Stanley D. and Rosemary A. Clough v. Commissioner , 119 T.C. No. 10 ( 2002 )

119 T.C. No. 10UNITED STATES TAX COURT
STANLEY D. CLOUGH AND ROSEMARY A. CLOUGH, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 6836-02. Filed October 18, 2002.
R filed a motion to dismiss for lack of
jurisdiction on the ground that Ps’ petition was not
timely filed. R attached a copy of the certified mail
list showing that the notice of deficiency was mailed
on Dec. 4, 2001. The U.S. Postal Service postmark on
the envelope in which the petition was mailed was dated
Mar. 21, 2002, a date more than 90 days after the
mailing of the notice of deficiency. R filed sworn
declarations of the manager of the office that
maintained the certified mail list stating that the
list was obtained from records of that office. R also
filed a declaration of a processing clerk of the U.S.
Postal Service outlining the procedure that he follows
in processing certified mail and stating that on Dec.
4, 2001, he placed a postal stamp on the certified mail
list attached to R’s motion. Ps object to the
introduction into evidence of the certified mail list
and the declarations on the grounds that these
documents constitute inadmissible hearsay.
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Held: The certified mail list is a record of
regularly conducted activity under Fed. R. Evid. 802(6)
and is self-authenticated by the accompanying
declarations under Fed. R. Evid. 902(11).
Stanley D. Clough and Rosemary A. Clough, pro se.
Karen N. Sommers, Melinda G. Williams, and Donna F. Herbert,
for respondent.
OPINION
DAWSON, Judge: This case was assigned to Special Trial
Judge Carleton D. Powell pursuant to the provisions of section
7443A(b)(5) and Rules 180, 181, and 183.1 The Court agrees with
and adopts the opinion of the Special Trial Judge, which is set
forth below.
OPINION OF THE SPECIAL TRIAL JUDGE
POWELL, Special Trial Judge: This matter is before the
Court on respondent’s motion to dismiss for lack of jurisdiction,
as supplemented. Respondent contends that the Court lacks
jurisdiction in this case on the ground that the petition was not
filed within the time prescribed in sections 6213(a) and 7502(a).
Petitioners resided in Sylmar, California, at the time the
petition was filed.
1
Unless otherwise indicated, section references are to the
Internal Revenue Code, as amended, and Rule references are to the
Tax Court Rules of Practice and Procedure.
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Background
On or about December 28, 2001, petitioners received a notice
of deficiency that respondent sent by certified mail. In the
notice, respondent determined a deficiency of $51,440 in
petitioners’ 1999 Federal income tax and an accuracy-related
penalty under section 6662(a) of $10,288. The notice of
deficiency was addressed to petitioners at 13550 Foothill Blvd.
Unit, Sylmar, California. Petitioners do not dispute that the
Sylmar address was their correct address.
The cover page of the notice of deficiency contained the
following information: (1) The date of the notice of deficiency
(December 4, 2001); (2) petitioners’ primary taxpayer
identification number; (3) the type of tax, the taxable year, and
the amount of the deficiency and penalty; (4) the name of an
Internal Revenue Service contact person, as well as a phone
number, fax number, and hours to call; and (5) the last date to
file a petition with the Court (March 4, 2002).2 The notice of
deficiency was issued by the Internal Revenue Service Center in
Ogden, Utah (the Ogden Service Center).
On April 1, 2002, the Court received and filed a joint
2
Sec. 3463 of the Internal Revenue Service Restructuring
and Reform Act of 1998, Pub. L. 105-206, 112 Stat. 685, 767,
directs the Secretary to include on each notice of deficiency
issued under sec. 6212 the date of the last day on which the
taxpayer may file a petition with the Tax Court. See Rochelle v.
Commissioner, 116 T.C. 356, 359 (2001), affd. 293 F.3d 740 (5th
Cir. 2002).
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petition for redetermination challenging the above-described
notice of deficiency. The petition arrived at the Court in an
envelope bearing a U.S. Postal Service postmark dated March 21,
2002.
Respondent filed a motion to dismiss for lack of
jurisdiction on the ground that the petition was not timely
filed. Attached to respondent’s motion to dismiss is a copy of a
certified mail list.3 The certified mail list indicates that on
December 4, 2001, duplicate original notices of deficiency for
the taxable year 1999 were mailed to petitioners. Petitioners
are identified on the certified mail list by name, address, and
primary taxpayer identification number. A U.S. Postal Service
postmark dated December 4, 2001, appears in the lower right-hand
corner of the certified mail list. The postmark, which is
rectangular, identifies the U.S. Post Office as “IRS OGDEN UT
USPS-84201" and includes the facsimile signature of Greg L. Holt.
Petitioners object to respondent’s reliance on the certified mail
list on the ground the document constitutes inadmissable hearsay.
The matter was called for hearing at the Court’s motions
session in Washington, D.C., on June 19, 2002. Counsel for
respondent appeared. Respondent submitted a declaration executed
3
The Court has recognized that a certified mail list is
the equivalent of a Postal Service Form 3877, Acceptance of
Registered, Insured, C.O.D. and Certified Mail. See Stein v.
Commissioner, T.C. Memo. 1990-378.
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by Susan D. Petersen (Ms. Petersen), the manager of the
Correspondence/Processing Examination Department at the Ogden
Service Center. Ms. Petersen’s declaration states that she is a
custodian of various records, including certified mail lists.
Ms. Petersen’s declaration describes in general terms the
procedures that are used in mailing notices of deficiency,
including the transfer of notices of deficiency to the U.S.
Postal Service and the Ogden Service Center’s practice of
retaining certified mail lists. Ms. Petersen’s declaration
states that the copy of the certified mail list attached to
respondent’s motion to dismiss was obtained from records
maintained at the Ogden Service Center.
Petitioners did not appear, but they filed a request to
change the place of hearing. The Court continued the matter for
further hearing to the Court’s trial calendar in San Diego,
California, on June 28, 2002. Petitioner Stanley D. Clough and
counsel for respondent appeared at the second hearing and were
heard.
During the second hearing, respondent filed with the Court a
supplement to the motion to dismiss and submitted a declaration
executed by Greg L. Holt (Mr. Holt), a U.S. Postal Service mail
processing clerk assigned to the Ogden Service Center.
Mr. Holt’s declaration states that his duties as a mail
processing clerk include processing certified mail items
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delivered to him by Ogden Service Center personnel. Mr. Holt’s
declaration outlines the procedures that he follows in processing
certified mail, including his practice of verifying the
information contained in the Commissioner’s certified mail lists,
and, thereafter, placing a postmark stamp on each such list. Mr.
Holt’s declaration states that, on December 4, 2001, he placed a
postmark stamp on the certified mail list that was attached as an
exhibit to respondent’s motion to dismiss. Petitioners also
object to the admission of Mr. Holt’s declaration on the ground
that the document constitutes inadmissible hearsay.
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; Judge v. Commissioner, 88 T.C. 1175, 1180-
1181 (1987); Naftel v. Commissioner, 85 T.C. 527, 529 (1985).
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. 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 a
taxpayer by certified or registered mail. Pursuant to section
6213(a), a taxpayer has 90 days (or 150 days if the notice is
addressed to a person outside of the United States) from the date
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the notice of deficiency is mailed to file a petition with the
Court for a redetermination of the deficiency.
The Commissioner bears the burden of proving by competent
and persuasive evidence that a notice of deficiency was properly
mailed to a taxpayer. Cataldo v. Commissioner, 60 T.C. 522, 524
(1973), affd. per curiam 499 F.2d 550 (2d Cir. 1974). We require
the Commissioner to introduce evidence showing that the notice of
deficiency was properly delivered to the U.S. Postal Service for
mailing. Coleman v. Commissioner, 94 T.C. 82, 90 (1990). The
act of mailing may be proven by evidence of the Commissioner’s
mailing practices corroborated by direct testimony or documentary
evidence. Id. The Commissioner is not required to produce
employees who personally recall each of the many notices of
deficiency which are mailed annually. Cataldo v. Commissioner,
supra at 524.
There is no dispute in this case regarding the existence of
the notice of deficiency dated December 4, 2001. Petitioners
acknowledge receiving the notice of deficiency in late December
2001.
Respondent asserts that the notice of deficiency was mailed
to petitioners on December 4, 2001, and, therefore, the 90-day
period for filing a timely petition with the Court expired on
March 4, 2002-–more than 2 weeks before petitioners mailed their
petition to the Court. Petitioners concede that, if the notice
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of deficiency was mailed to them on December 4, 2001, their
petition was not filed within the 90-day period prescribed in
section 6213(a). The only dispute, therefore, is the date the
notice of deficiency was mailed.
Where the existence of a notice of deficiency is not
disputed, a Postal Service Form 3877, Acceptance of Registered,
Insured, C.O.D. and Certified Mail, or its equivalent–-a
certified mail list-–represents direct documentary evidence of
the date and the fact of mailing. Coleman v. Commissioner, supra
at 90-91; see Magazine v. Commissioner, 89 T.C. 321, 324, 327
(1987). A properly completed certified mail list reflects
compliance with Internal Revenue Service procedures for mailing
deficiency notices. Coleman v. Commissioner, supra at 90.
Exact compliance with certified mail list procedures raises
a presumption of official regularity in favor of the
Commissioner. United States v. Zolla, 724 F.2d 808, 810 (9th
Cir. 1984). A failure to comply precisely with the certified
mailing list procedures may not be fatal if the evidence adduced
is otherwise sufficient to prove mailing. Coleman v.
Commissioner, supra at 91.
Petitioners contend, however, that both the certified mail
list and the declaration executed by Mr. Holt constitute
inadmissible hearsay, and respondent has otherwise failed to
prove the date that the notice of deficiency was mailed.
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In general, section 7453 and Rule 143(a) provide that Tax
Court proceedings are to be conducted in accordance with the
rules of evidence applicable in trials without a jury in the U.S.
District Court for the District of Columbia. Consistent with this
directive, we observe the Federal Rules of Evidence.4
Rule 801(c) of the Federal Rules of Evidence defines
“hearsay” as “a statement, other than one made by the declarant
while testifying at the trial or hearing, offered in evidence to
prove the truth of the matter asserted.” Rule 802 of the Federal
Rules of Evidence provides that hearsay generally is not
admissible except as otherwise provided. Rule 803(6) of the
Federal Rules of Evidence provides an exception to the hearsay
rule as follows:
Rule 803. Hearsay Exceptions; Availability of Declarant
Immaterial
The following are not excluded by the hearsay rule,
even though the declarant is available as a witness:
* * * * * * *
(6) Records of Regularly Conducted Activity.--A
memorandum, report, record, or data compilation, in any
form, of acts, events, conditions, opinions, or diagnoses,
made at or near the time by, or from information transmitted
by, a person with knowledge, if kept in the course of a
regularly conducted business activity, and if it was the
regular practice of that business activity to make the
memorandum, report, record or data compilation, all as shown
by the testimony of the custodian or other qualified
witness, or by certification that complies with Rule
4
Petitioners’ exegesis on California law is beside the
point.
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902(11), Rule 902(12), or a statute permitting
certification, unless the source of information or the
method or circumstances of preparation indicate lack of
trustworthiness. The term "business" as used in this
paragraph includes business, institution, association,
profession, occupation, and calling of every kind, whether
or not conducted for profit.
Rule 902 of the Federal Rules of Evidence, inter alia, provides:
Rule 902. Self-authentication
Extrinsic evidence of authenticity as a condition
precedent to admissibility is not required with respect to
the following:
* * * * * * *
(11) Certified Domestic Records of Regularly Conducted
Activity.–-The original or a duplicate of a domestic record
of regularly conducted activity that would be admissible
under Rule 803(6) if accompanied by a written declaration of
its custodian or other qualified person, in a manner
complying with any Act of Congress or rule prescribed by the
Supreme Court pursuant to statutory authority, certifying
that the record--
(A) was made at or near the time of the occurrence
of the matters set forth by, or from information
transmitted by, a person with knowledge of those
matters;
(B) was kept in the course of the regularly
conducted activity; and
(C) was made by the regularly conducted activity
as a regular practice.
A party intending to offer a record into evidence under this
paragraph must provide written notice of that intention to
all adverse parties, and must make the record and
declaration available for inspection sufficiently in advance
of their offer into evidence to provide an adverse party
with a fair opportunity to challenge them.[5]
5
The Advisory Committee Notes pertaining to Fed. R. Evid.
902(11) state in pertinent part:
(continued...)
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Respondent argues that the copy of the certified mail list
attached to the motion to dismiss should be admitted as evidence
of the date of mailing of the notice of deficiency under the
exception to the hearsay rule set forth in rule 803(6) of the
Federal Rules of Evidence. Respondent further argues that the
declarations executed by Ms. Petersen (Ogden Service Center
custodian of records) and Mr. Holt (U.S. Postal Service mail
processing clerk) are sufficient to self-authenticate the
certified mail list for purposes of admission into the record in
this case under rule 902(11) of the Federal Rules of Evidence.
Petitioners argue, however, that the certified mail list and
5
(...continued)
2000 Amendments
The amendment adds two new paragraphs to the rule
on self-authentication. It sets forth a procedure by
which parties can authenticate certain records of
regularly conducted activity, other than through the
testimony of a foundation witness. See the amendment
to Rule 803(6). * * *
A declaration that satisfies 28 U.S.C. § 1746would satisfy the declaration requirement of Rule
902(11), as would any comparable certification under
oath.
The notice requirement in Rules 902(11) and (12)
is intended to give the opponent of the evidence a full
opportunity to test the adequacy of the foundation set
forth in the declaration.
28 U.S.C. sec. 1746 (1994) provides in pertinent part that
any matter that is permitted to be proved by sworn declaration
may be proved by an unsworn declaration in writing which is dated
and states that the declaration is made under the penalty of
perjury and is true and correct.
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the declaration executed by Mr. Holt6 do not qualify under an
exception to the hearsay rule because those documents were
prepared in anticipation of litigation and, therefore, they are
inherently unreliable. See Palmer v. Hoffman, 318 U.S. 109, 113-
114 (1943).
As previously noted, the Commissioner is authorized to send
notices of deficiency to taxpayers by certified or registered
mail. Sec. 6212(a). Consistent with the mandate of section
6212(a), and in order to provide a means for determining the
dates regarding the issuance of notices of deficiency, it is
necessary and proper for the Commissioner to prepare and retain
certified mail lists in the normal course of operations. It is,
therefore, incorrect to state that the certified mail list was
prepared in anticipation of litigation. Rather, it is a record
of regularly conducted activities addressed by rule 803(6) of the
Federal Rules of Evidence.
The declarations executed by Ms. Petersen and Mr. Holt were
prepared in the course of litigation in order to satisfy the
requirements of rule 902(11) of the Federal Rules of Evidence.
The purpose of the declarations is to authenticate the certified
mail list. In short, the declarations show that: (1) The
certified mail list was prepared and retained by respondent in
6
Although petitioners do not challenge the declaration
executed by Ms. Petersen, our analysis is equally applicable to
her declaration.
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the normal course of operations; and (2) the postmark stamp was
placed on the certified mail list by Mr. Holt, a U.S. Postal
Service mail processing clerk, consistent with normal practices.7
Petitioners have offered no evidence that the disputed
documents are somehow unreliable. In the absence of any such
evidence, we shall admit the certified mail list and the
declarations into evidence.
In sum, respondent has produced competent and persuasive
evidence that duplicate original notices of deficiency were
mailed to petitioners on December 4, 2001. See Cataldo v.
Commissioner, 60 T.C. at 524. Petitioners have not presented any
evidence that the notices of deficiency were mailed on any date
other than December 4, 2001. Because we conclude that the
notices of deficiency were mailed to petitioners on December 4,
2001, it follows that the petition was not filed within the
statutory 90-day period. Consequently, we shall grant
respondent’s motion and dismiss this case for lack of
jurisdiction.8
7
Petitioners have not argued that respondent failed to
comply with the final sentence of Fed. R. Evid. 902.
8
Although we lack jurisdiction in this case, petitioners
are not without a remedy. In short, petitioners may pay the tax,
file a claim for refund with the Internal Revenue Service, and if
the claim is denied, sue for a refund in the Federal District
Court or the Court of Federal Claims. See McCormick v.
Commissioner, 55 T.C. 138, 142 n.5 (1970).
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To reflect the foregoing,
An order of dismissal for lack of
jurisdiction will be entered granting
respondent’s motion to dismiss for lack
of jurisdiction, as supplemented.