Opinion
12783-21
10-24-2023
ANTHONY W. SANTILIZ TRAVIZA & MARILI RODRIGUEZ RAMOS, Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER OF DISMISSAL FOR LACK OF JURISDICTION
Adam B. Landy, Special Trial Judge
Pending before the Court is the Commissioner's Motion to Dismiss for Lack of Jurisdiction (Motion), filed July 29, 2021. The Commissioner requests that this case be dismissed for lack of jurisdiction on the ground that the Petition was filed 100 days after the Notice of Deficiency (Notice) was mailed to petitioners. For the reasons below, we agree with the Commissioner, and we will grant the Motion.
Background
On January 4, 2021, the Commissioner mailed to petitioners a Notice determining an income tax deficiency and an accuracy-related penalty under section 6662(a) for tax year 2018 (the "Year in Issue"). On April 8, 2021, petitioners mailed a Petition, which this Court filed, challenging the Notice for the Year in Issue. The Petition arrived in a United States Postal Service (USPS) Priority Mail 2-Day envelope postmarked April 8, 2021. The Notice stated that April 5, 2021, was the last day for petitioners to file a timely petition with this Court for a redetermination of the income tax deficiency. Petitioners resided in Texas when the Petition was filed.
Unless otherwise indicated, statutory references are to the Internal Revenue Code, Title 26 U.S.C., in effect at all relevant times, regulation references are to the Code of Federal Regulations, Title 26 (Treas. Reg.), in effect at all relevant times, and Rule references are to the Tax Court Rules of Practice and Procedure.
On July 29, 2021, the Commissioner moved to dismiss this case for lack of jurisdiction. In support of the Court granting the Motion, the Commissioner attached a complete copy of the Notice issued to both petitioners, separately, and a certified mailing list, USPS Form 3877, Firm Mailing Book for Accountable Mail, which reflected the mailing of the Notice, by certified mail on January 4, 2021, to petitioners at the Crockett Avenue, Midland, Texas address (the "Crockett Avenue Address"), again, the same address listed on the Petition. The Commissioner noted that the copy of the Petition served upon him "bears a notation that the date of the U.S. Postmark stamped on the cover in which the [p]etition was mailed to the Tax Court is April 8, 2021, which is 94 days after the mailing of the [n]otices." Thus, the Commissioner concluded that the Petition was not timely filed, and he urged this Court to grant his Motion.
On October 7, 2021, petitioners filed an Objection stating that they filed the Petition late because they were receiving mail at the Crockett Avenue Address, which was not their current mailing address. Petitioners stated that Mr. Traviza went to the Post Office and requested a change of address by the USPS to an address located on Outlaw Court (the "Outlaw Court Address"). Mr. Traviza further stated that, although he requested a change of address from the Crockett Avenue Address, the Post Office continued to send mail to this address. Mr. Traviza asserted that once the Post Office began sending mail to his proper mailing address it was too late to timely respond to the Notice. Mr. Traviza's response infers that the Petition was filed late.
By Order served May 5, 2023, the Court ordered the parties to file supplemental responses to the Commissioner's Motion, by June 5, 2023, addressing the dispute surrounding petitioners' last known address. Specifically, the Court ordered petitioners to file a response stating their last known address at the time the Notice was mailed and whether, when and how the IRS was notified of any address change from the Crockett Avenue Address. Similarly, the Court ordered the Commissioner to provide evidence that the Crockett Avenue Address listed in the Petition was in fact petitioners' last known address, based on information known to him, within the meaning of Treas. Reg. § 301.6212-2.
On May 24, 2023, the Commissioner filed a supplemental response to his Motion stating that petitioners' last known address was the Crockett Avenue Address listed on the Petition. In support of this conclusion, the Commissioner attached a copy of petitioners' 2018 Form 1040 income tax return electronically filed on March 18, 2019, which listed the Crockett Avenue Address as their mailing address. The Commissioner also attached records from their internal database, FINDS, which maintained petitioners' last known address history. The Commissioner's records stated that petitioners' last known address was changed to the Crockett Avenue Address on April 11, 2019, consistent with the electronic filing of their 2018 Form 1040 income tax return.
The Commissioner's records also stated that petitioners then requested a change of address to an Outlaw Court Address on May 27, 2021, concurrently with the filing of their 2020 Form 1040 income tax return. The Commissioner argued that petitioners' last known address was the Crockett Avenue Address from March 18, 2019, to January 4, 2021, the date the Notice was issued. On June 5, 2023, the Court received and processed a Notice of Change of Address and Telephone Number from petitioners changing their address from the Crockett Avenue Address to the Outlaw Court Address in Midland, Texas. Petitioners did not file any other supplement in response to the Court's May 5, 2023, Order.
This case was called for hearing on July 12, 2023, during the Court's July 12, 2023, Washington, District of Columbia, special hearing session. Petitioners and counsel for the Commissioner appeared and were heard. During this remote hearing, the parties reiterated their positions stated in their motion papers. Petitioners, however, stated that they filed a 2018 Form 1040X, Amended U.S. Individual Income Tax Return prior to the issuance of the Notice, which they believed listed the Outlaw Court Address as their mailing address as of September 2020. In supplemental responses submitted after the hearing, the Commissioner confirmed that the 2018 Form 1040X was received on September 29, 2020, but the amended tax return listed the Crockett Avenue Address as petitioners' address. Petitioners filed a supplemental response stating that they moved to the Outlaw Court Address in December 2020, but they are unable to provide any documentation that they changed their address with the USPS from the Crockett Avenue Address to the Outlaw Court Address prior to January 4, 2021.
Discussion
This Court is a court of limited jurisdiction, and we may only exercise our jurisdiction to the extent authorized by Congress. See § 7442; Hallmark Rsch. Collective v. Commissioner, 159 T.C. 126, 135-36 (2022). When our jurisdiction is duly challenged by a party, our jurisdiction must be affirmatively shown by the party seeking to invoke that jurisdiction. 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, petitioners, as the party seeking to invoke our jurisdiction, "must establish affirmatively all facts giving rise to our jurisdiction." David Dung Le, M.D., Inc., 114 T.C. at 270.
In a case seeking redetermination of a deficiency, as here, our jurisdiction depends upon the issuance of a valid notice of deficiency and the timely filing of a petition. See §§ 6212 and 6213; Rule 13(a) and (c); Hallmark Rsch. Collective, 159 T.C. at 130 n.4. Generally, a notice of deficiency will be deemed valid if it is sent to the taxpayers' last known address by certified or registered mail. See § 6212(a) and (b); Yusko v. Commissioner, 89 T.C. 806, 807 (1987). To be timely, a petition must be filed within 90 days of the date on which the Commissioner mails a valid notice of deficiency. See § 6213(a); Estate of Cerrito v. Commissioner, 73 T.C. 896, 898 (1980). We have no authority to extend this 90-day period. Hallmark Rsch. Collective, 159 T.C. at 166-67.
A notice of deficiency mailed to the taxpayers' last known address, as required by section 6212, is valid even if the notice of deficiency is not received by the taxpayers. Pyo v. Commissioner, 83 T.C. 626, 632-33 (1984); see also Pomeroy v. United States, 864 F.2d 1191, 1195 (5th Cir. 1989). The taxpayers' last known address is generally the address appearing on their most recently filed and properly processed Federal tax return, unless the IRS is given clear and concise notification of a different address. Treas. Reg. § 301.6212-2(a). Generally, change of address information that taxpayers provide to a third party, such as a payor or another government agency, is not clear and concise notification of a different address for purposes of determining a last known address unless it is an address obtained from the USPS. Treas. Reg. §§ 301.6212-2(b)(1) and (2).
Section 301.6212-2(b)(2)(i) of the Treasury Regulations state that the IRS will update taxpayers' addresses maintained in IRS records by referring to data accumulated and maintained in the USPS National Change of Address database (the NCOA database). This regulation further states that if the taxpayers' name and last known address in IRS records match the taxpayers' name and old mailing address contained in the NCOA database, the new address in the NCOA database is the taxpayers' last known address, unless the IRS is given clear and concise notification of a different address. Id. If the address maintained in IRS records is updated based on information obtained from the NCOA database, that address will be the taxpayers' last known address until the taxpayers file and the IRS processes a federal tax return with a different address from the NCOA database, or the taxpayers provide the IRS with clear and concise notification of a change of address. Treas. Reg. § 301.6212-2(b)(2)(ii). The burden is on petitioners to show that the Notice was not sent to their last known address. Yusko, 89 T.C. at 808. However, the Commissioner must also exercise reasonable diligence in determining petitioners' last known address in light of all relevant facts and circumstances at the time the notice of deficiency is mailed. Terrell v. Commissioner, 625 F.3d 254, 259 (5th Cir. 2010) (quoting Mulder v. Commissioner, 855 F.2d 208, 211 (5th Cir. 1988)) (emphasis added).
Based on the evidence submitted with the motion papers and the statements made at the remote hearing, the Court determines that the Crockett Avenue Address was petitioners' last known address when the Notice was issued. Therefore, the Notice addressed to and mailed to the Crockett Avenue Address was a valid notice of deficiency. Petitioners have not carried their burden to show that the Crockett Avenue Address was not their last known address on January 4, 2021, the date the Notice was issued. The Court also determines that the Commissioner exercised reasonable diligence in determining petitioners' last known address as the Crocket Avenue Address at the time the Notice was mailed. Since the Notice was mailed by the Commissioner to petitioners' last known address by certified mail on January 4, 2021, petitioners had until April 5, 2021, to file a timely Tax Court petition as to that Notice. The Petition arrived late at the Court on April 14, 2021, in a USPS Priority Mail 2-Day envelope postmarked April 8, 2021. As stated above, the Court has no authority to extend the statutory period for filing a timely petition. The Petition is untimely. Consequently, the Court lacks jurisdiction to redetermine a deficiency in income tax for the Year in Issue.
We are quite sympathetic to petitioners' circumstances. While petitioners cannot pursue their case in this Court, they may pursue an administrative resolution of their tax liability for the Year in Issue with the IRS. Alternatively, petitioners, if feasible, may pay the proposed deficiency amount and then file a claim for refund with the IRS. If that claim is denied (or not acted upon after six months), petitioners may file a suit for refund in the appropriate U.S. District Court or the U.S. Court of Federal Claims. See McCormick v. Commissioner, 55 T.C. 138, 142 n.5 (1970).
Upon due consideration of the Commissioner's Motion, the parties' responses, and for cause more fully appearing in the transcript of the proceeding, it is
ORDERED that the Commissioner's Motion to Dismiss for Lack of Jurisdiction, filed July 29, 2021, and as supplemented on May 24, 2023, is granted, and this case is dismissed for lack of jurisdiction.