Luhring v. Glotzbach

• Decision Date: 28 May 1962
• Docket Number: No. 8527.,8527.
• Citation: 304 F.2d 556
• Parties: Lester L. LUHRING and Betty W. Luhring, Appellants, v. Clifford W. GLOTZBACH, District Director of Internal Revenue, Appellee.
• Court: U.S. Court of Appeals — Fourth Circuit

304 F.2d 556 (1962)

Lester L. LUHRING and Betty W. Luhring, Appellants, v. Clifford W. GLOTZBACH, District Director of Internal Revenue, Appellee.

No. 8527.

United States Court of Appeals Fourth Circuit.

Argued March 22, 1962.

Decided May 28, 1962.

George H. Bowers, Jr., Norfolk, Va. (William C. Baskett and Bowers & Baskett, Norfolk, Va., on brief), for appellants.

Giora Ben-Horin, Attorney, Department of Justice (Louis F. Oberdorfer, Asst. Atty. Gen., Lee A. Jackson and Meyer Rothwacks, Attorneys, Department of Justice, Claude V. Spratley, Jr., U. S. Atty., and Roger T. Williams, Asst. U. S. Atty., on brief), for appellee.

Before SOPER, HAYNSWORTH and BOREMAN, Circuit Judges.

SOPER, Circuit Judge.

Lester L. and Betty W. Luhring, husband and wife, brought suit against the District Director of Internal Revenue at Richmond, Virginia, to enjoin the collection of additional income taxes assessed against them for the taxable years 1957 and 1958. They alleged that notices of deficiency had not been mailed to them at their "last known address" under 26 U.S.C. § 6212(b)¹, and hence that the assessment of the taxes and their collection was illegal and subject to injunction under 26 U.S.C. § 6213(a)². A temporary restraining order was issued by the District Court and a hearing was held on the taxpayers' motion for a preliminary injunction at which the testimony of Walter G. Grigg, Jr., an Internal Revenue agent assigned to the District Director at Richmond, was received; but, on November 9, 1961, the District Court denied the motion, and from that ruling the taxpayers appeal.

There is little if any dispute over the facts which may be summarized as follows.

In 1958 and 1959 the taxpayers filed timely joint federal income tax returns for the taxable years 1957 and 1958, respectively, with the District Director at Richmond, Virginia, giving their address in the former return as 121 Sir Oliver Road, Norfolk, Virginia, and in the latter, as 628 Barcliff Road, Norfolk, Virginia. In June, 1959, the taxpayers moved to 941 Eucalyptus Street, Sebring, Florida, and in March, 1960, they moved from that address to 245 Algiers Avenue, Lauderdale-by-the-Sea, Florida. They filed a forwarding address with the Post Office in Sebring, but no change of address for either move was ever filed with the District Director at Richmond.

In April of 1960, the taxpayers filed a joint return with the District Director at Jacksonville, Florida, for the taxable year 1959, which stated their address correctly in Lauderdale-by-the-Sea, and refunds subsequently found to be due thereon were mailed to them at that address from the Internal Revenue Service Center in Kansas City, Missouri. In December of that year they also received at their Lauderdale address an instruction booklet, "Federal Income Tax Forms For 1960", containing income tax return forms. Again in 1961 the taxpayers filed a return for the taxable year 1960, and received a refund in the same manner as in 1960.

In late 1960 or early 1961, Agent Grigg, while investigating the returns of the taxpayers for the years 1957 and 1958, discovered that they no longer lived in Norfolk. He asked Lester L. Luhring's brother for the taxpayers' new address, but the brother refused to disclose it. Thereafter, the agent learned of the taxpayers' Sebring, Florida, address from the Post Office Department in Norfolk, and prior to April 1, 1961, a statutory notice of deficiency was mailed to the taxpayers at that address by certified mail. However, the certified mail was not called for and was returned to the District Director at Richmond on or about April 20, 1961, marked "unclaimed". No other notice of deficiency was mailed to the taxpayers, and they did not at any time receive a copy of the notice.

In July, 1961, the taxpayers received on Forms 17-A notices and demands of payment of additional taxes assessed on July 14, 1961, in the amount of $1,295.04, plus interest, for the year 1957, and $1,390.73, plus interest, for the year 1958. These forms had been mailed from the District Director at Richmond to the taxpayers' Sebring, Florida, address, and had been forwarded to them at their Lauderdale-by-the-Sea address by the Post Office. Shortly thereafter, on August 4, 1961, the taxpayers instituted the present action.

The sole question is whether the notice of deficiency for the years 1957 and 1958 was mailed to the last known address of the taxpayers within the meaning of the statute. If this was done the notice was valid even though it was not actually received by the taxpayers. Pfeffer v. Commissioner, 2 Cir., 272 F. 2d 383; Commissioner v. Rosenheim, 3 Cir., 132 F.2d 677. Ordinarily a notice of deficiency is sent to the address of the taxpayer shown on his return. In this case the taxpayers had moved from the Norfolk address shown on their return without notifying the District Director. The Internal Revenue agent in charge of the examination of the returns found that the taxpayers were no longer at the Norfolk address and, upon inquiry at the Norfolk Post Office, was given their Sebring address. In his report on the case he gave this address to the District Director and, accordingly, the notice of deficiency for the years 1957-1958 was sent to Sebring. The taxpayers do not dispute that the notice was sent to the address last known to the tax officials at Richmond, but they contend that this was not their last known address within the meaning of the statute because their later address at Lauderdale-by-the-Sea was known to the tax officials who processed their tax returns for subsequent years, and since the notice was not sent to this address their liability for additional taxes has not been validly established.

We are in agreement with the District Judge that this position is untenable. We must bear in mind the vast domain over which the Commissioner of Internal Revenue, as the delegate of the Secretary of the Treasury, presides in the performance of his duties, and the numerous tax officials whom a taxpayer, moving from place to place within the United States may encounter in the examination of the tax returns which he is obliged to file from year to year. The statute, 26 U.S.C. § 6091(b) (1) requires that individual returns shall be made in the Internal Revenue District in which is located the legal residence or principal place of business of the person making the return; and when the examination of a return by the tax officials in that District indicates that there is a deficiency in the tax shown in the return, certain procedural steps, looking toward an adjustment, are customarily taken and if they fail the notice of deficiency provided by § 6212 must be sent to the taxpayer.

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