That’s Judge Swift’s take on a favorite tactic of mine, summary judgment; see my blogpost “Summary Judgment – a Causerie”, 3/13/14. Though I’m a fan, I agree that, where there’s a real issue of fact, summary J is not a substitute for a trial.

And Judge Swift has one in Barry Knudsen, 2015 T. C. Memo. 69, filed 4/7/15.

Barry, a longtime nonfiler, claimed he never got the SNODs for his two SFR years. IRS claims they went by certified mail, and at Appeals the SO found a USPS Track-and-Confirm for one, but the other is off the USPS system because of age. And the Track and Confirm the SO got only shows delivery in the town and zipcode, which is all Track and Confirm ever shows, but Judge Swift seems to think that is insufficient. He might want to discuss my blogpost “On The Right Track”, 12/31/14, with Judge Holmes.

The SO, an enterprising type, found PS3877s for both, but they suffer from the same problems endemic to that form. One didn’t have the USPS employee’s manual signature (only a stamp) and didn’t list the number of pieces actually received, only the number tendered. The other wasn’t stamped or signed by a USPS employee, and didn’t state they were SNODs or for what year.

Appeals gave Barry a hearing on underlying liability when he petitioned the NITL he got, conceding Barry didn’t have a prior chance. Barry did nothing, NOD issues, Barry petitions saying he never got the SNODs, so levy invalid.

Judge Swift says: “On remand respondent clearly gave petitioner an opportunity to challenge the amounts of his underlying tax liabilities as respondent had determined them. Petitioner repeatedly chose not to provide respondent with any income or expense information and not to submit to respondent tax returns …. If that were the question before us now, we would not hesitate to grant summary judgment in respondent’s favor.” 2105 T. C. Memo. 69, at pp. 12-13.

But it isn’t.

“However, the key issue before us at this stage, which has been repeatedly raised by petitioner, is whether respondent ever mailed to petitioner the notices of deficiency on which respondent’s tax assessments and proposed levy are based. This is a question that involves not the amounts of petitioner’s underlying tax liabilities but rather the legality of the assessments made against him. As explained, this issue has been repeatedly raised by petitioner and is inherent in the verification requirement of section 6330(c)(1); i.e., it is an issue raised by statute in every CDP case.” 2015 T. C. Memo. 69, at p. 13. (Citation omitted).

And defective PS3877s don’t cut it. There’s much caselaw to that effect, and I’ve gone over it elsewhere. If, however, you want material for a memo of law, here’s Judge Swift.

“The U.S. Court of Appeals for the Second Circuit has held that a failure to indicate the number of pieces of mail received by the U.S. Postal Service and the absence of a signature by the receiving U.S. Postal Service post office employee, both of which defects are present in this case, render a PS Form 3877 improperly completed. See O’Rourke v. United States, 587 F.3d 537, 541 (2d Cir. 2009). This holding is consistent with this Court’s holdings in similar instances. See, e.g., Coleman v. Commissioner, 94 T.C. at 92; Massie v. Commissioner, T.C. Memo. 1995-173, aff’d without published opinion, 82 F.3d 423 (9th Cir. 1996); Wheat v. Commissioner, T.C. Memo. 1992-268.” 2015 T. C. Memo. 69, at p. 16.

So is Barry off the hook, owing nothing for those years, as he claims?

Negatory, good buddy.

“Petitioner has raised a factual issue concerning respondent’s mailing to him of the notices of deficiency, and respondent has failed adequately to address this issue. Summary judgment is not a substitute for a trial and is not to be used to resolve disputes over factual issues. Viewing the alleged facts in the light most favorable to petitioner, we conclude respondent has not sufficiently established that summary judgment is warranted. A trial will be necessary concerning respondent’s alleged mailing of the notices of deficiency to petitioner.” 2015 T. C. Memo. 69, at pp. 16-17.

However, neither should IRS rend their garments in mourning.

“…at trial the defects in the PS Forms 3877 do not necessarily preclude a decision in favor of respondent with respect to the proper mailing of the notices of deficiency. Our ultimate decision on this issue will depend on the credibility and persuasiveness of what petitioner and respondent offer into evidence at trial.” 2015 T. C. Memo. 69, at p. 17. (Citation omitted).

Takeaway–I never trust PS3877s; most of them are worthless. Spend the extra, and mail certified with track-and-confirm, despite Judge Swift’s reservations.