Eric Clarkson v. Commissioner of Internal Reven

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
___________
No. 16-1673
___________
ERIC D. CLARKSON,
Appellant
v.
COMMISSIONER OF INTERNAL REVENUE
____________________________________
On Appeal from the United States Tax Court
(Tax Court No. IRS-1: 27236-15)
Tax Court Judge: Honorable Michael B. Thornton
____________________________________
Submitted Pursuant to Third Circuit LAR 34.1(a)
November 16, 2016
Before: AMBRO, CHAGARES, and FUENTES, Circuit Judges
(Opinion filed: December 2, 2016)
_________
OPINION*
_________
FUENTES, Circuit Judge
Appellant Eric Clarkson petitioned in Tax Court to challenge an Internal Revenue
Service (“IRS”) levy notice. On motion by the IRS, the Tax Court dismissed Clarkson’s
*
This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not
constitute binding precedent.
petition, deciding that it was not timely filed and, thus, that the Court lacked jurisdiction
over it. Although we depart slightly from the Tax Court’s reasoning, we will
nevertheless affirm its judgment.
I.
At issue in this case is part of the statutory process that the IRS follows before it
can create a levy or commence an action arising out of unpaid taxes. We begin with
section 6212 of the Internal Revenue Code. Subsections (a) and (b)(1) require the IRS to
create and send a notice of deficiency—sometimes called a “90-day letter,” and
essentially an accounting of taxes owed for a given year—to the taxpayer’s “last known
address” by certified or registered mail. Proper mailing of the notice of deficiency
triggers the 90-day window of section 6213(a), during which the taxpayer can challenge
the alleged deficiencies by petitioning in Tax Court and, at the same time, the IRS is
prevented from making an assessment or collection on the tax.1 However, because the
mailing of the notice is the triggering event, “receipt of the notice by the taxpayers is not
required in order that the statutory filing period commence.”2 After the 90-day window
closes, the IRS can pursue its assessment or levy, and the Tax Court loses jurisdiction to
1
See Robinson v. United States, 920 F.2d 1157, 1158 (3d Cir. 1990).
2
Boccuto v. Comm’r, 277 F.2d 549, 552 (3d Cir. 1960).
2
entertain a late petition from the taxpayer.3
II.
Clarkson filed his Tax Court petition in October 2015, shortly after receiving
notice that the IRS intended to levy his wages based on unpaid tax for the years 2003
through 2008. Among other arguments (which he later abandoned and which we need
not discuss), Clarkson claimed that the IRS had not created and properly mailed to him
notices of deficiency for those years. He therefore argued that the levy notice and
attempts to collect were invalid.
The IRS moved to dismiss on the basis that Clarkson’s petition, which was filed
more than 90 days after the challenged notices of deficiency had been mailed, was
untimely under section 6213(a). Accompanying the IRS’s motion was the declaration of
its attorney, through which several exhibits were introduced into the record.4 The
exhibits included notices of deficiency for the years in question and the corresponding
certified mail forms—“Substitute PS Form 3877,” a privately generated bulk version of
3
Edwards v. Comm’r, 791 F.3d 1, 5 (D.C. Cir. 2015) (“The tax court is a court of limited
jurisdiction . . . and its jurisdiction is predicated on both the issuance of a notice of
deficiency and the filing of a timely petition.”); Robinson, 920 F.2d at 1158, 1160.
4
Clarkson now argues that it was improper for the Tax Court to consider the exhibits
attached to the declaration, as the declaring attorney, who litigated the case in Tax Court,
lacked personal knowledge of the facts contained in them. See Clarkson Br. 23.
Although Clarkson, who proceeded pro se before the Tax Court, did refer to the exhibits
as “hearsay,” see App’x 220, his appellate counsel concedes that the IRS attorney’s
personal knowledge was not raised below. To the extent we can even reach the
unpreserved argument, see Rushing v. Kan. City S. Ry., 185 F.3d 496, 508 & n.11 (5th
Cir. 1999), we see no error warranting reversal.
3
the standard certified mail receipt—reflecting that the notices were sent to Clarkson’s
address in Pemberton, New Jersey (the same address Clarkson was using on his Tax
Court filings). Significantly, the final postmark reflected a date in early 2011, well more
than 90 days before Clarkson’s 2015 Tax Court petition was filed.
In his response to the IRS’s motion, Clarkson identified alleged deficiencies in the
PS 3877 mail forms, such as missing entries for the name of the issuing IRS employee
and for the number of pieces received at the post office. These omissions, he claimed,
“prov[ed] that [the IRS] did not mail out the [notices] . . . as required by” section 6212.5
Clarkson also said that he had tried to input the certified mail numbers into the online
tracker at usps.com and had received either “not found” messages or information that
clearly contradicted the dates and information on the IRS’s exhibits.6
The Tax Court sided with the IRS, granting its motion to dismiss. Deeming the
postal forms “properly completed,” the Tax Court found that Clarkson had not met his
burden to show that the IRS had failed to mail the notices of deficiency to his last known
address.7 Since Clarkson’s petition was therefore filed far outside of the 90-day window,
the Court dismissed for lack of jurisdiction.
III.
On appeal, Clarkson again trains his sights on the PS 3877 forms, arguing that an
5
App’x 232–33.
6
See App’x 231–32.
4
improperly completed form fails to trigger a presumption of regularity in the IRS’s
mailing practices. We have jurisdiction under 26 U.S.C. § 7482(a)(1) and review the Tax
Court’s determination of its own subject matter jurisdiction de novo.8
Although Clarkson’s argument is narrow and somewhat technical, it is not without
some possible weight. The Tax Court has held elsewhere that “exact compliance with
Postal Service Form 3877 mailing procedures raises a presumption of official regularity
in favor of the Commissioner and is sufficient, absent evidence to the contrary, to
establish that a notice of deficiency was properly mailed.”9 Assuming without deciding
7
App’x 4.
8
Sunoco Inc. v. Comm’r, 663 F.3d 181, 185 (3d Cir. 2011). We may affirm on any basis
supported by the record. See ACM P’ship v. Comm’r, 157 F.3d 231, 249 n.33 (3d Cir.
1998). The IRS’s motion was authorized by Tax Court Rules 13(c), 40, 50, and 53,
which when taken together allow motions to dismiss for lack of jurisdiction due to the
untimely filing of a Tax Court petition. The Tax Court appropriately allowed the parties
to augment the record with exhibits and considered those exhibits in resolving the factual
challenge to its jurisdiction. See Redman v. Comm’r, 820 F.2d 209, 211 (6th Cir. 1987)
(treating Tax Court motion to dismiss for lack of jurisdiction as analogous to factual
jurisdictional challenge under Fed. R. Civ. P. 12(b)(1)); cf. Davis v. Wells Fargo, 824
F.3d 333, 346, 349 (3d Cir. 2016) (discussing review of factual challenges to jurisdiction
presented via Fed. R. Civ. P. 12(b)(1) motions).
We note that the Tax Court would have lacked jurisdiction no matter who prevailed
below. Had the Tax Court agreed with Clarkson, the IRS’s failure to properly mail the
notices of deficiency would have deprived the Court of jurisdiction. See Delman v.
Comm’r, 384 F.2d 929, 934 (3d Cir. 1967) (“It is true that unless a notice of deficiency is
mailed to the taxpayer the Tax Court may not acquire jurisdiction over the cause.”). Such
an outcome, however, would have also affected the IRS’s ability to assess and collect.
Thus, the “consequences of dismissal [would] differ depending on the [Tax C]ourt’s
reasoning.” Edwards, 791 F.3d at 6.
9
Hoyle v. Comm’r, 136 T.C. 463, 468 (2011) (emphasis added).
5
that the missing elements identified by Clarkson amount to something less than “exact
compliance,”10 they call into question the Tax Court’s conclusion here that the substitute
PS 3877 forms were “properly completed” and thus that the IRS is to be afforded its
presumption of proper mailing.
Even without its presumption, however, the IRS can still prevail so long as it
provides “otherwise sufficient” evidence of mailing.11 Broadly speaking, the more
documentation presented by the IRS, the less likely that minor errors or omissions will
defeat its proffer.12 And when “the existence of a notice of deficiency is not in dispute,”
as is the case here, all that is required is “evidence corroborating an actual timely mailing
of the notice of deficiency.”13
The relevant case law falls decisively in favor of the IRS, even in those instances
where the omissions or errors were more egregious than those identified by Clarkson
here. In O’Rourke v. United States, for instance, the Second Circuit decided that a “torn,
10
We observe that section 4.8.9.11.3 of the Internal Revenue Manual, which is available
at https://www.irs.gov/irm/part4/irm_04-008-009-cont01.html (last visited Nov. 16,
2016), appears to set forth requirements for Form 3877 completion that do not include the
deficiencies identified by Clarkson. Other courts, though, have found that the failure of
the PS 3877 form to reflect the number of pieces of mail received by the Post Office
“render[s] [the form] improperly completed.” O’Rourke v. United States, 587 F.3d 537,
541 (2d Cir. 2009) (per curiam). We will proceed under the assumption that it does.
11
Welch v. United States, 678 F.3d 1371, 1377 (Fed. Cir. 2012).
12
See id. at 1377–78 (collecting cases; among them, Coleman v. Comm’r, 94 T.C. 82,
91–92 (1990)).
13
Id.6
partial copy of the notice [of deficiency] and a certified mail log”—the former was
unsigned and incomplete, and the latter failed to set forth the number of mailed items and
did not contain a postal employee’s signature—passed the “otherwise sufficient”
threshold.14 The Tenth Circuit followed O’Rourke in Cropper v. Commissioner, holding
that the IRS had provided otherwise sufficient evidence when 1) the PS 3877 forms
exhibited the same “minor defects” as those in O’Rourke, but otherwise showed the date
they were submitted to the Postal Service for mailing; and 2) the IRS had produced
copies of the relevant notices of deficiency.15 By contrast, in Knudson v. Commissioner,
a Tax Court case cited by Clarkson, the petitioner overcame an IRS motion for summary
judgment when, in addition to those “minor defects,” the “PS Form 3877 in the record
relating to the notice of deficiency . . . d[id] not identify the listed items as notices of
deficiency or the years to which the documents relate.”16 Knudson is thus plainly
distinguishable.
Here, all notices of deficiency appear to be accounted for. The PS 3877 omissions
identified by Clarkson are comparatively minor; each form bears the appropriate
signature, corresponds with a notice of deficiency elsewhere in the record, and shows the
date of mailing. Clarkson does not contend to the contrary. Accordingly, we have no
14
O’Rourke, 587 F.3d at 540–42.
15
Cropper v. Comm’r, 826 F.3d 1280, 1286 (10th Cir. 2016). We note, as did the IRS,
that Cropper was brought by the same attorney who now represents Clarkson.
16
Knudsen v. Comm’r, T.C. Memo 2015-69, 14–15 (2015).
7
trouble concluding that the IRS has produced otherwise sufficient evidence to prevail on
its motion to dismiss.17
IV.
In light of the above, we agree with the Tax Court that Clarkson’s petition was
filed after the jurisdictional 90-day period had run. The Tax Court therefore lacked
jurisdiction, and we will affirm its order dismissing Clarkson’s petition.
17
Clarkson’s sole riposte involves his efforts to use usps.com to track each of the
certified mail numbers. See Clarkson Br. 18–19. The IRS argues that USPS records are
not kept in perpetuity. See IRS Br. 28–29. In any event, Clarkson’s exhibits would not
affect our decision in this context.
8