Epstein v. Commissioner, Docket No. 17564-87.
| Decision Date | 11 September 1989 |
| Docket Number | Docket No. 17564-87. |
| Citation | 58 TCM (CCH) 128,1989 TC Memo 498 |
| Parties | Michael Epstein v. Commissioner. |
| Court | U.S. Tax Court |
Zevie B. Schizer, 1 E. 57th St., New York, N.Y., Thomas S. Levine, for the petitioner. Theodore R. Leighton, for the respondent.
Memorandum Findings of Fact and Opinion
This case is before the Court on respondent's motion to dismiss for lack of jurisdiction on the ground that the petition was not timely filed pursuant to section 6213.1 Petitioner has not moved to dismiss, but he also takes the position that we lack jurisdiction, albeit for different reasons. In fact, the petition does not even allege that a notice of deficiency, which is a prerequisite to our jurisdiction, was mailed to petitioner. Likewise, in his reply petitioner denies respondent's allegations that a notice of deficiency was ever mailed to him. It is obvious and uncontested that we lack jurisdiction. Nevertheless, we must proceed to sift through the evidence presented by the parties to determine the reasons for what is already obvious. See Pietanza v. Commissioner Dec. 45,576, 92 T.C. 729 (1989).
We held a hearing on respondent's motion on June 22, 1988, and received stipulations, testimony, and exhibits. The findings of fact and opinion are combined for simplicity.
Petitioner resided at 27 Prospect Park West, Brooklyn, New York when he filed his petition in this case. He has lived at this address continuously since 1973. The petition in this case was received by the Tax Court on June 12, 1987 and was contained in an envelope bearing a postmark date of June 10, 1987.
Section 6213(a) provides that a petition must be filed with the Tax Court within 90 days from the date a statutory notice of deficiency is mailed to a taxpayer residing in the United States. If a petition is not filed within that 90-day period, this Court does not acquire jurisdiction of the case. Keado v. United States 88-2 USTC ¶ 9489, 853 F.2d 1209, 1212 (5th Cir. 1988); Cataldo v. Commissioner Dec. 32,032, 60 T.C. 522 (1973), affd. per curiam 74-2 USTC ¶ 9533, 499 F.2d 550 (2d Cir. 1974); Rappaport v. Commissioner Dec. 30,635, 55 T.C. 709 (1971), affd. without opinion 456 F.2d 1335 (2d Cir. 1972); August v. Commissioner Dec. 30,260, 54 T.C. 1535, 1536 (1970).
Respondent alleges that two separate notices of deficiency, both relating to petitioner's 1982 taxable year, were mailed via certified mail to petitioner's Brooklyn, New York address on January 17, 1986 and October 31, 1986.2 Noting that the petition in this case was filed 421 days after the mailing date of the first statutory notice and 224 days after the mailing date of the second statutory notice, respondent has moved this Court to dismiss the petition as untimely.
In opposition to respondent's motion, petitioner claims that he did not receive either one of these notices because respondent failed to properly follow established mailing procedures. Petitioner argues, therefore, that this case should be dismissed for lack of jurisdiction on the ground that respondent failed to properly provide notice, as required prior to assessment by section 6213(a). See Pietanza v. Commissioner, supra at 736; Keeton v. Commissioner Dec. 36,966, 74 T.C. 377, 379 (1980); O'Brien v. Commissioner Dec. 32,700, 62 T.C. 543, 548 (1974). Dismissal on the ground urged by petitioner would presumably bar any further attempts by respondent to assess additional taxes for the year in issue, the statute of limitations having expired. See secs. 6501(a) and 6503. Respondent bears the burden of proving that each statutory notice of deficiency was properly mailed. Barrash v. Commissioner Dec. 44,356(M), T. C. Memo. 1987-592, affd. without published opinion 862 F.2d 872 (5th Cir. 1988).
Petitioner contends that he was first apprised of the existence of a deficiency when he received a notice from the Internal Revenue Service, dated March 16, 1987, titled Statement of Tax Due on Federal Tax Return (Form 3552), for his 1982 tax year. A copy of the Form 3552 was attached to the petition filed in this case and indicates a balance due as follows:
ADD TAX .............. $343,254.00
DEL PEN .............. 17,162.70
NEG PEN .............. 17,162.70
INTEREST ............. 191,127.58
___________
$568,706.98
Respondent introduced evidence of two statutory notices of deficiency. The first statutory notice of deficiency is dated January 17, 1986. In that notice, respondent determined that petitioner and Ruth Epstein3 were liable for the following deficiency and additions to tax for taxable year 1982:
Additions to Tax
Deficiency Sec. 6653(a)(1) Sec. 6653(a)(2) Sec. 6651(a)(1) Sec. 6661
$25,274.00 $10,125.28 50 percent of $1,263.70 $2,527.40
interest due
on $106,967.00
Respondent determined that petitioner failed to report dividend income of $47,828, underreported interest income by $1,244, and overstated his medical expense deduction by $1,472. Several computational adjustments were also included in the January 17, 1986 statutory notice.
The second statutory notice of deficiency is dated October 31, 1986. In that notice, respondent determined that petitioner and Ruth Epstein were liable for the following deficiency and additions to tax for taxable year 1982:
Additions to Tax
Deficiency Sec. 6653(a)(1) Sec. 6653(a)(2) Sec. 6651(a)(1)
$343,254.00 $17,162.70 50 percent of $17,162.70
interest due on
$343,254.00
This notice disallowed a claimed partnership loss of $686,048. The claimed partnership loss is petitioner's distributive share of a $1,636,946 loss reported by the "Mike Epstein & Co." partnership on its 1982 tax return.4 The statutory notice of deficiency also made a number of minor computational adjustments, none of which were included in the January 17, 1986 statutory notice.
As a preliminary matter, we note that the Form 3552 received by petitioner, and on which he based his petition, requests payment based solely on an assessment of the deficiency set forth in the October 31, 1986 statutory notice. The October 31, 1986 notice takes into account the adjustments already made in the January 17, 1986 notice, but there is no evidence in the record indicating whether respondent has made an assessment of the deficiency set forth in the January 17, 1986 statutory notice. All we can be sure of is that the tax bill contained on the Form 3552 does not include any amount that might have been assessed pursuant to the first notice. Since the tax bill on the Form 3552 was the basis for the petition and is the only deficiency amount in issue, will will confine our opinion to the validity of the October 31, 1986 notice.
We find that respondent has submitted persuasive evidence that the statutory notice of deficiency was properly mailed to petitioner on October 31, 1986. We also find that the petition was filed more than 90 days after the date the second notice of deficiency was mailed to petitioner. We will therefore grant respondent's motion to dismiss this case for lack of jurisdiction.
Gail Bugden was employed as a statutory notice control clerk at the Internal Revenue Service Brookhaven Service Center during October 1986. Ms. Bugden testified concerning the procedure that she followed while preparing manually processed statutory notices of deficiency for mailing. Although she could not recall preparing the statutory notice dated October 31, 1986, Ms. Bugden recognized her handwriting on the face of the notice.
After receiving a statutory notice of deficiency and accompanying case file from a tax examiner, Ms. Bugden would date stamp the first and second pages of the notice, stamp the word "certified" on the first page of the notice, write a certified mail number on the first page of the notice, and stamp the name of the Service Center Director on the first page of the notice. On a typical day, Ms. Bugden would prepare between five and ten statutory notices for mailing.
To accompany each separate mailing of statutory notices, Ms. Bugden would prepare a Postal Service Form 3877, Application for Registration or Certification (Form 3877). On the Form 3877, Ms. Bugden would list each taxpayer's name and address, the certified mail number assigned to each statutory notice, the Internal Revenue Service return address, and the total number of statutory notices prepared for mailing and listed on the form. The line entries were listed on the Form 3877 in sequential certified mail number order and all of the statutory notices of deficiency listed on a particular Form 3877 should have borne the same date. Ms. Bugden recognized her handwriting on the Form 3877 that she prepared to accompany the October 31, 1986 statutory notice of deficiency.
The certified mail number assigned to and written on each statutory notice of deficiency was also handwritten on a blank line on the window envelope in which the notice was to be mailed. After preparing each statutory notice, envelope, and accompanying Form 3877, Ms. Bugden would attach the notice and corresponding envelope to the case file pertaining to the particular taxpayer and hand carry the file to an Internal Revenue Service tax examiner for review. The Form 3877 remained on Ms. Bugden's desk and was not checked by the tax examiner. If satisfied that the statutory notice of deficiency had been properly prepared by the statutory notice control clerk, the tax examiner then placed his or her initials on the lower right hand corner of the first page of the statutory notice of deficiency. The initials "C.M." are located in the lower right hand corner of the first page of the October 31, 1986 statutory notice of deficiency.
After receiving the case file containing the initialed...
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