And Confirmed

What better way to end the 2014 blogging year than with a designated hitter from the word processor of The Great Dissenter, a/k/a The Judge Who Writes Like a Human Being, s/a/k/a The Irrepressible, Illustrious, Indefatigable, Irrefragable and Incomparable Foe of the Partitive Genitive, Judge Mark V. Holmes?

So here, my faithful readers, is Marilyn S. Kwolek, Docket No. 560-11, filed 12/31/14. Better make that Dr. Marilyn S. Kwolek (doctorate unspecified; see Order, at p. 1).

Doc K and IRS are squabbling over whether the notice of deficiency (north of $4 million) was mailed to the Doc’s last known address.

All IRS has is a scanned copy of the SNOD, because the file containing the original has vanished, but that’s OK, because a SNOD need not follow any specific form, as long as it gives the years and the amounts asserted. IRS need not follow its own procedures, either.

But the SNOD must be mailed to Doc K’s last known address. And IRS must prove it by “competent and persuasive” evidence..

Doc K claims her POA was her “fiduciary”, and that the SNOD should have gone to said fiduciary, absent which the SNOD is invalid.

“But did Kwolek have a fiduciary on file? We find she did not. Kwolek maintained a Power of Attorney (POA) throughout the relevant tax years, but this does not mean that her POA was her fiduciary. Her form includes only boilerplate language that authorizes her attorney to ‘receive and inspect confidential tax information and to perform any and all acts that [he] can perform with respect to the tax matters’ – including the authority to sign agreements, consents, or other documents. But this authority goes no farther. For example, her representative did not have the authority to receive the taxpayer’s refund checks or the power to sign ‘certain’ returns.” Order, at p. 2.

See Section 6903 and Section 7701(a)(6). A POA’s address is not the “last known address” unless the Form 2848 specifically says so.

So what was Doc K’s last known address? Although her address changed before the SNOD was sent, the tax return so stating wasn’t filed until long after. And the address to which the SNOD was mailed matched most of the Forms 2848 on file and the address on Doc K’s most recent filed return.

Next comes the question of mailing. Our old pal Form PS3877 steps up. But our old pal is sadly defective.

“Kwolek argues that the Commissioner’s certified-mail list is incomplete and defective in that it fails to include a USPS employee’s initials or signature, does not identify how many pieces of mail were received by the Postal Service, is not written on US Postal Services Form 3877, and leaves blank the section which should include the postmaster’s identification, initials, and the date. See Cataldo v. Commissioner, 60 T.C. 522 (1973), aff’d per curiam 499 F.2d 550 (2d Cir. 1974); Wheat v. Commissioner, 63 T.C.M. (CCH) 2955, 2957 (1992) (failure to have the postal clerk initial and indicate how many pieces of mail were received); Bobbs v. Commissioner, 90 T.C.M. (CCH) 524, 526 (2005) (no indication of the number of items received or a signature by a USPS employee). The proffered form isn’t even the usual USPS Form 3877. This might not be fatal to the IRS’s attempt to get a presumption of official regularity, see Clough, 119 T.C. at 185, n. 3; Bobbs, 90 T.C.M. (CCH) at 526; Stein, 60 T.C.M. (CCH) at 213. But the form in this case has too many things wrong with it. While it indicates the ‘total number of pieces listed by sender’ as ‘1,’ it does not indicate how many pieces were received at the Post Office. It has a stamp that has the date and location of the Post Office – which the Commissioner argues shows the postmaster’s involvment [sic] – but it does not contain that information on the form itself in the specified location. We agree with the taxpayer here: This looks like nothing other than an IRS internal note with a Post Office stamp on it.” Order, at pp. 3-4.

I include these cases for your checklist, practitioner. See Takeaway 2, infra, as my already-pouring-the-Dom-Perignon colleagues would say.

So Doc K wins on the shabby PS3877?

No, bad news, Doc K. IRS has the goal line defense out.

IRS “…argues that … evidence of routine mailing procedures, the captured image of the notice of deficiency, the certified-mail list, and the USPS track-and-confirm notice, together establish that the notice was sent on April 13, 2010. With this we agree. While we find that the form does not comply with Form 3877 requirements, we do fmd that the ‘certified mailing list’ provided by the Commissioner is evidence of the fact and date that the notice was mailed. We also accept the track-and-confirm notice as an official record of the USPS, Boultbee v. Commissioner, 101 T.C.M. (CCH) 1031, 1034 (2011), and as evidence of the matters stated on the document. That track-and-confirm notice states that the notice arrived in Danville, California on April 14, 2010 and was left for delivery on April 15, 2010. It also states that USPS returned the unclaimed notice to the IRS on May 5, 2010.” Order, at p. 4.

And not picking up your mail doesn’t help, as Judge Holmes cites our old pal Eric Onyango’s case. Remember Eric? No? Then see my blogposts “You Have to Fulfill The Requirements”, 8/20/13, and “Blowing the Joint”, 6/24/14.

To celebrate the New Year, gang, here’s a bunch of takeaways, free and gratis.

Takeaway 1- If preparing a Form 2848, make sure you state that you want all notices to go to you, if your client so desires. But beware–make sure you let the client know the minute you get anything from IRS. And terminate all POAs when the client relationship terminates.

Takeaway 2- Make sure you put a demand for a copy of the PS3877 in every Branerton letter, and check the PS3877 against this checklist.

Takeaway 3- Impress upon your client that ignoring correspondence from IRS and not picking up certified mail is a very bad idea. It is like throwing stones at a lion engaged in eating a gazelle–you annoy the lion and do not save the gazelle.

Takeaway 4- From the Boutlbee case, supra: “The U.S. Postal Service Track and Confirm service provides reliable data from a neutral third-party source that is not susceptible to manipulation by the parties. Indeed, the Commissioner has relied upon the U.S. Postal Service Track and Confirm service. See, e.g., Sebastian v. Commissioner, T.C. Memo. 2007-138 (demonstrating that an incorrect ZIP Code did not delay attempted delivery of a notice of determination). In addition, respondent [IRS] has at no time suggested that the U.S. Postal Service Track and Confirm data is less reliable or accurate than a postmark in identifying the point in time that an envelope enters the domestic mail service of the United States.” Opinion, at p. 13. Might be a good idea to use track-and-confirm.