In Uncategorized on 05/21/2012 at 17:34

Or, Last Known Address

I wouldn’t waste my time, or my readers’ time (both of them), on a case like Sean Devlin, 2012 T. C. Mem. 145, filed 5/21/12. It’s the usual tax protester’s cocktail of frivolity, but Sean gets a boost from IRS’ failure to build a good trial record.

Sean didn’t bother to file five years’ worth of returns. IRS prepared SFRs and sent Sean a SNOD for the first of the five years, by certified mail, to a Long Island, New York address. This was returned as undeliverable. Two years later, IRS sent SNODs for the other four years to an address in Reno, Nevada, by certified mail, and those were not returned.

Sean never petitions Tax Court to contest his liabilities as stated in the five SNODs, so IRS sends Sean Letter 3172, a Notice of Federal Tax Lien Filing and Your Right to a Hearing Under IRC 6320. Apparently this got to Sean’s current address, and Sean seeks a face-to-face.

The usual charade follows. Sean makes frivolous arguments, Appeals demands Form 433-A, Sean doesn’t send it but repeats his frivolous arguments after claiming he’s withdrawing them, and Appeals issues a NOD denying Sean’s appeal and sustaining the lien.

Sean petitions Tax Court, claiming he never had a chance to contest liability. He’s right as to Year One, as IRS concedes the Long Island, New York address was not Sean’s last known address, but the Reno, Nevada letters were duly mailed (and IRS has Forms 3877 to prove it), and Sean never petitioned or appealed.

Ordinarily, the presumption of regularity would sink Sean despite his protestations of non-receipt. But the trial record is not of the best. Judge Vasquez: “We find nothing in the record that connects petitioner with 6110 Plumas [Reno]. As late as December 6, 2004, the IRS was mailing correspondence to petitioner at 3 Huskel Lane, Smith Town, New York[Long Island]. Although it is possible that after that date and before February 2, 2005, the date the IRS mailed the notices of deficiency for 2000 and 2002, the IRS received an information return or other document showing petitioner’s address to be 6110 Plumas, there is no evidence of this. Additionally, nowhere in Settlement Officer X’s declaration, respondent’s pretrial memorandum, or respondent’s posttrial brief is there anything to show that 6110 Plumas was petitioner’s correct address during 2005 and 2007. Accordingly, the presumption of proper mailing is not raised, and there is insufficient evidence to show that petitioner received the notices of deficiency for 2000, 2001, 2002, and 2004. We therefore allow petitioner to challenge his underlying tax liabilities for the years at issue.” 2102 T. C. Mem. 145, at pp. 8-9 (Footnotes and name omitted).

If IRS prepared the SFRs from 1099s or W-2s or K-1s, and had put those in evidence, then the address shown on those would substantiate the “last known address” of the elusive Sean. But none of those are in evidence.

Likewise, “In a number of recent cases the Court has found a taxpayer to have received a notice of deficiency despite a claim to the contrary. In these cases, however, the taxpayer either did not argue that the notice of deficiency was mailed to an improper address or did not unequivocally deny under oath receiving a notice of deficiency, or the evidence showed that the notice of deficiency was mailed to the correct address. See, e.g.,  Diamond v. Commissioner, T.C. Memo. 2012-90 (properly completed Form 3877 showing taxpayer’s correct address raised the presumption of proper mailing and allowed the Court to find that the taxpayer received the notice of deficiency after he refused to deny receipt under oath); Kamps v. Commissioner, T.C. Memo. 2011-287 (taxpayer argued only that he did not receive the notice of deficiency, not that it was mailed to the improper address); Clark v. Commissioner, T.C. Memo. 2008-155 (taxpayer presented no evidence that he did not receive the notices of deficiency and did not contest that the notices of deficiency were mailed to his correct address); Bailey v. Commissioner, T.C. Memo. 2005-241 (‘[p]etitioner does not dispute that the notice of deficiency was mailed to his last known address, and he does not unequivocally deny that he received it’). None of these scenarios is present in the matter before us.” 2012 T. C. Mem. 145, at p. 9, footnote 8.

So Sean gets a chance to disprove IRS’s asserted liabilities. But Sean just goes frivolous again. So Judge Vasquez sustains IRS, and shows Sean the Section 6673 yellow card. Further frivolity will cause the wrath of Tax Court to descend upon Sean heavily.

But IRS trial counsel, a word to the wise. When you get the SNODs, get the back-ups as well and put it all in at trial.

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