attach USPS Form 3877, Firm Mailing Book For Accountable Mail, as evidence that he mailed the notice of deficiency to petitioner. Rather, department represented that the Form 3877 was sent to the Federal Records Center pursuant to normal procedures and that he did not have sufficient time to request the form. As proof of mailing, department attached the Correspondence Examination Automation Support (CEAS) transcript. the department indicated that the entry number “24” on the CEAS transcript, dated November 26, 2012, establishes that a notice of deficiency was issued. As additional proof of mailing, the department relies on the certified mailing number listed on the copy of the notice of deficiency.
As for petitioner’s last known address, the department stated that a NAMES transcript lists petitioner’s address at the time the 2006 notice of deficiency was mailed as the 1st Avenue address; however, the department did not include a copy of the NAMES transcript. The CEAS transcript lists the petitioner’s address as the Via Verde Court address.
Conclusion
The court while dismissing the petition noted that the department has failed to carry his burden of establishing that the notice of deficiency was properly mailed. Respondent has not presented any testimony regarding the mailing procedures used with respect to this notice of deficiency such as through submitting an affidavit.
Case Details
Case Name: Mark F. Coble V/S Commissioner Of Internal Revenue
Citation: T.C. Summary Opinion 2024-16
Judges: Greaves
Decision Date: 12/08/2024
