T.C. Memo. 2008-175
UNITED STATES TAX COURT
CARLOS SAMANIEGO AND BERTHA E. LUCAS, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 25519-07. Filed July 24, 2008.
Ps altered and thus falsified a notice of
deficiency in order to make it appear that their
petition for redetermination was timely filed with the
Court.
Held: R’s motion to dismiss for lack of
jurisdiction on the ground that the petition was not
timely filed shall be granted.
Held, further, the Court shall make its Order To
Show Cause absolute and impose a penalty under I.R.C.
sec. 6673(a)(1), I.R.C., on petitioners for instituting
this action for purposes of delay.
T. Richard Sealy III and Eric Benson, for respondent.
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MEMORANDUM OPINION
ARMEN, Special Trial Judge: This case is before the Court
on (1) respondent’s Motion To Dismiss For Lack Of Jurisdiction,
filed December 11, 2007, and (2) the Court’s Order To Show Cause,
dated May 21, 2008. In his motion, respondent contends that this
case should be dismissed for lack of jurisdiction on the ground
that the petition was not filed within the time prescribed by
section 6213(a) or section 7502.1 In its order, the Court
directed petitioners to show cause why the Court should not
impose a penalty on them pursuant to section 6673(a)(1) for
instituting or maintaining a proceeding in this Court primarily
for delay.
At the time that the petition was filed, petitioners resided
in the State of Texas.
Background
The facts necessary to a resolution of the two matters
before us are as follows:
On July 23, 2007, respondent mailed joint duplicate original
notices of deficiency to petitioner Carlos Samaniego and to
petitioner Bertha E. Lucas (collectively, petitioners). In the
1
All section references are to the Internal Revenue Code
of 1986, as amended. All Rule references are to the Tax Court
Rules of Practice and Procedure.
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notice respondent determined a deficiency in petitioners’ Federal
income tax for the taxable year 2004 of $3,435.
The notice was sent to each petitioner by certified mail
addressed to each of them at the same address subsequently listed
by petitioners on their petition. The U.S. Postal Service has
reported that both duplicate original notices of deficiency were
delivered at 12:13 p.m. on July 27, 2007.
The first page of the notice of deficiency states as
follows: “Last Date to Petition Tax Court: October 22, 2007”.
On November 6, 2007, petitioners, acting pro se, filed a
petition with this Court seeking a redetermination of the
deficiency determined by respondent in the notice of deficiency.
The petition, which was handwritten on a Tax Court form, arrived
at the Court by regular, first-class mail in an envelope bearing
a clearly legible U.S. Postal Service postmark date of October
26, 2007.
The address appearing on the petition is the same address to
which the notice of deficiency was sent.
Paragraph 2 of the petition identifies 2004 as the taxable
year in issue and references an IRS notice dated “7-28-07” as the
notice from which petitioners were appealing. Attached as an
exhibit to the petition is a copy of the first page of
respondent’s July 2007 notice of deficiency. However, the
exhibit copy of the notice of deficiency has been altered in two
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material respects: First, the date of the notice has been
altered to read July 28, 2007, rather than July 23, 2007; second,
the “Last Date to Petition Tax Court” has been altered to read
October 28, 2007, rather than October 22, 2007.
As indicated, respondent filed a Motion To Dismiss For Lack
Of Jurisdiction on December 11, 2007.2 In the motion, respondent
contends that dismissal for lack of jurisdiction is required
because petitioners failed to file a timely petition. Further,
paragraph 1 of respondent’s motion includes the following
statements:
It appears that Petitioners altered and thus falsified
the dates of issuance and filing of the Notice of
Deficiency letter attached to the Petition. Thus, it
appears that Petitioners knowingly filed a false
document with the Court. Respondent welcomes
Petitioners’ response to this observation.
On December 12, 2007, the Court issued a Notice Of Filing
affording petitioners an opportunity to respond to respondent’s
motion. The Notice Of Filing, which was served on petitioners by
certified mail, was returned to the Court by the U.S. Postal
Service marked “Unclaimed - Return to Sender”. Thereupon, by
Order dated January 15, 2008, and served on petitioners by both
certified mail and regular, first-class mail, the Court extended
2
Respondent certified that a copy of his motion was served
on petitioners at the address of record on Dec. 10, 2007.
Service was made by regular, first-class mail and was not
returned undelivered to respondent by the Postal Service.
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the time within which petitioners were to respond to respondent’s
motion.
On February 12, 2008, petitioners filed a generic objection
to respondent’s motion, saying nothing about either the
timeliness matter upon which respondent’s motion was premised or
the “altered and thus falsified” statements made in paragraph 1
thereof. Petitioners requested that all future service be made on
them by both certified mail and regular, first-class mail.
By Order dated February 15, 2008, the Court directed
petitioners to file a supplement to their February 12, 2008
Objection setting forth their position regarding the substantial
differences between respondent’s notice of deficiency and the
copy thereof that petitioners attached to their petition as an
exhibit. That Order also provided for service on petitioners by
both certified mail and regular, first-class mail.3
Petitioners did not respond to the Court’s February 15, 2008
Order.
By Order dated March 31, 2008, the Court calendared
respondent’s motion for hearing on May 21, 2008, in Washington,
D.C. In that Order, petitioners were specifically advised that
they could submit, pursuant to Rule 50(c), a written statement in
lieu of appearing personally at the hearing. The Order was
3
The copy of the Order that was served by certified mail
was returned to the Court undelivered and marked “unclaimed”;
however, the other copy was not returned undelivered.
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served on petitioners by both certified mail and regular, first-
class mail. Neither copy was returned to the Court undelivered.
By Order dated April 1, 2008, the Court focused on the
“altered and thus falsified” statements made by respondent in
paragraph 1 of his motion. Specifically, the Court directed
petitioners to respond to the Order and to provide the original
notice of deficiency from which they appealed to this Court. We
expressly advised petitioners that their failure to respond might
be construed by the Court as an admission by them that they had
“altered and thus falsified” the notice of deficiency, as
suggested by respondent. Again, the Order provided for service
on petitioners by both certified mail and regular, first-class
mail. Neither copy was returned to the Court undelivered.
Petitioners did not respond to the Court’s April 1, 2008
Order.
Petitioners did not appear at the May 21, 2008 hearing in
Washington, D.C., nor did they file a written statement pursuant
to Rule 50(c).
Immediately after the hearing, the Court issued its Order To
Show Cause dated May 21, 2008. The final three paragraphs of the
preamble of that order provide as follows:
The record in this case clearly demonstrates that
respondent sent petitioners a notice of deficiency for
2004 on July 23, 2007, and not on July 28, 2007.
Accordingly, the last day to petition the Tax Court
would have been Monday, October 22, 2007, and not
October 28, 2007.1 An examination of the copy of the
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first page of the notice attached as an exhibit to the
petition reveals that the July 23, 2007 date has been
altered to read July 28, 2007, and that the October 22,
2007 date has been altered to read October 28, 2007.
The petition in this case was received and filed
by the Court on November 6, 2007. The envelope in
which the petition was mailed to the Court bears a
clearly legible United States Postal Service postmark
date of October 26, 2007. Thus, it appears that the
petition was not timely filed; it also appears that the
notice of deficiency was altered in order to make it
appear that the petition was timely filed.
As relevant herein, I.R.C. section 6673(a)(1)
authorizes the Tax Court to require a taxpayer to pay
to the United States a penalty not in excess of $25,000
whenever it appears that proceedings have been
instituted or maintained by the taxpayer primarily for
delay or that the taxpayer’s position in such
proceeding is frivolous or groundless. Altering the
date of a notice of deficiency and altering the date on
such notice by which a petition must be filed serve
only one purpose, namely, to make it appear that the
petition was timely filed in the hope that the case
will proceed. That stratagem, however, is tantamount
to instituting or maintaining a proceeding for purposes
of delay because a proceeding in this Court serves to
defer the date of assessment and collection of the
taxpayer’s tax liability.
1
If the notice had been dated July 28, 2007, the
last day to petition the Tax Court would have been
Friday, Oct. 26, 2007, and not Oct. 28, 2007. (We note
incidentally that Oct. 28, 2007, was a Sunday.)
As before, the Order To Show Cause provided for service on
petitioners by both certified mail and regular, first-class mail.
Neither copy was returned to the Court undelivered.
Petitioners did not appear at the show cause hearing on June
18, 2008, in Washington, D.C. However, later that day the Court
received from petitioners a brief written statement, which was
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filed pursuant to Rule 50(c). The statement provides in its
entirety as follows:
To the Court:
It was never the intention of the petitioners’ [sic] to
falsify or alter any documents pursuant to their case;
they only wished to be heard. There never was an
intention to file a groundless or frivolous case.
Due to family and travel difficulties, it is impossible
for anyone to be present at this hearing. Mr.
Samaniego and Ms. Lucas are Sales Representatives with
small children, and cannot attend. The assumption was
that their Petition would be dismissed for non-
attendance (original Change of Venue was to El Paso,
Texas), and they would deal with their tax bill,
accordingly.
No intent was meant to either disrespect nor defraud
the Court, in any way. We apologize for any
inconvenience to the Court, and ask that the Court rule
on this matter accordingly. Thank you for your time
and consideration.
Petitioners attached to their statement a copy of the Court’s May
21, 2008 Order To Show Cause.
Discussion
A. Respondent’s Motion
This Court’s jurisdiction to redetermine a deficiency in
income tax depends on 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
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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). Indeed, if the notice is
mailed to the taxpayer at the taxpayer’s last known address,
actual receipt of the notice by the taxpayer is immaterial. See
King v. Commissioner, 857 F.2d 676, 679 (9th Cir. 1988), affg. 88
T.C. 1042 (1987); Yusko v. Commissioner, 89 T.C. 806, 810 (1987);
Frieling v. Commissioner, supra at 52. The taxpayer, in turn,
has 90 days, or 150 days if the notice is addressed to a person
outside the United States, from the date the notice of deficiency
is mailed to file a petition in this Court for a redetermination
of the contested deficiency. Sec. 6213(a). By virtue of section
7502, a petition that is timely mailed is deemed to be timely
filed.
It is clear in the present case that respondent mailed the
notice of deficiency to petitioners on July 23, 2007. See
Magazine v. Commissioner, 89 T.C. 321, 327 n.8 (1987) (holding
that Postal Service Form 3877, or its equivalent, represents
direct evidence of the date of mailing of the notice of
deficiency). Therefore, the 90-day period within which
petitioners were required to file their petition with the Court
expired on Monday, October 22, 2007. See sec. 7503 (regarding
the time for performance of acts where the last day otherwise
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falls on a Saturday, Sunday, or legal holiday). However,
petitioners did not file a petition for redetermination with this
Court until November 6, 2007, a date after the expiration of the
critical 90-day period. Moreover, the petition arrived at the
Court in an envelope bearing a clearly legible U.S. Postal
Service postmark date of October 26, 2007, once again a date
after the expiration of the critical 90-day period. Under these
circumstances, respondent contends that the petition was not
timely filed and that the Court lacks jurisdiction to redetermine
petitioners’ liability for the deficiency in tax for the taxable
year in issue.
The defense most commonly asserted by taxpayers in cases
such as the present one is that a particular notice of deficiency
was not mailed to the taxpayer at the taxpayer’s last known
address and is therefore invalid. However, this defense has not
been raised in the present case, and the record suggests that any
such defense would be unavailing given the fact that petitioners
had the same address at the time when the notice of deficiency
was mailed and when the petition was filed. Thus, we need not
belabor this matter.
In view of the foregoing, we hold that the petition in this
case was not timely filed pursuant to either section 6213(a) or
section 7502. We shall therefore grant respondent’s motion.
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B. Order To Show Cause
We turn now to the Court’s Order To Show Cause dated May 21,
2008.
As petitioners were previously advised, and as relevant
herein, section 6673(a)(1) authorizes the Tax Court to require a
taxpayer to pay to the United States a penalty not in excess of
$25,000 whenever it appears that proceedings have been instituted
or maintained by the taxpayer primarily for delay. Altering the
date of a notice of deficiency and altering the date on the
notice by which a petition must be filed serve only one purpose,
namely, to make it appear that the petition was timely filed in
the hope that the case will proceed. That stratagem, however, is
tantamount to instituting or maintaining a proceeding for
purposes of delay because a proceeding in this Court serves to
defer the date of assessment and collection of the taxpayer’s tax
liability.
Paragraph 1 of respondent’s motion clearly sets forth
respondent’s allegations regarding the alteration and
falsification of the July 23, 2007 notice of deficiency.
Respondent invited petitioners to respond to those allegations.
Petitioners never meaningfully replied.
Further, in our Order dated February 15, 2008, and in our
subsequent Order dated April 1, 2008, we focused on respondent’s
allegations and directed petitioners to address the discrepancies
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between respondent’s notice of deficiency and the copy thereof
that petitioners attached to their petition as an exhibit.
Petitioners never responded to either order.
Although petitioners did respond to the Court’s May 21, 2008
Order To Show Cause, petitioners’ statement did not persuade us
that the order should be discharged. Petitioners merely alleged
that it was not their “intention” to falsify or alter any
document. However, petitioners did not deny the fact that the
notice of deficiency had been altered or offer any explanation
how that had happened. Further, petitioners did not address the
fact that their handwritten petition specifically referenced the
altered date, i.e., “7-28-07”, as the date of the notice from
which they were appealing. Petitioners also did not offer any
explanation how a copy of the altered notice came to be attached
to their petition as an exhibit. And, to date, petitioners have
ignored our April 1, 2008 Order directing them to produce the
original notice of deficiency.
Petitioners were given four opportunities to address the
situation and explain themselves. To ensure that petitioners had
notice, the Court consistently served its orders on petitioners
by both certified mail and regular, first-class mail. Thus:
Petitioners essentially ignored our Order dated January 15,
2008, by filing a generic objection to respondent’s motion. In
that generic objection, petitioners ignored the serious
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allegations made by respondent that petitioners had “knowingly
filed a false document with the Court.”
Petitioners also ignored our Order dated February 15, 2008,
and our Order dated April 1, 2008. Indeed, in the latter order
we expressly advised petitioners that their failure to respond
might be construed by the Court as an admission by them that they
had “altered and thus falsified” the July 23, 2007 notice of
deficiency.
In their Rule 50(c) statement, petitioners tell us that
“they only wished to be heard.” An altered notice of deficiency
offered petitioners the opportunity, at least if the alterations
went undiscovered, to challenge respondent’s deficiency
determination in court, i.e., to be heard. It would appear that
petitioners perceived the risk to this ploy as nothing other than
the dismissal of their case for lack of jurisdiction, the
consequence of which would be no different than defaulting on the
notice of deficiency in the first place.
The integrity of the judicial process demands that we not
reward petitioners’ stratagem by simply granting respondent’s
motion and moving on to the next case. Accordingly, we shall
make our Order To Show Cause absolute and impose on petitioners a
penalty under section 6673(a)(1) of $1,500.
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Conclusion
In sum, we shall enter an Order And Order Of Dismissal For
Lack Of Jurisdiction: (1) Granting respondent’s Motion To
Dismiss For Lack Of Jurisdiction, filed December 11, 2007; (2)
dismissing this case for lack of jurisdiction on the ground that
the petition was not timely filed; (3) making our Order To Show
Cause dated May 21, 2008, absolute; (4) imposing a penalty on
petitioners under section 6673(a)(1) of $1,500; and (5) providing
for service on petitioners by both certified mail and regular,
first-class mail.
An appropriate order and
order of dismissal for lack of
jurisdiction will be entered.