Opinion
15040-22
07-06-2023
ANDREA RAMIREZ PABLO, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER OF DISMISSAL FOR LACK OF JURISDICTION
Travis A. Greaves Judge
Pending before the Court are the parties' cross-motions to dismiss this case for lack of jurisdiction. Respondent's Motion to Dismiss for Lack of Jurisdiction, filed August 26, 2022, seeks dismissal on the ground that the petition was filed 191 days after the notice of deficiency was sent to petitioner. Petitioner's Motion to Dismiss for Lack of Jurisdiction, filed September 29, 2022, seeks dismissal on the ground that the notice of deficiency upon which this case is based is invalid because it was not sent to petitioner's last known address.
Background
Petitioner filed her Federal income tax return for tax year 2020, listing her address as 588 N.W. Oak Avenue, Corvallis, Oregon 97330 (Oak Avenue Address). In late 2021, petitioner moved to 2424 N.W. 9th Street, Corvallis, Oregon, 97330 (9th Street Address). Petitioner notified the U.S. Postal Service (USPS) of her new address and received a USPS Official Change-of-Address Confirmation Letter, dated December 22, 2021.
Respondent determined an income tax deficiency of $11,339, an accuracy-related penalty under section 6662(a) of $147, and an erroneous claim for refund or credit penalty under section 6676 of $2,121 for petitioner's 2020 tax year. On December 27, 2021, respondent mailed a notice of deficiency to petitioner at the Oak Avenue Address. The USPS tracking information shows that the notice was undeliverable and returned to respondent on January 8, 2022. Respondent did not reissue the notice of deficiency.
Unless otherwise indicated, all statutory references are to the Internal Revenue Code, Title 26 U.S.C. (Code or I.R.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.
All dollar amounts are rounded to the nearest dollar.
Petitioner alleges that she first became aware of the notice of deficiency upon receipt of Notice CP22E, dated May 9, 2022, which was mailed to the 9th Street Address. On July 6, 2022, petitioner electronically filed a petition to commence this case. On August 26, 2022, respondent filed a Motion to Dismiss for Lack of Jurisdiction on the ground that petitioner failed to timely file the petition. On September 26, 2022, petitioner filed a Response to Motion to Dismiss for Lack of Jurisdiction, asking this Court to apply equitable tolling to the 90-day deadline. Thereafter, petitioner filed a First Supplement to Response to Motion to Dismiss for Lack of Jurisdiction, alleging that the notice of deficiency was not sent to her last known address.
On September 29, 2022, petitioner filed a Motion to Dismiss for Lack of Jurisdiction on the ground that the notice of deficiency was invalid because it was not sent to her last known address. Petitioner attached to her Motion a USPS Official Change-of-Address Confirmation Letter, dated December 22, 2021. On January 30, 2023, respondent filed a Response to Motion to Dismiss for Lack of Jurisdiction. Therein, respondent asserted that on December 27, 2021, petitioner's last known address as reflected in the IRS master file was the Oak Avenue Address.
Discussion
The Tax Court is a court of limited jurisdiction, and we may exercise our jurisdiction only to the extent authorized by Congress. See § 7442; Naftel v. Commissioner, 85 T.C. 527, 529 (1985). 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); 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." See David Dung Le, M.D., Inc., 114 T.C. at 270; Wheeler's Peachtree Pharmacy, Inc. v. Commissioner, 35 T.C. 177, 180 (1960). Petitioner invoked our jurisdiction and therefore bears the burden of establishing jurisdiction.
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 Rule 13(a) and (c); Mulvania v. Commissioner, 81 T.C. 65, 67 (1983); Naftel, 85 T.C. at 530; David Dung Le, M.D., Inc., 114 T.C. at 270. Section 6213(a) provides: "Within 90 days . . . after the notice of deficiency authorized in section 6212 is mailed . . ., the taxpayer may file a petition with the Tax Court for a redetermination of the deficiency." We have held that the 90-day period prescribed by section 6213(a) sets forth a jurisdictional requirement. See Hallmark Research Collective v. Commissioner, 159 T.C. No. 6, at *42 (2022).
It is not disputed that petitioner filed her petition more than 90 days after respondent mailed the notice of deficiency to the Oak Avenue Address. Accordingly, we must dismiss this case as untimely under section 6213(c), unless we agree with petitioner that the notice of deficiency is invalid. If we agree with petitioner, we must also dismiss the case on the basis that the notice of deficiency is invalid. See Monge v. Commissioner, 93 T.C. 22, 27 (1989). Regardless of whether petitioner or respondent prevails, it is clear that we lack jurisdiction to consider this case on its merits. See McKay v. Commissioner, 89 T.C. 1063, 1067 (1987), aff'd, 886 F.2d 1237 (9th Cir. 1989). However, we have jurisdiction to determine the reason why we do not have jurisdiction. See Shelton v. Commissioner, 63 T.C. 193, 194-95 (1974).
The dispositive issue in this case is whether the notice of deficiency was mailed to petitioner's last known address. A notice of deficiency is valid, even if it is not actually received by the taxpayer if it is sent to the taxpayer's last known address. See § 6212(b)(1); McKay, 89 T.C. at 1067; see also Goodman v. Commissioner, 71 T.C. 974, 977 (1979) (holding that a notice of deficiency is also valid if the taxpayer actually receives notice without prejudicial delay). Respondent has a duty to exercise reasonable diligence in ascertaining the taxpayer's last known address. See Alta Sierra Vista, Inc. v. Commissioner, 62 T.C. 367, 374 (1974), aff'd, 538 F.2d 334 (9th Cir. 1976). The relevant inquiry pertains to respondent's actual knowledge rather than what might have been the taxpayer's most current address. See id.
As the Code does not define "last known address", we frequently rely upon the definition found in the Treasury Regulations. Generally, a taxpayer's last known address is the address appearing on the taxpayer's most recently filed and properly processed Federal tax return, unless the IRS is given clear and concise notification of a different address. See § 301.6212-2(a), Proced. & Admin. Regs.; King v. Commissioner, 857 F.2d 676, 680 (1988), aff'g 88 T.C. 1042 (1987). Generally, providing a third party, such as a payor or another government agency, change of address information is not clear and concise notification of a different address for purposes of determining the taxpayer's last known address. See § 301.6212-2(b)(1), Proced. & Admin. Regs. However, the regulations provide that the IRS will update taxpayer addresses by referring to data accumulated and maintained in the USPS National Change of Address (NCOA) database. See id. subpara. (2)(i).
The taxpayer must inform USPS of the change of address with sufficient time for the IRS to process and post the new address to the master file. The Treasury Decision accompanying section 301.6212-2, Proced. & Admin. Regs., explains that there may be a delay of up to two or three weeks from the date the taxpayer notifies USPS that her address has changed until such update is made to the IRS master file. See T.D. 8939, 2001-1 C.B. 899; Graham v. Commissioner, T.C. Memo. 2008-129, slip op. at 23. In the second example of section 301.6212-2(b)(3), Proced. & Admin. Regs., the IRS mailed a notice of deficiency to a taxpayer six days after the taxpayer informed USPS of a new permanent address and the IRS had not updated its records. The example states that the taxpayer's old address is still the last known address, presumably because the IRS did not have sufficient time to update its records. See id. In contrast, we have held that 23 days between the taxpayer notifying USPS of a new address and the mailing of a notice to be sufficient time for the IRS to update its records. See Graham, T.C. Memo. 2008-129, slip op. at 24.
Respondent did not have sufficient time to process petitioner's new address in his records before mailing the notice of deficiency. Respondent sent the notice of deficiency five days after petitioner notified USPS of her change of address. In addition to this period being much shorter than the example in the regulations, a portion of the five-day period occurred over a federal holiday and weekend. Moreover, respondent represents that it did not actually update its records in this five-day period. Thus, petitioner's last known address on December 27, 2021, was the Oak Avenue Address.
Petitioner argues that respondent had an obligation to exercise reasonable care in determining her new address after the notice of deficiency was returned as undeliverable. Petitioner also argues that once respondent learned of petitioner's new address, as evidenced by the mailing of Notice CP22E, respondent was required to reissue the notice of deficiency. We have long held that the validity of a notice of deficiency turns on proper mailing and not proper delivery and that the IRS has no obligation to take additional steps to effectuate delivery if a notice is returned as undeliverable. See Monge, 93 T.C. at 34; King v. Commissioner, 857 F.2d at 681. Respondent satisfied the requirements of section 6212 by properly mailing the notice of deficiency to the Oak Avenue Address and had no additional obligation when the notice of deficiency was returned. Accordingly, the notice of deficiency is valid because it was sent to petitioner's last known address.
Petitioner has failed to "establish affirmatively all facts giving rise to our jurisdiction." See David Dung Le, M.D., Inc., 114 T.C. at 270. While we appreciate that petitioner does not believe she owes the amount stated in the notice and that she may have been led astray by a tax return preparer, we have no authority to extend the period for timely filing a petition. See Axe v. Commissioner, 58 T.C. 256, 259 (1972) ("We have no authority to extend the period provided by law for filing a petition with the Tax Court whatever the equities of a particular case may be and regardless of the cause for its not being filed within the required period."). Accordingly, we must dismiss this case for lack of jurisdiction because the petition was not filed within the requisite time period prescribed by section 6213(a).
Upon due consideration, it is
ORDERED that petitioner's Motion to Dismiss for Lack of Jurisdiction, filed September 29, 2022, is denied. It is further
ORDERED that respondent's Motion to Dismiss for Lack of Jurisdiction, filed August 26, 2022, is granted, and this case is dismissed for lack of jurisdiction.