JOHN C. HOM & ASSOCIATES, INC., PETITIONER v.
COMMISSIONER OF INTERNAL REVENUE,
RESPONDENT
Docket No. 14081–11. Filed May 7, 2013.
R moved to dismiss the proceeding for lack of jurisdiction
because petitioner’s corporate powers were suspended at the
time the petition was filed. Petitioner contends that the notice
of deficiency is invalid for failing to include the address and
telephone number of the local office of the National Taxpayer
Advocate and that inclusion of a Web page link is inadequate
compliance with I.R.C. sec. 6212. Held: The notice was not
invalid. The motion to dismiss will be granted.
210
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(210) JOHN C. HOM & ASSOCS., INC. v. COMMISSIONER 211
John C. Hom (an officer), for petitioner.
Sarah E. Sexton, for respondent.
OPINION
COHEN, Judge: This case is before the Court on respond-
ent’s motion to dismiss for lack of jurisdiction. The issues for
decision are whether the notice of deficiency was invalid for
failing to include the address and telephone number of the
local office of the National Taxpayer Advocate, as directed by
section 6212(a), and whether the case should be dismissed for
lack of jurisdiction because petitioner’s corporate status was
suspended at the time the petition was filed. All section ref-
erences are to the Internal Revenue Code, and all Rule ref-
erences are to the Tax Court Rules of Practice and Proce-
dure.
Background
Petitioner was incorporated in California on April 2, 1986.
The California Franchise Tax Board suspended the powers,
rights, and privileges of petitioner on March 1, 2004. The
suspension remained in effect until April 13, 2012.
In a notice of deficiency sent March 16, 2011, respondent
determined deficiencies, additions to tax, and penalties as
follows:
Penalty Addition to tax
Year Deficiency sec. 6662(a) sec. 6654(a)(1)
2005 $38,520 $7,704.00 $9,630.00
2006 47,072 9,414.40 11,768.00
2007 27,354 5,470.00 6,838.50
2008 27,886 5,577.20 6,971.50
2009 28,251 5,650.20 7,104.75
The notice of deficiency included the following paragraph:
The contact person can access your tax information and help you get
answers. You also have the right to contact the office of the Taxpayer
Advocate. Taxpayer Advocate assistance is not a substitute for estab-
lished IRS procedures such as the formal appeals process. The Taxpayer
Advocate is not able to reverse legally correct tax determinations, nor
extend the time fixed by law that you have to file a petition in the U.S.
Tax Court. The Taxpayer Advocate can, however, see that a tax matter
that may not have been resolved through normal channels gets prompt
and proper handling. If you want Taxpayer Advocate assistance, please
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212 140 UNITED STATES TAX COURT REPORTS (210)
contact the Taxpayer Advocate for the IRS office that issued this notice
of deficiency. Please visit our website at www.irs.gov/advocate/content/
0,,id=150972,00.html for the Taxpayer Advocate telephone numbers and
addresses for this location.
The petition was filed June 13, 2011. After the case was
set for trial, respondent filed a motion to dismiss for lack of
jurisdiction pointing out suspension of petitioner’s corporate
privileges as of the time the petition was filed. Petitioner
first objected to the motion on the ground that the suspen-
sion had ended. When the motion was heard, however, peti-
tioner argued that the notice of deficiency was invalid for
failure to comply with the provision of section 6212(a) that
a notice of deficiency ‘‘shall include a notice to the taxpayer
of the taxpayer’s right to contact a local office of the taxpayer
advocate and the location and phone number of the appro-
priate office.’’
Discussion
Prerequisites to the deficiency jurisdiction of this Court are
a valid notice of deficiency and a timely petition. Rule 13(a),
(c); see, e.g., Monge v. Commissioner, 93 T.C. 22, 27 (1989);
Abeles v. Commissioner, 91 T.C. 1019, 1025 (1988). If either
a valid notice or a timely petition is lacking, the petition will
be dismissed for lack of jurisdiction. The ground for lack of
jurisdiction is generally stated, however, because the con-
sequences of our holding the Commissioner may proceed to
assess the taxes that have been determined would be that
the taxpayer may challenge the determination on the merits
only by making payment, filing a claim for refund, and
seeking a judicial remedy in a refund forum. See, e.g.,
DeWelles v. United States, 378 F.2d 37, 39 (9th Cir. 1967);
Pietanza v. Commissioner, 92 T.C. 729, 735–736 (1989), aff ’d
without published opinion, 935 F.2d 1282 (3d Cir. 1991);
McKay v. Commissioner, 89 T.C. 1063, 1067 (1987), aff ’d, 886
F.2d 1237 (9th Cir. 1989); Keeton v. Commissioner, 74 T.C.
377, 379 (1980).
Validity of the Notice of Deficiency
Petitioner contends that the statutory notice of deficiency
is invalid because the inclusion of a Web site address where
the address and telephone number of the local office of the
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(210) JOHN C. HOM & ASSOCS., INC. v. COMMISSIONER 213
National Taxpayer Advocate may be found does not comply
with the applicable statute. The language petitioner relies on
is the last sentence of section 6212(a) and was added by the
Internal Revenue Service Restructuring and Reform Act of
1998 (RRA 98), Pub. L. No. 105–206, sec. 1102(b), 112 Stat.
at 698. That section now appears as follows:
SEC. 6212. NOTICE OF DEFICIENCY.
(a) In General.—If the Secretary determines that there is a deficiency
in respect of any tax imposed by subtitle A or B or chapter 41, 42, 43,
or 44, he is authorized to send notice of such deficiency to the taxpayer
by certified mail or registered mail. Such notice shall include a notice
to the taxpayer of the taxpayer’s right to contact a local office of the tax-
payer advocate and the location and phone number of the appropriate
office.
Although the adequacy of the content of a notice of defi-
ciency has frequently been litigated, courts have held repeat-
edly that a notice of deficiency is valid if it notifies the tax-
payer that a deficiency has been determined and gives the
taxpayer the opportunity to petition this Court for redeter-
mination of the proposed deficiency. See Frieling v. Commis-
sioner, 81 T.C. 42, 53 (1983); Perlmutter v. Commissioner, 44
T.C. 382 (1965), aff ’d, 373 F.2d 45 (10th Cir. 1967). A notice
is invalid for this purpose only where the notice discloses on
its face that there has been no determination. See Clapp v.
Commissioner, 875 F.2d 1396, 1400 (9th Cir. 1989) (distin-
guishing Scar v. Commissioner, 814 F.2d 1363 (9th Cir.
1987), rev’g 81 T.C. 855 (1983)). Mistakes in a notice will not
invalidate it if there is no prejudice to the taxpayer. Elings
v. Commissioner, 324 F.3d 1110 (9th Cir. 2003).
In Smith v. Commissioner, 114 T.C. 489, 491 (2000), aff ’d,
275 F.3d 912 (10th Cir. 2001), we addressed whether the
failure to include in the notice the date a petition was due
invalidated the notice. The requirement to include the last
day to file the petition was also added by RRA 98 sec. 3463,
112 Stat. at 767, and is stated as follows: ‘‘The Secretary of
the Treasury or the Secretary’s delegate shall include on
each notice of deficiency under section 6212 of the Internal
Revenue Code of 1986 the date determined by such Secretary
(or delegate) as the last day on which the taxpayer may file
a petition with the Tax Court.’’
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214 140 UNITED STATES TAX COURT REPORTS (210)
Here, as in Smith, section 6212 does not specify that a
notice sent without the specified information is invalid. As in
Smith, there was no prejudice shown by petitioner. The
information described in section 6212(a) was made available
to the addressee of the notice, although in a manner that
may not be sufficient for a taxpayer without access to a com-
puter or knowledge of how to access a Web site. The notice,
however, was not misleading, and petitioner was able to file,
and did file, a timely petition.
The Court of Appeals for the Ninth Circuit reached the
same result in Elings v. Commissioner, 324 F.3d at 1112–
1113, explaining:
In other contexts, the Supreme Court and this court have held that,
when Congress fails to specify a consequence for an agency’s failure to
follow mandatory requirements, the failure does not render the agency’s
action ineffectual.14 Obedient to this instruction, we conclude that the
IRS’s failure to include the calculated date does not invalidate the notice.
The minor and technical nature of the error and the lack of prejudice
in this case further supports our conclusion. Non-prejudicial minor or
technical errors in a notice do not invalidate the notice. Major errors,
such as those that show the IRS failed to comply with the most funda-
mental statutory mandate, can invalidate a notice. However, these
errors are quite rare. The failure to include the calculated date, when
notice was dated and instructed Elings that he had ninety days in which
to file his petition, was a non-prejudicial minor or technical error. There-
fore, the error did not invalidate the notice. [Additional fn. refs. omitted.]
14See United States v. James Daniel Good Real Prop., 510 U.S. 43, 63–
65, 114 S.Ct. 492, 126 L.Ed.2nd 490 (1993); Brock v. Pierce County, 476
U.S. 253, 258–62, 106 S.Ct. 1834, 90 L.Ed.2d 248 (1986) (holding, when
addressing an agency’s mandatory duty to act within a certain time
period, that ‘‘courts should not assume that Congress intended the
agency to lose its power to act’’ for failure to follow even mandatory
statutory requirements when Congress has not so stated); see also Inter-
continental Travel Mktg., Inc. v. FDIC, 45 F.3d 1278, 1284–85 (9th Cir.
1994) (concluding that FDIC’s failure to comply with mandatory statu-
tory requirement of mailing a notice, when the failure was merely neg-
ligent, did not justify precluding the agency from further action).
The Court of Appeals for the Ninth Circuit specifically
agreed with the analysis by the Court of Appeals for the
Tenth Circuit in affirming Smith v. Commissioner, 275 F.3d
912, and with the Court of Appeals for the Fifth Circuit
reaching the same result in Rochelle v. Commissioner, 293
F.3d 740 (5th Cir. 2002), aff ’g 116 T.C. 356, 362–363 (2001).
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(210) JOHN C. HOM & ASSOCS., INC. v. COMMISSIONER 215
The rationale of Smith and Elings applies at least as much
to this case. There was no prejudice to petitioner. Petitioner
does not allege that any attempt to contact the local office of
the National Taxpayer Advocate was made. Moreover, it is
apparent from the record that petitioner’s officer and share-
holder is adept at Internet research and could easily have
accessed the Web site to locate the appropriate local office of
the National Taxpayer Advocate. We conclude that the notice
of deficiency was valid.
We have considered the case petitioner cites, Marangi v.
Gov’t of Guam, 319 F. Supp. 2d 1179 (D. Guam 2004). The
notice in question, and held invalid there, did not include
any reference to the taxpayer’s right to contact a local office
of the National Taxpayer Advocate, and there was no such
office in Guam at the time. Thus the taxpayer was prejudiced
by the denial of a right described by the District Court as
meaningful assistance and protection, significant and impor-
tant. Id. at 1184. That case is distinguishable and, in any
event, not precedential.
Corporate Capacity To File Petition
Rule 60(c) states in part: ‘‘The capacity of a corporation to
engage in such litigation [in this Court] shall be determined
by the law under which it was organized.’’ Petitioner’s cor-
porate capacity was suspended at the time the petition was
filed on June 13, 2011, and was not reinstated until April
2012, shortly before trial. Under the same scenario, in David
Dung Le, M.D., Inc. v. Commissioner, 114 T.C. 268 (2000),
aff ’d, 22 Fed. Appx. 837 (9th Cir. 2001), interpreting Cali-
fornia law, we concluded that the Court lacked jurisdiction.
That case is controlling here. Respondent’s motion to dismiss
for lack of jurisdiction will be granted.
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216 140 UNITED STATES TAX COURT REPORTS (210)
To reflect the foregoing,
An appropriate order of dismissal for lack
of jurisdiction will be entered.
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