US Tax Court Determines Taxpayer Received Notice of Deficiency Sent to Wrong Address

Share Article

In a daily release of Tax Court opinions from the Court's website, the Watson CPA Group learns the Court ruled that a taxpayer had actually received a tax deficiency notice even though the IRS made a clerical mistake in addressing the notice. While the taxpayer never physically touched the envelope, he still had received it according to previous case law.

Jason Watson, EA, MBA

IRS made a clerical error and the address shown on the taxpayer’s last tax returns was not used to mail the notice of deficiency. It didn’t matter.

In a case brought to the Tax Court under Docket 27511-11, filed October 1, 2012 the Court denied a taxpayer’s motion to dismiss based on the grounds that the tax deficiency notice was not properly sent to the taxpayer’s last known address. Therefore the taxpayer suggested that he could not timely file the petition to the Tax Court. The IRS stipulated that they had made a clerical error, and that the address shown on the taxpayer’s last tax returns was not used to mail the notice of deficiency. It didn’t matter.

While the address was incorrect, the taxpayer also had used his residential address to correspond with a revenue agent performing the audit. Through court documents, the taxpayer's last known address and his residential address were different.

The taxpayer also claimed he was experiencing marital difficulties, and only stayed at his residence sporadically. His wife would collect the mail, and place it by the stairs for his retrieval but would also throw the mail away if not picked up in a timely manner.

Section 6212(a) of the tax code allows the IRS to send notices by certified or registered mail. Typically the taxpayer has 90 days from the date the notice was mailed to file a petition with the Tax Court for redetermination of the deficiency. A taxpayer has 150 days if he or she is living outside the United States.

Sending a notice of deficiency to the last known address is not the only way the IRS can deliver a notice to a taxpayer. The Court has previously held that sending the notice to the last known address is merely a safe harbor whereby the notice will be considered received by the taxpayer even it if never was. Further, the last known address caveat is not a factor if the taxpayer actually receives the notice through other constructive means.

Actual receipt can take several forms such as receiving the envelope and throwing it away, or deliberately refusing delivery from the Postal Service. Also, delivery notifications from the Postal Service (the yellow or salmon colored sticky notes) might be considered constructive receipt even if the taxpayer never physically has the envelope containing the notice.

Since the taxpayer did not have problems receiving other mail, and since the taxpayer’s wife clearly understood the importance of an IRS notice after her own audit, the Tax Court ruled that the taxpayer had actually received the notice. He did not petition the Tax Court within the 90 day window, and therefore was denied his petition for determination of tax deficiency.

If the 90 day window expires, relief is to still available to the taxpayer. He or she could pay the tax, and has two years from the payment date to challenge the tax with a refund suit in the US Court of Federal Claims or the US District Court.

The Watson CPA Group is a progressive tax consultation and preparation firm embracing internet technology to interface with clients. Utilizing a secure Client Portal to exchange financial information, tax documents and tax returns saves valuable time and resources.

The Watson CPA Group has been preparing tax returns since 1997 from their offices in Colorado Springs and specializes in LLCs, small businesses, pilots and flight attendants, rental property owners and expatriate tax clients.

For more information visit

Share article on social media or email:

View article via:

Pdf Print

Contact Author

Tina Watson, CPA, MBA
Follow us on
Visit website