TAX COURT OPINION

Case: Javier C. Candelas
Docket Number: 16227-15
Judge: Carluzzo
Opinion Type: bench
Filed: 06/02/2016
Pages: 10

ALS UNITED STATES TAX COURT WASHINGTON, DC 20217 JAVIER C. CANDELAS, Petitioner(s), v. COMMISSIONER OF INTERNAL REVENUE, Respondent. ) ) ) ) ) Docket No. 16227-15 ) ) ) ) ) ) ORDER Pursuant to Rule 152(b), Tax Court Rules of Practice and Procedure, it is ORDERED that the Clerk of the Court shall transmit herewith to petitioner and to respondent a copy of the pages of the transcript of the trial in the above case before Special Trial Judge Lewis R. Carluzzo at Houston, Texas, containing his oral findings of fact and opinion rendered at the trial session at which the case was heard. In accordance with the oral findings of fact and opinion, an appropriate Order of Dismissal for Lack of Jurisdiction will be entered. Dated: Washington, D.C. June 2, 2016 (Signed) Lewis R. Carluzzo Special Trial Judge SERVED Jun 03 2016 Capital Reporting Company 3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Bench Opinion by S.T. Judge Lewis R. Carluzzo May 20, 2016 Javier C. Candelas v. Commissioner Docket No. 16227-15 The Court has decided to render oral findings of fact and opinion in this case, and the following represents the Court's oral findings of fact and opinion (bench opinion). Unless otherwise noted, section references made in this bench opinion are to the Internal Revenue Code of 1986, as amended, in effect for the relevant period, and Rule references are the Tax Court Rules of Practice and Procedure. This bench opinion is made pursuant to the authority granted by section 7459(b) and Rule 152. Except as provided in Rule 152(c), this bench opinion shall not be cited as authority. By Order dated January 4, 2016, petitioner's motion to restrain assessment and collection, filed June 23, 2015, and respondent's 20 motion to dismiss for lack of jurisdiction, filed 21 22 23 24 25 July 21, 2015, were set to be heard in Houston, Texas, on May 18, 2016. See Rule 50(b)(2). The hearing on the motions took place as scheduled. Gordon P. Sanz appeared on behalf of respondent, and at his request, the Court allowed Kevin Christiansen, 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 4 1 2 3 4 5 6 7 a law student, to participate in the hearing on respondent's behalf. Petitioner, who resides in El Paso, Texas, did not appear at the hearing. He did, however, submit a written statement in lieu of attendance. See Rule 50(c). The positions advanced and matters covered in petitioner's written statement, along with objection to respondent's 8 motion filed August 24, 2015, and respondent's 9 objection to petitioner's motion, filed July 10, 10 2015, are taken into account in the resolution of the 11 motions here under consideration. 12 13 14 15 16 17 Attached to respondent's motion are: (1) a copy of a notice of deficiency dated August 14, 2007 (notice), addressed to petition in which a deficiency in his 2003 Federal income tax is determined; and (2) a Form 3877 certified mailing list that indicates that the notice was 'sent to petitioner by certified 18 mail on August 14, 2007. Other attachments to 19 20 21 22 23 24 25 respondent's motion indicate that petitïoner, although obligated to do so, did not file a 2003 Federal income tax return, a point not disputed in anything submitted by petitioner. The petition and petitioner's other submissions, however, do show that he disputes the issuance of the notice. In essence, petitioner is challenging the assessment to which the 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 5 1 2 3 levy notice attached to the petition relates. Because this Court is a Court of limited jurisdiction, we can only entertain that challenge 4 within those limits. 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Under circumstances prescribed by statute, this Court has jurisdiction to directly consider a taxpayer's challenge to the validity of a Federal income tax assessment in a proceeding commenced under section 6330(d) (collection action), or indirectly in a proceeding commenced under section 6213(a) (deficiency action) by ruling on the issuance or validity of a notice of deficiency upon which the disputed assessment is based. Our lack of jurisdiction under section 6330(d) to review the validity of the assessment here in dispute is readily apparent. According to respondent, petitioner has not been issued a notice of determination within the meaning of section 6330 for 2003, and the levy notice attached to the petition does not qualify as one. According to respondent, petitioner was given a previous opportunity to seek relief under section 6330, but he failed to take advantage of that opportunity. To the extent that petitioner intended to commence this proceeding under section 6330(d) as a collection 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 6 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 action, it must be dismissed for lack of jurisdiction upon the ground relied upon in respondent's motion. See Offiler v. Commissioner, 114 T.C. 492 (2000). We also cannot help but to notice that if the notice of levy attached to the petition could be considered a notice of determination, then we would lack jurisdiction because the petition was not timely. The levy notice is dated April 21, 2015; the petition was filed more than 30 days later on July 23, 2015. See sec. 6330(d)(1). But a fair reading of the petition shows that this case should not be treated as a collection action, even though a collection notice is attached to the petition, and even though respondent's motion considers the possibility that it is. Paragraph 1 of the petition expressly indicates that petitioner is disputing a notice of deficiency, and that dispute is expanded upon elsewhere in the petition and in 19 petitioner's other submissions. More specifically, 20 21 22 23 24 petitioner references section 6213 in paragraphs 5 and 6 of the petition. Taking into account the arguments advanced by petitioner after the petition in this case was filed, we proceed as though this is a deficiency case and our jurisdiction is determined 25 with reference to section 6213(a). See Rule 13(a). 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 7 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Treated as a deficiency case, we must decide whether we are without jurisdiction as claimed by respondent because the petition was not timely, or because we are without jurisdiction because respondent did not issue a notice of deficiency to petitioner with respect to the assessment he now disputes. At the hearing we pointed out that the deficiency procedures are not the only method that respondent can rely upon to support an assessment, but the parties proceed as though the disputed assessment in this case is based upon a defaulted notice of deficiency, and so we'll follow their lead in that regard. According to respondent, and as noted above, the notice is dated and was mailed to petitioner on August 14, 2007. The petition in this case, filed July 23, 2015, obviously was not filed 18 within the applicable period prescribed in section 19 20 21 22 23 24 6213(a). According to petitioner, he never received the notice, and he questions whether it was, in fact, ever issued. Respondent relies upon the above- referenced Form 3877 to support his claim that the notice was issued and properly mailed to petitioner. 25 Petitioner does not suggest that the address shown on 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 8 1 the notice or the Form 3877 attached to respondent's 2 motion was not his last known address within the 3 meaning of section 6212(b). Instead, he points to 4 5 6 7 8 9 two irregularities, or insufficiencies, in the Form 3877 that support his position that the notice was never issued or mailed. First, petitioner correctly points out that the Form 3877 does not show on its face confirmation by an employee of the U.S. Postal Service of the 10 number of items listed on the Form 3877, which has 11 12 13 14 15 16 been redacted so as not to disclose the names of other taxpayers. See sec. 6103. Second, petitioner also correctly points out that the Form 3877 does not show the "manual signature" or initials of the Internal Revenue Service employee who issued the notices of deficiency listed on the Form 3877. 17 Petitioner's submissions contain cites to numerous 18 19 20 21 22 23 24 25 authorities from this Court and other Federal courts to the effect that irregularities on the face of a Form 3877 preclude respondent's reliance upon what is commonly referred to as the "presumption of regularity" to support the issuance and mailing of a notice of deficiency. Relying upon these authorities, petitioner argues that respondent is not entitled to the presumption of regularity to 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 9 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 establish the issuance and mailing of the notice. We agree with petitioner on this point, and we see no need to repeat those authorities in this bench opinion. We do not agree with petitioner, however, that the irregularities he points out compels a finding that the notice was not issued and mailed. Independent of the presumption of regularity normally relied upon by respondent in disputes such as the one now before us, respondent may rely upon circumstances to show the issuance and mailing of a notice of deficiency, and his threshold to do so is relatively low, especially in a situation such as the one before us where much time has passed between the date shown on the notice and the date petitioner challenges its existence. The defects in the Form 3877 involved in this are identical to the defects in the Form 3877 pointed by the taxpayer in O'Rourke v. Commissioner, 587 F.3d 537 (2nd Cir. 2009). In that case the U.S. Court of Appeals for the Second Circuit characterized those defects as "minor" and affirmed the lower court's finding that the Commissioner, who apparently offered no other proof of mailing other than the defective Form 3877, had satisfied his burden that 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 10 1 2 3 4 5 6 7 8 9 10 11 12 the notice of deficiency involved in that proceeding had been issued and properly mailed. We agree that the defects in the Form 3877 respondent relies upon in this case should be considered minor. Respondent has produced a copy of the notice and the certified mailing number shown on the notice is consistent with the certified mailing number shown on the Form 3877. Furthermore, respondent's records show that petitioner did not file a Federal income tax return for 2003 and petitioner does not claim that he did. The income attributed to petitioner in the notice, combined with 13 petitioner's failure to file a Federal income tax 14 15 16 17 18 19 20 21 22 23 24 25 return on which the income should have been reported, strongly suggests the likelihood that a notice of deficiency would be and was issued. We are satisfied from what has been presented that respondent has sufficiently established that the notice was issued and mailed as shown on the Form 3877. It follows that we therefore lack jurisdiction in this case upon the ground that the petition was not filed within the period prescribed by section 6313(a). To reflect the foregoing, an appropriate order granting respondent's motion will be entered. 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company Because of our ruling, petitioner's motion is moot. This concludes the Court's bench opinion in this matter. 11 (Whereupon, at 11:05 a.m., the above- entitled matter was concluded 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 866.488.DEPO www.Capita1ReportingCompany.com