Abeles v. Comm'r of Internal Revenue

• Decision Date: 07 December 1988
• Docket Number: Docket No. 37192-86.
• Citation: 91 T.C. 1019,91 T.C. No. 65
• Parties: BARBARA ABELES, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
• Court: U.S. Tax Court

91 T.C. 1019

91 T.C. No. 65

BARBARA ABELES, Petitioner

v.COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 37192-86.

United States Tax Court

Filed December 7, 1988.

W and H filed joint Federal income tax returns for their 1975, 1976, and 1977 taxable years. R issued a joint notice of deficiency with respect to W and H's 1976 taxable year on October 15, 1980. W filed a Federal income tax return in the status of married, filing separately, on June 15, 1982, with respect to her 1981 taxable year. Such return indicated a new address for W. On November 30, 1982, R sent a notice of deficiency to W and H with respect to their 1975 and 1977 taxable years. Although R's computer records contained a different address for W and H, R issued only a single joint notice concerning W and H's 1975 and 1977 taxable years to the address its records contained with respect to H. W never received actual notice of the notices of deficiency, concerning 1976, and 1975 and 1977, until R levied W's bank accounts and put a lien against her house in 1986. Following such levies and lien, W filed an untimely petition seeking a redetermination of deficiency for taxable years 1975 through 1977, inclusive. Also by such petition, W sought redetermination of her tax liability for taxable year 1978, a year for which no notice of deficiency has been issued. W and R, based upon different grounds, both assert this Court lacks jurisdiction over years 1975 through 1978, inclusive.

HELD, this Court lacks jurisdiction over the subject matter of taxable years 1975 and 1977 because the notice issued concerning those years was invalid as against W.

HELD FURTHER, this Court lacks jurisdiction over the subject matter of taxable year 1976 because the petition with respect thereto was filed untimely.

HELD FURTHER, this Court lacks jurisdiction over the subject matter of taxable year 1978 because no notice of deficiency has been issued with respect thereto. Bruce I. Hochman, William M. Weintraub, and Dennis L. Perez, for the petitioner.

Joyce Sugawara, for the respondent.

OPINION

FAY, JUDGE:

Respondent determined deficiencies in petitioner's Federal income tax as follows:

+----------------+
                ¦Year¦Deficiency ¦
                +----+-----------¦
                ¦1975¦$48,591.00 ¦
                +----+-----------¦
                ¦1976¦31,892.82  ¦
                +----+-----------¦
                ¦1977¦29,844.00  ¦
                +----------------+
                

In two previously docketed cases, Harold Abeles and Barbara Abeles v. Commissioner, docket Nos. 1372-81 and 4433-83, pertaining to the Abeles' 1976, and 1975 and 1977 tax years, respectively, this Court granted respondent's motions to dismiss for lack of prosecution and entered decisions in respondent's favor in the reduced amounts of $24,008.00, $19,790.32, and $23,809.00, with respect to the Abeles' 1975, 1976, and 1977 taxable years, respectively. Such decisions were subsequently vacated, however, as they related to Barbara Abeles, in Abeles v. Commissioner, T.C. Memo. 1988-25, with respect to the 1976 tax year, and in Abeles v. Commissioner, 90 T.C. 103 (1988), with respect to the 1975 and 1977 tax years. The decisions in respondent's favor in those docketed cases were so vacated because Barbara Abeles alleged, and this Court found, that she never filed petitions, nor ratified those that were filed, in either of the cases, and that Barbara Abeles was, therefore, not a party to those actions. ¹

Subsequent to having the decisions which were previously entered against her in docketed cases numbered 1372-81 and 4433-83 vacated, Barbara Abeles filed a petition commencing the present action seeking a redetermination of the above described deficiencies as such relate to her. This matter now comes before us on the parties' cross-motions to dismiss the present action for lack of jurisdiction. The issue for decision is whether this Court has jurisdiction over the subject matter of petitioner's 1975, 1976, 1977 and 1978 taxable years.

At the time the petition in this case was filed, Barbara Abeles resided in Encino, California.

Barbara Abeles and Harold A. Abeles (hereinafter referred to collectively as the Abeles, or singularly as petitioner and Mr. Abeles, respectively) were married in 1972, separated in 1982, and divorced sometime thereafter. With respect to their 1975, 1976 and 1977 taxable years, the Abeles filed joint Federal income tax returns.

In 1980, respondent determined deficiencies in the Abeles' Federal income tax for the 1976 taxable year and, on October 15, 1980 respondent sent a single joint notice of such deficiency determination to:

(the Beverly Drive address). Such was the address of Mr. Abeles' law office at that time, and was not the Abeles' personal residence. Petitioner and Mr. Abeles had maintained a personal residence together at 16154 High Valley Place, Encino, CA, 91316 (the High Valley address), from 1974 until May 15, 1982, when, because of a marital separation, Mr. Abeles moved from such High Valley address. As of the date of trial, petitioner had continued to reside at the High Valley address.

In 1982, petitioner undertook to file a Federal income tax return separately for her 1981 taxable year. On April 15, 1982, petitioner's accountant filed with respondent an application for an automatic extension of time to file petitioner's 1981 Federal income tax return. The application for extension of time to file a return was granted automatically for a period of two months. On June 15, 1982, petitioner filed with respondent her Federal income tax return for taxable year 1981. Such return was in petitioner's name only. Although petitioner's filing status, as reflected by the 1981 tax return, was that of married, filing separately, the return required that petitioner also provide the name and taxpayer identification number (TIN) — i.e., social security number — of her spouse. This information was provided by petitioner. The address given for petitioner on both the request for extension and the 1981 tax return was in care of her accountants as follows:

(the Santa Monica Boulevard address).

Following the filing of petitioner's above described request for extension and 1981 tax return, respondent made a determination of deficiency with respect to petitioner and Mr. Abeles' 1975 and 1977 joint tax returns. Respondent sent a single joint statutory notice of deficiency concerning such determinations to:

(the La Cienega address) on November 30, 1982. Such address was a new address for the law offices of Mr. Abeles which was established when he moved his business from the Beverly Drive address. Mr. Abeles had his law offices located at the La Cienega address for approximately one year preceding the date such notice of deficiency was mailed. It was during such one-year period that respondent had been notified of Mr. Abeles' use of the La Cienega address for tax purposes.

During their marriage, petitioner relinquished all authority to Mr. Abeles with respect to their tax and financial matters. Petitioner was not even aware that Federal income tax returns were filed on her behalf for the years before us. Around the time the notices of deficiency were mailed and the petitions and amended petitions were filed in docketed cases 1372-81 and 4433-83, petitioner and Mr. Abeles were in the process of obtaining a divorce. Mr. Abeles never informed petitioner of the receipt of the notices of deficiency, of the filing of petitions and amended petitions in response to such notices, or of the decisions which had been entered against the Abeles, jointly and severally, in connection with such petitions. Petitioner did not become aware of any of these events until after the Internal Revenue Service (the IRS) levied her bank account and placed a lien upon her home in 1986.

When a husband and wife file a joint return, each spouse's TIN is reported upon the return filed. The TIN which appears first on the return is considered by the IRS as the ‘primary‘ TIN and the second TIN is considered the ‘spousal‘ TIN. Certain information reported upon the joint return so filed, including the address of the joint taxpayers, is entered into the IRS's computer files under the primary TIN only; none of such information is entered by the IRS into its computer files maintained under the spousal TIN. The record retained with respect to the joint return under the primary TIN is considered by the IRS to be the JOINT tax account of the husband and wife so filing.

If the person bearing the spousal TIN subsequently files, with respect to a later taxable year, a return in the status of married, filing separately, and if such a separate return reflects an address for the spousal taxpayer different from that address reported upon the previously filed joint return, such new address is not entered into the IRS's computer files maintained with respect to the joint tax account of the spousal taxpayer and their previous joint filer. The new address reported by the spousal taxpayer when filing separately is entered into the IRS's computer under only the files maintained concerning the spousal TIN. However, if the person bearing the primary TIN also files, with respect to a later taxable year, a separate return reflecting an address different from that used on the previously filed joint return, such new address is entered into the IRS's computer files maintained with respect to the joint tax account of both the primary and spousal taxpayers. This is because the joint tax account is, again, maintained under only the primary TIN, and is not cross-referenced to the spousal TIN.

When petitioner and Mr. Abeles filed joint Federal income tax returns with respect to their 1975, 1976 and 1977 taxable years, Mr. Abeles' TIN, because it was listed first on the returns for those years, was considered to be the primary TIN, and petitioner's TIN was considered to be the spousal TIN. Certain information reported upon those returns, including the address the Abeles were then using for tax purposes, was entered into the IRS's computer system under Mr. Abeles'...