T.C. Memo. 1998-37
UNITED STATES TAX COURT
DONNA C. CLEVENGER, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 6677-95. Filed January 28, 1998.
Donna C. Clevenger, pro se.
Richard A. Rappazzo, for respondent.
MEMORANDUM OPINION
DAWSON, Judge: This case was assigned to Special Trial
Judge Norman H. Wolfe pursuant to the provisions of section
7443A(b)(4) and Rules 180, 181, and 183. All section references
are to the Internal Revenue Code in effect for the tax years in
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issue, unless otherwise indicated. All Rule references are to
the Tax Court Rules of Practice and Procedure. The Court agrees
with and adopts the opinion of the Special Trial Judge, which is
set forth below.
OPINION OF THE SPECIAL TRIAL JUDGE
WOLFE, Special Trial Judge: This matter is before the Court
on respondent's motion to dismiss for lack of jurisdiction.
Petitioner contends that this Court lacks jurisdiction because
the notice of deficiency mailed to her by respondent was not sent
to her last known address within the meaning of section
6212(b)(1). Respondent's position is that this Court lacks
jurisdiction because petitioner failed to file a timely petition
within the time prescribed in section 6213(a) or section 7502.
Background
Respondent determined deficiencies in petitioner's Federal
income taxes for the taxable years 1979, 1980, and 1981, and
additions to tax as follows:
Addition to Tax
Year Deficiency Sec. 6653(b) Sec. 6654
1979 $6,575 $3,287 $274
1980 2,120 1,060 136
1981 10,689 5,345 817
The evidence in this case consists of a stipulation of facts
with attached exhibits (incorporated herein by reference) and
oral testimony presented at the hearing on the parties' cross-
motions.
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Respondent's notice of deficiency is dated April 13, 1984.
The petition in this case was filed on April 18, 1995, that is,
4,032 days, or approximately 11 years, after the mailing of the
notice of deficiency. Petitioner resided in Peoria, Arizona,
when her petition was filed. Petitioner filed an amended
petition pertaining to those same years (1979 through 1981) on
June 26, 1995.
Respondent's notice of deficiency was sent to petitioner by
certified mail addressed as follows: Donna Clevenger, 20935 Bell
Avenue, Lakeview, California 92353 (hereafter the Bell Avenue
address). Respondent asserts that this address was on
petitioner's last filed tax return. The property located at the
Bell Avenue address consisted of a mobile home that was owned by
petitioner and her husband and was situated on 2-1/2 acres of
land.
Petitioner resided with her husband, Coy A. Clevenger, at
all times at issue and until his death in 1992. Petitioner's
last filed return prior to the issuance of the statutory notice
of deficiency was the 1978 return filed jointly with her husband
on February 2, 1983. Petitioner did not file a Federal income
tax return either individually or jointly with her husband for
the taxable years 1979, 1980, and 1981. At respondent's request,
the Fresno Service Center, the service center with which
petitioner was required to file her Federal income tax returns
during the years at issue, conducted a diligent search of its
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records and determined that the original as well as any copies of
any joint income tax returns (Form 1040) filed by petitioner for
the years prior to and including the 1978 taxable year had been
routinely destroyed by respondent after a 7-year retention
period. Petitioner did not produce a copy of her 1978 joint
income tax return at trial. There is no evidence in the record
that the notice of deficiency ever was returned to respondent as
undeliverable.
Petitioner claims that at the time of the issuance of the
notice of deficiency in April 1984, her last known address, to
which the notice of deficiency should have been sent, was "30840
Apricot Avenue, Nuevo, California" (hereafter the Apricot
address). According to petitioner, she and her husband moved
from the Bell Avenue address to the Apricot address in mid-
January 1983, and therefore the Apricot address would have been
the address on her 1978 joint income tax return. Petitioner
testified that the property located at the Apricot address was a
horse ranch known as Solar View Farms owned by Rick Fritz.
Petitioner claims that she and her husband lived in a house on
the property in exchange for taking care of the ranch and the
horses. Mr. Fritz did not testify at the hearing.
On February 13, 1984, petitioner and her husband filed a
voluntary petition in bankruptcy with the U.S. Bankruptcy Court
for the Central District of California. On March 6, 1984,
petitioner and her husband filed with the bankruptcy court a
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"Statement of Affairs of Debtor Not Engaged in Business", dated
and executed on February 10, 1984, in which petitioner and her
husband stated that they resided at the Bell Avenue address from
1978 until June 1983. On February 10, 1984, petitioner and her
husband also executed a "Statement of Compensation Paid For
Assistance in Connection with the Filing of the Bankruptcy Case
Pursuant to Local Bankruptcy Rule 221", promptly thereafter filed
with the bankruptcy court. This statement identified the Bell
Avenue address as real property owned by petitioner and her
husband as of the date of the filing of the bankruptcy petition,
and as property exempt pursuant to 11 U.S.C. sec. 522(d)(1)
(Supp. II, 1978), as the residence of the debtor or a dependent
of the debtor. Petitioner and her husband were discharged from
bankruptcy on June 29, 1984.
On November 2, 1989, petitioner wrote to the Internal
Revenue Service Problem Resolution Office in Laguna Nigel,
California, and requested audit reports. In response, on January
17, 1990, personnel of that office sent petitioner copies of her
audit reports for the taxable years 1979, 1980, and 1981. A copy
of the original notice of deficiency dated April 13, 1984, was
included with the audit reports received by petitioner.
Ernest Avilla (Avilla) worked as the postmaster for the post
office in Nuevo, California (hereafter the Nuevo post office),
from 1981 through 1984. His job functions as postmaster included
traveling to the Lakeview post office approximately once a week
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to observe the postal practices and procedures at the Lakeview
post office. As a result of his duties as postmaster, Avilla
testified that he was familiar with petitioner's last name
"Clevenger". In 1983 and 1984, the Lakeview post office had 300
post office boxes and the Nuevo post office had 594 post office
boxes and one highway contract route for street delivery that
extended into the Lakeview area and had about 500 deliveries.
The Bell Avenue address was not located along the highway
contract route. According to Avilla, it was the policy of the
Nuevo and Lakeview post offices to deliver mail to the residents
of Lakeview and Nuevo based upon the resident's last name rather
than street address. For example, mail received by either the
Lakeview or Nuevo post offices that was addressed to a resident
of the Nuevo or Lakeview area with only the resident's name and
city on the letter or package was still delivered either to the
resident's post office box or to the resident's street address if
that resident was receiving mail at the street address.
Petitioner's witness Edna Morrison (Morrison) testified that
she, her husband, and her son resided at the Bell Avenue address
from mid-January 1983 until December 1983. Morrison was unable
to produce any documentary evidence or records to corroborate the
dates she claims to have resided at the Bell Avenue address.
Morrison testified that during the time she claims she resided at
the Bell Avenue address she never received any mail that was
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addressed to petitioner or her husband because she "only received
mail at her post office box".
Petitioner's second witness, Melinda Hayes (Hayes),
testified that she, her mother, and her brother resided at the
Bell Avenue address from December 1983 until June 1984.
Accordingly, Hayes allegedly was living at the Bell Avenue
address when the notice of deficiency was issued to petitioner.
Hayes testified that during the time she claims she resided at
the Bell Avenue address, she never received any mail that was
addressed to petitioner or her husband. Hayes claimed that her
family actually received mail at the Bell Avenue address. At the
time of the hearing, Hayes was petitioner's daughter-in-law.
Discussion
The jurisdiction of this Court is governed by statute. Sec.
7442. A valid notice of deficiency and a timely filed petition
are essential to our deficiency jurisdiction. Secs. 6212 and
6213; Rule 13(a), (c); Monge v. Commissioner, 93 T.C. 22, 27
(1989); Abeles v. Commissioner, 91 T.C. 1019, 1025 (1988). Under
section 6212, a notice of deficiency is sufficient if it is
mailed to the taxpayer's last known address by certified or
registered mail. Sec. 6212(a) and (b). "A notice of deficiency
is valid if it is mailed to the taxpayer's last known address
even if it is not received by the taxpayer." Williams v.
Commissioner, 935 F.2d 1066, 1067 (9th Cir. 1991), affg. T.C.
Memo. 1989-439; King v. Commissioner, 857 F.2d 676, 681 (9th Cir.
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1988), affg. on other grounds 88 T.C. 1042 (1987). Even if the
notice is mailed to the wrong address, it will be valid if the
taxpayer receives actual notice of the deficiency and is not
unduly prejudiced in timely filing his or her petition. Erhard
v. Commissioner, 87 F.3d 273, 275 (9th Cir. 1996), affg. T.C.
Memo. 1994-344 (quoting Patmon & Young Profl. Corp. v.
Commissioner, 55 F.3d 216, 218 (6th Cir. 1995), affg. T.C. Memo.
1993-143); Frieling v. Commissioner, 81 T.C. 42, 53 (1983).
Respondent's motion to dismiss is based on the ground that
the petition was not timely filed. This Court will not dismiss
the petition as untimely filed unless respondent first
establishes that respondent mailed a notice of deficiency to
petitioner and proves the date on which the notice was mailed.
Pietanza v. Commissioner, 92 T.C. 729, 736 (1989), affd. without
published opinion 935 F.2d 1282 (3d Cir. 1991).
The record here includes a copy of the notice dated April
13, 1984, that was sent to petitioner as well as a copy of the
U.S. Postal Service Form 3877 (For Registered, Insured, C.O.D.,
Certified, and Express Mail) with an April 13, 1984, postmark
date. The legend stamped at the top left-hand side of the Form
3877 states "Statutory Notices of Deficiency, For The Year(s)
Indicated, Have Been Sent To The Following Taxpayers".
Petitioner's name and the Bell Avenue address appear on the Form
3877 in addition to the redacted names of four other taxpayers.
Petitioner has not disputed the mailing of the deficiency notice
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to the Bell Avenue address. Based on this evidence, and the
record as a whole, we find that respondent has established that
the subject notice of deficiency was mailed to petitioner at the
Bell Avenue address on April 13, 1984. See August v.
Commissioner, 54 T.C. 1535 (1970).
Generally, a taxpayer has 90 days after the mailing of a
notice of deficiency to file a petition with this Court. Sec.
6213(a); Monge v. Commissioner, supra at 27. However, if the
taxpayer is involved in bankruptcy proceedings, the debtor-
taxpayer is prohibited from filing a petition with this Court
while the bankruptcy case is pending. 11 U.S.C. sec. 362(a)(8)
(Supp. II, 1978). Under section 6213(f)(1), the 90-day period is
suspended for the time during which the debtor-taxpayer is
prohibited by reason of the bankruptcy proceedings from filing a
petition and for 60 days thereafter. Although the Tax Court's
jurisdiction is limited by 11 U.S.C. section 362(a)(8) (Supp. II,
1978), the Commissioner is not prohibited from issuing a notice
of deficiency during the pendency of a bankruptcy case. 11
U.S.C. sec. 362(b)(8) (Supp. II, 1978); see Zimmerman v.
Commissioner, 105 T.C. 220, 224-225 (1995).
Petitioner and her husband filed for individual bankruptcy
on February 13, 1984, 2 months before the notice of deficiency
was mailed. Petitioner and her husband were discharged from
bankruptcy on June 29, 1984. Accordingly, the 90-day period
began to run 60 days later. Secs. 6212 and 6213(f)(1); 11 U.S.C.
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sec. 362(a)(8), (c)(2) (Supp. II, 1978). The 90-day period
expired on November 25, 1984. Sec. 6213(a). Petitioner did not
file her petition in this case until April 28, 1995. Therefore,
given a valid notice of deficiency, the petition must be
dismissed for lack of jurisdiction as untimely. Secs. 6213(a),
7502; Rule 13(a), (c); see Pietanza v. Commissioner, supra at
735-736. However, if we should find that jurisdiction is lacking
because respondent did not mail a valid notice of deficiency
under section 6212, we would dismiss the case on that ground.
Pietanza v. Commissioner, supra at 736.
Petitioner argues that respondent's motion should be denied
on the ground that the notice was not sent to her last known
address. Neither section 6212 nor the regulations thereunder
define a taxpayer's "last known address". A taxpayer's last
known address is the address to which, in light of all
surrounding facts and circumstances, the Commissioner reasonably
believed the taxpayer wished the notice of deficiency to be sent.
The practical refinement of this rule is that, generally, a
taxpayer's last known address is that used on his most recent
return, unless the taxpayer communicates to the Commissioner
"clear and concise" notice of a change of address. Williams v.
Commissioner, supra at 1067 (quoting United States v. Zolla, 724
F.2d 808, 810 (9th Cir. 1984)). When a taxpayer changes his
address, the taxpayer must notify the Commissioner of the change
or else accept the consequences. Alta Sierra Vista, Inc. v.
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Commissioner, 62 T.C. 367, 374 (1974), affd. without published
opinion 538 F.2d 334 (9th Cir. 1976). To supplant the address on
the most recent return, the taxpayer must clearly indicate that
the former address is no longer to be used. Tadros v.
Commissioner, 763 F.2d 89, 92 (2nd Cir. 1985); White v.
Commissioner, T.C. Memo. 1990-528.
Petitioner's joint Federal income tax return for 1978, filed
February 2, 1983, was the most recent return filed by petitioner
when the notice of deficiency was issued on April 13, 1984.
Petitioner bears the burden of proving that the notice of
deficiency was not mailed to her last known address. Rule
142(a); Yusko v. Commissioner, 89 T.C. 806, 808 (1987).
Moreover, regardless of the burden of proof, the record before us
is replete with documents indicating that in February 1983 when
petitioner's most recent return was filed, petitioner and her
husband considered the Bell Avenue address their residence
address. Among the documents introduced as evidence by
respondent were petitioner's bankruptcy records, official
employment records, including her wage reports and personnel
records, records from the California Department of Motor
Vehicles, and an Abstract of Judgment and Notice of Judgment Lien
filed by First Interstate Bank of California against petitioner
and her husband.
On October 22, 1984, respondent filed a "Notice of Federal
Tax Lien" with the Riverside, California, Recorder's Office
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against petitioner and her husband for the 1978 tax year. The
lien identifies petitioner's residence as the Bell Avenue
address. Respondent argues that because this lien was filed
based upon petitioner's last filed income tax return, an
inference can be made that respondent used petitioner's last
filed return to determine petitioner's address when filing this
lien. We conclude on the basis of the substantial available
evidence that the Bell Avenue address was the address listed on
petitioner's 1978 tax return and was petitioner's residence
address in February 1983 when she and her husband filed their
return for 1978.
Petitioner never sent notice to respondent specifically
informing respondent that the address on her most recent return
no longer should be used or that she wanted a different address
to be used for tax purposes. Based upon all the evidence in the
record, we find that respondent mailed the subject notice of
deficiency to the address which was shown as petitioner's
residence on her most recent return prior to the date of the
deficiency notice and which was in fact her residence at the time
of filing that return.
Petitioner argues that respondent knew that her address had
changed since her most recent return. She contends that
respondent knew of her address change by virtue of her bankruptcy
petition and a Form 3242 "Request for Information From Employer
(To Locate Individual)", which had been mailed by the Internal
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Revenue Service to petitioner's employer on August 14, 1983. On
August 16, 1983, petitioner's employer, the Nuview Union School
District, completed and returned Form 3242 to the Internal
Revenue Service in San Diego, California. As completed, the Form
3242 identified petitioner's "current" address as the Apricot
address. Petitioner presented no evidence that she ever sent a
copy of the bankruptcy petition to respondent.
This Court repeatedly has held that notification by a third
party of a taxpayer's new address is not sufficient to provide
respondent with clear and concise notification of a taxpayer's
change of address. See Monge v. Commissioner, 93 T.C. 22 (1989)
(different addresses on Forms 4868 and 2688); Roy v.
Commissioner, T.C. Memo. 1992-559 (different address on a
bankruptcy cover sheet); Oak Center v. Commissioner, T.C. Memo.
1990-633 (Form 2848 where the Form did not expressly provide that
the taxpayers' address had changed); Grencewicz v. Commissioner,
T.C. Memo. 1990-597 (Forms 1099 and various other interest
statements filed by third parties); White v. Commissioner, T.C.
Memo. 1990-528 (a Form W-2 reflecting a different address);
Greenstein v. Commissioner, T.C. Memo. 1990-405 (Forms W-2 and
1099-DIV filed by third party payers). In United States v.
Zolla, 724 F.2d 808 (9th Cir. 1984), the Court of Appeals
indicated that third party notification would be adequate,
stating that "where the taxpayer himself did not communicate the
change of address to the IRS, the taxpayer would not be estopped
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from arguing that a change of address noted by the IRS was
incorrect." Id. at 811.
The documents introduced by respondent in this case
establish to our satisfaction that in February 1983, when
petitioner and her husband filed their 1978 joint Federal income
tax return, they were using the Bell Avenue address as their
residence address and apparently listed that address on their
return. Considering all the evidence available concerning
petitioner's ownership of the Bell Avenue property and repeatedly
claiming it as a residence address in contrast to her temporarily
occupying quarters at her place of employment, the Apricot
address, some time in 1983, we conclude that, on the date the
deficiency notice was mailed, respondent reasonably believed that
the Bell Avenue address was the address this taxpayer wished to
have respondent use in sending mail to her. Thus, petitioner's
last known address was the Bell Avenue address. Respondent
mailed the subject notice of deficiency to the Bell Avenue
address. That address would have been satisfactory to assure
delivery to petitioner even if she had moved elsewhere in the
Lakeview-Nuevo area. Respondent was not given clear and concise
notification of a change of address. Therefore, we hold that the
notice of deficiency with respect to petitioner's taxable years
1979 through 1981 was properly sent by respondent by certified
mail to petitioner's last known address on April 13, 1984.
Accordingly,
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An order will be entered granting
respondent's motion to dismiss for lack
of jurisdiction on the ground that the
petition was untimely filed.