Opinion
5192-20L
02-01-2023
AMANASU ENVIRONMENT CORPORATION, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER
L. Paige Marvel Judge
Petitioner commenced this section 6320(c) case by filing its Petition on March 17, 2020, in response to a Notice of Determination Concerning Collection Actions under IRC Sections 6320 or 6330 of the Internal Revenue Code (Notice of Determination) dated December 13, 2019. On December 21, 2022, respondent filed a Motion for Summary Judgment. The Court directed petitioner to file a response to respondent's Motion for Summary Judgment by January 11, 2023. On January 11, 2023, petitioner filed its Objection to Motion for Summary Judgment. We will deny respondent's Motion for Summary Judgment.
Unless otherwise indicated, all statutory references are to the Internal Revenue Code, Title 26 U.S.C., in effect at all relevant times, all regulation references are to the Code of Federal Regulations, Title 26 (Treas. Reg.), in effect at all relevant times, and all Rule references are to the Tax Court Rules of Practice and Procedure.
Summary adjudication is designed to expedite litigation and avoid unnecessary and expensive trials. Fla. Peach Corp. v. Commissioner, 90 T.C. 678, 681 (1988). Under Rule 121(b), we may grant summary judgment "if the pleadings, answers to interrogatories, depositions, admissions, and any other acceptable materials, together with the affidavits or declarations, if any, show that there is no genuine dispute as to any material fact and that a decision may be rendered as a matter of law." See Sundstrand Corp. v. Commissioner, 98 T.C. 518, 520 (1992), aff'd, 17 F.3d 965 (7th Cir. 1994). In resolving a motion for summary judgment, we view the facts and draw inferences therefrom in the light most favorable to the nonmoving party. Dahlstrom v. Commissioner, 85 T.C. 812, 821 (1985). The nonmoving party, however, may not rest on mere allegations or denials but must set forth specific facts showing that there is a genuine dispute for trial. Rule 121(d); see Sundstrand Corp., 98 T.C. at 520.
Respondent argues that he is entitled to summary judgment because petitioner failed timely to file a petition in this case as required by sections 6320(c) and 6330(d) and failed to plead facts sufficient to demonstrate entitlement to equitable tolling that would overcome petitioner's untimely filing. See Boechler, P.C. v. Commissioner, 142 S.Ct. 1493, 1500-01 (2022). Petitioner makes a number of arguments in response, but we need only address two of them here.
First, viewing the facts and inferences therefrom in the light most favorable to petitioner, there is a genuine dispute of material fact concerning the validity of the Notice of Determination. "Our jurisdiction under section 6330(d)(1) depends upon the issuance of a valid notice of determination[.]" Wilson v. Commissioner, 131 T.C. 47, 50 (2008). We agree with respondent 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." Weber v. Commissioner, 122 T.C. 258, 261-62 (2004). However, Treas. Reg. § 301.6212-2(a) provides that "a taxpayer's last known address is 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." Respondent does not argue that the address to which the Notice of Determination was mailed, 4503 Bellevue Drive, Vanclover BC V6R1E4, Canada (emphasis added), is the same as petitioner's last known address, 4503 Bellevue Drive, Vancouver BC V6R1E4, Canada. Instead, respondent argues that "the minor typographical error did not stop (or even appear to impede) delivery of the Notice of Determination, as delivery of the Notice of Determination to Petitioner's last known address was attempted on January 8, 2020, and was successfully completed on January 18, 2020." Nonetheless, viewed in the light most favorable to petitioner, the fact that the Notice of Determination appears to have taken over a month to be delivered to petitioner supports an inference that the error impeded delivery of the notice and that the notice may have been invalid.
In Weber, 122 T.C. at 261, we explained that "[a]lthough section 6330(d) does not specify the means by which the Commissioner is required to give notice of a determination made under sections 6320 and 6330, . . . the method that Congress specifically authorized for sending notices of deficiency in section 6212(a) and (b) certainly should suffice."
Respondent relies on our opinions in Kohilakis v. Commissioner, T.C. Memo. 1989-366, 1989 WL 81593, and McMullen v. Commissioner, T.C. Memo. 1989-455, 1989 Tax Ct. Memo LEXIS 455, for support. This reliance is misplaced on the record currently before us. These cases do not stand for the proposition that a minor typographical error in mailing a notice to a taxpayer's last known address is categorically excused. In one case, we relied on the taxpayer's prior history of receipt of communications at the incorrect address, as well as the taxpayer's own use of portions of the incorrect address, to find that the errors were inconsequential. Kohilakis v. Commissioner, 1989 WL 81593, at *2. In the other, we made extensive findings about the operations of the United States Postal Service, the files and activities of the specific post office responsible for delivery, and the circumstances surrounding attempted deliveries to the taxpayer to conclude that a typographical error was inconsequential. McMullen, 1989 Tax Ct. Memo LEXIS 455, at *3-7. The import of these cases is limited where, as here, the record does not disclose virtually any facts concerning who was responsible for making delivery in Canada, the circumstances surrounding an attempted delivery on January 8, 2020, or a prior history of receipt at, or use of, the incorrect address. We have previously distinguished these and similar opinions in a case in which the IRS presented the expert testimony of a postal supervisor on the grounds that "guesswork by the supervisor is not a valid substitute for the testimony of the actual carrier"; that "we are not prepared to find, as a factual matter, that delivery of the notice . . . was attempted at the correct address"; and that "in Kohilakis the taxpayers had previously received correspondence from the Commissioner at the" incorrect address. Wilson v. Commissioner, T.C. Memo. 1997-515, 1997 WL 711405, at *3 and 4. These statements are applicable here as well, with the further observation that we do not have the benefit of a declaration or lodged expert report of any postal employee here.
This lack of clarity extends both to the entity and the individual carrier responsible for making final delivery in Canada.
We could also construe respondent's argument as one that petitioner actually received the Notice of Determination and that the notice is therefore valid notwithstanding whether it was properly sent to petitioner's last known address. See Bongam v. Commissioner, 146 T.C. 52, 57 (2016) ("[A] notice . . . need not be sent to the taxpayer's last known address in order to be valid. Rather, the notice will be valid if it is actually received by the taxpayer 'without prejudicial delay,' that is, generally in time to file a timely petition in this Court."). However, our cases only support deeming a notice to be properly addressed upon actual receipt of the notice if the taxpayer has sufficient time to file a petition with this Court. See id. Here, the record discloses facts indicating that petitioner actually received the Notice of Determination after the 30-day statutory deadline to file a petition with this Court had already passed. Even assuming for the sake of argument that attempted delivery was properly made to petitioner's correct address on January 8, 2020, this attempt was made a mere five days before the statutory deadline for filing a petition with this Court on January 13, 2020, and without any indication in the record that petitioner could have retrieved it from the carrier after the failed delivery. Cf. McMullen v. Commissioner, 1989 Tax Ct. Memo LEXIS 455, at *6-7 (finding that two attempted deliveries were made three and 14 days after the notice's mailing and that "customary forms were left in petitioners' mailbox which, if they had been acted on by petitioners, would have allowed petitioners to receive the article of certified mail being held").
"Whether a taxpayer has been prejudiced by an improperly addressed notice is a question of fact." McKay v. Commissioner, 89 T.C. 1063, 1068 (1987), aff'd, 886 F.2d 1237 (9th Cir. 1989). Viewed in the light most favorable to petitioner, the short period between attempted delivery and the statutory deadline gives rise to an inference that there was insufficient time for petitioner to file a petition in this Court, even if the attempted delivery was properly made. The lack of facts in the record indicating that the carrier left customary forms with petitioner allowing it to retrieve the notice after the attempted delivery gives rise to the same inference, as does the lack of facts indicating that attempted delivery was properly made to the correct address. The record also does not make clear what the usual procedure for delivering certified or registered mail in Canada is. While it is possible that the record at trial may show that "inaction . . . was responsible for the late filing" and that "petitioner's failure to file a timely petition cannot be said to have been the direct result of any error in the address to which the notice . . . was mailed", id. at 1070, we cannot make that determination as a matter of law on the record currently before us. Therefore, we think that there is a genuine issue of material fact for trial on the issue of the validity of the Notice of Determination.
Second, viewing the facts and inferences therefrom in the light most favorable to petitioner, we find that there is a genuine issue of material fact concerning whether or how equitable tolling may be applied. We agree with respondent that the undisputed facts in the record show that petitioner filed its Petition in this case after the 30-day deadline imposed by sections 6320(c) and 6330(d), assuming that the deadline is not equitably tolled. We also agree that the Petition did not set forth any facts concerning whether equitable tolling is warranted, which raises the question of whether the issue of equitable tolling should be deemed conceded. See Rule 331(b)(4). However, concurrently with this Order, we have granted petitioner's Motion for Leave to File Amended Petition. The Amended Petition pleads facts that, if proven, might entitle petitioner to equitable tolling depending on the entirety of the record developed at trial, so the issue of equitable tolling is not deemed conceded. Petitioner has also submitted a Declaration of Lina Lei in Support of Objection to Motion for Summary Judgment containing facts that, viewed in the light most favorable to petitioner, could support the application of equitable tolling. Therefore, respondent is not entitled to judgment as a matter of law on the issue of equitable tolling.
The record before us discloses that genuine disputes of material fact exist concerning whether (1) the Notice of Determination is invalid and (2) even if it is valid, equitable tolling should be applied to deem the Petition as timely filed under sections 6320(c) and 6330(d). Therefore, it is
ORDERED that respondent's Motion for Summary Judgment, filed December 21, 2022, is denied.