Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca7-13-03363/USCOURTS-ca7-13-03363-0/pdf.json

Parties Involved:
Commissioner of Internal Revenue
Appellee
Christopher Gyorgy
Appellant

Document Text:

In the

United States Court of Appeals

For the Seventh Circuit ____________________

No. 13-3363

CHRISTOPHER GYORGY,

Petitioner-Appellant,

v.

COMMISSIONER OF INTERNAL REVENUE,

Respondent-Appellee.

____________________

Appeal from the United States Tax Court.

No. 19240-11L — Elizabeth Crewson Paris, Judge.

____________________

ARGUED SEPTEMBER 17, 2014 — DECIDED FEBRUARY 27, 2015

____________________

Before FLAUM, KANNE, and ROVNER, Circuit Judges.

KANNE, Circuit Judge. The Internal Revenue Service 

(“IRS”) determined that Appellant Christopher Gyorgy 

owed approximately $100,000 in unpaid income taxes, 

penalties, and interest for tax years 2002 and 2003. The IRS 

mailed notices of his deficiencies in 2006 and 2007, including 

demands for payment, to the address on his most recently 

filed tax return. But Gyorgy no longer lived there and did 

not receive the notices. More than two years later, his debts 

were still outstanding, so the IRS filed notice of a federal tax 

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2 No. 13-3363

lien on his property in an effort to collect what he owed.

Gyorgy challenged the IRS’s action in a collection due 

process (“CDP”) hearing before the IRS Office of Appeals 

(the “Appeals Office”).

The Appeals Office sustained the IRS’s filing of the lien 

notice. Its decision rested, in part, on findings that the IRS 

(1) properly mailed Gyorgy’s deficiency notices to his “last 

known address” under I.R.C. § 6212(b)(1) before filing the 

lien; and (2) correctly determined his underlying tax 

liabilities. Gyorgy appealed both determinations to the tax 

court, which affirmed in relevant part after a bench trial. He 

now appeals the tax court’s judgment. We affirm.

I. BACKGROUND

A. The IRS’s Collection Efforts

From 2001 through 2003, Gyorgy earned taxable income 

from various sources, including wages from Goodby 

Silverstein & Partners (an advertising agency) and interest 

and dividends from his investments. But he filed no federal 

income tax returns for those years. In fact, he neglected to 

file any income tax returns from tax year 2001 through at 

least tax year 2007. During that same period, he moved 

frequently, living at eight different addresses in four cities 

and two states.

To determine Gyorgy’s tax liability for 2001, 2002, and 

2003—the years relevant to this appeal—the IRS had to rely 

on W-2 forms, 1099 forms, and other information submitted 

by third parties to create substitute returns. See I.R.C. 

§ 6020(b). When the substitute returns revealed deficiencies 

for all three years, the IRS began the process of notifying 

Gyorgy and attempting to collect his debts. 

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No. 13-3363 3

The IRS’s computer system shows that it sent notice of 

Gyorgy’s 2001 deficiency on or shortly after March 9, 2004, to 

his apartment on Octavia Street in San Francisco. That was 

the address he had reported on his most recently filed tax 

return, for the 2000 tax year, and it was the most recent 

address in the IRS’s computer system. It is unclear whether 

the notice was in fact mailed, but in any event Gyorgy no 

longer lived on Octavia Street and did not receive it. In 

August 2004, the IRS assessed his deficiency for tax year 

2001.

The IRS had no record of any address update from 

Gyorgy. But the forms submitted to the IRS by third parties 

showed a few possible addresses. Gyorgy’s 2002 W-2s listed 

Octavia Street as well as an address on Lee Street in 

Oakland, California. His W-2 and one of his 1099s for 2003 

listed an address on Jean Street in Oakland. In addition, his 

1099s and other forms for both years listed his business 

address at Goodby Silverstein in San Francisco. 

On November 29, 2004, the IRS mailed a form 2797 “R-UThere” letter to Jean Street. The letter requested Gyorgy’s 

assistance in updating IRS records. It asked him to check a 

box if Jean Street was his current address, or to write in 

another address if it was not, then sign and return the form. 

The IRS received no answer to its letter.

The IRS continued to use Octavia Street as Gyorgy’s 

address. It sent a deficiency notice there for tax year 2003 on 

December 11, 2006, demanding payment of $68,954 in 

income taxes, penalties, and interest.1 Gyorgy did not 

1 All figures are rounded to the nearest dollar.

 

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receive the notice, and the postal service returned it to the 

IRS marked “not deliverable as addressed” and “unable to 

forward” with a date stamp of “12/17/06.” The IRS took no 

further steps (at least none reflected in the record) to locate

Gyorgy or to re-issue the notice after it received the returned 

mail. In May 2007, it assessed his deficiency for tax year 

2003. 

On July 30, 2007, the IRS mailed another deficiency notice 

to Octavia Street, this time for tax year 2002. It demanded 

payment of $27,621 in taxes, penalties, and interest. Again, 

Gyorgy did not receive the notice, and the postal service 

returned it to the IRS marked “attempted – not known” and 

“unable to forward” with a date stamp of “08/03/07.” The 

IRS again took no further steps to locate Gyorgy or re-issue 

the notice. In December 2007, it assessed his deficiency for 

tax year 2002. 

Gyorgy did not pay his debts or petition the tax court for 

a redetermination of his deficiencies under I.R.C. § 6213(a) (a 

procedure for contesting one’s tax liability after the IRS 

issues a deficiency notice). Two years later, his debts were 

still outstanding, so the IRS proceeded with collection 

efforts. It filed a notice of federal tax lien in the recorder’s 

office in Cook County, Illinois, in August 2009 with respect 

to Gyorgy’s residence at 8900 Forestview Road in Evanston, 

where he had been living since 2008.2 By then, Gyorgy’s tax 

liability had grown to $120,644 ($12,684 for 2001; $30,416 for 

2 It is unclear from the record exactly how and when the IRS first located 

the property on Forestview Road and connected it to Gyorgy.

 

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No. 13-3363 5

2002; and $77,544 for 2003). The IRS sent notification of the 

lien filing to the subject property on Forestview Road. 

Gyorgy received the notice and timely requested a CDP 

hearing. He questioned whether the IRS had followed the 

necessary procedures and claimed he was not liable for the 

assessed taxes. 

B. The Collection Due Process Hearing

The Appeals Office conducted its CDP review between 

2009 and 2011. The appeals officer assigned to Gyorgy’s case 

asked him to submit original tax returns and supporting 

documentation if he disagreed with the IRS’s calculation of 

his liabilities. To aid the task, she enclosed copies of the 

third-party information reported to the IRS and summaries 

of his income for each year. But Gyorgy—who was 

proceeding pro se—provided no returns or other 

information to challenge his liability. 

Nor did Gyorgy participate meaningfully in the CDP 

process. The appeals officer initially scheduled a telephone 

conference to discuss his objections, but he did not 

participate or timely request an alternative date. Instead, he 

sent a letter the day before the hearing insisting on meeting 

face-to-face. The appeals officer agreed to do so, but only if 

Gyorgy filed his overdue tax returns from 2001 through 2010 

(his non-filing appears to have been habitual). He refused, so 

the Appeals Office based its review on the information in the 

administrative file.

The Appeals Office issued a notice of determination 

sustaining the IRS’s lien notice on July 15, 2011. It concluded 

that the IRS “follow[ed] all legal and procedural 

requirements in the assessment and collection process.” In 

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6 No. 13-3363

particular, it found that the IRS properly issued Gyorgy’s 

deficiency notices to Octavia Street because that was the 

address on his most recently filed tax return, and because he 

had not “clearly and concisely notified the IRS of a change of 

address.” The Appeals Office also upheld the IRS’s 

determination of Gyorgy’s tax liabilities because, although 

he claimed he was not liable, he never actually challenged 

the agency‘s calculations.

Gyorgy filed a timely petition in tax court on August 15, 

2011, challenging the Appeals Office’s determination. See

I.R.C. § 6330(d)(1); Tax Ct. R. 331(a). 

C. Proceedings before the Tax Court

The tax court granted a de novo review of Gyorgy’s 

underlying tax liability and held a bench trial on January 28, 

2013. At trial, the IRS presented the deficiency notices, 

evidence, and testimony in support of its calculations, but 

Gyorgy—who was again proceeding pro se—presented no 

evidence and no argument on the issue of liability.

The tax court also heard testimony concerning Gyorgy’s 

whereabouts between 2000 and 2008. He testified that he 

lived on Octavia Street until the spring of 2002; on Lee Street 

in Oakland until the spring of 2003; on Jean Street in 

Oakland until November 2004; in an apartment in Irvine, 

California, until the spring of 2005 (he could not recall the 

address); on Quail Bush in Irvine until the winter of 2006; in 

a temporary apartment on Ridge Street in Evanston, Illinois, 

until the spring of 2007; on Colfax Street in Evanston until 

the spring of 2008; and since then on Forestview Road in 

Evanston. He admitted, “It’s hard to keep track of it all.”

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No. 13-3363 7

Gyorgy claimed that, even though he was not filing tax 

returns during this period, he called the IRS’s 1-800 number 

and submitted a change-of-address form to the post office 

every time he moved. He also claimed he wrote one or two 

letters to the IRS informing it of his new addresses (though 

he could not recall which ones). On cross-examination he 

could not recall the dates or other details of any calls or 

letters. For example, when asked when exactly he wrote to 

the IRS, he said, “I don’t have specific dates. It’s such a blur. 

One [letter] here, one there, mostly through phone calls.” He 

had no documentation to support his testimony.

The Commissioner called Debra Dufek, the appeals team 

manager who supervised Gyorgy’s case. She testified that 

Octavia Street was his address of record when the IRS 

mailed the deficiency notices at issue, and that he did not 

update his address until 2009. Gyorgy did not cross-examine 

her. The IRS also produced verifications that it had received 

no returns from Gyorgy from 2001 through 2007. Gyorgy 

acknowledged—and admits on appeal—that he did not file 

tax returns for those years. 

The tax court orally issued findings of fact and an 

opinion on January 31, 2013. It reviewed Gyorgy’s tax 

liability de novo and all other determinations for abuse of 

discretion. The court vacated the lien notice as to tax year 

2001 because the Commissioner was unable to produce a 

copy of the deficiency notice or other proof that a notice was 

mailed. The Commissioner did not appeal that ruling, so tax 

year 2001 is not at issue here. 

The tax court sustained the lien notice, however, for the 

2002 and 2003 tax years. It agreed with the Appeals Office 

that the deficiency notices for those years were validly sent 

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8 No. 13-3363

to Octavia Street because Gyorgy had not notified the IRS of 

a new address. It also upheld the IRS’s calculation of 

Gyorgy’s 2002 and 2003 tax liabilities because he “did not 

forward any arguments ... or present any evidence” on that 

issue. 

The tax court entered a final decision giving effect to its 

bench opinion and disposing of the parties’ claims on March 

25, 2013. Gyorgy filed a timely motion to vacate,3 which the 

tax court denied on July 22, 2013. That denial reset the clock 

for Gyorgy to appeal the March 25 decision. See Fed. R. App. 

P. 13(a)(1)(B). He filed a timely notice of appeal on October 

21, 2013. See I.R.C. § 7483; Fed. R. App. P. 26(a)(1)(C).

We have jurisdiction under I.R.C. § 7482(a)(1).

II. ANALYSIS

The tax court upheld the Appeals Office’s determination 

that the IRS (1) properly mailed deficiency notices to 

Gyorgy’s last known address before filing the lien, and 

(2) correctly determined his underlying tax liabilities. We 

find no error in the first conclusion, and we hold that 

Gyorgy waived any challenge to the second conclusion.4

3 On June 10, 2013, Gyorgy filed a motion for leave to file the motion to 

vacate. The tax court granted leave on June 27 and entered the motion to 

vacate on the docket. That was after the time to appeal normally would 

have expired (June 24). See I.R.C. § 7483. But under tax court precedent, 

we treat the motion to vacate as though it were filed at the same time as 

the motion for leave, i.e., on June 10. See Stewart v. Comm’r, 127 T.C. 109, 

117 (2006). Gyorgy’s motion to vacate was therefore timely.

4 Gyorgy also raised a third issue for the first time in his reply brief. He 

claims the IRS did not prove it actually mailed deficiency notices for 2002 

 

(continued...)

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No. 13-3363 9

We begin with an overview of the CDP process and the 

taxpayer’s right to appeal. The Internal Revenue Code (the 

“Code”) directs the Treasury Secretary—acting through the 

IRS—to determine, assess, and collect federal taxes. See I.R.C. 

§§ 6201(a), 6301. It also requires taxpayers to file returns as 

prescribed by the IRS. See id. § 6011(a). If the IRS finds that a 

person has unpaid taxes for a given year, it must notify him 

of the deficiency before it can collect the debt. See id.

§§ 6212(a), 6213(a). Once the IRS mails notice, the taxpayer 

may petition the tax court to redetermine the correct amount 

of the deficiency. Id. §§ 6213(a), 6214(a). If he does not file a 

timely petition (normally within ninety days), then the 

deficiency “shall be assessed, and shall be paid upon notice 

and demand.” Id. § 6213(c).

If the taxpayer does not pay, then his tax liabilities 

become a lien on his real and personal property. Id. § 6321. 

To protect the government’s rights against other secured 

creditors with respect to the encumbered property, the IRS 

must generally file a notice of the tax lien with the 

appropriate state authority. See id. § 6323(a), (f). It must then 

inform the taxpayer that it filed the lien notice. Id. § 6320(a). 

The taxpayer is entitled to challenge the lien in a CDP 

hearing before the Appeals Office, which is an independent 

bureau within the IRS. Id. § 6320(b). The “hearing” is 

informal and may consist of correspondence, telephone 

conversations, or in-person meetings. Treas. Reg. § 301.6330-

and 2003. While we see little merit in this argument, we do not consider 

it because “[t]he reply brief is not the appropriate vehicle for presenting 

new arguments.” United States v. Feinberg, 89 F.3d 333, 341 (7th Cir. 1996).

 

(...continued)

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10 No. 13-3363

1(d)(2), Q&A-D6; Kindred v. Comm’r, 454 F.3d 688, 691 n.7, 

695 n.19 (7th Cir. 2006). In general, the taxpayer may raise 

any relevant issue. I.R.C. § 6330(c)(2)(A). That includes a 

challenge to his underlying tax liability if he “did not receive 

any statutory notice of deficiency for such tax liability or did 

not otherwise have an opportunity to dispute such tax 

liability.” Id. § 6330(c)(2)(B). The appeals officer must 

consider the issues raised by the taxpayer and verify that the 

IRS followed proper procedures. Id. § 6330(c)(3).

After the hearing, the Appeals Office issues a notice of 

determination containing its findings and conclusions. Treas. 

Reg. § 301.6330-1(e), Q&A-E8. If the taxpayer is dissatisfied, 

he can appeal the determination to the tax court. I.R.C. 

§ 6330(d)(1). If his underlying tax liability was properly at 

issue in the CDP hearing, the tax court reviews that issue de 

novo. Goza v. Comm’r, 114 T.C. 176, 181-82 (2000). It reviews 

the Appeals Office’s other determinations for abuse of 

discretion. Id.; see also Jones v. Comm’r, 338 F.3d 463, 466 (5th 

Cir. 2003) (“In a collection due process case in which the 

underlying tax liability is properly at issue, the Tax Court ... 

reviews the underlying liability de novo and reviews the 

other administrative determinations for an abuse of 

discretion.” (citing Craig v. Comm’r, 119 T.C. 252, 260 (2002))).

The tax court’s decision is in turn subject to review in the 

appropriate court of appeals. I.R.C. § 7482(a)(1). We review 

tax court decisions “in the same manner and to the same 

extent as decisions of the district courts in civil actions tried 

without a jury.” Id.

With this background in hand, we turn to the two issues 

on appeal.

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No. 13-3363 11

A. Validity of the Deficiency Notices

Before the IRS can assess or collect a tax deficiency, it 

must “send notice of such deficiency to the taxpayer” under 

§ 6212 of the Code (subject to a few exceptions that are 

irrelevant here). See id. §§ 6212(a), 6213(a). Gyorgy contends 

that the IRS violated this mandate when it mailed the 

deficiency notices for 2002 and 2003 to his former address on 

Octavia Street, and that the notices were therefore invalid. 

The Appeals Office disagreed and found that the IRS 

properly issued the notices. Because that conclusion was an 

administrative determination unrelated to the amount of 

Gyorgy’s tax liability, the tax court’s standard of review was 

abuse of discretion. Goza, 114 T.C. at 182; Jones, 338 F.3d at 

466. We apply that same standard on appeal. See Kindred, 454 

F.3d at 694; Williams v. Comm’r, 718 F.3d 89, 91-92 (2d Cir. 

2013) (per curiam). Accordingly, our review is “highly 

deferential.” Kindred, 454 F.3d at 694 n.16. 

Judicial review of an administrative decision is ordinarily 

confined to the record that was before the agency. Fla. Power 

& Light Co. v. Lorion, 470 U.S. 729, 743-44 (1985); Cronin v. 

U.S. Dept. of Agric., 919 F.2d 439, 443-44 (7th Cir. 1990). But 

the tax court here looked beyond the CDP record when it 

considered trial testimony regarding the deficiency notices 

and Gyorgy’s addresses. Whether it was appropriate for the 

tax court to consider that additional evidence—either 

because it was not bound by the administrative-record rule 

or because one of the exceptions to that rule applied—is a 

question we need not decide today because neither party 

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12 No. 13-3363

objects to the tax court’s expansion of the record.5

Accordingly, we will consider both the CDP record and the 

evidence adduced at trial in deciding whether the Appeals 

Office abused its discretion. 

Gyorgy’s main complaint is that he did not receive the 

deficiency notices at issue. But that does not render them 

invalid, for nothing in § 6212 requires actual notice. 

Rappaport v. United States, 583 F.2d 298, 301 (7th Cir. 1978) 

(per curiam). On the contrary, subpart (b)(1) provides that a 

deficiency notice “shall be sufficient” if it is “mailed to the 

taxpayer at his last known address.” I.R.C. § 6212(b)(1). This 

rule gives the IRS a “safe harbor” by permitting constructive 

notice where, for instance, the taxpayer has “failed to inform 

the Service of a change of address.” Borgman v. Comm’r, 888 

F.2d 916, 917 (1st Cir. 1989). Congress was concerned that 

requiring actual notice in such cases would impose an 

almost impossible burden on the IRS to keep track of every 

taxpayer’s whereabouts. See Gaw v. Comm’r, 45 F.3d 461, 465 

(D.C. Cir. 1995) (discussing the legislative history of the lastknown-address rule), nonacq., 1996-1 C.B. 1, 1996-2 C.B. 1; 

Lewis v. Comm’r, 72 T.C.M. (CCH) 790, 792 (1996) (same); 

H.R. Rep. No. 70-2, at 22 (1927) (“It is obviously impossible 

5 The tax court held in Robinette v. Commissioner, 123 T.C. 85, 95 (2004), 

that “when reviewing for abuse of discretion under section 6330(d) ... 

our review is not limited to the administrative record.” On appeal, the 

Eighth Circuit reversed, holding that the administrative-record rule 

applies in such cases. Robinette v. Comm’r, 439 F.3d 455, 459-62 (8th Cir. 

2006). The First and Ninth Circuits agree with the Eighth. See Keller v. 

Comm’r, 568 F.3d 710, 718 (9th Cir. 2009); Murphy v. Comm’r, 469 F.3d 27, 

31 (1st Cir. 2006). This court has not decided the issue, and we do not 

reach it today. 

 

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No. 13-3363 13

for the Commissioner to keep an up-to-date record of 

taxpayers’ addresses.”); S. Rep. No. 70-960, at 30 (1928) 

(same).

The last-known-address rule Congress adopted 

“provides a method of notification which insures that the 

vast majority of taxpayers will be informed that a tax 

deficiency has been determined against them.” Jones v. 

United States, 889 F.2d 1448, 1450 (5th Cir. 1989). The vast 

majority, but not all: as Gyorgy points out, a taxpayer who 

no longer lives at his last known address likely will not 

receive notice and will therefore miss his opportunity to 

petition the tax court for a redetermination under I.R.C. 

§ 6213(a) (requiring the filing of a petition within ninety 

days after notice is mailed). But such taxpayers have other 

avenues to contest their liability. They can, for example, raise 

liability in a CDP hearing, see I.R.C. § 6330(c)(2)(B), seek an 

audit reconsideration, see Tucker v. Comm’r, 135 T.C. 114, 148 

(2010), aff’d, 676 F.3d 1129 (D.C. Cir. 2012), or pay the tax and 

then seek a refund, see I.R.C. § 7422(a); 28 U.S.C. § 1346(a)(1). 

Or, of course, they can avoid the problem in the first place by 

keeping the IRS informed of their current address. See

Goulding v. United States, 929 F.2d 329, 331 (7th Cir. 1991) 

(holding that the taxpayer bore responsibility to notify the 

IRS of a different address).

The determinative question, then, is not whether Gyorgy 

received the deficiency notices for 2002 and 2003 (he did 

not), but whether the IRS mailed them to his “last known 

address” under § 6212(b)(1). To decide that question, we first 

discuss the governing definition of “last known address” 

and then apply it to this case.

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1. Definition of “Last Known Address”

In numerous places—not just § 6212(b)(1)—the Code 

authorizes or requires the IRS to send notice to a taxpayer’s 

“last known address.”6 But the Code itself does not define 

that phrase, and for many years neither did the 

implementing regulations. So the task of construing “last 

known address” was left to the courts.

In Eschweiler v. United States and earlier decisions, we 

defined it as the address “where ‘the Commissioner 

reasonably believes the taxpayer wished to be reached at the 

time the notice of deficiency was sent.’” 946 F.2d 45, 48 (7th 

Cir. 1991) (per curiam) (quoting Goulding, 929 F.2d at 331); see 

also McPartlin v. Comm’r, 653 F.2d 1185, 1189 (7th Cir. 1981)

(endorsing the tax court’s definition: the “last permanent 

address of a definite duration to which the taxpayer has 

directed the Commissioner to send all communications"

(internal quotation marks and citation omitted)). We held 

that “the IRS need only exercise reasonable diligence” under 

the particular circumstances of each case to determine the 

taxpayer’s last known address. Eschweiler, 946 F.2d at 48 

(citing Eschweiler v. United States, 877 F.2d 634, 636 (7th Cir. 

1989)).

6 See, e.g., I.R.C. §§ 6015(e) (notice of final determination regarding 

spousal relief); 6110(f)(3)(B), (4)(B) (notice of disclosure proceedings); 

6245(b)(1) (notice of partnership adjustment); 6303(a) (notice of tax 

assessment and payment demand); 6320(a)(2)(C) (notice of filing of 

notice of lien); 6330(a)(2)(C) (notice of right to hearing before levy); 

6331(d)(2)(C) (notice of intention to levy); and 6335(a) (notice of seizure).

 

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No. 13-3363 15

In discharging its duty of reasonable diligence, we 

allowed the IRS to “rely on the address found in the return 

being audited, unless there is clear and concise notification 

from the taxpayer directing the Commissioner to use a 

different address.” Eschweiler, 946 F.2d at 48 (internal 

quotation marks and citation omitted). This rule placed the 

burden on the taxpayer to notify the IRS of a change of 

address. Id. Other circuits adopted similar rules, with some 

differences in the exact formulation. See id. at 48 n.5.

Ten years after Eschweiler, the Treasury Secretary 

promulgated a new regulation defining “last known 

address” wherever that phrase appears in the Code. See 66 

Fed. Reg. 2817 (Jan. 12, 2001) (notice of final rulemaking). 

Treasury Regulation § 301.6212-2, entitled “Definition of last 

known address,” provides in relevant part:

(a) General rule. Except as provided in 

paragraph (b)(2) of this section, a taxpayer's last 

known address is the address that appears on the 

taxpayer's most recently filed and properly 

processed Federal tax return, unless the Internal 

Revenue Service (IRS) is given clear and concise 

notification of a different address. Further 

information on what constitutes clear and concise 

notification of a different address and a properly 

processed Federal tax return can be found in Rev. 

Proc. 90-18 (1990-1 C.B. 491) or in procedures 

subsequently prescribed by the Commissioner.

(b) Address obtained from third party—

(1) In general. Except as provided in 

paragraph (b)(2) of this section, change of address 

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16 No. 13-3363

information that a taxpayer provides to a third 

party, such as a payor or another government 

agency, is not clear and concise notification of a 

different address for purposes of determining a 

last known address under this section.

(2) Exception for address obtained from the 

United States Postal Service—(i) Updating taxpayer 

addresses. The IRS will update taxpayer addresses 

maintained in IRS records by referring to data 

accumulated and maintained in the United States 

Postal Service (USPS) National Change of Address 

database ... (NCOA database).... [A] new address 

in the NCOA database is the taxpayer's last known 

address, unless the IRS is given clear and concise 

notification of a different address....

The last-known-address inquiry under § 301.6212-2 

focuses on the information that was in the IRS’s possession at 

the time it mailed the deficiency notice at issue. See I.R.C.

§ 6212(b)(1) (making notice sufficient “if mailed to the ... last 

known address”) (emphasis added); Treas. Reg. § 301.6212-

2(a) (focusing on the information the IRS “is given”); 

Eschweiler, 946 F.2d at 48. 

Under subpart (a) of the regulation, a taxpayer’s last 

known address is presumptively the one shown on his most 

recently filed and processed tax return. To update his 

address, the taxpayer must file a new return or give the IRS 

“clear and concise notification.” Thus, as under our prior 

case law, see Eschweiler, 946 F.2d at 48, it is the taxpayer’s 

responsibility to properly notify the IRS if he wants 

correspondence sent to an address other than the one on file. 

The revenue procedures in effect when the IRS issued 

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No. 13-3363 17

Gyorgy’s deficiency notices permitted notification either in 

writing—through a signed statement, a response to certain 

correspondence from the IRS, or the IRS’s change-of-address 

form—or by oral statement directly to an IRS employee who 

initiated contact with the taxpayer. See Rev. Proc. 2001-18 

§ 5.04-05, 2001-1 C.B. 708 (effective Feb. 20, 2001), superseded 

by Rev. Proc. 2010-16, 2010-1 C.B. 664 (effective June 1, 2010). 

Additionally, subpart (b)(2) of the regulation treats a new 

address in the postal service’s NCOA database as sufficient 

notification.

Other than information in the NCOA database, however, 

a new address obtained from a payer or another third party 

does not count as clear and concise notification. Treas. Reg. 

§ 301.6212-2(b)(1). This rule is consistent with our prior 

decisions allowing the IRS to rely on the documents 

submitted by the taxpayer. See, e.g., Eschweiler, 946 F.2d at 49; 

see also Greenstein v. Comm’r, 60 T.C.M. (CCH) 379, 382 (1990) 

(holding that forms submitted by third parties “[did] not 

provide sufficient notification of an address change”). 

Indeed, because notice sent to a temporary or unverified 

address may be ineffective, “the IRS would run a risk in 

relying on address information about a taxpayer submitted 

by a third party.” Gille v. United States, 33 F.3d 46, 48 (10th 

Cir. 1994). If the deficiency notice is invalid, the IRS’s tax 

assessment is generally unenforceable. See I.R.C. § 6213(a). 

And if the normally applicable three-year statute of 

limitations has expired, see id. § 6501(a), the IRS may be 

unable to collect the taxes at all.

Neither party here contends that § 301.6212-2 exceeds the 

Treasury Secretary’s authority to “prescribe all needful rules 

and regulations for the enforcement of [the Code],” I.R.C. 

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18 No. 13-3363

§ 7805(a), or that it is otherwise invalid. So for purposes of 

this decision we accept the regulation as controlling under 

Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 

467 U.S. 837, 843-45 (1984). See Stoops v. One Call Commc’ns, 

Inc., 141 F.3d 309, 311 (7th Cir. 1998) (accepting regulations 

as controlling where neither party challenged their

propriety). In other words, we look to § 301.6212-2 for the 

governing definition of “last known address.” Cf. Planes v. 

United States, No. 8:05-CV-1242, 2006 U.S. Dist. LEXIS 72407, 

at *13 (M.D. Fla. Oct. 4, 2006) (following Treas. Reg. 

§ 301.6212-2), aff’d per curiam, 239 F. App’x 480 (11th Cir. 

2007); Lewis v. Comm’r, 98 T.C.M. (CCH) 174, 176 (2009) 

(same). Because our pre-2001 judicial definition of “last 

known address” is consistent with § 301.6212-2, however, we 

also continue to follow our earlier cases.7

7 There are two exceptions. First, we follow § 301.6212-2(a)’s 

presumption that the last known address is the one listed on the 

taxpayer’s most recently filed return; whereas our earlier decisions 

presumed it was the address on the return being audited, see Eschweiler, 

946 F.2d at 48, though subsequent returns were also relevant, see id. at 48 

n.5 (citing McPartlin, 653 F.2d at 1190). Second, we treat a new address in 

the NCOA database as sufficient to update the last known address under 

§ 301.6212-2(b)(2), even though none of our prior cases established such a 

rule. See Nat’l Cable & Telecomm. Ass’n v. Brand X Internet Servs., 545 U.S. 

967, 982 (2005) (“A court’s prior judicial construction of a statute trumps 

an agency construction otherwise entitled to Chevron deference only if 

the prior court decision holds that its construction follows from the 

unambiguous terms of the statute and thus leaves no room for agency 

discretion.”).

 

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No. 13-3363 19

2. Gyorgy’s Last Known Address

In this case, we must decide whether the Appeals Office 

correctly concluded that Octavia Street was Gyorgy’s last 

known address when the IRS mailed his deficiency notices 

for tax years 2002 and 2003. 

The IRS sent the first notice (for 2003) in December 2006 

and the second (for 2002) in July 2007. It is undisputed that, 

at that time, Gyorgy’s most recently filed return was for tax 

year 2000, as he had not filed any subsequent returns. 

Because his 2000 return listed Octavia Street as his address, 

that was presumptively his last known address. See Treas. 

Reg. § 301.6212-2(a). 

Gyorgy maintains, however, that Octavia Street was not

his last known address—although he does not say which 

one of his addresses the IRS should have used instead. As 

best we can discern (his briefs are unclear), Gyorgy offers 

three arguments for his position. 

First, he claims that although he did not file any new 

returns, he updated his address in other ways. The Appeals 

Office rejected this contention. It found that the IRS had no 

more recent address on file and that the postal service, 

having returned the two deficiency notices as “unable to 

forward,” could not provide a more current address either. 

During the tax court trial, Gyorgy testified that each time he 

moved he left his new address with both the post office and 

the IRS. But he remembered few details and had no 

documentation to support his testimony. The IRS, by 

contrast, confirmed through Ms. Dufek’s testimony and 

print-outs of the information in its computer systems that it 

had no record of a new address for Gyorgy until 2009. On 

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20 No. 13-3363

this record, we find no error in the Appeals Office’s 

conclusion that he did not update his address with either the 

IRS or the postal service before the issuance of his deficiency 

notices.8

Second, Gyorgy points to the fact that the W-2 and 1099 

forms reported to the IRS by third parties for tax years 2002 

and 2003 listed possible addresses other than Octavia Street. 

But new address information obtained from a third-party 

payer is not “clear and concise notification.” Treas. Reg. 

§ 301.6212-2(b)(1). These were only possible, not known, 

addresses; if Gyorgy wanted the IRS to use one of them, it 

was his responsibility to inform it which address was 

correct. See Goulding, 929 F.2d at 331; cf. Marks v. Comm’r, 947 

F.2d 983, 986 (D.C. Cir. 1991) (per curiam) (“[T]he 

Commissioner had no duty to send duplicate notices to 

every single address of which he had knowledge, especially 

when he had no reason to believe that any such address was 

permanent.”).

In any event, the IRS attempted to verify Gyorgy’s 

address by sending the so-called R-U-There letter in 2004 to 

the Jean Street residence listed on his most recent W-2. The 

IRS received no response. Far from demonstrating that 

Gyorgy had updated his address, as he argues, the R-UThere letter shows that the IRS was unable to determine 

whether Jean Street was his current address. It had no clear 

8 We therefore need not reach the further question of whether the 

telephone calls, letters, and change-of-address forms Gyorgy claims to 

have submitted would constitute clear and concise notification of a new 

address.

 

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No. 13-3363 21

and concise notification of any address other than Octavia 

Street.

Gyorgy’s third argument is that the IRS should have 

known he no longer lived on Octavia Street because the 

postal service returned both deficiency notices as 

undeliverable. That argument fails with respect to the first 

deficiency notice because the last-known-address inquiry 

focuses on the information the IRS possessed at the time of 

mailing. Eschweiler, 946 F.2d at 48. Once the IRS sends notice 

to what is at that time the last known address, as it did here, 

“’nothing in [section 6212] suggests that the IRS is obligated 

to take additional steps to effectuate delivery if the notice is 

returned....’” Id. at 49-50 (quoting King v. Comm’r, 857 F.2d 

676, 681 (9th Cir. 1988)) (alteration in original). 

But the second deficiency notice stands on different 

ground, according to Gyorgy. He points out that before the

IRS mailed the second notice in July 2007, the postal service 

had already returned the first notice as undeliverable on 

December 17, 2006.9 At that point the IRS knew or should 

have known that Octavia Street was no longer Gyorgy’s 

correct address; therefore, he argues, it was not entitled to 

send the second notice there. As we have already discussed, 

9 The postal service apparently stamped the date “12/17/06” on the 

returned envelope containing the first deficiency notice. While it would 

be reasonable to infer that the notice was in fact returned to the IRS on or 

around that date, Gyorgy did not introduce any evidence to that effect at 

trial or question the IRS’s witness about when it actually received the 

returned mail. Nevertheless, we will grant Gyorgy’s factual inference for 

purposes of this opinion, because even having done so, we ultimately 

find his argument unpersuasive.

 

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however, the IRS did not have a more recent, reliable 

address for Gyorgy in its files. He suggests that it should 

have done more to find him through its own investigation. 

We disagree.

To be sure, Gyorgy is correct that the IRS must use 

reasonable diligence to determine which address is the last 

known address under the applicable definition. See, e.g.,

Eschweiler, 946 F.2d at 48; Downing v. Comm’r, 94 T.C.M. 

(CCH) 319, 324 (2007). Courts have held, for example, that 

the IRS must carefully process and review more recent tax 

returns for a new address. See, e.g., McPartlin, 653 F.2d at 

1190, 1193 (finding an IRS deficiency notice sent to 

taxpayers’ old address invalid where, among other facts, 

they had submitted a more recent return disclosing a new 

address and another IRS service center had previously sent 

mail to the new address); Wallin v. Comm’r, 744 F.2d 674, 676-

77 (9th Cir. 1984) (holding that the IRS was insufficiently 

diligent where it knew taxpayer had moved and where a 

thorough computer search for her social security number 

would have revealed that she filed, under her new last name, 

a more recent joint return listing her new address). 

Reasonable diligence also requires the IRS to carefully 

determine whether the taxpayer has otherwise provided 

proper notification of an address change. See, e.g., Ward v. 

Comm’r, 907 F.2d 517, 522 (5th Cir. 1990) (holding that the 

IRS should have seen a “PN” notification in its computer 

systems indicating that a change of address was pending 

based on a letter from the taxpayer). And, having 

determined the proper address, the IRS must correctly 

transcribe it on the mailing envelope. See, e.g., Mulvania v. 

Comm’r, 769 F.2d 1376, 1377, 1379 (9th Cir. 1985) 

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No. 13-3363 23

(invalidating a deficiency notice which the IRS mistakenly 

sent to “St. Linda Isle Drive” rather than “57 Linda Isle 

Drive,” and which the postal service returned as 

undeliverable). 

But these cases, and other, similar cases cited by Gyorgy,

do not bolster his position. As the Appeals Office correctly 

found, this is not a case where the IRS overlooked a more 

recently filed tax return, ignored an address update from the 

taxpayer, or misaddressed an envelope. No amount of 

diligence would have uncovered a new return or notification 

from Gyorgy because he never submitted one.

Seeking to push the IRS’s reasonable-diligence obligation 

further, Gyorgy asks us to follow two decisions from the 

Fifth Circuit that required the IRS to conduct further 

investigation when it had reason to believe the address on 

file was no longer correct. In Mulder v. Commissioner, the 

postal service had returned two letters sent to the taxpayer’s 

address on file, but the IRS sent a deficiency notice to that 

address anyway. 855 F.2d 208, 210 (5th Cir. 1988). The court 

invalidated the notice. Id. at 212. It held that, in addition to 

reviewing its own files, the IRS should have inquired with 

the tax-preparer or the Texas motor vehicle or driver’s 

license bureau for a new address. Id.

In Terrell v. Commissioner, the postal service had returned 

three letters to the taxpayer’s address on file, but the IRS had 

not yet received notification of her new address. 625 F.3d 

254, 257 (5th Cir. 2010). It therefore mailed a determination 

denying the taxpayer’s request for spousal relief to the 

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address on file.10 Id. The notice was returned to the IRS as 

undeliverable. Id. Again, the Fifth Circuit invalidated the 

notice. Id. at 260. It explained that “[w]hen the IRS knows or 

should know at the time of mailing that the taxpayer’s 

address on file may no longer be valid because of previously 

returned letters,” it may not simply rely on the most recent 

address on file. Id. at 259. Instead, it must conduct “further 

investigation” by, for example, searching DMV records or 

contacting the taxpayer’s employer. Id. at 259-60.

There is a tension between these two decisions and the 

applicable Treasury regulation, which requires a new tax 

return or clear and concise notification to change the last 

known address, see Treas. Reg. § 301.6212-2(a), and which 

provides that a new address obtained from a third party 

(other than the NCOA database) is not sufficient, see id.

§ 301.6212-2(b)(1). But we need not decide today whether 

that tension can be resolved or whether we would follow 

Mulder or Terrell if presented with similar facts. Even if we 

adopted the holdings in those cases, they would not help 

Gyorgy for two reasons. 

First, the IRS’s duty of reasonable diligence is rooted in 

equity. See Gaw, 45 F.3d at 468 (characterizing the duty as an 

“equitable obligation ... distinct from and supplementary to 

the statutory obligation imposed by the last known address 

requirements of section 6212”); 13 Mertens Law of Federal 

Income Taxation § 49C:16, at 2 (2015) (discussing the IRS’s 

10 A taxpayer’s deadline to challenge a denial of spousal relief under 

§ 6015(e)(1)(A) runs from the time the IRS mails its final determination 

“to the taxpayer’s last known address.” I.R.C. § 6015(e)(1)(A)(i)(I).

 

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No. 13-3363 25

“equitable obligation to use reasonable diligence”). It 

therefore matters whether the taxpayer claiming its 

protection has “clean hands.” See Gutierrez v. Gonzales, 458 

F.3d 688, 694 (7th Cir. 2006) (recognizing “the venerable 

doctrine that ‘he who comes into equity must come with 

clean hands’” (citation omitted)); McPartlin, 653 F.2d at 1191 

(according significance to the fact that taxpayers were 

innocent, having done nothing to conceal their new address 

from the IRS). 

The taxpayer in Mulder made no attempt to obscure his 

whereabouts. On the contrary, he notified the IRS of his new 

address before it sent his deficiency notice, but the IRS 

apparently did not process the new information in time. 855 

F.2d at 211 n.5. The taxpayer in Terrell, too, was innocent. She 

filed her tax returns on time, but the IRS happened to send 

the notice at issue several days before it received her new 

return reflecting a new address. 625 F.3d at 257.

Gyorgy, by contrast, neglected to file his tax returns year 

after year, moved frequently, and left the IRS in the dark 

concerning his whereabouts. This case is more like the 

scenario before the Tenth Circuit in Gille, where the taxpayer 

had not filed tax returns for several years. 33 F.3d at 47. The 

IRS prepared a substitute return in 1987 for tax year 1983 

and sent a deficiency notice to the address listed on the last 

return filed by the taxpayer, for tax year 1982. Id. The postal 

service had already returned a letter sent to that address as 

undeliverable, but the IRS lacked notice of a new address. Id.

at 47-48. The IRS sent four more mailings, including the 

deficiency notice itself, to the address on file, and the postal 

service returned them. Id. at 47. Yet the Tenth Circuit upheld 

the validity of the deficiency notice. Id. at 48. “Under these 

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circumstances,” it explained, “taxpayer, who did not bother 

to file a tax return after 1982, will not now be heard to 

complain that the IRS was not adequately diligent in its 

efforts to track him down.” Id.

We reached a similar conclusion in Eschweiler, where the 

taxpayer had gone roughly four years without filing a tax 

return. 946 F.2d at 47 n.3. Although the IRS knew before it 

sent his deficiency notice that the taxpayer’s lease at the 

address on file had expired, id. at 47, we rejected the notion 

that this knowledge gave rise to “a duty of greater 

diligence,” id. at 49 n.6. The IRS was entitled to rely on the 

most recent address in its files, and the deficiency notice was 

valid even though the taxpayer no longer lived there. Id. at 

47, 50. 

The same reasoning applies here. Gyorgy is in no 

position to complain that the IRS should have done more to 

track him down. The IRS properly relied on the address 

listed on his most recently filed tax return.

Second, even assuming arguendo that the IRS had a duty 

to conduct further investigation for Gyorgy’s address, he 

does not identify what reasonable steps it could have taken 

to find him. There is no evidence that the IRS had record—

let alone clear and concise notification—of an address where 

he could have been reached in 2006 and 2007. It had already 

tried, to no avail, to verify the Jean Street address on his 2003 

W-2. It appears, in fact, that Gyorgy did not want to be 

found. From 2001 through 2008, he filed no tax returns, 

moved seven times, never remained in the same place for 

more than roughly eighteen months, and often moved on 

after only a few months. Yet he never notified the IRS of his 

new addresses. The IRS cannot be expected to keep track of 

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No. 13-3363 27

an itinerant taxpayer in such circumstances. See Marks, 947 

F.2d at 986 (“[A] taxpayer’s effort ‘to obscure the change in 

his address so as to confound the IRS’ is a factor relevant in 

assessing whether the Commissioner acted properly.” 

(citation omitted)). 

For the reasons above, we conclude that the Appeals 

Office did not abuse its discretion in finding that Octavia 

Street was Gyorgy’s last known address when the IRS mailed 

his deficiency notices for tax years 2002 and 2003, or in 

concluding that the notices were valid.

B. Gyorgy’s Underlying Tax Liability

Because Gyorgy did not receive the deficiency notices at 

issue, he had a right to contest his underlying tax liability in 

his CDP hearing. See I.R.C. § 6330(c)(2)(B). He also had a 

right to de novo review of that issue in tax court. See Goza, 114 

T.C. at 181-82. The tax court acknowledged that right and 

gave Gyorgy a bench trial. We normally assess de novo the 

tax court’s legal conclusions after trial, and we review its 

factual findings and its applications of law to fact for clear 

error. Kikalos v. Comm’r, 434 F.3d 977, 981-82 (7th Cir. 2006).

But here there is nothing for us to review. Gyorgy 

presented no arguments and no evidence before the tax 

court to challenge the IRS’s calculation of the taxes and 

penalties he owes. He presented nothing before the Appeals 

Office either.11 After finding that the Commissioner made an 

11 By not presenting any challenge to his liability in the CDP hearing, 

Gyorgy arguably waived his right to do so in tax court. Treasury 

Regulation § 301.6330-1(f)(2), A-F3 provides that “the taxpayer can only 

ask the court to consider an issue, including a challenge to the 

 

(continued...)

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28 No. 13-3363

adequate showing and noting the absence of any challenge 

from Gyorgy, the tax court upheld the IRS’s determination of 

his liabilities for 2002 and 2003. On appeal, Gyorgy does not 

identify any alleged error in the tax court’s decision; he has 

therefore waived any challenge to his tax liability. See United 

States v. Bryant, 750 F.3d 642, 651 (7th Cir. 2014) (“Failure to 

develop an argument on appeal results in waiver....”); 

Mahaffey v. Ramos, 588 F.3d 1142, 1146 (7th Cir. 2009) 

(“Perfunctory, undeveloped arguments without discussion 

or citation to pertinent legal authority are waived.”). 

III. CONCLUSION

We AFFIRM the judgment of the tax court.

underlying tax liability, that was properly raised in the taxpayer’s CDP 

hearing. An issue is not properly raised if ... the taxpayer fails to present 

to Appeals any evidence with respect to that issue after being given a 

reasonable opportunity to present such evidence.” The Commissioner, 

however, did not make this argument on appeal.

 

(...continued)

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