Alta Sierra Vista, Inc. v. Comm'r of Internal Revenue

• Citation: 62 T.C. 367
• Decision Date: 24 June 1974
• Docket Number: 4025-73.,Docket Nos. 4024-73
• Parties: ALTA SIERRA VISTA, INC., SUCCESSOR IN INTEREST TO ALTA SIERRA RANCHES, INC., PETITIONER v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENTALTA SIERRA VISTA, INC., SUCCESSOR IN INTEREST TO ALTA SIERRA CATTLE CO., INC., PETITIONER v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT
• Court: United States Tax Court

62 T.C. 367

ALTA SIERRA VISTA, INC., SUCCESSOR IN INTEREST TO ALTA SIERRA RANCHES, INC., PETITIONER

v.COMMISSIONER OF INTERNAL REVENUE, RESPONDENTALTA SIERRA VISTA, INC., SUCCESSOR IN INTEREST TO ALTA SIERRA CATTLE CO., INC., PETITIONER

v.COMMISSIONER OF INTERNAL REVENUE, RESPONDENT

Docket Nos. 4024-73

4025-73.

United States Tax Court

Filed June 24, 1974.

Stephen J. Schwartz and Charles A. Lane, for the petitioners.

Leo McLaughlin, for the respondent.

The Commissioner timely mailed deficiency notices to T corporation in respect of its two predecessor corporations at the post office box address used on T's income tax return for the taxable period immediately following its absorption of its predecessors. Although T received the deficiency notices 13 days later, it failed to file its petitions herein for an additional 123 days. Held, despite the confusion occasioned by T's use of several other addresses during its correspondence with the Commissioner, the address used by the Commissioner in the deficiency notices was the ‘last known address,‘ sufficient to render the deficiency notices valid, and the Commissioner's motions to dismiss for lack of jurisdiction are granted.

Petitioner is the successor in interest to two corporations. The Commissioner determined income tax deficiencies against petitioner in respect of each of its predecessor corporations in the following amounts:

+------------------------------------------------------------+
                ¦Docket No.  ¦Predecessor's taxable year ended  ¦Deficiency  ¦
                +------------+----------------------------------+------------¦
                ¦            ¦                                  ¦            ¦
                +------------+----------------------------------+------------¦
                ¦4024-73     ¦Feb. 29, 1968                     ¦$10,862.38  ¦
                +------------+----------------------------------+------------¦
                ¦4025-73     ¦Mar. 1, 1968                      ¦281,384.58  ¦
                +------------------------------------------------------------+
                

These cases were consolidated for the purposes of the hearing on the Government's motion to dismiss for lack of jurisdiction. The primary issue presented is whether the Commissioner mailed the deficiency notices herein to petitioner at its ‘last known address' as that phrase is used in section 6212(b)(1), I.R.C. 1954. In the event the Commissioner did satisfy the terms of section 6212(b)(1), the parties do not dispute that petitioner filed its petitions herein after the close of the permissible statutory period in which to file its petitions, hence depriving this Court of jurisdiction in the matter.

FINDINGS OF FACT

The parties have filed a stipulation of facts which, together with its accompanying exhibits, is incorporated herein by this reference.

Alta Sierra Vista, Inc., the petitioner, is a California corporation which maintained its principal office in Sacramento, Calif., at the time of filing its petitions herein. Petitioner is the successor in interest to both Alta Sierra Ranches, Inc., and Alta Sierra Cattle Co., Inc., each of which was a California corporation. Petitioner filed final Federal corporate income tax returns for both corporations for their taxable periods ended February 29, 1968, and March 1, 1968, respectively, with the district director of internal revenue at San Francisco, Calif.

The petitioner, Alta Sierra Vista, Inc., was incorporated on February 20, 1968, under the laws of California. On March 1, 1968, its two wholly owned subsidiary corporations, Alta Sierra Ranches, Inc. (‘Ranches'), and Alta Sierra Cattle Co., Inc. (‘Cattle’), effected statutory mergers with petitioner, the surviving corporation, and thereafter ceased doing business in their former corporate capacities. On or about July 29, 1968, petitioner filed a final Federal income tax return for Ranches on which appeared the following name and address of the taxpayer:

Alta Sierra Ranches, Inc.

P.O. Box 86

Grass Valley, California 95945

Likewise, on or about August 1, 1968, petitioner filed a final tax return for Cattle using the same address as shown on Ranchers' return, i. e., P.O. Box 86, Grass Valley, Calif. 95945 (‘Box 86 address'). Appended to Cattle's return was the following statement:

On March 1, 1968, Alta Sierra Vista, Inc., 140 Tammy Way, Grass Valley, California, acquired 100% of the outstanding stock. Alta Sierra Vista, Inc. also owns 100% of Alta Sierra Ranches, Inc.

Both Ranches' and Cattle's returns were mailed in envelopes which bore ‘140 Tammy Way, Grass Valley, California’ (‘Tammy Way address') as the sender's address.

On January 9, 1969, the United States Postmaster at Grass Valley opened Post Office Drawer E for use by petitioner. On or about April 16, 1969, petitioner filed its income tax return for the taxable period March 1, 1968, through January 31, 1969, with the Western Service Center at Ogden, Utah. On that return petitioner provided the following address (‘Drawer E address'):

P.O. Drawer E

Grass Valley, California 95945

On July 16, 1970, the Western Service Center received petitioner's income tax return for its taxable year ended January 31, 1970. That return, which also showed the Drawer E address, was accompanied by a transmittal letter on the addressed stationery of petitioner's general legal counsel, Diepenbrock, Wulff, Plant & Hannegan, 455 Capitol Mall, Sacramento, Calif. 95814 (‘Capitol Mall address'), which read as follows:

DEAR SIR:

On behalf of Alta Sierra Vista, Inc., we enclose the Federal Income Tax Return of Alta Sierra Vista, Inc. Return shows that no tax is due.

Very truly yours,

DIEPENBROCK, WULFF, PLANT & HANNEGAN

By ROBERT R. WULFF

Robert Wulff, in addition to being a practicing attorney and a member of the Diepenbrock law firm, had become the president and sole executive officer of petitioner in February of 1970.

In March 1971, petitioner moved all of its books and records to new quarters at 950 Fulton Avenue, Suite 145, Sacramento, Calif. 95825 (‘Fulton Avenue address'), at which address they have remained until the time of these proceedings. Accordingly, on March 8, 1971, petitioner's agent notified the postmaster at Grass Valley of the new address which was thereupon recorded on the Post Office Department Address Change Sheet in order to facilitate forwarding mail sent to petitioner at its former Drawer E address.

At sometime prior to March 25, 1971, Revenue Agent Kenneth Kimble began an audit of both Cattle's and Ranches' final tax returns. In the course of his examination, Kimble had opportunity to communicate a number of times with Wulff at his law office. He sent Wulff consent forms for the extension of the applicable periods of limitations, which Wulff executed; on at least two occasions Kimble called Wulff at his law office in respect of the audit; he wrote to Wulff at his law office requesting documents; and he met with Wulff there on May 26, 1971. Kimble addressed his correspondence to Wulff in care of Diepenbrock, et al., at the Capitol Mall address; Wulff's return correspondence was signed by him on behalf of his law firm, not as president of petitioner. In dealing with Kimble, Wulff advised him that, although the Diepenbrock firm was acting as petitioner's general counsel, Stephen Schwartz, an attorney practicing in San Francisco, was representing petitioner with respect to the Government's examination and audit; however, this did not preclude a reasonable inference that Wulff as a member of the Diepenbrock firm was also representing petitioner in this matter.

At about the end of May 1971, petitioner sent its income tax return for the period ended January 31, 1971, to the Western Service Center at Ogden, Utah. The taxpayer's address appearing on the return was:

Alta Sierra Vista, Inc.

c/o Robert L. (sic) Wulff, 455 Capitol Mall

Sacramento, California 95814 The accompanying transmittal letter, however, was written on petitioner's stationery with the Fulton Avenue address typed in in place of the former Drawer E address which was thoroughly ‘X'-ed out.

At sometime prior to September 21, 1971, Kimble left his employment with the Internal Revenue Service, and Revenue Agent Frank Beyer undertook to complete the examination. By that time the examination had expanded in scope to include petitioner's returns for the taxable periods ended January 31, 1969, and January 31, 1970. On September 21, 1971, Beyer mailed additional consent forms to Wulff at his law office requesting further extensions of the periods of limitations to June 30, 1972, for each of the three corporations involved. The forms, as filled out by Beyer, showed the Box 86 address for both Cattle and Ranches and the Drawer E address for petitioner. Wulff signed each of the three forms and returned them to the IRS accompanied by a transmittal letter written on his law firm stationery and signed ‘Diepenbrock, Wulff, Plant & Hannegan, By Robert R. Wulff.’ Wulff did not then or later notify Beyer or any other agent of the Commissioner that the addresses on the forms were erroneous.

Again, on March 10, 1972, Beyer mailed unexecuted consent forms to Wulff's law office for his signature. Wulff signed all three forms, including the one pertaining to petitioner which bore the Drawer E address, and thereby extended the applicable periods of limitations until December 31, 1972. Wulff returned the forms to Beyer along with a transmittal letter typed on petitioner's stationery on which was printed the Fulton Avenue address. The Service thereupon mailed a fully executed copy of Ranches' consent form to the Box 86 address and also sent a copy of a reexecuted consent form¹ for Cattle to:

Alta Sierra Vista, Inc.

(Successor in Interest to:

Alta Sierra Cattle Co., Inc.)

P.O. Box 86

Grass Valley, CA 95949 (sic)

Wulff did not communicate to Beyer or to any other Government representative that any of the addresses referred to, and specifically the Box 86 and Drawer E addresses, were either incorrect or no longer in use.

On or about July 10, 1972, petitioner filed its income tax...