TAX COURT OPINION

Case: Nathanael L. Kenan
Docket Number: 22293-16
Judge: Gustafson
Opinion Type: bench
Filed: 10/05/2017
Pages: 9

ALS UNITED STATES TAX COURT WASHINGTON, DC 20217 NATHANAEL L. KENAN, Petitioner, v. ) ) ) ) Docket No. 22293-16. COMMISSIONER OF INTERNAL REVENUE, Respondent ) ) ) ORDER Pursuant to Rule 152(b) of the 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 hearing in the above case before the undersigned judge at Detroit, Michigan, 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 will be issued dismissing this case for lack ofjurisdiction on the ground that the petition in this case was filed untimely. (Signed) David Gustafson Judge Dated: Washington, D.C. October 5, 2017 SERVED Oct 05 2017 1 2 3 4 5 6 7 (cid:16)042 9 8 10 11 12 13 14 15 16 3 Bench Opinion by Judge David Gustafson September 19, 2017 Nathanael L. Kenan v. Commissioner; Docket No. 22293-16 THE COURT: The Court has decided to render the following as its oral Findings of Fact and Opinion in this case. This Bench Opinion is made pursuant to the authority granted by section 7459(b) of the Internal Revenue Code (26 U.S.C.), and Tax Court Rule 152; and it shall not be relied on as precedent in any other case.. This is a deficiency case brought by petitioner Nathanael L. Kenan pursuant to 26 U.S.C. section 6213, and it is founded on a statutory notice of deficiency ("SNOD") for the year 2011 dated February 19, 2013. The Commissioner contends that this case (filed more than three years later on October 14, 2016) was untimely, and (cid:16)04217 he moved to dismiss the petition on that ground; but Mr. 18 19 20 21 Kenan opposed, contending that the SNOD was not mailed to his last kno address ("LKA"). In view of this factual dispute, we denied Commissioner's motion and ordered that this jurisdictional issue would be heard in Detroit, 22 Michigan, on September 18, 2017. Mr. Kenan represented 23 24 25 himself, and Charles Dumas represented the Commissioner. We hold that Mr. Kenan did not prove that the SNOD was not sent to his LKA, and we therefore dismiss the A BEEER (973)406-2250loperationseextibers.net|wwwescribers.net case in favor of the Commissioner on the grounds that the 4 petition was filed untimely. FINDINGS OF FACT Because of Mr. Kenan's noncooperation, the parties did not present a stipulation of facts as required by Rule 91(a). The Commissioner's counsel proposed that the Court could take notice of the undisputed facts in the parties' briefing of the Commissioner's motion to dismiss (ECF Nos. 8, 10, 13), and Mr. Kenan did not object. The agreed facts were previously set out in our order of August 11, 2017 (ECF No. 15), and were supplemented by testimony at the4.r-ie-1-. hfA The Ivanhoe Lane Address on the 2010 and 2011 Returns In about April 2011, Mr. Kenan filed with the IRS a Federal tax return for 2010, on which he reported his address on Ivanhoe Lane in Southfield, Michigan, where he resided. In about April 2012, he filed with the IRS a tax return for 2011 and again reported on it the Ivanhoe Lane address. Mr. Kenan's Move and Change of Address In June 2012, Mr. Kenan moved from his residence on Ivanhoe Lane to a different residence on Franklin Hills Drive in Southfield. Sometime thereafter he submitted to the U.S. Postal Service a change of address form; but employing the burden-of-proof principles discussed below, 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 (973)406-2250loperations escrbetsnet|www.escríbers.net 1 2 3 4 5 6 7 (cid:16)042 9 8 10 11 12 13 we are unable to find when he submitted it or exactly what information he reported on it as to his precise name and 5 address. IRS Exam and SNOD Sometime after Mr. Kenan filed his 2011 return in about April 2012, the IRS examined that return. On it, Mr. Kenan had claimed a son as a dependent and had claimed related child tax credit and earned income credit. The IRS determined disallow the claimed dependent exemption and related credits, and it mailed to Mr. Kenan an SNOD determining the resulting tax deficiency. The Commissioner shows, by Form 3877 (ECF Doc. 8, Ex. B), that on February 19, 2013, the IRS mailed the SNOD by certified 14 mail to the Ivanhoe Lane address. 15 16 Mr. Kenan did not receive the SNOD. When he did not, within 90 days of the issuance of the SNOD, file a (cid:16)04217 petition in the Tax Court, the IRS assessed the deficiency 18 19 20 21 22 23 24 25 of tax. The Franklin Hills Drive Address on the 2012 Return Mr. Kenan filed his 2012 Federal income tax return in about April 2013, after the IRS had mailed the 2011 SNOD to the Ivanhoe Lane address, and on it he gave his new Franklin Hills Drive address. This was the first time that he gave notice of his change of address directly to the IRS. The 2012 return claimed an overpayment of (973J406-2250loperatiomtescr&assnet|www.escribers.net ® 6 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 tax. Tax Court Proceedings When the IRS did not refund that 2012 overpayment, but instead applied it toward the 2011 deficiency (as well as garnishing his wages and levying against his bank account), Mr. Kenan contacted the National Taxpayer Advocate and learned of the 2011 SNOD that he had not received. Mr. Kenan filed a Tax Court petition on October 14, 2016, asserting that he never received the 2011 SNOD. Mr. Kenan later clarified in his July 24, 2017, response to the Commissioner's motion to dismiss that he had moved to the Franklin Hills Drive address by the time the SNOD was issued, completed an "address change form" every time he moved, and that no 2011 SNOD was ever forwarded to him by the USPS. (ECF 10, paragraphs 4 and 6). The Commissioner filed a motion to dismiss the petition as untimely, but in view of the LKA dispute, we denied the Commissioner's motion and ordered an evidentiary hearing. (Our order stated that the case would proceed "to trial", but since both parties dispute our jurisdiction (though for different reasons), a trial of the merits of Mr. Kenan's 2011 liability could not happen in this case, and the proceeding was in the nature of an evidentiary hearing as to jurisdiction.) (973J406-2250loperations®escilhenmet twww.escribersnet OPINION 7 If the IRS duly mailed an SNOD to Mr. Kenan, then he was required to file his petition within 90 days, see section 6213(a). We would then have to dismiss his late petition for lack of jurisdiction on that untimeliness ground, and the IRS's assessment of tax would stand (unless and until it were later effectively challenged in a refund suit or a collection due process suit). However, an SNOD must be sent to the taxpayer's "last-known-address"; and if it is not, then the SNOD is invalid. See section 6212. If the SNOD was not properly issued, then we would have to dismiss this case on that different ground, and the consequence would be that the tax assessment is invalid and must be abated. As petitioner, Mr. Kenan bears the burden of proof. See Rule·142(a)(1). The IRS shows that they 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 mailed an SNOD to the last address that had appeared on a 18 19 20 21 22 23 24 25 tax return filed by Mr. Kenan. His only attempt to show nonmailing was his testimony of nonreceipt (which we accept); but all his testimony shows is that he did not receive the SNOD at the Franklin Hills Drive address, whereas the Commissioner shows that the IRS mailed the SNOD to the Ivanhoe Lane address, so Mr. Kenan's nonreceipt at Franklin Hill's Drive does not show nonmailing to Ivanhoe Lane. cnbem 73;4%2250|orerations@escribes.net|wwwescribers.net 1 2 3 The dispute here is whether Ivanhoe Lane was still Mr. Kenan's "last-known-address" in February 2013, even though by then he had actually moved to Franklin 4 Hil ' Drive. As of February 2013, the Ivanhoe Lane 8 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 address was the last address that Mr. Kenan had reported to the IRS on a return; but in the Commissioner's motion to dismiss that we denied, the Commissioner did not make any showing of the IRS's compliance with, or the effect of, 26 C.F.R. section 301.6212-2(b)(2)(i), which provides: "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 that retains change of address information for 36 months (NCOA database). Except as provided in paragraph (b)(2)(ii) of this section, if the taxpayer's name and last-known-address in IRS records match the taxpayer's name and old mailing address contained in the NCOA database, the 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." 25 Mr. Kenan's change of address with the U.S. Postal Service 73)406-2250!operations escitesnetlwwwescribers.net 9 1 2 3 4 5 6 7 8 9 10 11 12 13 14 was the issue set for hearing; and our order of August 11, 2017, ated: "...Mr. Kenan is advised that at the trial, he will have the burden of proving all the facts he relies on, including the date of his change of address and the date and manner of his giving notice to the USPS of his change of address". At the hearing, however, Mr. Kenan did not give evidence sufficient to let us find either when he submitted his form to the USPS nor exactly what he put on it. He offered only his testimony, and no documents, not a copy of the change of address form he submitted, nor a copy of the confirming letter that the USPS would have sent him, nor any piece of mail showing a forwarding by the USPS before or during the relevant time period. 15 Moreover, his testimony on the subject was very general. 16 17 18 19 20 21 22 23 24 25 He did not profess to know the date he had submitted the form to the USPS, and he did not even attempt much of an approximation, only that he submitted it after he moved in June 2012 and before the IRS issued the SNOD in February 2013. In the absence of any document reflecting what Mr. Kenan submitted to the USPS, we are also unable to find whether, in the words of the regulation, "the taxpayer's name and last known address in IRS records match the taxpayer's name and old mailing address (973;406-2250ioperations escritermet [wwwescribers.net 10 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 contained in the NCOA database". Before assuming that a new address in the USPS database is really the address of a taxpayer, the IRS must be able to correlate that new address to the old address and the taxpayer. Any difference in the IRS's record of the taxpayer's name and old address, on the one hand, and the USPS's data of an individual and his new address, on the other, would be a reason not to use the USPS address as an LKA for a taxpayer. Without any documentation of Mr. Kenan's notice to the USPS, we cannot know whether his name and old address as he rendered them on it might have differed from his LKA maintained in the IRS records, by something like the presence or absence of a middle name, the use of initials or a nickname, or an abbreviation or misspelling of a street name or city name. We are unable to find precisely what he submitted to the USPS or when. We therefore cannot say that he has proved that the Ivanhoe Lane address was not his last-known-address for purposes of mailing the SNOD. We will therefore dismiss this case for lack of jurisdiction on the ground that it was filed untimely. This concludes the Court's oral Findings of Fact and Opinion in this case. (Whereupon, at 1:23 a.m./p.m., the above-entitled matter was concluded.) (9733406-2250|operations escribessnet{www.escribers.net