Sebastian v. Comm'r ( 2007 )

T.C. Memo. 2007-138
UNITED STATES TAX COURT
FRED SEBASTIAN, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 8013-05L. Filed May 31, 2007.
On Mar. 10, 2005, R sent a notice of determination
concerning collection action by certified mail to P’s
last known address. The address contained an erroneous
ZIP Code. Delivery attempts were made on Mar. 14 and
Apr. 11, 2005. The notice of determination was
delivered on Apr. 13, 2005.
P filed a petition on Apr. 27, 2005. R filed a
motion to dismiss P’s petition for lack of jurisdiction
on the ground that it was not filed timely.
Held: The notice of determination concerning
collection action is valid as it was sent by certified
mail to petitioner’s last known address.
Held, further: Because P did not file timely his
petition, this Court lacks jurisdiction to review R’s
determination to proceed with collection action.
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Fred Sebastian, pro se.
T. Richard Sealy III, for respondent.
MEMORANDUM FINDINGS OF FACT AND OPINION
WHERRY, Judge: This collection review case is before the
Court on respondent’s motion to dismiss for lack of jurisdiction.
The issue for decision is whether the notice of determination
concerning collection action was mailed to petitioner’s last
known address.
FINDINGS OF FACT
At the time the petition was filed, petitioner resided in
Chaparral, New Mexico. The address petitioner provided on his
petition was “864 Broadmoor, Chaparral, New Mexico, 41011.” The
ZIP Code “41011" was crossed out and replaced by the handwritten
notation “88081".
Petitioner did not file a Federal tax return for any of the
taxable years 1995 through 2004. On May 25, 2001, respondent
mailed to petitioner Proposed Individual Income Tax Assessments
for taxable years 1996, 1997, and 1999. On June 24, 2001,
respondent received from petitioner a letter disputing the
proposed assessments. Petitioner listed his address as “864
Broadmoor, Chaparral, NM 88021". Petitioner’s arguments
regarding the assessments consisted solely of tax-protester
rhetoric.
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On October 11, 2004, respondent mailed to petitioner a Final
Notice--Notice Of Intent To Levy And Notice Of Your Right To A
Hearing. The notice was addressed to “864 Broadmoor, Chaparral,
NM 88021-7504645 [sic]”. In response, petitioner, on November 9,
2004, submitted timely a Form 12153, Request for a Collection Due
Process Hearing. Petitioner listed his address on Form 12153 as
“864 Broadmoor, Chaparral, NM 88081". Petitioner failed to state
his disagreement with the levy. The only notation petitioner
provided on Form 12153 was: “ALL FACTUAL ISSUES WILL BE DISCUSSED
AT THE LIVE IN PERSON HEARING THAT I WILL BE AUDIO TAPING.”
In response, on February 4, 2005, respondent’s Albuquerque
Appeals Office mailed to petitioner a letter entitled We Received
Your Request for A Collection Due Process Hearing And We Need To
Advise You On Procedures. The letter was addressed to “864
Broadmoor, Chaparral, NM 41011”. The letter advised petitioner
that settlement officer Joann Mares (Ms. Mares) had been assigned
to his case. It also explained that petitioner was not entitled
to a face-to-face hearing because he had raised only frivolous or
groundless arguments. The letter further stated that if
petitioner still desired a “face-to-face” hearing, he “must be
prepared to discuss issues relevant to paying * * * [his] tax
liability”; otherwise petitioner was entitled to a telephonic
hearing, which was scheduled for February 17, 2005. The letter
instructed petitioner to call Ms. Mares, or to reschedule the
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hearing if that date was inconvenient. Petitioner did not call
Ms. Mares for his scheduled telephonic hearing, and it does not
appear that petitioner attempted to reschedule his hearing.
The Notice of Determination Concerning Collection Action(s)
Under Section 6320 and/or 6330 for taxable years 1996 and 1997
was mailed to petitioner on March 10, 2005.1 The notice of
determination was addressed to “Fred Sebastian, 864 Broadmoor,
Chaparral, NM 41011”. According to U.S. Postal Service Form
3877, the envelope that contained the notice of determination was
addressed to “Fred Sebastian, 864 Broadmoor, Chaparral, New
Mexico, 71011”.2 The correct ZIP Code for Chaparral, New Mexico,
is 88081.3
A U.S. Postal Service track and confirm receipt reflects
that the notice of determination arrived in Anthony, New Mexico,
88021, on March 14, 2005, at 9:44 a.m. The track and confirm
receipt further provides that on March 14, 2005, at 1:05 p.m., a
notice of attempted delivery was left in petitioner’s mail box.
1
Unless otherwise indicated, all section references are to
the Internal Revenue Code (Code) of 1986, as in effect for the
year in issue, and all Rule references are to the Tax Court Rules
of Practice and Procedure.
2
While the envelope that contained the notice of
determination was not part of the record, both parties agree that
the envelope contained an incorrect ZIP Code.
3
ZIP Code 41011, which respondent listed on the notice of
determination, is for Covington, Kentucky. ZIP Code 71011, which
according to Form 3877 respondent listed on the envelope
containing the notice of determination, is an invalid ZIP Code.
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Petitioner’s mail box is physically located on a rural road with
three other neighbors’ mail boxes and is in front of 860
Broadmoor, which is two houses down from petitioner’s house. The
notice of attempted delivery was recorded in Chaparral, New
Mexico, 88081. Additionally, the track and confirm receipt
reflects that a second notice of attempted delivery was delivered
on April 11, 2005, at 4:26 p.m., and was recorded in Anthony, New
Mexico, 88021. The track and confirm receipt provides that the
notice of determination was delivered in Chaparral, New Mexico,
88081, on April 13, 2005, at 9:44 a.m., which delivery date was
more than 30 days after the mailing of the notice of
determination.4
The notice of determination was delivered to a contract
postal unit located in the General Store in Chaparral, New
Mexico. In response to the second notice of attempted delivery,
petitioner requested that his certified letter be delivered to
the General Store. It is unclear from the record the exact date
that petitioner retrieved the notice of determination from the
General Store. It would have occurred, however, sometime after
4
A taxpayer has 30 days after the issuance of the notice of
determination concerning collection action to petition this Court
for a redetermination. See sec. 6330(d)(1). The notice of
determination was mailed to petitioner on March 10, 2005. Taking
into account an intervening weekend, the 30th day thereafter was
Monday, Apr. 11, 2005. See sec. 7503.
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April 13 and before April 21, 2005, when the petition was mailed
to this Court.
The Court received and filed petitioner’s petition on April
27, 2005. On June 16, 2005, respondent filed a motion to dismiss
for lack of jurisdiction. Petitioner filed an objection to
respondent’s motion to dismiss for lack of jurisdiction on July
26, 2005. A hearing was held on respondent’s motion on November
23, 2005. Petitioner failed to appear at the hearing. The Court
ordered that the case be continued for further hearing on
respondent’s motion. A subsequent evidentiary hearing was held
on February 6, 2006.
OPINION
Collection Action
A. General Rules
Pursuant to section 6331(a), if a taxpayer liable to pay
taxes fails to do so within 10 days after notice and demand for
payment, the Secretary is authorized to collect such tax by levy
upon the taxpayer’s property. The Secretary is obliged to
provide the taxpayer with 30 days’ advance written notice of levy
and to include in the notice information regarding the
administrative appeals available to the taxpayer.
Sec. 6331(d)(2), (4). The written notice that the Secretary is
obliged to provide shall be given in person; left at the
taxpayer’s dwelling or usual place of business; or sent by
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certified or registered mail, return receipt requested, to the
taxpayer’s last known address. Secs. 6330(a)(2), 6331(d)(2).
Section 6330 elaborates on section 6331 and provides that upon a
timely request a taxpayer is entitled to a collection hearing
before the IRS Office of Appeals. Sec. 6330(a)(3)(B), (b)(1).
The taxpayer is entitled to appeal the determination of the
Appeals Office, if made on or before October 16, 2006, to the Tax
Court or a U.S. District Court, depending on the type of tax at
issue. Sec. 6330(d).5 It is well established that this Court’s
jurisdiction under section 6330 depends on the issuance of a
valid notice of determination and the filing of a timely petition
for review. See Rule 330(b); Sarrell v. Commissioner, 117 T.C.
122, 125 (2001); Moorhous v. Commissioner, 116 T.C. 263, 269
(2001); Offiler v. Commissioner, 114 T.C. 492, 498 (2000).
Because the petition was filed late, this case must be
dismissed. The issue for decision is whether the dismissal of
this case should be based on petitioner’s failure to file a
timely petition, or whether dismissal should be based on
respondent’s failure to issue a valid notice of determination.
The answer makes a significant difference to the parties. If
jurisdiction is lacking because of respondent’s failure to issue
a valid notice of determination, then the Court will dismiss on
5
Determinations made after Oct. 16, 2006, are appealable
only to the Tax Court. See Pension Protection Act of 2006, Pub.
L. 109-280, sec. 855, 120 Stat. 1019.
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that ground, and respondent will be unable to collect by levy
without repeating the process, assuming the statute of
limitations is still open. See Pietanza v. Commissioner, 92 T.C.
729, 735-736 (1989), affd. without published opinion 935 F.2d
1282 (3d Cir. 1991); Weinroth v. Commissioner, 74 T.C. 430, 434-
435 (1980). If the Court dismisses because the petition was
filed late, then respondent can proceed with enforced collection
of the tax.
B. Notice of Determination Concerning Collection Action
Section 6330(d) does not specify the means by which the
Commissioner is required to give notice of a determination made
under section 6330. Regulations promulgated under section 6330
provide that “Taxpayers will be sent a dated Notice of
Determination by certified or registered mail.” Sec. 301.6330-
1(e)(3), Q&A-E8, Proced. & Admin. Regs. This Court has held that
respondent’s compliance with the methodology of section 6212(a)
and (b) will suffice. Weber v. Commissioner, 122 T.C. 258, 261
(2004). Specifically, this Court has held “that a notice of
determination issued pursuant to sections 6320 and/or 6330 is
sufficient if such notice is sent by certified or registered mail
to a taxpayer at the taxpayer’s last known address.” Id. at 261-
262.
Section 6212 does not require actual receipt by a taxpayer
of the notice of deficiency. If the notice of deficiency is sent
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by certified mail to the taxpayer’s last known address, actual
receipt of the notice is immaterial. Sec. 6212(b)(1); Frieling
v. Commissioner, 81 T.C. 42, 52 (1983). Thus, in Weber v.
Commissioner, supra at 263, the notice of determination
concerning collection action, sent by certified mail to the
taxpayer’s last known address, was held to be valid even though
the taxpayer received the notice after the expiration of the 30-
day filing period.
Regulations promulgated under section 6212 define “last
known address” as “the address that appears on the taxpayer’s
most recently filed and properly processed Federal tax return,
unless the Internal Revenue Service (IRS) is given clear and
concise notification of a different address.” Sec. 301.6212-
2(a), Proced. & Admin. Regs. The taxpayer bears the burden of
proving that a notice of deficiency was not mailed to his or her
last known address. Yusko v. Commissioner, 89 T.C. 806, 808
(1987) (citing Mollet v. Commissioner, 82 T.C. 618, 624-625
(1984), affd. without published opinion 757 F.2d 286 (11th Cir.
1985)).
It is well established that an inconsequential error in the
address used in mailing the notice of deficiency does not render
the notice invalid. Yusko v. Commissioner, supra at 810;
Pickering v. Commissioner, T.C. Memo. 1998-142. An error in the
address used to mail the notice of deficiency is inconsequential
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where the error is so minor that it did not prevent delivery of
the notice. Pickering v. Commissioner, supra (citing McMullen v.
Commissioner, T.C. Memo. 1989-455 and Kohilakis v. Commissioner,
T.C. Memo. 1989-366). This Court has specifically held that an
error in the ZIP Code constitutes an inconsequential error and
does not affect the last known address. Gam v. Commissioner,
T.C. Memo. 2000-115; Pickering v. Commissioner, supra; Watkins v.
Commissioner, T.C. Memo. 1992-6; Boothe v. Commissioner, T.C.
Memo. 1986-361.
In the instant case, the Court concludes that the notice of
determination concerning collection action was mailed to
petitioner’s last known address, and the incorrect ZIP Code is an
inconsequential error. The address used to mail the notice of
determination is the same address listed by petitioner in his
correspondence with respondent and on Form 12153.6 The notice of
determination correctly listed petitioner’s name, street address,
city and State, but incorrectly provided the ZIP Code.7 See
Pickering v. Commissioner, supra; Boothe v. Commissioner, supra.
Despite the error, within 4 days of respondent’s mailing the
notice of determination, it was received by the Anthony, New
6
Petitioner did not file a Federal tax return for any of the
taxable years 1995 through 2004.
7
It is noteworthy that petitioner incorrectly listed his own
ZIP Code in correspondence with respondent.
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Mexico, U.S. Postal Service, and delivery to petitioner was
attempted.
At trial, the Postmaster of Anthony, New Mexico, Bob Moulds
(Mr. Moulds) stated that a ZIP Code is not required for proper
delivery of an item, but does expedite delivery, and is
considered part of the address once added. See Watkins v.
Commissioner, supra. Mr. Moulds testified that the incorrect ZIP
Code in the address used to mail the notice of determination did
not affect the proper delivery of the notice to petitioner.
Mr. Moulds stated that an item mailed from Austin, Texas, such as
the notice of determination, would not have had sufficient time
to be sent to the incorrect ZIP Code used in mailing the notice,
and then be sent to Anthony, New Mexico, in the span of 4 days.
Mr. Moulds testified that he believed the notice of
determination was sent from Austin, Texas, to Albuquerque, New
Mexico, then to Las Cruces, New Mexico, and finally to Anthony,
New Mexico, which was the normal course of mail, despite the
error in the ZIP Code. The tracking information presented to the
Court appears to confirm that the incorrect ZIP Code did not
adversely affect delivery of the notice of determination.
Mr. Moulds also testified as to the usual procedure followed
for certified mail. Certified mail is scanned at the U.S. Postal
Service Office and treated as an accountable. Initially, the
mail carrier takes the accountable with him or her to the address
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of delivery. When the mail carrier arrives at the address of
delivery, he or she honks the mail truck’s horn a couple of times
to alert the addressee that he or she has an accountable.
Generally, if the addressee is home, he or she will meet the mail
carrier at the mail box to sign for the accountable.8 The mail
carrier is not required to go to the door of the address of
delivery; standard procedure is to honk the mail truck’s horn.
If the addressee does not meet the mail carrier at the mail
box, the mail carrier leaves a notice informing the addressee
that he or she has an accountable.9 The mail carrier generates
the notice of attempted delivery by scanning the bar code on the
accountable and printing a notice which includes the time and
date of the attempted delivery. Generally, if the addressee does
not contact the U.S. Postal Service regarding the first notice, a
second notice is delivered approximately 5 days after the first
notice. A postal employee at the U.S. Postal Service Office
scans the bar code on the accountable and prints a notice, and
8
Petitioner testified that he was aware of the standard
procedure for certified mail and accountables. Petitioner
further testified that due to the size of his property and the
fact that his mail box is located a distance from his house, he
sometimes cannot hear the mail carrier honk his or her horn, or
is unable to make it to the mail box in time to meet the mail
carrier before he or she continues on his or her route.
9
Petitioner testified that he did not receive the first
notice of attempted delivery. Petitioner claimed that his mail
box was damaged, and that there are high winds in his area that
have caused his mail to be lost.
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the mail carrier delivers only the second notice of attempted
delivery.
In the instant case, due to a shortage of postal workers,
the second notice of attempted delivery was not delivered to
petitioner until April 11, 2005, almost a month after the first
delivery attempt. The notice of determination was delivered on
April 13, 2005, which was after the expiration of the 30-day
filing period. This was unfortunate, but “Once the notice of
deficiency is mailed to the taxpayer’s last known address,
nothing in the Code requires respondent to take additional steps
to effectuate delivery.” Howard v. Commissioner, T.C. Memo.
1993-315 (citing Pomeroy v. United States, 864 F.2d 1191, 1195
(5th Cir. 1989) and King v. Commissioner, 857 F.2d 676, 681 (9th
Cir. 1988), affg. on other grounds 88 T.C. 1042 (1987)).
The Court concludes that respondent mailed the notice of
determination concerning collection action to petitioner’s last
known address, and that the erroneous ZIP Code was an
inconsequential error because it did not adversely affect the
proper delivery of the notice. Accordingly, the notice of
determination is valid. The Court will grant respondent’s motion
to dismiss for lack of jurisdiction on the ground that the
petition was not filed timely.
The Court has considered all of the petitioner’s
contentions, arguments, requests, and statements. To the extent
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not discussed herein, we conclude that they are meritless, moot,
or irrelevant.
To reflect the foregoing,
An order will be entered
dismissing this case for lack
of jurisdiction.