T.C. Memo. 1999-410
UNITED STATES TAX COURT
ANTHONY AND ESTHER SICARI, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 11761-95. Filed December 16, 1999.
Sheldon Eisenberger, Richard L. Herzfeld, and Cris Alcamo,
for petitioners.
Wendy Sands, Paul Darcy, and Theodore Leighton, for
respondent.
SUPPLEMENTAL MEMORANDUM OPINION
DAWSON, Judge: This case was assigned to Special Trial
Judge Norman H. Wolfe pursuant to Rules 180, 181, and 183. All
Rule references are to the Tax Court Rules of Practice and
Procedure. All section references are to the Internal Revenue
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Code in effect at the time the petition was filed, unless
otherwise indicated. 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 us on
remand from the Court of Appeals for the Second Circuit. In
Sicari v. Commissioner, T.C. Memo. 1997-104 (Sicari I) we granted
respondent's motion to dismiss for lack of jurisdiction on the
ground that respondent had properly mailed the notice of
deficiency by certified mail to petitioners' last known address
and that petitioners had failed to file a timely petition for a
redetermination of income tax deficiencies. The Court of Appeals
for the Second Circuit has concluded that we erred in holding
that the notice was mailed to petitioners' last known address and
has vacated our decision and ordered us to make findings whether
the notice of deficiency, regardless of improper addressing,
actually was delivered to petitioners. See Sicari v.
Commissioner, 136 F.3d 925 (2d Cir. 1998), vacating and remanding
T.C. Memo. 1997-104. We find that the statutory notice was not
actually delivered to petitioners.
Background
The background of this case was summarized in Sicari I and
we incorporate that statement of background without repetition,
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except as to certain matters directly bearing on the issue of
actual delivery.
On October 9, 1992, respondent issued to petitioners by
certified mail, return receipt requested, a statutory notice of
deficiency (the statutory notice) addressed as follows: Mr.
Anthony Sicari and Mrs. Esther Sicari, Route 208, Gardiner, NY
12525 (the route 208 address).
During 1992, the Postal Service had changed petitioners'
permanent mailing address to the following address: 871 Route
208, Gardiner, NY 12525. Early in 1992, the postmaster of
Gardiner, New York, Marianne Walker (Walker), issued notices
explaining the address changes and notifying Gardiner Postal
Service customers that regardless of the changes, all mail would
be delivered without interruption. In fact, the Gardiner Postal
Service delivered mail to customers even if it was addressed to
the route 208 address throughout 1992 and up to the time of
trial. In October 1992, the Postal Service treated mail
addressed to the route 208 address as properly addressed.
In 1992, Theresa Williams (Williams) was the letter carrier
for the postal route that includes route 208 and the Sicari
residence. She worked throughout the month of October 1992
without missing a day for sick leave or vacation. She was well
acquainted with the location of the Sicari residence. During
1992, if items of certified mail were addressed to petitioners at
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the route 208 address, Williams would deliver them to
petitioners.
Williams does not remember the envelope containing the
statutory notice. She is unable to recall whether she delivered
this particular piece of mail.
On November 10, 1992, the envelope containing the statutory
notice was returned, unopened, to respondent. The envelope bore
a "Returned to Sender" stampmark in red ink, and the "REASON
CHECKED" for return was "Unclaimed". Additionally, the words
"Return unclaimed" had been handwritten, by Walker, at the top of
the envelope. The envelope also listed three dates. Two of
these dates purported to be the dates on which Williams had
delivered to petitioners notices informing them that they needed
to come to the Post Office to claim the envelope. The last date
indicates the date on which the envelope was returned to
respondent. The date of the "1st Notice" was listed as "9-24",
presumably a reference to September 24, 1992. This date preceded
the date of the enclosed notice of deficiency by more than 2
weeks. The date on the "2nd Notice" was listed as "10-16", and
the date of return was listed as "10-19".
Respondent made no further effort to contact petitioners
concerning the tax deficiencies.
One of petitioners' accountants and tax advisers, Noreen
Masztal, C.P.A., testified that in mid-1992 she warned
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petitioners to anticipate the statutory notice. She stated that
she repeatedly spoke with petitioner Anthony Sicari (petitioner)
about the importance of the statutory notice and repeatedly
emphasized that he should call her as soon as he received it.
According to her, petitioner several times denied receiving the
statutory notice and assured her that he would call her as soon
as he received it.
Petitioner confirmed the accountant's testimony and denied
receiving the statutory notice of deficiency until June 1995,
when he met with an Internal Revenue agent to discuss an
unrelated matter. Petitioner Esther Sicari also stated that she
never had failed to accept certified mail or pick up such mail in
response to a notice. Petitioners commenced the present action
on June 30, 1995, by filing a petition for redetermination of the
deficiencies, and thereafter respondent filed the motion to
dismiss for lack of jurisdiction.
Discussion
The opinion of the Court of Appeals for the Second Circuit
is that in this case respondent did not satisfy the requirements
of section 6212 for mailing of a notice of deficiency to the
taxpayer's last known address by certified or registered mail.
Nevertheless, as the Court of Appeals states, the notice here
would be considered valid if the taxpayers received actual notice
of the deficiencies and were not prejudiced in timely filing
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their petition. See Sicari v. Commissioner, 136 F.3d 925 (2d
Cir. 1998), (citing Pugsley v. Commissioner, 749 F.2d 691, 692-
693 (11th Cir. 1985)); see also Frieling v. Commissioner, 81 T.C.
42, 53 (1983). There is a strong presumption in the law that a
properly addressed letter will be delivered, or offered for
delivery, to the addressee. See Hoffenberg v. Commissioner, 905
F.2d 665, 666 (2d Cir. 1990), affg. T.C. Memo. 1989-676; Mulder
v. Commissioner, 855 F.2d 208, 212 (5th Cir. 1988), revg. T.C.
Memo. 1987-363; Zenco Engineering Corp. v. Commissioner, 75 T.C.
318, 323 (1980), affd. 673 F.2d 1332 (7th Cir. 1981). This
presumption can be rebutted with a showing of postal mishandling.
See Mulder v. Commissioner, supra (lack of return receipt for
deficiency notice indicates Postal Service mishandled the
notice); Estate of McKaig v. Commissioner, 51 T.C. 331 (1968)
(envelope was diverted by the Post Office); Violette v.
Commissioner, T.C. Memo. 1994-173 (envelope with notation
indicating "First Notice, 1-30-83", which preceded issuance of
the notice of deficiency dated 01-27-86, "suggests a lack of
attention to detail that we are unwilling to overlook under such
circumstances".) Here we must determine whether, given the
strong presumption of delivery, there was actual delivery of the
notice of deficiency.
Although the envelope containing the notice of deficiency
was received by the Gardiner Post Office and was treated by the
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Postal Service as properly addressed, we are not convinced that
the notice actually was delivered to petitioners. The envelope
that contained the notice of deficiency indicates that there was
some postal mishandling.
The date of "First Notice" precedes the issuance of the
notice of deficiency. The envelope reflects an initial delivery
attempt on September 24, 1992. The notice of deficiency was
issued on October 9, 1992. The first notice of delivery date
precedes the date of issuance by 2 weeks, and plainly this
circumstance evidences mishandling of this item by the postal
authorities.
The return date does not correspond with proper mail
handling procedure as provided by postal regulations. Postal
regulations provide:
The carrier must leave a notice of arrival * * * if the
carrier cannot deliver the certified article for any
reason. The article is brought back to the post office
and held for the addressee. If the article is not
called for within 5 days, a final notice is issued. If
the article is not called for or redelivery of the
article is not requested, it must be returned after 15
days, unless the sender specifies a lesser number on
the mailpiece. Domestic Mail Manual sec. 912.55.
The statutory notice of deficiency was mailed by respondent
on October 9, 1992. If the first attempted delivery was on
October 10, 1992, the envelope did not have to be returned until
October 26, 1992. The markings on the envelope indicate that the
envelope was returned on October 19, 1992. The envelope was not
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handled pursuant to the postal regulations, and this is further
evidence of postal mishandling.
Williams testified that she could not recall delivering this
particular piece of mail. Such a lack of recollection may seem
entirely appropriate in view of the large number of items handled
each day by a letter carrier. Here the item was certified and
supposedly went out for delivery several times before return to
the sender with markings that are chronologically impossible.
In sum, the letter carrier has no recollection of the item;
at least one of the stampings on the envelope is at best
inaccurate; and the postal authorities failed to follow their own
regulations concerning the handling of certified mail. There is
evidence of irregularity in the Postal Service's handling of the
item here and, with respect to the issue of actual delivery,
those irregularities are too significant to be ignored.
Additionally, both petitioners have testified that they did
not receive the certified mail delivery they were awaiting.
Anthony Sicari was explicit and emphatic in his testimony that he
had been told to await the deficiency notice and call his tax
advisers immediately upon the receipt of such a document. One of
his accountants, Noreen Masztal, testified that she had explained
to Mr. Sicari that the 90-day letter should be expected and that
in their own interests the Sicaris should act on it promptly.
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The Sicaris deny actual receipt although they were expecting
the 90-day letter. The letter carrier does not remember
delivering the letter. Postal procedures were not followed, and
the actual envelope is mismarked. The address employed by
respondent, while it generally should have resulted in delivery
of the mail, was not the taxpayers' last known address.
Under all these circumstances, we find that actual delivery
was not accomplished.
Accordingly, based upon the facts and circumstances of this
case, we will deny respondent's motion to dismiss for lack of
jurisdiction and will dismiss for lack of jurisdiction on the
ground that no valid notice of deficiency was ever issued or
delivered to petitioners.
An appropriate order will
be issued.