T.C. Memo. 1998-301
UNITED STATES TAX COURT
ROBERT AND DIANA ROBERTS, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 22985-97. Filed August 19, 1998.
Edward A. Rose, Jr., for petitioners.
T. Ian Russell, for respondent.
MEMORANDUM OPINION
DAWSON, Judge: This case was assigned to Chief Special
Trial Judge Peter J. Panuthos, pursuant to the provisions of
section 7443A(b)(4) and Rules 180, 181, and 183.1 The Court
1
Unless otherwise indicated, all section references are
to the Internal Revenue Code. All Rule references are to the Tax
Court Rules of Practice and Procedure.
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agrees with and adopts the opinion of the Special Trial Judge,
which is set forth below.
OPINION OF THE SPECIAL TRIAL JUDGE
PANUTHOS, Chief Special Trial Judge: This matter is before
the Court on respondent's motion to dismiss for lack of
jurisdiction. The issue for decision is whether petitioners are
entitled to the 150-day period for filing a petition with this
Court as provided in section 6213(a).
Background
The material facts in this case are not in dispute. On July
31, 1997, respondent mailed a notice of deficiency to petitioners
regarding their 1991, 1992, and 1993 Federal income tax returns.
Duplicate notices of deficiency were mailed to petitioners' home
address at 14615 Wood Road, Riverside, California, and petitioner
Robert Roberts' (hereinafter petitioner) business address at
18856 Van Buren Boulevard, Riverside, California.2 Petitioner
received one of the duplicate notices of deficiency at his
business on August 2, 1997. The record does not reflect whether
the notice of deficiency mailed to petitioners' residence was
received by them, nor is there any indication that said notice
was returned to respondent undelivered.
2
The jointly filed Federal income tax returns in issue
reflected petitioner Robert Roberts' business address (18856 Van
Buren Boulevard).
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Respondent determined the following deficiencies, additions
to tax, and penalties for each year:
Additions to Tax Penalties
Year Deficiency Sec. 6651(a)(1) Sec. 6662(a)
1991 $32,847 $8,011 $6,409
1992 7,978 1,881 1,545
1993 5,612 1,403 1,122
The notice of deficiency states in pertinent part:
If you want to contest this determination in court
before making any payment, you have 90 days from the
date of this letter (150 days if addressed outside the
United States) to file a petition with the United
States Tax Court for a redetermination of the
deficiency. You can get a copy of the rules for filing
a petition and a petition form you can use by writing
to the address below.
United States Tax Court
400 Second Street, NW
Washington, DC 20217
Upon receipt of the notice of deficiency at his office on
August 2, 1997, petitioner opened and read the notice. He then
called his accountant and advised the accountant of its receipt.
Pursuant to that communication, the accountant picked up the
notice from petitioner's business office soon thereafter. On
August 3, 1997, petitioner left the United States for Akumal,
Mexico. He returned to the United States on November 4, 1997.
While petitioner was in Mexico, his accountant prepared the
petition. Petitioner periodically talked with his wife and
persons in his office while he was away; however, he did not have
any conversations relating to the notice of deficiency or the
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need to file a petition. Soon after his return to the United
States on November 4, 1997, petitioner looked through his
accumulated mail and found the petition prepared by his
accountant. Petitioner contacted his accountant for instructions
on how to execute the petition. Petitioner had a discussion with
the accountant about the above-quoted language in the notice of
deficiency. The accountant instructed petitioner to sign, date,
and mail the petition. Petitioner signed the petition and placed
a date of August 30, 1997, next to his signature. Petitioner
Diana Roberts also signed the petition, placing the date of
August 30 next to her signature. Petitioners placed their home
address on the petition.
The 90-day period prescribed in section 6213(a) for filing a
timely petition expired on Wednesday, October 29, 1997, a day
that was not a legal holiday in the District of Columbia. The
envelope in which the petition was contained reflects a private
postmeter postmark of November 21, 1997.3 The petition was filed
with the Court on Wednesday, November 26, 1997, 118 days after
the mailing of the notice of deficiency. At the time the
petition was filed, petitioners were residents of Riverside,
California.
3
Petitioner's testimony was inconsistent as to the date
he actually signed the petition. It is clear that it was
sometime after Nov. 4, 1997. Given the postmeter date of Nov.
21, 1997, and receipt by the Tax Court on Nov. 26, 1997, it seems
likely that the petition was signed on or about Nov. 21, 1997.
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Respondent filed a motion to dismiss for lack of
jurisdiction contending the petition was not timely filed under
section 6213(a). Petitioners filed an objection to respondent's
motion. Petitioners contend they are entitled to the 150-day
period to file a petition with the Court because petitioner was
absent from the United States for a period in excess of 3 months
around the time that the notice of deficiency was issued.
Petitioner contends his leaving the United States so shortly
after the mailing and receipt put him at a disadvantage for
filing timely. Petitioners also contend that they will be
severely prejudiced if their petition is dismissed.
This case was called for hearing in San Diego, California.
Counsel for both parties appeared at the hearing and presented
argument and evidence with respect to the motion.
Discussion
The Tax Court is a court of limited jurisdiction, and we may
exercise our jurisdiction only to the extent authorized by
Congress. Sec. 7442; Commissioner v. Gooch Milling & Elevator
Co., 320 U.S. 418 (1943); Naftel v. Commissioner, 85 T.C. 527,
529 (1985); Kluger v. Commissioner, 83 T.C. 309, 314 (1984);
Medeiros v. Commissioner, 77 T.C. 1255, 1259 (1981); Lundy v.
Commissioner, T.C. Memo. 1997-14. 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.
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v. Commissioner, 90 T.C. 142, 147 (1988). The taxpayer has 90
days from the date the notice of deficiency is mailed (150 days
if the notice is mailed to a taxpayer outside of the United
States) to file a petition in this Court for a redetermination of
the deficiency. Sec. 6213(a); Estate of Moffat v. Commissioner,
46 T.C. 499, 501 (1966); Lundy v. Commissioner, supra.
There is no dispute that respondent mailed a valid notice of
deficiency to petitioners, or that the date of mailing was July
31, 1997. The question to be resolved is whether petitioners
were required to file the petition with this Court within 90 days
from the date of the mailing of the notice of deficiency, or
whether they were entitled to the 150-day period.
Section 6213(a) provides in pertinent part:
SEC. 6213(a). Time For Filing Petition and
Restriction on Assessment.--Within 90 days, or 150 days
if the notice is addressed to a person outside the
United States, after the notice of deficiency
authorized in section 6212 is mailed * * *, the
taxpayer may file a petition with the Tax Court for a
redetermination of the deficiency. * * *
The 90-day period for filing the petition with this Court
expired on Wednesday, October 29, 1997. The petition was
received and filed by this Court on November 26, 1997, 118 days
after the mailing of the notice of deficiency. As the petition
was filed after October 29, 1997, we will have jurisdiction in
this matter only if petitioner is entitled to the 150-day filing
period prescribed by section 6213(a).
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It has previously been determined that the 150-day period
applies not only to persons who are outside the United States "on
some settled business and residential basis", but also to persons
who are temporarily absent from the country. Mindell v.
Commissioner, 200 F.2d 38, 39 (2d Cir. 1952). In Mindell, the
Court of Appeals for the Second Circuit clarified the reasoning
behind the 150-day rule by stating:
Whatever the reason for the taxpayer's absence from the
country receipt of the deficiency notice was likely to
be delayed if he was not physically present at the
address to which the notice was sent; hence he was
given additional time to apply for a review of the
deficiency. * * * [Id. at 39.]
In Mindell the Court of Appeals relied upon two related
factors for its decision: (1) Absence from the country (2)
resulting in delayed receipt of the notice of deficiency. We
subsequently expressed agreement with the holding in Mindell,
citing the above-quoted language. Levy v. Commissioner, 76 T.C.
228, 231 (1981); Lewy v. Commissioner, 68 T.C. 779, 783 (1977);
Estate of Krueger v. Commissioner, 33 T.C. 667, 668 (1960) (Court
reviewed). If there is no delayed receipt, the 150-day rule does
not apply. See Cross v. Commissioner, 98 T.C. 613, 616 (1992);
Malekzad v. Commissioner, 76 T.C. 963, 970 (1981); Levy v.
Commissioner, supra; Lewy v. Commissioner, supra; Degill Corp. v.
Commissioner, 62 T.C. 292, 297 (1974); Cowan v. Commissioner, 54
T.C. 647, 652 (1970) (Court reviewed); Wade v. Commissioner, T.C.
Memo. 1998-235.
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In Malekzad v. Commissioner, supra, we explained that in
determining whether the 150-day period is applicable, we look at
both the date of mailing of the notice of deficiency and the date
on which the notice was received by the taxpayer. The crucial
inquiry is whether the taxpayer falls within the class of persons
that Congress intended to receive the benefit of the longer
period and whether the notice of deficiency served the notice
function that it was designed to serve. Id. at 970. The purpose
behind the enactment of the 150-day rule was the prevention of
hardships caused by delays in the receipt of a notice of
deficiency due to the taxpayer's absence from the United States
and the relatively slow international mails. Looper v.
Commissioner, 73 T.C. 690, 694 (1980).
On the facts in the instant case, petitioners were not
entitled to the 150-day period for filing their petition.
Petitioners were in the United States on the date the notice of
deficiency was mailed as well as on the date it was received.
Petitioner actually received the notice of deficiency 2 days
after it was mailed to the address reflected on the tax returns.
Thus, petitioner's absence from the country did not result in a
delay in the receipt of the notice. Lewy v. Commissioner, supra.
Since petitioner's absence from the country did not cause a
delay in the receipt of the notice of deficiency, petitioner's
only argument is that the absence caused a delay in preparation
and filing of the petition. In this regard, petitioners' counsel
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argues that petitioner did not understand the contents of the
notice of deficiency and, in the alternative, that respondent
failed to enclose a petition with the notice sent to petitioners.
We note at the outset that the basis for operation of the
90- or 150-day filing period set forth in section 6213(a) is not
dependent upon a taxpayer's understanding of the notice of
deficiency or upon the taxpayer's understanding of section
6213(a). Even if such were the case, petitioner contacted his
tax adviser immediately upon receipt of the notice of deficiency
and then left the country. Thus, while petitioner may not have
understood the entire contents of the notice of deficiency, he
clearly understood enough to immediately contact his tax adviser.
Petitioners failed to explain why there was no further
communication with the tax adviser with respect to this matter
during petitioner's absence from the United States. Further,
petitioners presented no evidence as to the role of petitioner
Diana Roberts, who remained in the United States during this
time. Petitioner did indicate that he communicated with his
office as well as with his wife periodically. Yet, there appears
to be a total absence of communication with respect to the need
to file a petition in response to the July 31, 1997, notice of
deficiency. Such neglect by petitioners and their tax adviser is
not a basis to invoke the 150-day rule.
Petitioners' alternative argument must also fail. There is
nothing in the statute or case law which would suggest that the
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Commissioner is required to send a taxpayer a petition or form to
file with this Court. The notice of deficiency clearly sets out
the address of the Court and the fact that a petition form and
instructions could be obtained by writing to the Court. Despite
receipt of the notice of deficiency 2 days after it was sent,
neither petitioners nor their adviser apparently took such
action.
Because the petition was not filed within 90 days of the
date of the mailing of the notice of deficiency, we will grant
respondent's motion to dismiss for lack of jurisdiction.
Petitioners, however, are not without a judicial remedy.
Petitioners may pay the tax, file a claim for refund with the
Internal Revenue Service, and if the refund claim is denied, sue
for a refund in the appropriate Federal District Court or the
United States Court of Federal Claims.
To reflect the foregoing,
An appropriate order of
dismissal will be entered.