Rochelle v. Comm'r of Internal Revenue, 18483–99.
| Decision Date | 24 May 2001 |
| Docket Number | No. 18483–99.,18483–99. |
| Citation | 116 T.C. No. 26,116 T.C. 356 |
| Parties | James A. ROCHELLE, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent |
| Court | U.S. Tax Court |
OPINION TEXT STARTS HERE
Taxpayers petitioned for redetermination of deficiencies 56 days after expiration of 90-day period for filing. Parties filed cross-motions to dismiss for lack of jurisdiction. The Tax Court, Vasquez, J., held that: (1) IRS' failure to provide due date for filing petition did not render notice of deficiency invalid, and (2) petition was not timely filed.
IRS' motion granted.
Judgment affirmed, 293 F3d 740. R mailed to P a notice of deficiency which failed to provide a date in the section entitled “Last Day to File a Petition With the United States Tax Court” (i.e., the petition date). Although P received the notice within several days of its mailing, P did not file his petition with this Court until 56 days after expiration of the 90–day period prescribed by sec. 6213(a), I.R.C.Held: R's failure to provide the petition date in accordance with sec. 3463(a) of the Internal Revenue Service Restructuring and Reform Act of 1998, Pub.L. 105–206, 112 Stat. 685, 767, does not render the notice of deficiency invalid.Held, further, P's petition is not rendered timely by the operation of the last sentence of sec. 6213(a), I.R.C.Lawrence R. Jones, Jr., for petitioner.
Denise G. Dengler, for respondent.
Respondent determined the following deficiencies in Federal income tax and section 6662(a) accuracy-related penalties:
+------------------------------------+
¦Year¦Deficiency¦Penalty Sec. 6662(a)¦
+------------------------------------¦
¦ ¦
+------------------------------------¦
¦1995¦$229,096 ¦$45,819 ¦
+----+----------+--------------------¦
¦1996¦34,549 ¦6,910 ¦
+------------------------------------+
This case is before the Court on the parties' cross-motions to dismiss for lack of jurisdiction. Petitioner has moved for dismissal in his favor on the ground that respondent's notice of deficiency is invalid. Respondent moves for dismissal in his favor on the ground that the petition in this case was not timely filed. A hearing was held with respect to these motions on February 5, 2001.
Unless otherwise indicated, all section references are to the Internal Revenue Code as amended, and all Rule references are to the Tax Court Rules of Practice and Procedure.
Petitioner resided in Austin, Texas at the time the petition in this case was filed. Petitioner is an attorney who performed legal services in the Dallas, Texas, area during the years at issue. The facts necessary to decide the motions are few, and they are based on the parties' stipulations.
On July 20, 1999, respondent sent petitioner a notice of deficiency via certified mail.1 The notice was sent to petitioner's last known address in Austin, Texas. Although the exact date of delivery cannot be ascertained from the U.S Postal Service delivery receipt, the parties agree that petitioner received the notice of deficiency on or about July 23, 1999.
After the heading “Date” located in the upper right corner of the notice of deficiency appears a stamped date of July 20, 1999. Also in the upper right corner of the notice of deficiency appears a heading entitled “Last Day to File a Petition With the United States Tax Court”. The space immediately following this heading is blank, and nowhere else within the notice does the Commissioner provide the specific calendar date on which petitioner can last timely file a petition with this Court. The body of the notice of deficiency does, however, contain the following passage regarding the timing considerations for filing a petition with this Court:
If you want to contest this deficiency in court before making any payment, you have 90 days from the above mailing date of this letter (150 days if addressed to you outside of the United States) to file a petition with the United States Tax Court for a redetermination of the deficiency. * * * The time in which you must file a petition with the Court (90 or 150 days as the case may be) is fixed by law and the Court cannot consider your case if your petition is filed late.
Petitioner mailed his petition to the Court on December 10, 1999, and the petition was received on December 13, 1999. The parties have stipulated that these dates are 143 and 146 days after the mailing of the notice of deficiency, respectively.
There are two prerequisites to this Court's jurisdiction to redetermine a deficiency: (1) The issuance of a valid notice of deficiency by the Commissioner; and (2) the timely filing of a petition with the Court by the taxpayer. See Rule 13(a), (c); Monge v. Commissioner, 93 T.C. 22, 27, 1989 WL 75172 (1989); Abeles v. Commissioner, 91 T.C. 1019, 1025, 1988 WL 129221 (1988); Pyo v. Commissioner, 83 T.C. 626, 632, 1984 WL 15623 (1984). The parties have each moved this Court to dismiss for lack of jurisdiction, albeit on different grounds. Petitioner moves to dismiss on the ground that the notice of deficiency issued by respondent is invalid. Respondent moves to dismiss on the ground that the petition filed in this case was untimely. If the notice of deficiency is found to be invalid, we must dismiss in petitioner's favor regardless of whether the taxpayer's petition was timely filed. See Weinroth v. Commissioner, 74 T.C. 430, 435, 1980 WL 4608 (1980). Accordingly, we shall first address the validity of respondent's notice.
Petitioner contends that the notice of deficiency issued by respondent is invalid on account of its failure to specify the last possible date on which petitioner could file a timely petition with this Court (the petition date), as required by section 3463(a) of the Internal Revenue Service Restructuring and Reform Act of 1998 (RRA 1998), Pub.L. 105–206, 112 Stat. 685, 767. 2 Section 3463 of RRA 1998 provides in full as follows:
(a) In General.—The Secretary of the Treasury or the Secretary's delegate shall include on each notice of deficiency under section 6212 of the Internal Revenue Code of 1986 the date determined by such Secretary (or delegate) as the last day on which the taxpayer may file a petition with the Tax Court.
(b) Later Filing Deadlines Specified on Notice of Deficiency To Be Binding.—Subsection (a) of section 6213 () is amended by adding at the end the following new sentence: “Any petition filed with the Tax Court on or before the last date specified for filing such petition by the Secretary in the notice of deficiency shall be treated as timely filed.”.
(c) Effective Date.—Subsection (a) and the amendment made by subsection (b) shall apply to notices mailed after December 31, 1998.
Petitioner notes that the Commissioner's obligation to provide the petition date in the notice of deficiency is described in mandatory terms. Petitioner argues that respondent's failure to provide the petition date as required renders the notice invalid.
We recently addressed section 3463(a) of RRA 1998 in Smith v. Commissioner, 114 T.C. 489, 2000 WL 730739 (2000). The taxpayer in Smith received a notice of deficiency mailed after December 31, 1998, which failed to specify the last day for filing a timely Tax Court petition. The taxpayer therein nonetheless filed his petition within the 90–day period prescribed by section 6213(a). We rejected the taxpayer's argument that the notice of deficiency was rendered invalid by the Commissioner's failure to comply with section 3463(a) of RRA 1998. Instead, we held that where the Commissioner fails to provide the petition date on the notice of deficiency but the taxpayer nonetheless receives the notice and files a timely petition, the notice is valid. See id. at 492.
Unlike the taxpayer in Smith, petitioner did not file his petition within the 90–day period prescribed by section 6213(a). Petitioner therefore argues that our decision in Smith does not foreclose his argument that the notice of deficiency in this case is invalid. Despite the fact that petitioner filed his petition beyond the statutory period, we hold that the notice in this case is valid. We explain our reasoning below.
Section 6212(a) provides that if the Commissioner determines a deficiency in income tax, “he is authorized to send notice of such deficiency to the taxpayer by certified mail or registered mail.” The purpose of this provision is to provide the taxpayer with actual notice of the deficiency in a timely manner, so that the taxpayer will have an opportunity to seek a redetermination of such deficiency in the prepayment forum offered by this Court. See Smith v. Commissioner, supra at 490–491; McKay v. Commissioner, 89 T.C. 1063, 1067, 1987 WL 45785 (1987), affd. 886 F.2d 1237 (9th Cir.1989). In this case, the notice of deficiency was received by petitioner within days of its mailing. The statutory goal of providing the taxpayer with actual notice of the deficiency determination in a timely manner was therefore satisfied.
Although the notice of deficiency failed to provide the petition date, the notice was by no means devoid of information regarding the time frame in which petitioner had to file his Tax Court petition. The notice clearly stated that the petition had to be filed within 90 days of the mailing of the notice. In addition, the necessity of filing a timely petition was emphasized in underscored type.
Furthermore, petitioner was not prejudiced by the respondent's failure to specify the petition date in the notice. The legislative materials accompanying section 3463 of RRA 1998 reveal that Congress was concerned about taxpayers who, due...
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