Following on my blogpost “You Didn’t Get It”, 5/31/13, here’s the story of Antonio Lepore, as told by Judge Morrison in 2013 T. C. Memo. 135, filed 5/30/13.

This was a TFRP case (Trust Fund Recovery Penalty, non-remittance of FICA/FUTA and withheld income taxes).

Antonio claimed he never got the Letter 1153, triggering the period wherein Antonio could contest his liability. IRS proves the letter and the mailing thereof by certified mail to Casa Antonio, and shows receipt signed by Antonio’s 23-year-old son.

Should be a slam dunk for IRS. After all, see FRCP 4(e)(2)(B), the so-called SAD service (person of suitable age and discretion at party’s dwelling or usual place of abode).

Antonio testified he never saw the letter. So what? Judge Morrison: “Section 6330(c)(2)(B) provides that the taxpayer ‘may also raise at the hearing challenges to the existence or amount of the underlying tax liability’ if the taxpayer did not receive any statutory notice of deficiency for such liability, or did not otherwise have an opportunity to dispute it.” 2013 T. C. Memo. 135, at p. 7.

Non-receipt trumps SAD in a TFRP. And Judge Morrison believes Antonio. And it doesn’t matter whether this is a de novo review or an abuse-of-discretion review, because Tax Court must “reject erroneous views of the law.” 2013 T. C. Memo. 135, at p. 8. Don’t ask about Judge Holmes’ side-step of this proposition in my blogpost “The Busted Stipulation”, 1/27/12.

Antonio didn’t intentionally duck receipt of the Letter 1153. And Sonny Lepore testified he threw the letter in the basement among his, his brother’s and his father’s miscellaneous business papers. And Papa, Sonny and Bro get lots of mail. And Sonny didn’t live with Papa Antonio; he only showed up a few times a week.

Finally, though FRCP 4(e)(2)(B) says what it says, Section 6330(c)(2)(B) says what it says. “The IRS contends that the merit of its theory is that ‘[r]equiring personal service of Letters 1153 would be costly, time consuming, and inefficient’ and would ‘greatly impair the Service’s ability to assess the trust fund recovery penalty against liable taxpayers.’ But to make the notification required before assessing the trust fund recovery penalty, the IRS need only mail the Letter 1153 to the last known address of the person to be assessed. Sec. 6672(b)(1), (4); Mason v. Commissioner, 132 T.C. at 322-323. The IRS can assess the penalty without making personal service on the person. Id. The receipt requirement applies only to the letter’s function to provide an opportunity to dispute the underlying liability, not its effectiveness as pre-assessment notice of the penalty. The IRS’s imputed-receipt theory (as articulated in this case) is therefore not compelled by the need to facilitate the assessment of trust fund recovery penalties.” 2013 T. C. Memo. 135, at pp. 12-13.

In short, IRS can assess just by mailing, but taxpayer can contest by not actually receiving.

So back to Appeals goes Antonio, to fight over his liability. He didn’t get it.