Peter v. Comm'r of Internal Revenue

Decision Date30 March 1989
Docket NumberDocket No. 29531-87.
Citation92 T.C. No. 41,92 T.C. 729
PartiesPETER AND MARY PIETANZA, Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent
CourtU.S. Tax Court

OPINION TEXT STARTS HERE

Petitioners and respondent each moved to dismiss the petition for redetermination of petitioners' 1980 Federal income tax for lack of jurisdiction: petitioners on the ground that no valid notice of deficiency had been issued; respondent on the ground that petitioners had not filed their petition within the time set forth in sec. 6213. Petitioners did not receive a notice of deficiency. Respondent has lost the administrative file for petitioners' 1980 year and is unable to supply a copy of a notice of deficiency but he has placed into evidence postal service Form 3877, indicating a certified mailing to petitioners on April 15, 1985, at their last known address, as well as a draft of a deficiency notice.

HELD, postal service Form 3877, standing alone, does not prove that respondent issued a valid notice of deficiency where the presumption of official regularity is overcome by evidence of irregularity. Petitioners' motion to dismiss for lack of jurisdiction is granted. Michael D. Savage, for the petitioners.

Richard G. Goldman, for the respondent.

OPINION

COHEN, JUDGE:

This case was assigned to Special Trial Judge Buckley pursuant to the provisions of section 7443A(b) of the Internal Revenue Code of 1986 and Rules 180 and 181. 1 After a review of the record, we agree with and adopt her opinion which is set forth below.

FINDINGS OF FACT AND OPINION OF THE SPECIAL TRIAL JUDGE

BUCKLEY, SPECIAL TRIAL JUDGE:

This case is before us on cross- motions to dismiss for lack of jurisdiction. Petitioners have moved to dismiss this case for lack of jurisdiction on the alternative grounds that (1) no notice of deficiency was mailed to petitioners, (2) any notice mailed to petitioners was not mailed to them at their last known address, and (3) any notice which was mailed was barred by the statute of limitations. Respondent has moved to dismiss this case for lack of jurisdiction on the ground that the petition was not filed timely pursuant to section 6213.

Petitioners have resided at 1560 Kearney Drive, North Brunswick, New Jersey 08902, at all relevant periods herein. They received a notice at that address from the Internal Revenue Service, Holtsville, New York (Form 3552) dated September 16, 1985, titled Statement of Tax Due on Federal Tax Return, for their 1980 tax year indicating a balance due as follows:

+--------------------+
                ¦“TAX   ¦$122,869.00 ¦
                +-------+------------¦
                ¦NEG PEN¦6,143.00    ¦
                +-------+------------¦
                ¦INT    ¦98,781.47   ¦
                +-------+------------¦
                ¦       ¦227,793.47” ¦
                +--------------------+
                

This statement indicated an assessment date of September 4, 1985.

Petitioners subsequently received from the Internal Revenue Service (IRS) an undated communication (Form 8125) which referred to their 1980 year, the ‘balance of prior assessments‘ in the amount of $227,793.47, together with ‘late payment penalty‘ of $14,197.28 and ‘interest‘ of $41,910.19, for a ‘total amount due‘ of $283,900.94.

Petitioners allege they executed a Form 872, Consent to Extend Time to Assess Tax, in regard to 1980 which expired on April 15, 1985. They further allege that the Internal Revenue Service did not send them a notice of deficiency for 1980 either prior to or after that date.

Respondent alleges that on April 15, 1985, a statutory notice of deficiency was mailed to petitioners in regard to their 1980 year and that the notice was sent by certified mail to 1560 Kearney Drive, North Brunswick, New Jersey 08902. In support of his allegations, respondent attached to his Motion to Dismiss postal service Form 3877, Application for Registration or Certification, with an April 15, 1985, postmark date from the Newark, New Jersey, U.S. Postal Service, indicating a mailing to petitioners on that date. 2

On the surface, this case appears to be a futile action on petitioners' part. Without going beyond petitioners' allegations, it is clear that we must dismiss because there is a total failure to state a claim over which we have jurisdiction to grant any relief. Respondent agrees we have no jurisdiction albeit for different reasons. Inasmuch as it is patently clear that there is no possibility that we have jurisdiction, there is no need to hold a hearing, review evidence, and make difficult legal decisions. Granted, we have jurisdiction to decide our own jurisdiction, but one would think this to be a simple matter when the petitioners argue there is none, allege facts that if proven would remove any doubt, and respondent is not arguing for a different result. Under such circumstances, we should dismiss for petitioners' failure to allege or invoke the jurisdiction of this Court. It is a waste of our time and an improper use of our authority to go further.

I must acknowledge that we have deemed it appropriate (if not necessary) in past cases to decide the grounds for our lack of jurisdiction even though both parties argued that we lacked jurisdiction. See Pyo v. Commissioner, 83 T.C. 626 (1984) and Shelton v. Commissioner, 63 T.C. 193 (1974). In such cases, unlike the instant case, the parties were in agreement that the IRS had actually prepared and mailed notices of deficiency. The taxpayers in those cases were claiming that the notices were improperly addressed. It was arguably necessary, therefore, to decide the factual basis for our lack of jurisdiction under the facts presented in those cases since some courts have found that jurisdiction might exist where respondent failed to use the proper last known address which resulted in the filing of a petition more than 90 days after the mailing of the notice. For a discussion of this possibility, see Pyo v. Commissioner, supra at 638. See also Wallin v. Commissioner, 744 F.2d 674 (9th Cir. 1984), revg. a Memorandum Opinion of this Court and McPartlin Commissioner, 653 F.2d 1185 (7th Cir.1981), revg. a Memorandum Opinion of this Court, where improperly addressed notices of deficiency were mailed and the taxpayers filed their petitions long after the normal filing period which ends 90 days from the mailing of the notice of deficiency. The circuit courts found that petitions to this Court were proper when filed within 90 days of actual notice.

In the instant case, petitioners allege the total absence of a mailing of the notice of deficiency. If they are correct, we have no jurisdiction. If they are wrong, there are no facts alleged by either party that would support jurisdiction on any alternate approach like that taken in Wallin v. Commissioner, supra or McPartlin v. Commissioner, supra 2. A simple dismissal because of petitioners' failure to allege any possible basis for our jurisdiction would and should decide nothing that would impact on the merits of the underlying factual dispute.

One could argue that if petitioners had no prepayment remedy for respondent's alleged total failure to mail a notice of deficiency we should provide that forum. However, petitioners do have a prepayment remedy. In the same statutory provision granting this Court jurisdiction to redetermine deficiencies where there is a proper notice of deficiency and a timely petition, Congress also specifically provided that if an assessment is made without first mailing the required notice ‘the making of such assessment or the beginning of such proceeding [for collection of the tax] or levy * * * may be enjoined by a proceeding in the proper court, including the Tax Court.‘ Sec. 6213(a). (Emphasis added.) Injunctive power was first given to the Tax Court by section 6243(a) of the Technical and Miscellaneous Revenue Act of 1988, Pub. L. 100-647, 102 Stat. 3342, 3749. That section provides, however, that ‘The Tax Court shall have no jurisdiction to enjoin any action or proceeding under this subsection unless a timely petition for a redetermination of the deficiency has been filed and then only in respect of the deficiency that is the subject of such petition.‘ Sec. 6213(a) (Emphasis added). Because the petition in this case was not timely, this Court could not have issued an injunction. The proper court for petitioners to seek injunctive relief in this case is a United States District Court.

Our dismissal of this case does not result in claim preclusion (res judicata) regarding petitioners' tax liability since we had no jurisdiction over that question. If our disposition of this case results in issue preclusion (collateral estoppel) as to whether a notice of deficiency was mailed, we have unnecessarily usurped the District Court's jurisdiction to decide the operative facts on which to base any injunctive relief pursuant to section 6213(a). To that extent, our disposition of the instant case amounts to a declaratory judgment which we clearly do not have jurisdiction to issue in this situation.

The majority's finding regarding the mailing of the notice of deficiency should properly be characterized as dictum since there was no need to decide that issue where petitioners failed to allege any possible basis for jurisdiction. As the majority opinion states, before it discusses the merits of the parties' respective positions, ‘The one thing that is clear is that we have no jurisdiction over this case.‘ (Majority opinion at p. 11) Once that conclusion was arrived at, additional findings were unnecessary.

Petitioners never asked that we take jurisdiction of their case. They filed a petition and alleged facts which, if true, conclusively show that we have no jurisdiction. The majority's disposition results in a declaration from this Court that purportedly controls the statute of limitations defense to the underlying tax assessment and collection. Petitioners could hope for little more if we had jurisdiction, which we do not. In addition, section 6213(a) provides that a petition to this Court stays collection activity pending our decision or dismissal....

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