T.C. Memo. 1998-256
UNITED STATES TAX COURT
BARRY AND DEBRA BULAKITES, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 1269-98. Filed July 13, 1998.
Carolyn J. Jackson, for petitioners.
Robert E. Marum and Richard Fultz, for respondent.
MEMORANDUM OPINION
DAWSON, Judge: This case was assigned to Special Trial
Judge Robert N. Armen, Jr., pursuant to the provisions of section
7443A(b)(4) and Rules 180, 181, and 183.1 The Court agrees with
1
All section references are to the Internal Revenue Code,
as amended, and all Rule references are to the Tax Court Rules of
(continued...)
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and adopts the opinion of the Special Trial Judge, which is set
forth below.
OPINION OF THE SPECIAL TRIAL JUDGE
ARMEN, Special Trial Judge: This matter is before the Court
on respondent's Motion To Dismiss For Lack Of Jurisdiction.
Although respondent contends that this case should be dismissed
on the ground that Barry and Debra Bulakites (petitioners) failed
to file their petition within the time prescribed by sections
6213(a) and 7502, petitioners argue that dismissal should be
based on respondent's failure to issue a valid notice of
deficiency under section 6212. Because there is no dispute that
we lack jurisdiction over the petition filed herein, we must
resolve the parties' dispute regarding the proper ground for
dismissal. See Pietanza v. Commissioner, 92 T.C. 729, 735-736
(1989), affd. without published opinion 935 F.2d 1282 (3d Cir.
1991).
Background
On November 13, 1996, petitioners filed joint Federal
income tax returns for the taxable years 1994 and 1995. On each
of those returns, petitioners listed their address as 53
Christopher Lane, Guilford, Connecticut 06437 (the Guilford
address).
1
(...continued)
Practice and Procedure.
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On April 14, 1997, respondent mailed a 30-day letter to
petitioners at the Guilford address. In the 30-day letter,
respondent notified petitioners of proposed changes to their tax
liability for 1994.
On May 16, 1997, petitioners' accountant, Edward E. Pratesi
(Mr. Pratesi), wrote a letter to respondent's agent, apparently
in response to the 30-day letter. Mr. Pratesi's letter stated
as follows:
Because our client Barry Bulakites * * * has relocated
to Michigan, the enclosed letter was not received
until recently.
In accordance with my client's wishes, we request an
appeal of the tax and related penalties. The reason
for the appeal is that certain documentation
supporting a disallowed deduction must be located upon
Mr. Bulakites' return to Connecticut.
Mr. Pratesi's letter made no mention of Mr. Bulakites' address
in Michigan.
In the interim, on May 14, 1997, petitioners executed a
Form 2848 (Power of Attorney and Declaration of Representative)
appointing Mr. Pratesi as their attorney-in-fact regarding their
Federal income tax liabilities for the taxable years 1994, 1995,
and 1996. Petitioners listed the Guilford address as their
address on the Form 2848.
Line 7 of the Form 2848 provides in pertinent part as
follows:
Notices and communications. Original notices and
other written communications will be sent to you and a
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copy to the first representative listed on line 2
unless you check one or more of the boxes below.
Although the first of three boxes referred to in line 7 provided
an election under which all original notices would be sent to
petitioners' attorney-in-fact, petitioners did not check the
box.
Respondent received petitioners' Form 2848 on May 21, 1997.
On June 2, 1997, respondent's agent left a recorded
telephone message for Mr. Pratesi reminding him of the need to
respond further to the 30-day letter. Mr. Pratesi did not
respond to the message, nor did he respond further to the 30-day
letter.
On September 16, 1997, respondent mailed a notice of
deficiency to petitioners. In the notice, respondent determined
a deficiency in petitioners' Federal income tax for 1994 in the
amount of $27,675, as well as an addition to tax under section
6651(a)(1) in the amount of $6,918.75 and an accuracy-related
penalty under section 6662 in the amount of $5,535.
The notice of deficiency was mailed to petitioners at the
Guilford address; i.e., the address listed by petitioners on
their income tax returns for 1994 and 1995.2 Respondent did not
mail a copy of the notice of deficiency to Mr. Pratesi.
2
It appears that petitioners' income tax return for 1996
was not filed before the notice of deficiency was mailed.
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The notice of deficiency was apparently forwarded by the
U.S. Postal Service to petitioners in Michigan. In any event,
petitioners received the notice of deficiency no later than the
latter part of October 1997.
On January 22, 1998, a date 128 days after the notice of
deficiency was mailed, the Court received and filed a petition
for redetermination contesting respondent's deficiency
determination.3 The petition arrived at the Court in an
envelope bearing a U.S. Postal Service postmark date of January
16, 1998, a date 122 days after the notice of deficiency was
mailed. The petition, which is dated January 15, 1998, was
signed on petitioners' behalf by their counsel, Carolyn J.
Jackson, Esq. (Ms. Jackson). At the time that the petition was
filed, petitioners resided in East Lansing, Michigan.
As indicated, respondent filed a Motion To Dismiss For Lack
Of Jurisdiction on the ground that the petition was not timely
filed. Petitioners filed an objection to respondent's motion,
to which respondent filed a response.
This matter was called for hearing at the Court's Motions
Session in Washington, D.C., on June 17, 1998. Counsel for both
parties appeared at the hearing and presented argument with
respect to the pending motion.
3
The petition, consisting of a preamble, five numbered
paragraphs, and a prayer for relief, is less than three pages in
length.
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Discussion
The Court's jurisdiction to redetermine a deficiency
depends upon the issuance of a valid notice of deficiency and a
timely filed petition. Rule 13(a), (c); Monge v. Commissioner,
93 T.C. 22, 27 (1989); Normac, Inc. v. Commissioner, 90 T.C.
142, 147 (1988). Section 6212(a) expressly authorizes the
Commissioner, after determining a deficiency, to send a notice
of deficiency to the taxpayer by certified or registered mail.
It is sufficient for jurisdictional purposes if the Commissioner
mails the notice of deficiency to the taxpayer at the taxpayer's
"last known address". Sec. 6212(b); Frieling v. Commissioner,
81 T.C. 42, 52 (1983). The taxpayer, in turn, has 90 days (or
150 days if the notice is addressed to a person outside of the
United States) from the date that the notice of deficiency is
mailed to file a petition in this Court for a redetermination of
the deficiency. Sec. 6213(a); see sec. 7502(a); see also sec.
301.7502-1(c)(1)(iii)(b), Proced. & Admin. Regs.
Respondent mailed the notice of deficiency in question to
petitioners at the Guilford address on September 16, 1997. The
petition, which arrived at the Court in an envelope postmarked
January 16, 1998, was filed by the Court on the date of receipt;
i.e., on January 22, 1998.
Because the petition was neither mailed nor filed prior to
the expiration of the 90-day statutory period for filing a
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timely petition, it follows that we lack jurisdiction. Secs.
6213(a), 7502; Rule 13(a), (c); see Normac, Inc. v.
Commissioner, supra. The question presented is whether
dismissal of this case should be premised on petitioners'
failure to file a timely petition under section 6213(a), or on
respondent's failure to issue a valid notice of deficiency under
section 6212. Petitioners contend that the notice is invalid
because respondent did not use due diligence in attempting to
determine their last known address prior to mailing the notice.4
Although the phrase "last known address" is not defined in
the Internal Revenue Code or in the regulations thereunder, we
have held that a taxpayer's last known address is the address
shown on the taxpayer's most recently filed return, absent clear
and concise notice of a change of address.5 Abeles v.
Commissioner, 91 T.C. 1019, 1035 (1988); see King v.
Commissioner, 857 F.2d 676, 681 (9th Cir. 1988), affg. 88 T.C.
1042 (1987). The burden of proving that a notice of deficiency
was not sent to the taxpayer at the taxpayer's last known
4
Petitioners do not complain that respondent failed to
send a copy of the notice of deficiency to Mr. Pratesi.
5
It should be recalled that petitioners' income tax
returns for 1994 and 1995 were filed on Nov. 13, 1996, and that
the notice of deficiency was mailed to petitioners on Sept. 16,
1997. As previously noted, it appears that petitioners' income
tax return for 1996 was not filed before the notice of deficiency
was mailed.
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address is on the taxpayer. Yusko v. Commissioner, 89 T.C. 806,
808 (1987).
Petitioners do not dispute that they did not provide
respondent with clear and concise notice of a change of address.
However, petitioners contend that Mr. Pratesi's letter dated May
16, 1997, put respondent's agent on notice that Mr. Bulakites
was in the process of relocating to Michigan, and, therefore,
that respondent knew or should have known that the Guilford
address was not petitioners' correct address.
Considering all of the facts and circumstances, including
the fact that petitioners listed the Guilford address as their
address on the Form 2848 submitted to respondent on May 21,
1997, we are not persuaded that respondent in the exercise of
reasonable diligence knew or should have known that the Guilford
address was not petitioners' correct address. Thus we find that
the deficiency notice was mailed to their last known address.
In addition, petitioners actually received the notice of
deficiency no later than the latter part of October 1997.
It is well settled that a notice of deficiency is not
invalid merely because it is not sent to a taxpayer at the
taxpayer's last known address. In particular, an otherwise
erroneously addressed notice of deficiency remains valid under
section 6212(a) if it is actually received in sufficient time to
permit the taxpayer, without prejudice, to file a timely
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petition for redetermination. See Mulvania v. Commissioner, 81
T.C. 65, 67-69 (1983) (erroneously addressed notice held valid
in light of actual receipt by the taxpayer 16 days after it was
mailed); see also Patmon & Young Professional Corp. v.
Commissioner, 55 F.3d 216, 217 (6th Cir. 1995), affg. T.C. Memo.
1993-143.
The notice of deficiency was mailed to petitioners on
September 16, 1997. The record, as developed at the hearing,
shows that petitioners actually received the notice of
deficiency no later than the latter part of October 1997.
Consequently, petitioners had no less than 45 days in which to
file a timely petition for redetermination with the Court. The
Court has held that receipt of a notice of deficiency with as
few as 30 days remaining in the 90-day filing period was not
prejudicial to the taxpayer. See Bowers v. Commissioner, T.C.
Memo. 1991-609 (69 days remaining); Fileff v. Commissioner, T.C.
Memo. 1990-452 (60 days remaining); George v. Commissioner, T.C.
Memo. 1990-147 (52 days remaining); Manos v. Commissioner, T.C.
Memo. 1989-442 (at least 38 days remaining); Loftin v.
Commissioner, T.C. Memo. 1986-322 (30 days remaining). But see
Sicker v. Commissioner, 815 F.2d 1400, 1401 (11th Cir. 1987)
(receipt of notice with 8 days remaining in the filing period is
not ample time in which to prepare a petition); Looper v.
Commissioner, 73 T.C. 690, 699 (1980) (receipt of notice with 17
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days remaining in the filing period is prejudicial to the taxpayer).
Consistent with Mulvania v. Commissioner, supra, we hold
that petitioners received the notice of deficiency with
sufficient time to file a timely petition for redetermination,
that petitioners suffered no prejudice, and that the notice of
deficiency in question is valid. Because petitioners failed to
file their petition in a timely manner, we will grant
respondent's Motion To Dismiss For Lack Of Jurisdiction.6
To reflect the foregoing,
An order will be entered
granting respondent's Motion To
Dismiss For Lack Of Jurisdiction.
6
Although petitioners cannot pursue their case in this
Court, they are not without a remedy. In short, petitioners may
pay the tax, file a claim for a refund with the Internal Revenue
Service, and if the claim is denied, sue for a refund in the
Federal District Court or the U.S. Court of Federal Claims. See
McCormick v. Commissioner, 55 T.C. 138, 142 (1970).