O'Brien v. Comm'r of Internal Revenue

• Decision Date: 30 July 1974
• Docket Number: Docket No. 6401-71.
• Citation: 62 T.C. 543
• Parties: PATRICK MICHAEL O'BRIEN, PETITIONER v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT
• Court: U.S. Tax Court

62 T.C. 543

PATRICK MICHAEL O'BRIEN, PETITIONER

v.COMMISSIONER OF INTERNAL REVENUE, RESPONDENT

Docket No. 6401-71.

United States Tax Court

Filed July 30, 1974.

Patrick Michael O'Brien, pro se.

Richard H. Gannon, for the respondent.

Held, a notice of deficiency mailed to petitioner, who was incarcerated in prison, in care of an attorney who did not represent petitioner and a bondsman, and which notice of deficiency was not received by petitioner for more than a hear after it was mailed, was insufficient and invalid and did not serve to give this Court jurisidiction in the case.

DRENNEN, Judge:

In a notice of deficiency dated May 7, 1969, respondent determined a deficiency of $3,756.40 in petitioner's Federal income tax for the year 1967, as well as additions to tax for that year under sections 6651(a), 6653(a), and 6654(a). A petition for redetermination was filed in this Court September 13, 1971. Proceedings before this Court culminated in the entry of an order of dismissal for lack of jurisdiction on the ground that the petition had not been timely filed. The case is now before the Court under order of the United States Court of Appeals for the Ninth Circuit vacating the order of dismissal and remanding for reconsideration in light of Robinson v. Hanrahan, 409 U.S. 38 (1972). The issue now before us is the validity of the notice of deficiency in the light of the due process clause of the Constitution of the United States and section 6212, I.R.C.

In accord with the order of the Court of Appeals, additional proceedings, including a hearing at which petitioner and respondent presented testimony and other evidence, have been conducted regarding the sufficiency of the notice of deficiency in this case. The following Findings of Fact and Opinion are rendered in conformity with those proceedings.

FINDINGS OF FACT

At the time of filing of the petition herein, petitioner was incarcerated in Folsom State Prison, Represa, Calif. Petitioner did not file a return for the year 1967, the year here involved.

On March 18, 1969, petitioner was arrested in Los Angeles, Calif., on a charge of burglary. The arrest report of the Los Angeles Police Department gave petitioner's address as ‘6935-A Morella,‘ North Hollywood. Petitioner was incarcerated at the Los Angeles City Jail where, on March 19, 1969, he was interviewed by two of respondent's revenue officers. Information obtained during the interview formed the basis for the deficiency subsequently determined by respondent.

The notice of deficiency determined that during 1967 petitioner realized net income from burglary in the amount of $15,000 which he had failed to report on a tax return. In an ‘Explanation of Items' Form 886-A, which was attached to the notice of deficiency, it was stated:

You admitted to Revenue Officers, Leo Pascal and Raymond Kuszewski on March 19, 1969 at the Los Angeles Police Department headquarters that you had never filed your income tax returns and that your standard of living would entail realizing a total earnings of $15,000.00 annually from burglary.

Petitioner denies making the statement. The record does not reveal whether respondent's agents made any further effort to determine petitioner's actual taxable income for 1967.

One of the officers who interviewed petitioner, Leo Pascal, testified at the hearing herein. During the interview petitioner stated he was living with a girl on Mulholland Drive but did not want to involve her in his problems, that he expected to be released on bail shortly, and that he did not know where he would be thereafter. Petitioner did not specify a house number on Mulholland Drive and Pascal ‘didn't pursue it any further. I saw there wouldn't be much use to do that.’

Pascal examined police records and noted that they listed several different addresses for petitioner at different times. One of the police reports indicated that other documents found in petitioner's possession at some time also showed a ‘number of different addresses.’ Pascal did not, however, ask petitioner about the varying addresses shown in the report ‘cause they varied so.’ Petitioner told Pascal that he had a bail bondsman. Pascal obtained the name and address of the bondsman from police records, and then ‘went to see’ the bondsman. Pascal did not testify as to the substance of that visit.

Pascal did not attempt to ascertain from the Los Angeles police how long petitioner might be in their custody. Pascal testified that he assumed petitioner was still incarcerated at the time Pascal contacted the bondsman, but he did not thereafter inquire of the police as to petitioner's whereabouts.

Petitioner was released on March 19, 1969, from the custody of the Los Angeles police, but was arrested again on April 21, 1969, and has been in custody since then. Pascal had no knowledge that petitioner had been released.

Respondent issued two notices of deficiency to petitioner, both sent by certified mail on May 7, 1969. One was mailed to petitioner ‘c/o Edwin Tolmas, Esq., 6380 Wilshire Boulevard, Los Angeles, California 90048.’ The other was mailed to petitioner ‘c/o Dan Majors-Bailsbondsman (sic), 951 North Vignes, Los Angeles, California 90012.’ Edwin Tolmas was the attorney of a codefendant of petitioner in a criminal prosecution, but had no other connection with petitioner. Petitioner did not give a power of attorney to Edwin Tolmas, nor had he given Edwin Tolmas' address as his own. At the hearing in this case, respondent expressly did not attempt to defend the mailing of a notice to Tolmas.

Pascal caused the other notice of deficiency to be sent care of ‘Dan Majors-Bailsbondsman (sic), 951 North Vignes, Los Angeles, California 90012.’ Petitioner had not given as his address that of Dan Majors. Petitioner could not remember whether he was using Dan Majors as a bail bondsman in March 1969, was under the impression that he had not so used Majors himself, but may have used a bondsman affiliated with Majors.

At the time of mailing of the notices of deficiency herein, petitioner was incarcerated in the Los Angeles County Jail.

Petitioner did not receive the notice of deficiency until June of 1970. In June 1970, petitioner received from one Mark Herman, a bail bondsman, the notice of deficiency dated May 8, 1969, showing the address of Edwin Tolmas. At that time, petitioner was in custody in the Los Angeles County Jail. There is no evidence that petitioner received the other notice.

Petitioner filed a petition for redetermination of deficiency in this Court on September 13, 1971.

ULTIMATE FINDING OF FACT

The notice of deficiency was invalid because it was not mailed to petitioner ‘at his last known address' within the meaning of section 6212, I.R.C. 1954, or to an address respondent could reasonably believe petitioner wanted respondent to use in sending mail to him.

OPINION

This case is before the Court on remand from the U.S. Court of Appeals for the Ninth Circuit. Respondent mailed two notices of deficiency to petitioner on May 7, 1969, one in care of an attorney in Los Angeles, the other in care of a bail bondsman in the same city. Neither address had been given as his own by petitioner, who was at the time incarcerated in the Los Angeles County Jail. Petitioner received one of the notices in June 1970; there is nothing in the record to suggest that he ever received the other. Petitioner filed a petition in this Court on September 13, 1971. On November 17, 1971, we entered an order of dismissal for lack of jurisdiction, on the ground that the petition was not filed in the time prescribed by statute. Petitioner appealed to the Ninth Circuit Court of Appeals which first dismissed the appeal, then vacated its dismissal order, vacated our order of dismissal, and remanded to us for reconsideration in light of Robinson v. Hanrahan, 409 U.S. 38 (1972).

Robinson concerned the notice requirements of the due process clause of the 14th amendment and, though not a tax case, bears a factual resemblance to the case at bar. Robinson was in custody in the Cook County Jail awaiting trial for armed robbery when the State of Illinois began proceedings against his automobile under the Illinois vehicle forfeiture statute. The State, knowing of Robinson's incarceration, nonetheless mailed notice of the forfeiture proceedings to his home address. Robinson did not receive the notice until his release in or around October 1970. In the meantime, a State trial court had ordered the forfeiture and sale of the vehicle after an ex parte hearing.

The Supreme Court found that Robinson had not been accorded due process of law:

‘An elementary and fundamental requirement of due process in any proceeding which is to be accorded finality is notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections.’ 339 U.S., at 314. More specifically, Mullane held that notice by publication is not sufficient with respect to an individual whose name and address are known or easily ascertainable. Similarly, in Covey v. Town of Somers, 351 U.S. 141 (1956), we held that, in the context of a foreclosure action by the town, notice by mailing, posting, and publication was inadequate where the individual involved was known by the town to be an incompetent without the protection of a guardian. See also Schroeder v. New York, 371 U.S. 208 (1962); Walker v. City of Hutchinson, 352 U.S. 112 (1956); New York v. New York, N.H. & H.R. Co., 344 U.S. 293 (1953).

In the instant case, the State knew that appellant was not at the address to which the notice was mailed and, moreover, knew also that appellant could not get to that address since he was at that very time confined in the Cook County jail. Under these circumstances, it cannot be said that the State made any effort to provide notice which was ‘reasonably calculated’ to apprise appellant of the pendency of the forfeiture...