Opinion
14054-21
02-15-2022
ISOBEL BERRY CULP & DAVID CULP, Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER OF DISMISSAL FOR LACK OF JURISDICTION
Eunkyong Choi, Special Trial Judge
Pending before the Court is respondent's Motion to Dismiss for Lack of Jurisdiction, filed September 1, 2021. Therein, respondent requests that this case be dismissed for lack of jurisdiction on the following grounds: (1) to the extent petitioners seek to challenge any collection activity by respondent for the 2015 taxable year, no notice of determination concerning collection action has been issued to petitioners for such year that would permit them to invoke the jurisdiction of this Court; (2) to the extent petitioners may seek redetermination of the deficiency determined in petitioners' federal income tax for the 2015 taxable year by Notice of Deficiency dated February 5, 2018, the Petition in this case is untimely; (3) to the extent petitioners may seek to dispute respondent's denial of a penalty abatement request made by Berry and Culp, P.C., relating to an addition to tax assessed against that entity for the 2016 taxable year, no notice has been issued to petitioners that would permit them to invoke the jurisdiction of this Court; and (4) no other determination has been made for petitioners' 2015 taxable year that would permit them to invoke the jurisdiction of this Court.
By Order served September 3, 2021, the Court directed petitioners to file an objection, if any, to the Motion. On September 27, 2021, petitioners filed a Response, therein objecting to the granting of the Motion to Dismiss. Among other things, petitioners argue that they never received a copy of the Notice of Deficiency issued to them for the 2015 taxable year, and that respondent's Motion to Dismiss was not timely filed. 1
To the extent petitioners argue that respondent's Motion to Dismiss should be denied as untimely, we are unpersuaded. It is well settled that this Court may proceed in a case only if it has jurisdiction and that either party, or the Court sua sponte, may raise jurisdiction at any time. See Brown v. Commissioner, 78 T.C. 215, 217-218 (1982) (rejecting the same argument); Grama v. Commissioner, T.C. Memo. 1985-608 (same); Hollister v. Commissioner, T.C. Memo. 1979-35 (same).
For the reasons set forth below, we must grant respondent's Motion and dismiss this case for lack of jurisdiction.
Background
On April 22, 2021, petitioners filed the Petition to commence this case. Therein, petitioners checked the box indicating that they were disputing a purported notice of determination concerning collection action issued to them by respondent for the 2015 taxable year. No such notice of determination was attached to the Petition, nor was any other notice issued by respondent so attached. Instead, petitioners attached an 18-page document titled "Petition", which identifies as "petitioners" not only Mr. Culp and Mrs. Berry Culp, but also their law firm, Berry and Culp, P.C., and raises as an issue a penalty apparently assessed by respondent against that firm for failure to file a timely tax return for the 2016 taxable year. The Petition arrived at the Court via U.S. Postal Service, in an envelope bearing a postmark of April 19, 2021.
Discussion
The Tax Court is a court of limited jurisdiction, and we may exercise our jurisdiction only to the extent authorized by Congress. See I.R.C. § 7442; Guralnik v. Commissioner, 146 T.C. 230, 235 (2016). Where this Court's jurisdiction is duly challenged, as here, our jurisdiction must be affirmatively shown by the party seeking to invoke that jurisdiction. See David Dung Le, M.D., Inc. v. Commissioner, 114 T.C. 268, 270 (2000), aff'd, 22 Fed.Appx. 837 (9th Cir. 2001); Romann v. Commissioner, 111 T.C. 273, 280 (1998); Fehrs v. Commissioner, 65 T.C. 346, 348 (1975). To meet this burden, the party "must establish affirmatively all facts giving rise to our jurisdiction." David Dung Le, M.D., Inc., 114 T.C. at 270.
All statutory references are to the Internal Revenue Code in effect at all relevant times, and all Rule references are to the Tax Court Rules of Practice and Procedure.
I. Notice of Determination Concerning Collection Action for 2015
Our jurisdiction in the collection due process context depends upon the issuance of a valid notice of determination and the timely filing of a petition. See I.R.C. §§ 6320(c), 6330(d)(1); Rule 330(b); Orum v. Commissioner, 123 T.C. 1, 8 (2004), aff'd, 412 F.3d 819 (7th Cir. 2005); Offiler v. Commissioner, 114 T.C. 492, 498 (2000). It follows that when a valid notice of determination has not been issued to the taxpayer, we are obliged to dismiss the case for lack of jurisdiction. See Offiler, 114 T.C. at 498; 2 Moorhous v. Commissioner, 116 T.C. 263, 270-271 (2001).
To the extent petitioners seek to challenge any collection activity by respondent for the 2015 taxable year, they have failed to demonstrate that respondent has issued a notice of determination concerning collection activity for such year. No such document is attached to the Petition, nor to petitioners' Response to the Motion to Dismiss. As petitioners have failed to introduce a notice of determination for the 2015 taxable year, and respondent reports that IRS records contain no evidence that any such notice of determination has been mailed to petitioners, there is no determination for this Court to review and no basis for our jurisdiction under section 6330(d) for such year.
II. Notice of Deficiency for 2015
In a case seeking redetermination of a deficiency, our jurisdiction depends upon the issuance of a valid notice of deficiency and the timely filing of a petition. See I.R.C. §§ 6212, 6213, and 6214; Rule 13(a) and (c); Monge v. Commissioner, 93 T.C. 22, 27 (1989). A notice of deficiency generally will be deemed valid for this purpose if it is mailed to the taxpayer at his last known address. See I.R.C. § 6212(b); Pietanza v. Commissioner, 92 T.C. 729, 736 (1989), aff'd, 935 F.2d 1282 (3d Cir. 1991); Frieling v. Commissioner, 81 T.C. 42, 52 (1983). In order to be timely, a petition generally must be filed within 90 days of the date on which the Commissioner mails a valid notice of deficiency. See I.R.C. § 6213(a); Brown v. Commissioner, 78 T.C. 215, 220 (1982). We have no authority to extend this 90-day period. See Joannou v. Commissioner, 33 T.C. 868, 869 (1960); see also Organic Cannabis Found., LLC v. Commissioner, 962 F.3d 1082, 1093-1095 (9th Cir. 2020). However, under certain circumstances, a timely mailed petition may be treated as though it were timely filed. See I.R.C. § 7502; Treas. Reg. § 301.7502-1.
If the notice of deficiency is addressed to a person outside the United States, a petition must be filed within 150 days of mailing of the notice. See I.R.C. § 6213(a); Smith v. Commissioner, 140 T.C. 48 (2013); Lewy v. Commissioner, 68 T.C. 779 (1977). There is no indication in the record-nor have petitioners asserted, after having been given an opportunity to do so-that they were outside the United States at or about the time that the Notice of Deficiency in this case was mailed. In any event, the Petition is this case was untimely filed under either applicable period.
In his Motion to Dismiss, respondent asserts that he has attached, as Exhibits A and B, copies of (1) a Notice of Deficiency dated February 5, 2018, determining a deficiency in petitioners' Federal income tax for the 2015 taxable year, and (2) a U.S. Postal Service Form 3877, respectively, together showing that the Notice of Deficiency was sent by certified mail on February 5, 2018, to petitioners' last known 3 address. A review of the foregoing documents establishes that respondent sent the Notice of Deficiency to petitioners by certified mail on February 5, 2018, to a PO Box in Montrose, Pennsylvania. That same address is listed on various and sundry of the documents attached to petitioners' Response, including a copy of petitioners' Form 1040, U.S. Individual Income Tax Return, for the 2015 taxable year. Moreover, petitioners have not disputed that the aforementioned address was their last known address. We therefore take it as established.
The Notice of Deficiency states that the last date to petition this Court is May 7, 2018.
A properly completed U.S. Postal Service Form 3877 (or its equivalent) is direct evidence of both the fact and date of mailing and, in the absence of contrary evidence, is sufficient to establish proper mailing of the notice of deficiency. See Clough v. Commissioner, 119 T.C. 183, 187-191 (2002); Stein v. Commissioner, T.C. Memo. 1990-378; see also Keado v. United States, 853 F.2d 1209, 1213 (5th Cir. 1988); United States v. Zolla, 724 F.2d 808, 810 (9th Cir. 1984); Coleman v. Commissioner, 94 T.C. 82, 91 (1990). The document attached as Exhibit B to respondent's Motion to Dismiss appears to be properly completed and bears sufficient indicia of authenticity, such as a U.S. Postal Service postmark date of February 5, 2018. Finding no evidence to the contrary, we accept the foregoing document as presumptive proof of its contents.
In their Response, petitioners assert that they never received the Notice of Deficiency issued to them for the 2015 taxable year. Furthermore, petitioners challenge whether such Notice was ever issued. However, a notice of deficiency is valid, even if it is not received by the taxpayer, where, as here, it is mailed to the taxpayer's last known address. See Mollet v. Commissioner, 82 T.C. 618, 623-24 (1984). Therefore, even assuming that petitioners never received the Notice of Deficiency in this case, that Notice is valid in view of having been mailed to petitioners' last known address. To the extent petitioners argue that the Notice was never issued in the first place, we are unpersuaded on the record before us. As noted, attached to respondent's Motion to Dismiss are copies of the Notice of Deficiency and a U.S. Postal Service Form 3877. Moreover, we note that the certified mail numbers listed on the separate copies of the Notice sent to Mr. Culp and Mrs. Berry Culp match the numbers listed on the corresponding entries on the Form 3877.
In view of the fact that the Notice of Deficiency was mailed to petitioners' last known address on February 5, 2018, the last date to file a petition with this Court was May 7, 2018, as stated in the Notice of Deficiency. As noted, the Petition in this case was filed on April 22, 2021. And, although a petition that is delivered to the Court after the expiration of the period provided by section 6213(a) shall be deemed timely if it bears a timely postmark, see I.R.C. § 7502, the envelope in which the Petition was mailed to the Court bears a postmark of April 19, 2021. Consequently, the Petition was not filed within the period prescribed by sections 6213(a) and 7502, and we lack jurisdiction over any challenge to the Notice of Deficiency. 4
III. Berry and Culp, P.C. Penalty Abatement Denial for 2016
As noted, the 18-page document titled "Petition" attached to the Petition in this case raises as an issue a penalty apparently assessed by respondent against the law firm Berry and Culp, P.C., for failure to file a timely tax return for the 2016 taxable year. In his Motion to Dismiss, respondent argues that these claims appear to relate to respondent's denial of a penalty abatement request made by Berry and Culp, P.C., with respect to an addition to tax assessed against the entity under section 6699(a) for failure to file an S corporation return for the 2016 taxable year. Among other things, respondent argues that this Court lacks jurisdiction to consider petitioners' related claim on two grounds: (1) Berry and Culp, P.C. is not a party to this case and the addition to tax is not a liability of petitioners; and (2) deficiency procedures do not apply with respect to assessment and collection of the failure to file penalty imposed under section 6699(a).
We agree with respondent. First, Mr. Culp and Mrs. Berry Culp, as individuals, are the party-petitioners in this case. Berry and Culp, P.C., against which the section 6699(a) penalty was apparently imposed for the 2016 taxable year, is not such a party. Second, even assuming that the penalty was imposed against Mr. Culp and Mrs. Berry as individuals, section 6699(d) states that deficiency procedures do not apply in respect of the assessment and collection of any penalty imposed under section 6699(a). Accordingly, we lack jurisdiction to consider this issue to the extent it has been raised in the Petition.
IV. No Other Basis on Which to Invoke the Court's Jurisdiction for 2015
As noted, in his Motion to Dismiss, respondent asserts that no other determination has been made by respondent that would permit petitioners to invoke the jurisdiction of this Court for the 2015 taxable year. After having been apprised of respondent's jurisdictional allegations, and given an opportunity to respond, petitioners have not provided any notice of deficiency, notice of determination, or any other notice sufficient to confer jurisdiction on this Court. As petitioners have failed to carry their burden to "establish affirmatively all facts giving rise to our jurisdiction", David Dung Le, M.D., Inc., 114 T.C. at 270, we must dismiss this case for lack jurisdiction.
Upon due consideration of the foregoing, it is
ORDERED that respondent's above-referenced Motion to Dismiss is granted, and this case is dismissed for lack of jurisdiction. 5