McKaig v. Comm'r of Internal Revenue (In re Estate of McKaig)
| Decision Date | 03 December 1968 |
| Docket Number | Docket No. 3729-68. |
| Citation | 51 T.C. 331 |
| Parties | ESTATE OF FRANCIS P. MCKAIG, JR., DECEASED, AND NETTIE M. MCKAIG, PETITIONER v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT |
| Court | U.S. Tax Court |
OPINION TEXT STARTS HERE
William A. Brown, for the petitioners.
Andrew S. Coxe, for the respondent.
Respondent's motion to dismiss for lack of jurisdiction denied where respondent did not reasonably ascertain the ‘last known address' of petitioner. As a result, the deficiency notice was returned to respondent and was not delivered to petitioner until about 140 days after it was mailed to the old address. Petitioner filed her petition well within 90 days after thus receiving the deficiency notice. Held, such filing is considered timely.
This matter is before the Court on respondent's motion to dismiss the petition filed by Nettie M. McKaig for lack of jurisdiction on the ground that the petition was not filed within 90 days after the deficiency notice was allegedly mailed to an old address of petitioner and her deceased husband.
Respondent's motion was calendared for hearing in Washington. Pursuant to Rules 27(a) and 30(b), Tax Court Rules of Practice, petitioner, prior to the hearing, filed ‘Opposition to Motion to Dismiss and Brief in Support Thereof’ stating that personal appearance by petitioner or her counsel was not justified because of distance and ‘because of the absence of controverted facts.’
On February 12, 1968, the district director of internal revenue, Austin, Tex., by certified mail, allegedly mailed statutory notices of deficiency in income tax to the following taxpayers:
+----------------------------------------------------------------------------------------+
¦No. of certified ¦ ¦ ¦ ¦
+------------------+----------------------------------------------------+----------------¦
¦article ¦Name of addressee, street, and post office address ¦Years involved ¦
+------------------+----------------------------------------------------+----------------¦
¦257713 ¦Mrs. Nettie M. McKaig, 4654 Cedar St., ¦(¦1964 ¦
+------------------+----------------------------------------------------+-+--------------¦
¦ ¦Bellaire, Tex. 77401 ¦(¦1965 ¦
+------------------+----------------------------------------------------+-+--------------¦
¦ ¦ ¦(¦1966 ¦
+------------------+----------------------------------------------------+-+--------------¦
¦ ¦ ¦ ¦ ¦
+------------------+----------------------------------------------------+-+--------------¦
¦ ¦ ¦(¦1964 ¦
+------------------+----------------------------------------------------+-+--------------¦
¦257714 ¦Mr. Francis P. McKaig, Jr., 4654 Cedar St., ¦(¦1/1/65 to ¦
+------------------+----------------------------------------------------+-+--------------¦
¦ ¦Bellaire, Tex. 77401 ¦(¦5/21/65 ¦
+----------------------------------------------------------------------------------------+
Francis P. McKaig, Jr., died on May 21, 1965, leaving a will naming his surviving wife, Nettie M. McKaig, his sole beneficiary and appointing her executrix of his will.
The notice of deficiency addressed to Francis P. McKaig, Jr. (certified article 257714), was delivered. On May 8, 1968, Nettie filed a petition for ‘Francis P. McKaig, Jr., Deceased.’ The petition was given docket No. 2017-68. By order dated July 30, 1968, the caption was amended to read ‘Estate of Francis P. McKaig, Jr., Deceased, Nettie M. McKaig, Surviving Wife, Petitioner, v. Commissioner of Internal Revenue, Respondent.'1
The notice of deficiency addressed to Mrs. Nettie M. McKaig (certified article 257713) was not delivered but was returned to the Internal Revenue Service marked ‘Unclaimed.’ The Cedar Street address was crossed out and written above it was ‘3411 Timmons Lane, No. 207, Houston Texas 77027.’
The record does not show who crossed out the Cedar Street address and inserted the Timmons Lane address on the letter addressed to ‘Mrs. Nettie M. McKaig’ (certified article 257713). The record does show, however, that the following information was made known to respondent by the postal authorities:
The Bellaire Post Office Department received the letter and pursuant to a change of address notification, presumably filed by Nettie M. McKaig, the letter was forwarded to the Highland Village Station Post Office which is the post office serving an area of Houston, Texas, within which 3411 Timmons Lane, Number 207 is located. Post Office man number 2705Y of the Highland Village Station attempted to deliver the letter on February 14, 1968 at 3411 Timmons Lane.
Apparently, Mrs. McKaig was not home and a notice of attempt to deliver a letter sent by certified mail was left at the above address. The letter was then retained by the Highland Village Station for 15 days. Mrs. McKaig did not pick up the letter as instructed in the notification form and it subsequently was returned to the District Director of Internal Revenue, Austin, Texas, as ‘marked unclaimed.’
Upon receipt of the returned ‘unclaimed’ letter the Internal Revenue Service made no further attempt to deliver the letter to petitioner until it received Brown's letter dated June 5, 1968, mentioned below, and then it waited until July 1, 1968, before complying with Brown's request.
On August 1, 1968, a petition was filed for ‘Estate of Francis P. McKaig, Jr., Deceased, and Nettie M. McKaig’ which was given docket No. 3729-68. Nettie M. McKaig signed the petition and verified it under oath saying in part ‘that she has read the fore-going Petition and is familiar with the statements contained therein, and that the statements contained herein are true.’ Among other things, the petition in docket No. 3729-68 alleged:
Petitioner, hereby respectfully petitions for a redetermination of the deficiency set forth by the Commissioner of Internal Revenue in his notice of deficiency of July 1, 1968. This suit is a companion suit of the case known as Docket No. 2017-68. * * *.
The permanent residence address of Nettie M. McKaig is 4654 Cedar Street, Bellaire, Texas, 77401. The returns for the period in controversy were filed in the Office of the District Director at Austin, Texas.
II.
A. The Notice of Deficiency on which this Petition is based was mailed on July 1, 1968. This Petition was filed within 90 days thereafter. A copy of the Notice of Deficiency is attached hereto.
B. As shown on the Notice of Deficiency attached hereto, said Notice is dated February 12, 1968, the same date as the Notice of Deficiency involved in the companion case Docket No. 2017-68, and appears to have been addressed to Petitioner at 4654 Cedar Street, Bellaire, Texas, 77401, which is the same address to which the notice in Docket 2017-68 was addressed. Counsel for Respondent in Docket 2017-68 asserts that both the Notice of Deficiency in Docket 2017-68 and the Notice of Deficiency herein were mailed on February 12, 1968 to Petitioner at the same address indicated above, but that the Notice of Deficiency herein, although so addressed and so mailed, was returned to the sender by the Post Office Department, undelivered. Petitioner has no knowledge of such mailing, but would show that the Notice of Deficiency in Docket 2017-68, similarly addressed and simultaneously mailed, was delivered to Petitioner without difficulty and there is no reason why the Notice herein would not have been delivered if it were properly mailed simultaneously and addressed to the same address. Petitioner did not receive and did not have knowledge of the contents of the Notice of Deficiency attached hereto until July 2, 1968 after it had been mailed by Respondent's Attorney to Petitioner's Attorney on July 1, 1968. This Petition is filed promptly upon receipt thereof and at the first opportunity after acquiring knowledge of the Claim asserted by Respondent, and the Counsel for Respondent has given assurances that all matters requiring adjustment in either case will be considered regardless of the actual circumstances as to the alleged previous mailing of the Notice of Deficiency herein, and that efforts for collection will be withheld pending determination.
Francis P. McKaig, Jr. was, during his life, engaged in business for himself as an independent boat broker. * * * He always reported his income and paid the tax thereon as an individual proprietorship reporting on the cash basis. His wife, Nettie M. McKaig knew substantially nothing of his business affairs and had absolutely no knowledge of his income tax returns or his tax accounting, and she never filed a joint tax return nor a separate tax return of her own. She had no income of her own nor any income under her management and control. * * *
Over 8 months prior to the mailing on February 12, 1968, of the two statutory notices of deficiency, the district director of internal revenue, Austin, Tex., wrote a letter dated June 6, 1967, to ‘Mrs. Nettie M. McKaig, 3400 Timmons Lane, Apt. 46, Houston, Texas 77027’ the body of which is as follows:
We recently learned that you are the fiduciary in the Estate of Francis P. McKaig, Jr., Deceased.
Although the Federal tax liability of Mr. McKaig has not yet been determined, we feel that we should at this time mention the provisions of law found in Title 31, U.S.C. 191. 192, Revised Statutes 3466 and 3467.
Section 3466 provides that whenever any person indebted to the United States is insolvent, the debts due the United States shall first be satisfied. Section 3467 provides generally that every receiver, administrator, executor, assignee or other...
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