In Uncategorized on 11/24/2014 at 12:42

While nonreceipt of an 1153 billet doux doesn’t invalidate the Section 6672 TFRP, it does raise the question (no it doesn’t “beg” the question, a locution that betrays an imperfect education) whether the petitioner had a chance to contest the penalty.

And here IRS loses summary J, because apparently it shot a blank at the late John W. Houston, co-resident of Omaha, NE, with the great Warren Buffet.

The late John’s cudgel is taken up by his surviving spouse Sarah, in Estate of John W. Houston, Deceased, Sarah V. Houston, Personal Representative, Docket No. 11561-12L, filed 11/24/14. Sarah cross-moves, but doesn’t win either.

The late John was CFO of Merit Transportation Company, LLC, but Merit had little Merit. It stiffed the fisc of $700K in withholdings a month before firing the late John, and filed bankruptcy thereafter.

Judge Paris checks out the late John’s job description. He was:“…in charge of overseeing the ‘comp controller [sic]’ and the individual in charge of the company’s payroll. Decedent was listed on one copy of Merit’s bank account signature cards, which appeared to give him authority to direct funds on behalf of the company. This signature card was not dated and the other bank cards were not signed by decedent and there is no evidence that decedent actually used this authority to write any checks.” Order, at p. 2.

A somewhat shaky case for IRS. And it doesn’t get better.

“Decedent’s Letter 1153 was purportedly sent to decedent and petitioner’s undisputed address in Omaha, Nebraska. … the Postal Service directed the envelope back to the sender because it was ‘not deliverable as addressed’ and ‘unable to forward’. The same day… respondent received and acknowledged the envelope returned from the Postal Service. The envelope was returned within 48 hours of the initial deposit into the mail and upon return, the revenue officer in charge of the case determined that besides waiting 60 days, no further notice action was needed to assess a trust fund penalty against decedent. The revenue officer determined the mere lapse of 60 days from posting the envelope was adequate notice.” Order, at pp. 2-3.

Well, that should do it, right? Section 6672(b)(2) says give the notice, wait 60 days, and then go get ‘em.

Not quite. There was a minor problem with the letter.

“On the copy of the envelope introduced into evidence, decedent’s address does not appear on the front side of the envelope that was supposedly sent to him. The envelope has a clear window, which is supposed to align with an address printed on a sheet inserted into the envelope’s enclosure. The clear window of Letter 1153 does not show any address; instead the window shows what appears to be a security pattern on either the inside of the envelope or paper within the envelope. In any case, the envelope does not display decedent’s address and raises the issue of whether a letter was ever properly inserted into the envelope or if the Postal Service’s prompt return reflecting that it was ‘not deliverable as addressed and unable to forward’ should have alerted the revenue officer of a failed mailing. Neither decedent nor petitioner protested the proposed assessment.” Order, at p. 3.

Appeals gave Sarah a hearing, but said the IRS’ self-generated certified mail receipt showing a letter sent to the late John’s last-known address (the correctness of which no one contests) means “game over” as far as contesting liability.

Sarah petitions.

It’s one thing if the nonreceipt is the result of a USPS error or malfunction. If IRS correctly addressed and mailed the letter, that’s it as far as contesting liability goes. And if the letter was stamped “UNCLAIMED” by USPS, or the addressee ducked delivery, likewise. But see my blogposts “You Didn’t Get It”, 5/31/13, and “You Didn’t Get It – Part Deux”, 5/31/13.

And here all IRS has is the self-generated certified mail receipt.

But maybe IRS can produce something from USPS showing proper mailing of the 3172; no summary J for IRS–yet.

And no summary J for Sarah.


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