Mollet v. Comm'r of Internal Revenue , Docket No. 3633–83.

• Decision Date: 18 April 1984
• Docket Number: Docket No. 3633–83.
• Citation: 82 T.C. 618,82 T.C. No. 49
• Parties: MERLIN L. MOLLET, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
• Court: U.S. Tax Court

82 T.C. 618

82 T.C. No. 49

MERLIN L. MOLLET, Petitioner

v.COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 3633–83.

United States Tax Court

Filed April 18, 1984.

Under the facts presented, Held, that petitioner has failed to prove that he gave respondent clear and concise oral notification of a change of address to Florida from Minnesota prior to the issuance of respondent's statutory notice for the years 1978 and 1979; Held, further, that petitioner failed to prove he had given such notice through the filing of returns for 1980 and 1981 showing a Florida address; Held, further, that petitioner's allegation of a Florida legal residence in a petition filed with the Court in another case, and served on respondent's counsel by the Court, does not constitute adequate notification to respondent of a change of address for purposes of section 6212. Petitioner's motion to dismiss for lack of jurisdiction denied; respondent's motion to dismiss granted. Shannon M. O'Toole, for the petitioner.

Dale L. Newland and Gerald W. Leland, for the respondent.

KORNER, Judge:

This matter is before the Court on cross motions by the parties to dismiss for lack of jurisdiction. Petitioner's motion is based upon the alleged failure of respondent to send his statutory notice of deficiency with respect to the years 1978 and 1979 to petitioner at his last known address, as required by section 6212(b)(1).¹ Respondent's motion to dismiss is based upon the alleged failure of petitioner to file his petition in this Court within 90 days of the issuance of respondent's statutory notice of deficiency, as required by section 6213.

Argument on both motions was heard at a trial session of the Court at St. Paul, Minnesota. The record consists of attachments to respondent's motion to dismiss and testimony and exhibits received at the hearing.

FINDINGS OF FACT

At the time of filing his petition herein, petitioner was a resident of St. Petersburg, Florida.

For a number of years prior to the years which are before the Court and continuously up to the time of trial herein, petitioner has been employed as a commercial airline pilot at Republic Airlines (and its predecessor North Central Airlines). The home base of this airline is at the Minneapolis-St. Paul Airport, and most of the flights which petitioner flew either began or terminated there.

In addition to his employment as an airline pilot, petitioner, at some time prior to 1976, acquired a tract of farm land near Farmington, Minnesota, where he built a home and commenced a horse breeding and training operation known as Mollet's Quarter Horse Farm. Petitioner established his residence there, and his individual income tax returns for the years 1976 through 1979 were filed from that location, shown on his returns as Route 2, Farmington, Minnesota 55024.²

In early 1979, petitioner's returns for the years 1976 and 1977 were assigned for examination to respondent's revenue agent Harold Shogren, located in the town of Edina, Minnesota. During the course of this examination, which lasted from January 1979 until June 1980, Mr. Shogren met with petitioner at least twice, and also met with petitioner's representative, Mr. John F. Dolezal, C.P.A., of Bethel, Minnesota. In addition, he talked to petitioner on the telephone at various times concerning the issues involved in his case. In these conversations, as well as other attempts to reach petitioner by telephone or correspondence, Mr. Shogren used petitioner's telephone number or mailing address in Minnesota, where petitioner had a maid and an answering service to receive calls on the many occasions when he was not at home; his flying duties caused him to be away from home frequently. In June 1980, and prior to completing his work with respect to petitioner's years 1976 and 1977, Mr. Shogren visited petitioner at the farm in Farmington, at which time petitioner indicated to him that he was considering selling the farm and moving the horse operation to Florida. Mr. Shogren was aware that petitioner owned a condominium in Florida, which he visited from time to time. He was apparently not told of any specific dates or locations when or where this move would take place.

Mr. Shogren's proposed adjustments to petitioner's income for the years 1976 and 1977 involved, inter alia, the disallowance of claimed losses with respect to the Mollet Quarter Horse Farm operation. This result being unsatisfactory to petitioner, he took an administrative appeal within the Internal Revenue Service, and on June 9, 1981, petitioner and his representative Mr. Dolezal had a conference with respect to the years 1976 and 1977 with respondent's appeals officer Alfred J. Anderson, in St. Paul, Minnesota. Mr. Anderson was made aware at the conference that petitioner was planning to sell his Minnesota farm and move his horse operation to Florida at some future date.

Since the parties were unable to reach a mutually satisfactory settlement of the case involving 1976 and 1977, respondent issued his statutory notice of deficiency with respect to these years on December 8, 1981, addressed to petitioner at the Minnesota address. In response thereto, petitioner timely filed a petition with this Court on March 8, 1982 (Docket No. 5151–82), in which petitioner, without challenging the propriety of the address used in respondent's statutory notice, alleged that he was an individual with legal residence at 4904 38th Way South, St. Petersburg, Florida 33711. Respondent's answer to this petition, filed April 5, 1982, neither admitted nor denied petitioner's allegation of Florida legal residence, but alleged that petitioner's last known address at the time of mailing of the statutory notice was the Minnesota address. No reply thereto was filed by petitioner.

A week before the issuance of respondent's statutory notice with respect to the years 1976 and 1977, respondent's revenue agent Tom Healy, also located in Edina, Minnesota, began an examination of petitioner's tax returns for the years 1978 and 1979. Since the principal issue for these two years was the same as that presented for the years 1976 and 1977, Mr. Healy discussed the case with appeals officer Anderson. On December 3, 1981 he sent a form letter to petitioner at the Minnesota address, setting up an appointment to meet with petitioner at Mr. Healy's office on December 28, 1981, and requesting petitioner to produce certain books and records for his examination. He also called petitioner regarding this appointment and sent him a follow-up note reminding him of the appointment, on December 17, 1981, all at the Minnesota address. Petitioner did not keep the appointment, but called Mr. Healy on the afternoon of December 28, 1981, explaining that he was out of town and unable to keep the appointment.

Mr. Healy also had one or two telephone conversations with petitioner's representative Mr. Dolezal. Since Mr. Dolezal did not have a power of attorney to represent petitioner for the years 1978 and 1979, Mr. Healy felt that he was not free to discuss the merits of these years with Mr. Dolezal, and their conversations were apparently limited to a discussion of the fact that the same principal issue for the years 1976 and 1977 was under review in the Internal Revenue Service, and for this reason it might not be worthwhile to make an extensive examination of the same issues for 1978 and 1979. In these conversations, Mr. Dolezal did not tell Mr. Healy that petitioner had moved his residence to Florida, nor did he supply Mr. Healy with a Florida address.

On February 23, 1982, Mr. Healy concluded that he would prepare his report for the years 1978 and 1979 on the basis of disallowing the claimed losses concerning Mollett's Quarter Horse Farm, and his revenue agent's report containing this as well as other adjustments was mailed to petitioner at the Minnesota address on March 11, 1982. This report was largely based upon the investigation and findings of revenue agent Shogren for the years 1976 and 1977.

The record does not disclose that there was any further communication between petitioner, or his representative, and Mr. Healy, and on September 15, 1982, respondent's statutory notice for the years 1978 and 1979 was issued, was mailed to petitioner at the Minnesota address, and was received there. At some later undisclosed date, the statutory notice was found in a drawer at petitioner's farm in Minnesota, either by petitioner's daughter or housekeeper, and was forwarded, unopened, to Mr. Dolezal,³ who received it after the 90-day period for filing a petition with this Court had expired. Petitioner then mailed his petition to the Court in the instant case on February 18, 1983, attaching a copy of said notice of deficiency as required by Rule 34, and alleging once again that his legal residence was at 4904 38th Way South, St. Petersburg, Florida 33711. The petition was received and filed by the Court on February 22, 1983. Respondent's motion to dismiss for lack of jurisdiction, on the grounds of the late filing of the petition herein, then followed, and petitioner countered with a cross-motion to dismiss for lack of jurisdiction, on the grounds that respondent's statutory notice had not been sent to his last address known to respondent.

Seven months after the issuance of respondent's statutory notice in the instant case, on April 15, 1983, respondent's collection office in Doraville, Georgia, sent form collection letters to petitioner at 4904 38th Way South, St. Petersburg, Florida 33711, regarding the alleged unpaid deficiencies in tax for the years 1978 and 1979, and similar collection letters were also sent to petitioner at the same address for these years on May 6, 1983. At no time did petitioner or Mr. Dolezal give specific written notification to respondent's representatives, with whom they were dealing, that petitioner had changed his mailing address to Florida.

OPINION

The parties each have moved the Court to dismiss this...