Judd v. Commissioner
| Decision Date | 23 May 1990 |
| Docket Number | Docket No. 23024-88. |
| Citation | 1990 TC Memo 253,59 TCM (CCH) 663 |
| Parties | Lewis B. Judd and Vivienne Judd v. Commissioner. |
| Court | U.S. Tax Court |
William F. De Francis, 120 N. Main St., New City, N.Y., for the petitioners. Robert W. Sadowski, for the respondent.
Memorandum Findings of Fact and Opinion
This matter is before us to consider petitioners' Motion to Dismiss For Untimely Receipt of Notice of Deficiency (Motion to Dismiss for Lack of Jurisdiction), filed November 6, 1989. The issues for consideration are: (1) Whether petitioners' receipt (other than by mail) of a notice of deficiency which had been mailed, but not addressed to their "last known address," at a time when the period for assessment would have expired, but for the issuance of said notice, would result in our jurisdiction; and (2) whether the petition herein was timely filed.
Petitioners, who at all times pertinent to this proceeding were married, had their legal residence at Jupiter, Florida, at the time of the filing of their petition herein. Petitioners' 1984 Federal income tax return, which was received by respondent June 18, 1985, reflected "MAN O WAR CAY, ABACO, BAHAMAS" (Bahamas address) as their mailing address on a preprinted label provided to petitioners by respondent. Petitioners had resided at the Bahamas address from about 1970 until sometime in 1986, when petitioners moved to Jupiter, Florida. Petitioners' 1987 Federal income tax return, reflected their address as "C/O GOLDING, 105 Eganfuskee Street, Jupiter, FL 33477" (Jupiter address) and also was printed on a pre-addressed label provided to petitioners by respondent.
On June 3, 1988, subsequent to petitioners' filing of their 1987 return, respondent mailed a notice of deficiency for petitioners' 1984 taxable year to their Bahamas address. The notice was received by the Bahamian postal representative on Man O War Cay, a locality with a population approximating 265 people. On or about August 10, 1988, Jerry Tubbs (Tubbs), a friend of petitioners, was at Man O War Cay on business and the Bahamian postal representative inquired whether Tubbs knew of the whereabouts of petitioners. The Bahamian postal representative gave the notice to Tubbs for delivery to petitioners. Tubbs delivered the notice to petitioners at Jupiter, Florida on or about August 12, 1988. The petition in this case was mailed on September 1, 1988, and filed on September 6, 1988.
OpinionPetitioners assert that we do not have jurisdiction and that this case should be dismissed because the notice was not sent to their last known address and the 3-year statutory period within which the tax could be assessed had expired before August 12, 1988, when they actually received notice of respondent's determination. Respondent agrees that the notice had not been sent to petitioners's last known address, but that a notice had been mailed to petitioners, they received actual notice and they timely petitioned, providing this Court with jurisdiction. We agree with respondent.
The parties agree that respondent determined a deficiency with respect to petitioners. It is also agreed that respondent did not mail a notice to petitioners' "last known address." Petitioners argue that respondent's failure to mail a notice to their last known address raises the fundamental issue of whether respondent issued and mailed a notice or otherwise attempted to communicate a deficiency determination. More specifically, petitioners argue that respondent's failure to mail a notice to their last known address as required by section 62121, may be tantamount to a complete failure by respondent to mail a deficiency notice. They conclude that the 3-year period for assessing a deficiency had expired and that respondent is barred from assessing any tax deficiency.
Respondent, under the standard of Abeles v. Commissioner Dec. 45,203, 91 T.C. 1019 (1988), was charged with knowledge that petitioners had established a new residence at the Jupiter address. Although respondent failed to comply with the last known address requirement of section 6212(b), he did comply with the more basic requirements of sections 6212(a), 6213(a), and 6503(a)(1) by issuing, attempting to mail or otherwise communicate a deficiency determination to petitioners. Miller v. Commissioner Dec. 46,435, 94 T.C. ___, ___ (March 8, 1990) (slip op. at 19-23). Simply stated, the notice was not mailed to petitioners' "last known address" but was nonetheless timely mailed and respondent's failure to comply with the last known address requirement of section 6212(b)(2) did not invalidate the notice. Respondent argues that he mailed a notice to petitioners; that they received actual notice; and that they timely petitioned this Court providing for our timely acquisition of jurisdiction.
If the Commissioner determines that there is a deficiency in income tax, respondent must notify or attempt to notify the taxpayer(s) of the deficiency determination. Sec. 6212(a).2 With some exceptions not applicable here, respondent is precluded from assessing and collecting any tax deficiency without first mailing a notice of deficiency under section 6212(a) or otherwise notifying the taxpayer of the deficiency. Sec. 6213(a).
Although rarely focused upon, it should be understood that respondent is not limited to the use of a mailing by certified or registered mail to effectuate notice of his deficiency determination. Respondent may use regular mail. See McKay v. Commissioner Dec. 44,346, 89 T.C. 1063, 1069 n.7 (1987), affd. 89-2 USTC ¶ 9574 886 F.2d 1237 (9th Cir. 1989), and cases cited therein. If respondent uses certified or registered mail addressed to a taxpayer's "last known address," then he is protected and within a safe harbor as to the requirements of sections 6212 and 6213. However, actual or direct notice or delivery suffices to meet the requirements of section 6212. Tenzer v. Commissioner 61-1 USTC ¶ 9186, 285 F.2d 956, 957-958 (9th Cir. 1960); Clodfelter v. Commissioner 76-1 USTC ¶ 9166, 527 F.2d 754, 757 n.7 (9th Cir. 1975), affg. Dec. 31,034 57 T.C. 102 (1971).
Respondent may issue a valid notice even though he fails to meet the mailing requirements of section 6212(a). Section 6212(b) is to guide respondent in determining where to mail the notice of deficiency. Paragraph (1) of section 6212(b) provides, as follows:
(1) Income and gift taxes and certain excise taxes.—In the absence of notice to the Secretary under section 6903 of the existence of a fiduciary relationship, notice of a deficiency in respect of a tax imposed by subtitle A, chapter 12, chapter 42, chapter 43, chapter 44, or chapter 45 if mailed to the taxpayer at his last known address, shall be sufficient for purposes of subtitle A, chapter 12, chapter 42, chapter 43, chapter 44, chapter 45, and this chapter even if such taxpayer is deceased, or is under a legal disability, or, in the case of a corporation, has terminated its existence.
In the present case respondent was constructively charged with and had actual knowledge of petitioners' Jupiter address. Although respondent did not meet the last known address requirements, the joint deficiency notice was a notice of a deficiency determination within the meaning of section 6212(a). Further, it notified petitioners that a deficiency had been determined against them; and it gave petitioners the opportunity to petition this Court for a redetermination of the deficiency without having to first pay the deficiency. See Abeles v. Commissioner, supra at 1028; McKay v. Commissioner, 89 T.C. at 1067; Frieling v. Commissioner Dec. 40,284, 81 T.C. 42, 46 (1983). We have held that the mailing of a notice of deficiency to a taxpayer's last known address under section 6212(b) is a safe harbor assuring respondent that the notice is valid for purposes of section 6212(a). Frieling v. Commissioner, supra. Consequently, a notice that is mailed to the taxpayer's last known address will toll the period for assessment even if the notice is not received by the taxpayer. King v. Commissioner 88-2 USTC ¶ 9521, 857 F.2d 676, 681 (9th Cir. 1988), affg. on other grounds Dec. 43,864 88 T.C. 1042 (1987); Wallin v. Commissioner 84-2 USTC ¶ 9768, 744 F.2d 674, 676 (9th Cir. 1984), revg. and remanding a Memorandum Opinion of this Court Dec. 39,861(M); United States v. Zolla 84-1 USTC ¶ 9175, 724 F.2d 808, 810 (9th Cir. 1984); DeWelles v. United States 67-1 USTC ¶ 9403, 378 F.2d 37, 39-40 (9th Cir. 1967); Alta Sierra Vista, Inc. v. Commissioner Dec. 32,649, 62 T.C. 367, 372 (1974), affd. without published opinion 538 F.2d 334 (9th Cir. 1976); Lifter v. Commissioner Dec. 31,887, 59 T.C. 818, 821 (1973).
In certain relatively unique circumstances, however, the mailing of a deficiency notice which is not addressed to the taxpayer's last known address may result in our acquisition of jurisdiction. In a limited but established line of cases an incorrectly addressed notice has resulted in our jurisdiction where the taxpayer receives "actual notice of the contents of the deficiency notice without prejudicial delay * * *." Clodfelter v. Commissioner 76-1 USTC ¶ 9166, 527 F.2d 754, 757 (9th Cir. 1975), affg. Dec. 31,034 57 T.C. 102 (1971); see also McKay v. Commissioner, supra; Frieling v. Commissioner, supra at 51-53; Goodman v. Commissioner Dec. 35,909, 71 T.C. 974, 977-978 (1979); Zaun v. Commissioner Dec. 32,616, 62 T.C. 278 (1974); Brzezinski v. Commissioner Dec. 20,639, 23 T.C. 192, 195 (1954); see also Commissioner v. Stewart 51-1 USTC ¶ 9151, 186 F.2d 239 (6th Cir. 1951), revg. a Memorandum Opinion of this Court Dec. 17,301(M). By providing the safe harbor of section 6212(b), Congress did not intend to invalidate actual rather than constructive methods of communicating respondent's determination. McKay v. Commissioner, 89 T.C. at 1068 n.6.; Frieling v. Commissioner, supra, contains a discussion of the "actual notice" principle, as follows:
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