T.C. Memo. 2009-198
UNITED STATES TAX COURT
THOMAS BUTTI, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 7403-07L. Filed September 3, 2009.
Thomas Butti, pro se.
Frederick C. Mutter, for respondent.
MEMORANDUM FINDINGS OF FACT AND OPINION
VASQUEZ, Judge: Respondent sent a Decision Letter
Concerning Equivalent Hearing Under Section 6320 and/or 6330 of
the Internal Revenue Code (decision letter) to petitioner with
respect to a notice of Federal tax lien filed to collect
petitioner’s unpaid income tax liabilities for 1991, 1992, and
1993. The parties and the Court agree that the decision letter
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shall be treated as a notice of determination consistent with
Craig v. Commissioner, 119 T.C. 252 (2002). In response to the
decision letter petitioner timely filed a petition pursuant to
section 6330(d)1 seeking review of respondent’s determination.
The issues for decision are: (1) Whether respondent properly
issued a notice of deficiency to petitioner for 1991, 1992, and
1993; (2) whether petitioner received the notice of deficiency
for 1991, 1992, and 1993; and (3) whether respondent may proceed
with collection of the above-mentioned unpaid income tax
liabilities.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
The stipulation of facts and the attached exhibits are
incorporated herein by this reference. At the time he filed the
petition, petitioner resided in New York.
The Statutory Notice of Deficiency
Respondent audited petitioner’s income tax returns for 1991,
1992, and 1993. Petitioner signed Forms 872, Consent to Extend
the Time to Assess Tax, for the tax periods ending December 31,
1991 through 1993, extending the time to assess income tax for
1991, 1992, and 1993 to December 31, 1998.
1
Unless otherwise indicated, all section references are to
the Internal Revenue Code.
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A notice of deficiency was prepared for the deficiencies in
petitioner’s income tax for 1991, 1992, and 1993. As standard
operating procedure, the Commissioner makes a file copy of each
notice of deficiency. A file copy of a notice of deficiency
(which is kept by the Commissioner) differs from an original
notice of deficiency (which is mailed to the taxpayer) in that
the original notice of deficiency is stamped with a manager’s
name and initialed by a technical service reviewer, while the
file copy is initialed and dated by the technical service
reviewer on the date that the original notice of deficiency is
prepared.
After a technical service reviewer prepared petitioner’s
original notice of deficiency and the file copy of the notice of
deficiency, Tax Examining Technician Jessie Lewis (Ms. Lewis)
received: (1) The original notice of deficiency for mailing
addressed to petitioner in care of the Gowanda Correctional
Facility, P.O. Box 311, Gowanda, NY 14070 (Gowanda); (2) the file
copy of the notice of deficiency; and (3) a separate mailing
envelope for the original notice of deficiency.
Before mailing the original notice of deficiency, Ms. Lewis
(1) ensured that the notice of deficiency contained petitioner’s
Social Security number, was signed by a manager, was properly
addressed to petitioner, and showed the correct amount of tax due
from petitioner; (2) stamped the date “December 30, 1998” onto
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the original and the file copy of the notice of deficiency; and
(3) wrote “Z 009 132 170” on the top of page 1 of the file copy
of the notice of deficiency.
The envelope sent to petitioner at Gowanda contained the
original notice of deficiency, the Tax Advocate letter, and a
return envelope. The original notice of deficiency was sent by
certified mail, article No. Z 009 132 170, on December 30, 1998,
by Ms. Lewis to petitioner in care of Gowanda. The notice of
deficiency included petitioner’s inmate number, 97R6402. On
December 30, 1998, Ms. Lewis walked the original notice of
deficiency to the U.S. post office and mailed it to petitioner to
ensure it was mailed before December 31, 1998.
In addition to mailing the original notice of deficiency to
petitioner on December 30, 1998, Ms. Lewis prepared a U.S. Postal
Service Form 3877, Acceptance of Registered, Insured, C.O.D. and
Certified Mail, or its equivalent, a certified mail list, for
December 30, 1998 (PS Form 3877). The PS Form 3877 states in the
first entry “Statutory Notice of Deficiency for the years
indicated have been sent to the following taxpayers”. The PS
Form 3877 lists article No. Z 009 132 170 as mailed by certified
mail to Thomas A. Butti, DIN: 97R6402, c/o Gowanda Correctional
Facility, P.O. Box 311, Gowanda, NY 14070. In the remarks column
associated with article No. Z 009 132 170 is the following:
“9112, 9212, 9312”. The PS Form 3877 indicates that the mail
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listed on the form, including article No. Z 009 132 170 mailed to
petitioner, was sent by the “District Director of IRS” from the
address “P.O. Box 4645, Grand Central Station, New York, New York
10163”. Next to this was typed “By J. Lewis”, and Ms. Lewis
initialed the PS Form 3877 to indicate that she had prepared it.
Ms. Lewis followed proper procedures in mailing the original
notice of deficiency to petitioner on December 30, 1998.
Gowanda’s incoming certified, registered, and express mail
log for January 4, 1999 (mail log), shows that on that date
Gowanda received two pieces of certified mail on petitioner’s
behalf. The return address on the mail log for both letters is
“IRS P.O.B. 4645 Grand Central St., NYC”. The mail log shows
that one of the pieces of mail bore the certified mail number
“Z009132170”.
On January 4, 1999, petitioner was not at Gowanda.
Petitioner was out to court and was housed at various other
correctional facilities between October 22, 1998, and January 20,
1999. Mail petitioner received at Gowanda between October 22,
1998, and January 20, 1999, would have been held for him until he
returned to Gowanda.
On January 21, 1999, petitioner signed the legal mail
logbook for two pieces of mail from “Internal Rev Grand Central”.
Between December 1998 and March 1999 petitioner received at
Gowanda only two articles of certified mail from respondent.
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One of the articles of certified mail petitioner received was
article No. “Z 009 132 170”.
Collection
On November 5, 2002, the Internal Revenue Service (IRS)
filed a notice of Federal tax lien (NFTL) with respect to
petitioner’s 1991, 1992, and 1993 income tax liabilities with the
County Clerk, Westchester County, White Plains, New York.
On November 8, 2002, respondent sent to petitioner a Notice
of Federal Tax Lien Filing and Your Right to a Hearing Under IRC
6320, with respect to petitioner’s income tax liabilities for
1991, 1992, and 1993. Petitioner filed a timely Form 12153,
Request for a Collection Due Process Hearing (collection
hearing).
Appeals Officer Federico Lawrence (AO Lawrence) was assigned
to petitioner’s case. In accordance with petitioner’s wishes, AO
Lawrence conducted the collection hearing by correspondence.
Petitioner did not offer any collection alternatives during the
collection hearing. Petitioner did not complete Form 433-A,
Collection Information Statement for Wage Earners and
Self-Employed Individuals, as requested by AO Lawrence.
AO Lawrence reviewed transcripts and the case file for 1991,
1992, and 1993 and determined that respondent had satisfied the
legal and administrative requirements in filing the NFTL. On the
basis of his review of the case file and transcripts AO Lawrence
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also determined that: (1) The assessment period had not expired
for 1991, 1992, and 1993 before the issuance of the notice of
deficiency sent to petitioner on December 30, 1998; (2)
petitioner did not petition the Tax Court in response to the
notice of deficiency; (3) respondent timely assessed petitioner’s
tax liabilities for 1991, 1992, and 1993; (4) respondent made
proper notice and demand for payment after assessment of the
taxes; and (5) the collection period had not expired for 1991,
1992, and 1993.
On March 3, 2007, respondent mailed the decision letter
sustaining the filing of the NFTL with respect to petitioner’s
tax liabilities for 1991, 1992, and 1993.
OPINION
Section 6320 provides that the Secretary shall furnish the
person described in section 6321 with written notice of the
filing of a notice of lien under section 6323. Section 6320
further provides that the taxpayer may request administrative
review of the matter (in the form of a hearing) within a 30-day
period. The hearing generally shall be conducted consistent with
the procedures set forth in section 6330(c), (d), and (e). Sec.
6320(c).
Pursuant to section 6330(c)(2)(A), a taxpayer may raise at
the section 6330 hearing any relevant issue with regard to the
Commissioner’s collection activities, including spousal defenses,
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challenges to the appropriateness of the Commissioner’s intended
collection action, and alternative means of collection. Sego v.
Commissioner, 114 T.C. 604, 609 (2000); Goza v. Commissioner, 114
T.C. 176, 180 (2000). In addition to considering issues raised
by the taxpayer under section 6330(c)(2), the Appeals officer
must also verify that the requirements of any applicable law or
administrative procedure have been met. Sec. 6330(c)(1), (3);
Hoyle v. Commissioner, 131 T.C. ___, ___ (2008) (slip op. at 5).
Petitioner questioned whether respondent issued a notice of
deficiency to him for 1991, 1992, and 1993 (i.e., whether the
requirements of applicable law and administrative procedure have
been met). In Butti v. Commissioner, T.C. Memo. 2008-82 (Butti
I), we were faced with the same issue regarding the same
taxpayer’s 1989 and 1990 income tax liabilities. In Butti I, as
in the case at bar, respondent contended that a notice of
deficiency was issued to petitioner. In Butti I we held that it
was not.
Respondent bears the burden of proving by competent and
persuasive evidence that the notice of deficiency was properly
mailed. See Coleman v. Commissioner, 94 T.C. 82, 90 (1990);
August v. Commissioner, 54 T.C. 1535, 1536-1537 (1970). The act
of mailing may be proven by documentary evidence of mailing or by
evidence of respondent’s mailing practices corroborated by direct
testimony. See Coleman v. Commissioner, supra at 90.
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Where the existence of the notice of deficiency is not in
dispute, a properly completed PS Form 3877 by itself is
sufficient, absent evidence to the contrary, to establish that
the notice was properly mailed to a taxpayer. United States v.
Zolla, 724 F.2d 808, 810 (9th Cir. 1984); Coleman v.
Commissioner, supra at 91. However, where the existence of the
notice of deficiency is in dispute, we have previously rejected
the Commissioner’s reliance on the presumption of regularity
based solely on the PS Form 3877. Pietanza v. Commissioner, 92
T.C. 729 (1989), affd. without published opinion 935 F.2d 1282
(3d Cir. 1991); see also Koerner v. Commissioner, T.C. Memo.
1997-144 (a PS Form 3877 does not by itself establish that the
Commissioner mailed a notice of deficiency); cf. Spivey v.
Commissioner, T.C. Memo. 2001-29 (the Commissioner produced a
copy of the notice of deficiency and witnesses described how
notices of deficiency are produced and mailed).
In Butti I respondent contended that Pietanza was
distinguishable; however, respondent did not show that the facts
present in Butti I differed in any material way from those in
Pietanza. In Pietanza, as in Butti I, the Commissioner: (1)
Lost the administrative file, (2) had no copy of a notice of
deficiency, (3) did not establish that a final notice of
deficiency ever existed, (4) relied on PS Form 3877, and (5) did
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not introduce evidence showing how the Commissioner’s personnel
prepare and mail notices of deficiency.
The case at bar is distinguishable from Pietanza and
Butti I. Albeit belatedly, respondent found petitioner’s
administrative file. Respondent introduced the file copy of the
notice of deficiency. Respondent introduced testimonial evidence
establishing how respondent’s personnel prepare and mail notices
of deficiency. Revenue Agent Robert Gruska, who for 20 years has
prepared notices of deficiency, credibly testified that as shown
by the file copy of the notice of deficiency, an original notice
of deficiency was prepared for the deficiencies in petitioner’s
income tax for 1991, 1992, and 1993. Furthermore, respondent
called as a witness Ms. Lewis, the IRS employee who mailed the
original notice of deficiency to petitioner, and she credibly
testified as to the mailing of the original notice of deficiency.
The original notice of deficiency sent to petitioner on
December 30, 1998, was properly prepared in accordance with
respondent’s policies and procedures. Respondent has shown that
he timely issued the notice of deficiency before assessing
petitioner’s taxes.
Petitioner contends that even if respondent issued the
notice of deficiency he never received it. The documentary
evidence is to the contrary.
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Receipt of a notice of deficiency means receipt in time to
petition the Tax Court for a redetermination of the deficiency.
Secs. 301.6320-1(e)(3), Q&A-E2, 301.6330-1(e)(3), Q&A-E2, Proced.
& Admin. Regs. Respondent has established that on January 4,
1999, Gowanda received the original notice of deficiency and that
on January 21, 1999, petitioner acknowledged receipt of the
original notice of deficiency by signing the legal mail logbook
maintained by Gowanda.
The original notice of deficiency sent to Gowanda was sent
by certified mail, article No. Z 009 132 170. Certified mail,
article No. Z 009 132 170, is listed on the PS Form 3877 dated
December 30, 1998. The sender’s address on the PS Form 3877 is
“P.O. Box 4645, Grand Central Station”. Gowanda’s mail log lists
two certified mailings to petitioner received on January 4, 1999,
with certified mail article No. Z 009 132 170, being one of them
and lists a return address of “IRS P.O.B. 4645, Grand Central
St., NYC”. Gowanda’s legal mail logbook shows that petitioner
picked up two pieces of mail on January 21, 1999, and each piece
of mail is listed in a row that shows the mail was from “Internal
Rev Grand Central”.
Accordingly, we conclude that petitioner received the notice
of deficiency in time to petition the Tax Court for
redetermination of the deficiencies. This means that petitioner
may not challenge his underlying tax liabilities and we review
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respondent’s administrative determination for abuse of
discretion. See Sego v. Commissioner, 114 T.C. at 610.
Petitioner did not offer any collection alternatives at his
collection hearing or in his petition. AO Lawrence verified that
the requirements of any applicable law or administrative
procedure had been met. Accordingly, we conclude that respondent
did not abuse his discretion in determining to proceed with
collection of petitioner’s 1991, 1992, and 1993 income tax
liabilities.
To reflect the foregoing,
Decision will be entered
for respondent.