tft galveston portfolio ltd as successor_in_interest for tft ltd et al petitioners v commissioner of internal revenue respondent docket nos filed date p received a notice_of_determination concerning worker classification and corresponding employment_tax liabilities on cases of the following petitioners are consolidated herewith tft gal- tft galveston portfolio ltd v commissioner its own behalf and other such notices as successor_in_interest to various partnerships the parties dispute whether p was a successor_in_interest under texas law and r asserts this court should establish a federal standard of successor_in_interest as federal common_law in addition the status of p’s workers for the period involving p is itself at issue held on the facts before us p was not a successor_in_interest under texas law held further we do not adopt a federal common_law standard of successor_in_interest held further p’s workers were employees gary i currier for petitioners jeremy h fetter and jason d laseter for respondent goeke judge these consolidated case sec_2 are before us on petitions for redetermination of employment status filed pursuant to sec_7436 in separate notices of determina- tion concerning worker classification notices respondent determined that for purposes of federal employment_taxes the individuals listed in table attached to the notices should be legally classified as petitioners’ employees and thus determined deficiencies in additions to and penalties with respect to petitioner’s federal employment_taxes as fol- lows veston portfolio ltd successor_in_interest to tft ltd docket no tft galveston portfolio ltd successor_in_interest to tft ltd docket no tft galveston portfolio ltd docket no tft galveston portfolio ltd as successor_in_interest for tft cha- teau lafitte-wjt ltd docket no tft galveston portfolio ltd as successor_in_interest for tft somerset-wjt ltd docket no and tft galveston portfolio ltd as successor_in_interest to tft ltd docket no we refer to tft galveston portfolio ltd as petitioner or tft gal- veston portfolio when referencing docket no alone regarding worker classification for the fourth quarter of and successor in inter- est we refer to the partnerships named in the other consolidated cases as petitioners when referencing docket nos and regarding worker classification unless otherwise indicated all section references are to the internal_revenue_code in effect for the period at issue and all rule references are to the tax_court rules_of_practice and procedure in this case the court uses the term employment_taxes as it is de- fined by sec_7436 to refer to taxes imposed pursuant to subtitle c of the internal_revenue_code including taxes imposed under sec_3402 fed- eral income_tax_withholding and fica tax and futa_tax we round all amounts to the nearest dollar united_states tax_court reports tft galveston portfolio ltd docket no additions to tax period ended type of tax amount sec_6651 sec_6651 penalty sec_6656 fica itw futa dollar_figure big_number dollar_figure big_number dollar_figure big_number dollar_figure tft galveston portfolio ltd successor_in_interest to tft ltd docket no period ended additions to tax type of tax amount sec_6651 sec_6651 penalty sec_6656 fica itw fica itw fica itw fica itw futa fica itw fica itw fica itw fica itw futa fica itw fica itw fica itw fica itw futa fica itw fica itw fica itw fica itw futa fica itw fica itw fica itw fica itw futa dollar_figure big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number dollar_figure big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number dollar_figure big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number dollar_figure tft galveston portfolio ltd as successor_in_interest for tft ltd docket no additions to tax period ended type of tax amount sec_6651 sec_6651 penalty sec_6656 fica itw fica itw fica itw fica itw futa fica itw fica itw fica itw fica itw dollar_figure big_number big_number big_number big_number big_number big_number big_number big_number dollar_figure big_number big_number big_number big_number big_number big_number big_number dollar_figure big_number big_number big_number big_number big_number big_number big_number big_number dollar_figure tft galveston portfolio ltd v commissioner tft galveston portfolio ltd as successor_in_interest for tft ltd docket no additions to tax period ended type of tax amount sec_6651 sec_6651 penalty sec_6656 futa fica itw fica itw fica itw fica itw futa fica itw futa big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number tft galveston portfolio ltd as successor_in_interest to tft ltd docket no period ended additions to tax type of tax amount sec_6651 sec_6651 penalty sec_6656 fica itw fica itw fica itw fica itw futa fica itw fica itw fica itw fica itw futa fica itw fica itw fica itw fica itw futa fica itw fica itw fica itw fica itw futa fica itw fica itw fica itw fica itw futa dollar_figure big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number dollar_figure big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number dollar_figure big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number dollar_figure tft galveston portfolio ltd successor_in_interest to tft ltd docket no additions to tax period ended type of tax amount sec_6651 sec_6651 penalty sec_6656 fica itw fica itw dollar_figure big_number dollar_figure big_number dollar_figure big_number dollar_figure united_states tax_court reports tft galveston portfolio ltd successor_in_interest to tft ltd docket no period ended additions to tax type of tax amount sec_6651 sec_6651 penalty sec_6656 fica itw fica itw futa fica itw fica itw fica itw fica itw futa fica itw fica itw fica itw fica itw futa fica itw futa big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number tft galveston portfolio ltd as successor_in_interest for tft chateau lafitte-wjt ltd docket no additions to tax period ended type of tax amount sec_6651 sec_6651 penalty sec_6656 fica itw fica itw fica itw fica itw futa fica itw fica itw fica itw fica itw futa dollar_figure big_number big_number big_number big_number big_number big_number big_number big_number big_number dollar_figure big_number big_number big_number big_number big_number big_number dollar_figure big_number big_number big_number big_number big_number big_number big_number dollar_figure tft galveston portfolio ltd as successor_in_interest for tft somerset- wjt ltd docket no additions to tax period ended type of tax amount sec_6651 sec_6651 penalty sec_6656 fica itw fica itw fica itw fica itw futa fica itw fica itw fica itw fica itw futa dollar_figure big_number big_number big_number big_number big_number big_number big_number big_number big_number dollar_figure big_number big_number big_number big_number big_number big_number dollar_figure big_number big_number big_number big_number big_number big_number dollar_figure tft galveston portfolio ltd v commissioner after concessions the issues for decision are whether the workers listed in the notice_of_determination for tft galveston portfolio ltd ’s tft galveston portfolio fourth quarter of the taxable_year were properly classified as employees for purposes of federal employment_taxes we hold that the identified individuals were tft galveston port- folio’s employees and tft galveston portfolio is liable for the employment_taxes determined with respect to those individ- uals whether in addition to being liable for employment_taxes for the fourth quarter of taxable_year tft gal- veston portfolio is liable for the federal employment_taxes additions to tax and penalties as a successor_in_interest to tft ltd tft ltd tft ltd tft ltd tft chateau lafitte-wjt ltd and tft somerset-wjt ltd we hold it is not and whether tft galveston portfolio is liable for additions to tax pursuant to sec_6651 and and penalties pursuant to sec_6656 we hold that it is so liable findings_of_fact some of the facts have been stipulated and are so found the parties’ stipulations of facts are incorporated herein by this reference petitioner’s organizational structure petitioner tft galveston portfolio and its alleged prede- cessors tft ltd tft tft ltd tft tft ltd tft tft ltd tft tft chateau lafitte-wjt tft chateau lafitte-wjt and tft somerset- wjt tft somerset-wjt are all organized as texas limited_partnerships at all relevant times tft galveston portfolio’s principal office and mailing address was in tomball texas tft galveston portfolio concedes that it is not entitled to treatment under the revenue act of pub_l_no sec_530 stat pincite as amended with respect to the workers listed in any of the notices for the period at issue respondent concedes that the workers who per- formed janitorial and maid services as well as those who performed pool and fountain maintenance for the apartment complexes along with a num- ber of other listed workers were not employees of petitioners during the period at issue consequently our decision in docket no will be entered under rule united_states tax_court reports during the period at issue tft comprised one general_partner tft holdings l l c tft holdings and one lim- ited partner walter j teachworth from date through date its principal business activity was the operation of the ebbtide apartment complex tft 1’s final form_1065 u s return of partnership income reported that it was for the period january through date no additional forms were filed for tft after that return on date the state of texas canceled the certificate of limited_partnership for tft tft comprised two general partners tft holdings and hunters r hill inc and two limited partners mr teachworth and henry hamman from date through date its principal business activity was the operation of the chateau lafitte apartment complex tft 2’s final form_1065 reported that it was for the period january through date no additional forms were filed for tft after that return on date the state of texas canceled the certificate of limited_partnership for tft on or about date mr hamman sold his partnership_interest in tft to mr teachworth who cre- ated tft chateau lafitte-wjt to operate the chateau lafitte apartment complex tft chateau lafitte-wjt com- prised one general_partner tft holdings and one limited_partner mr teachworth from date through date its principal business activity was the oper- ation of the chateau lafitte apartment complex tft cha- teau lafitte-wjt’s final form_1065 reported that it was for the period january through date no addi- tional forms were filed for tft chateau lafitte-wjt after that return on date the state of texas canceled the certificate of limited_partnership for tft cha- teau lafitte-wjt tft comprised one general_partner tft holdings and one limited_partner mr teachworth from date through date its principal business activity was the operation of the seasons resort apartment complex tft 3’s final form_1065 reported that it was for the period january through date no additional forms were filed for tft after that return on november tft galveston portfolio ltd v commissioner the state of texas canceled the certificate of limited_partnership for tft tft comprised two general partners tft holdings and hunters r hill inc and two limited partners mr teachworth and mr hamman from date through date its principal business activity was the operation of the somerset retirement village apart- ment complex tft 4’s final form_1065 reported that it was for the period january through date no additional forms were filed for tft after that return on date the state of texas canceled the certificate of limited_partnership for tft on or about date mr hamman sold his partnership_interest in tft to mr teachworth who cre- ated tft somerset-wjt to operate the somerset retirement village apartment complex tft somerset-wjt comprised one general_partner tft holdings and one limited_partner mr teachworth from date through date its principal business activity was the operation of the somerset retirement village apartment complex tft somerset-wjt’s final form_1065 reported that it was for the period january through date no additional forms were filed for tft chateau lafitte-wjt after that return on date the state of texas canceled the certificate of limited_partnership for tft somerset-wjt tft galveston portfolio comprised one general_partner tft portfolio investments l l c and one limited_partner mr teachworth on date the four apartment complexes were conveyed from tft tft chateau lafitte- wjt tft and tft somerset-wjt respectively to tft galveston portfolio tft galveston portfolio did not expressly assume the liabilities of the other partnerships from october through date its principal business activity was the operation of the ebbtide chateau lafitte the seasons resort and somerset retirement vil- lage apartment complexes collectively apartment prop- erties during the period at issue mr teachworth was the only owner of the partnerships who was actively involved in oper- ating the business he signed numerous documents on behalf of tft holdings the listed general_partner of tft tft tft tft tft chateau lafitte-wjt and tft united_states tax_court reports somerset-wjt as its manager authorized manager and sole manager and he was the sole manager of tft gal- veston portfolio during the period at issue petitioners’ financial information during the period at issue petitioners employed galen mansee a certified_public_accountant to perform accounting services including gathering of data from apartment man- agers payment of all bills approved by mr teachworth bank reconciliations and preparation of tax returns for the part- nerships and mr and mrs teachworth petitioners maintained and used a commercial checking account funded entirely by mr teachworth all expenses for the apartment properties and all payments to petitioners’ workers were approved by mr teachworth and were made from that account mr teachworth provided all the informa- tion and coding for the general ledger entries prepared by mr mansee following the transfer of the chateau lafitte and somerset retirement village complexes to tft chateau lafitte-wjt and tft somerset-wjt respectively mr mansee continued maintaining the same general ledgers he had previously used for tft and tft petitioners’ workers the workers for petitioners during the period at issue fall within four groups apartment managers and leasing agents security personnel a maintenance supervisor and general maintenance workers the general mainte- nance workers performed a variety of tasks including appli- ance and air conditioning maintenance cleanup landscape maintenance drywall repairs painting roof maintenance carpentry and general miscellaneous maintenance the apartment managers during the period at issue mr teachworth hired all the apartment managers they were not required to submit bids or fill out any applications before securing their positions nor did the managers sign written agreements for the work they performed mr teachworth established the management office’s hours of operation for each of the apartment properties and he set tft galveston portfolio ltd v commissioner the hours that the managers were supposed to work he also established the monthly salaries that were paid to the apart- ment managers along with nominal performance-based bonuses further the apartment managers were provided onsite housing and had their utilities expenses paid as part of their compensation mr teachworth established all the managers’ duties leaving them with little to no discretion in how services were to be performed they had to consult with mr teachworth when determining how to handle vacancies at the apartment properties and had to seek approval to return security deposits to departing tenants he established the community rules and regulations and the rent for the properties the managers could not change policies without his approval mr teachworth provided the apartment managers with the office supplies and equipment required to perform their duties he reimbursed them for expenses they incurred while performing their duties he established a petty cash fund which he monitored to purchase office supplies and postage and for general office use finally he would directly pay any replacement manager for the time worked in place of the normal manager mr teachworth supervised all aspects of the apartment managers’ work he had to approve the managers’ time off requests and he could fire them at any time during the period at issue none of the managers worked at any prop- erties that were not owned by mr teachworth the maintenance supervisor during the period at issue petitioners employed jerrell adams as the maintenance supervisor for the apartment properties in that capacity he performed general repairs and any required maintenance project he also supervised all the other maintenance workers he was not required to submit a bid or fill out an application before securing his position mr adams did not enter into a written_agreement for the work he performed he was paid a monthly salary mr teachworth was mr adams’ supervisor with regard to the services he performed for petitioners mr teachworth had to approve any maintenance work and expenditures that were not routine during the period at issue mr adams pro- vided full-time services to petitioners he averaged around united_states tax_court reports hours per week on the job additionally he was on call hours a day days a week mr adams was never personally at risk of losing money by working for petitioners because mr teachworth maintained accounts with home depot maintenance warehouse and chalmers hardware that were used to purchase materials_and_supplies required to perform his job additionally he was reimbursed for any expenses he incurred performing his duties as maintenance supervisor however mr adams sup- plied some of his own hand tools and equipment including saws a sewer machine spray rigs a welder and scaffolding mr teachworth directly paid any replacement maintenance supervisor for the time worked in place of mr adams in addition to the standard duties mr adams performed for petitioners he established a business called circle a through which he performed occasional maintenance services for exact realty a property management company and for petitioners during the period at issue however the services provided to petitioners through circle a were separate and distinct from the typical services he performed for peti- tioners the maintenance workers during the period at issue petitioners employed numerous maintenance workers for general maintenance of the apart- ment properties those workers were not required to submit bids or fill out applications before securing their positions nor did they have written agreements for the work they per- formed the workers were hired by either the maintenance supervisor or the apartment managers but mr teachworth had the final approval over all hiring decisions their hours were set by mr adams and they could be fired at any time for their work the maintenance workers were paid an hourly rate with mr teachworth having final approval on that rate the maintenance workers were never personally at risk of losing money by working for petitioners because the mate- rials used in performing their services for petitioners were provided by mr teachworth all the maintenance workers were supervised by mr adams they mostly worked at the same apartment complex each day unless one of the com- plexes had a project requiring more workers tft galveston portfolio ltd v commissioner the security workers during the tax years and the seasons resort apartment complex had security workers the somerset retirement village had security workers for all of and the first two months of mr teachworth hired the secu- rity workers and they reported to him and the apartment managers where they worked their hours were set by mr adams and mr teachworth but the amount they were paid was determined solely by mr teachworth none of the secu- rity workers were off-duty police officers during the period at issue and their presence was included in the advertisements and was a selling point for the apartment complexes federal tax filings tft tft tft tft tft chateau lafitte- wjt and tft somerset-wjt all filed forms for the period at issue tft galveston portfolio did not however none of the six partnerships filed any form sec_941 employer’s quarterly federal tax_return or forms employer’s annual federal unemployment futa_tax return for the period at issue nor did they file or furnish any forms misc miscellaneous income to any of the workers in ques- tion petitioners did not deposit employment_taxes for the relevant periods respondent previously audited the forms of petitioners for the period at issue at which time respondent learned of petitioners’ treating the workers in question as independent contractors and deducting their compensation accordingly on forms because the irs had not received any forms and from petitioners irs employees prepared substitutes for returns sfrs in accordance with the authority provided by sec_6020 notices on date respondent issued a notice of deter- mination to tft galveston portfolio in which he determined that workers listed in table attached to the notice were to be treated as petitioner’s employees petitioner was not entitled to relief under the revenue act of ra ’78 pub_l_no sec_503 stat pincite as amended and petitioner was liable for income_tax with- holding fica and futa taxes the sec_6651 and united_states tax_court reports additions to tax and the sec_6656 penalty for failure to make deposit of taxes for the period at issue between september and date respondent issued an additional six separate notices of determination to tft galveston portfolio as successor_in_interest to tft tft tft tft tft chateau lafitte-wjt and tft somerset-wjt in which he determined that workers listed in table attached to each notice were to be treated as petitioner’s employees petitioner was not entitled to relief under ra ’78 sec_530 and petitioner was liable for income_tax_withholding fica and futa taxes the sec_6651 and additions to tax and the sec_6656 penalty for failure to make deposit of taxes for the period at issue petitioner filed timely petitions challenging the determina- tions i jurisdiction opinion under sec_7436 this court has jurisdiction to deter- mine whether an individual providing services to a per- son is that person’s employee whether the person if in fact an employer is entitled to relief under ra ’78 sec_530 and the correct amount of employment_taxes which relate to the commissioner’s determination concerning worker classification 121_tc_89 aff ’d 425_f3d_1203 9th cir sec_7701 provides that t he term ‘per- son’ shall be construed to mean and include an individual a_trust estate partnership_association company or corpora- tion respondent issued notices of determination to tft galveston portfolio determining that the individuals in ques- tion were tft galveston portfolio’s employees and that tft galveston portfolio owes employment_taxes additions to tax and penalties with respect thereto and tft galveston port- folio filed a timely petition in response therefore we have jurisdiction to hear the challenge to respondent’s determina- tions tft galveston portfolio ltd v commissioner ii successor_in_interest the structure of petitioner and the other six partnerships is for the most part uncontested as demonstrated by the extensive stipulations of those facts the issue before the court is whether successor liability should be imposed on tft galveston portfolio as the successor_in_interest to tft tft tft tft tft chateau lafitte-wjt and tft somerset-wjt tft galveston portfolio’s liability for the employment_tax additions to tax and penalties deter- mined with respect to tft galveston portfolio as successor_in_interest to the other six partnerships will turn on this decision a successor_in_interest is o ne who follows another in ownership or control of property a successor_in_interest retains the same rights as the original owner with no change in substance black’s law dictionary 9th ed successor liability relies on two policy goals compen- sating plaintiffs as if the damage-causing business had not terminated and preventing the rule_of successor liability from otherwise reducing the free transferability of firms or their assets mark j roe mergers acquisitions and tort a comment on the problem of successor_corporation liability va l rev the government may rely on the successor liability doctrine to hold a successor_corporation liable for the tax debts of its predecessor see 614_f2d_860 3d cir aff ’g 70_tc_86 further if permitted by state law successor liability may be asserted when a partnership transfers its assets to another entity see 144_f3d_229 2d cir ‘the traditional rule_of corporate successor liability and the excep- tions to the rule are generally applied regardless of whether the predecessor or successor organization was a corporation or some other form of business organization ’ quoting am jur 2d products liability sec_117 respondent is arguing liability only under the theory of successor in in- terest and not under sec_6901 providing for transferee_liability as re- spondent did not issue notices of transferee_liability to tft galveston portfolio see also irs cca date discussing the irs’ ability continued united_states tax_court reports a application of federal common_law respondent argues that because the uniform imposition and collection of employment_taxes is a significant federal interest we should disregard state law and adopt the broader parameters of federal common_law in determining successor liability in employment_tax cases the application of federal common_law in a novel context requires ‘a significant conflict between some federal policy or interest and the use of state law’ 519_us_213 quoting 384_us_63 the supreme court cautioned against the creation of federal common_law noting that ‘cases in which judicial creation of a special federal rule would be justified are few and restricted ’ id pincite quoting 373_us_647 the court further directed that ‘ w hether latent federal power should be exercised to displace state law is pri- marily a decision for congress ’ not the federal courts id quoting wallis u s pincite we have not found a significant conflict between a federal policy or interest and the use of state law that would justify the adoption of federal common_law in this context respondent contends that t he uniform imposition and collection of employment_taxes is a significant federal interest justifying the application of a uniform federal approach however the supreme court has specifically rejected uniformity as a sufficient reason for adopting fed- eral common_law see eg atherton u s pincite 512_us_79 440_us_715 fur- ther courts have rejected the application of federal common_law in tax cases in similar contexts see eg 357_us_39 526_fsupp2d_819 n d ohio stramaglia v united_states wl e d mich aff ’d 377_fedappx_472 6th cir as support for his theory respondent has offered a number of cases where courts have adopted federal common_law in determining successor liability however these decisions to collect employment_tax from a multimember llc taxed like a partner- ship tft galveston portfolio ltd v commissioner seem to be grounded in either environmental liability ie cercla or labor law ie erisa and appear to have little or no application outside of those contexts the only case to which respondent invites our attention involving the applica- tion of federal common_law successor liability in an employ- ment tax context is 40_fsupp2d_268 e d pa in that case the court held that today’s child was the mere continuation and or successor_in_interest of the original tax- payer wee care however because the court’s analysis of the continuation de_facto merger successor_in_interest theories was essentially one inquiry and its use of the term successor_in_interest was not necessary to its decision we are not persuaded by its holding cf eg 490_fsupp2d_955 s d ind also distinguishing today’s child for pur- poses of similar federal common_law argument finally respondent contends that i f federal common_law is not applied it could encourage taxpayers subject_to texas law to use a similar structure to easily avoid the payment of employment_taxes thereby thwarting the service’s crucial function of enforcement and collection of federal employment_taxes respondent further contends that other states could be persuaded to modify their laws to reject the de_facto merger or mere continuation exceptions and further frustrate the collection of federal taxes respondent’s fear of the potential for manipulation is unfounded none of these concerns are present here and no evidence was put forth tending to show that the concerns will be present there is no evidence that petitioner’s business structure was anything other than a valid reorganization more importantly successor_in_interest liability is only one procedure by which the commissioner may collect taxes from a successor who received assets from a taxpayer who owed the taxes on brief respondent concedes that he could have potentially applied transferee_liability against petitioner under sec_6901 by issuing notices of determination con- cerning worker classification to the other six partnerships assessing the resulting liabilities and then issuing a notice of transferee_liability to tft galveston portfolio addition- ally respondent could have potentially attempted to collect directly from mr teachworth as a responsible_person united_states tax_court reports under sec_6672 thus our decision against applying fed- eral common_law successor rules and holding that tft gal- veston portfolio is not a successor_in_interest to the six part- nerships listed on the notices does not by itself thwart respondent’s crucial function of collecting federal employ- ment taxes accordingly we do not accept respondent’s suggestion that we adopt a federal common_law to override texas law b application of state law successor liability is generally determined by state law 178_f3d_114 2d cir as we have discussed above we do not accept respondent’s suggestion of applying federal common_law in this case therefore we will apply the applicable state law because tft galveston portfolio and its alleged predecessors were all organized in texas we look to texas law to determine whether tft galveston portfolio is a successor_in_interest to the other partnerships under texas law a person acquiring property may not be held responsible or liable for a liability or obligation of the transferring domestic entity that is not expressly assumed by the person tex bus orgs code ann sec b west in a majority of states that have a similar rule four well-recognized exceptions impose liability on an acquiring company the first is similar to that codified above in the texas business organizations code the three other exceptions are as follows when the transaction amounts to a de_facto merger when the successor is a mere continuation of the seller company and when the transaction is entered into fraudulently to escape liability this court generally follows state law to determine the legal interests and rights of the taxpayer see eg 403_us_190 357_us_39 309_us_78 the texas business organizations code was adopted in see h b no tex sess law serv ch h b vernon its pred- ecessor contained substantially_similar language see tex bus corp act art dollar_figure expired date 635_f3d_734 5th cir because there is no substantive difference between the statutes the court refers to the currently enacted version of the law for the sake of convenience and it does not decide which version of the statute would apply tft galveston portfolio ltd v commissioner see eg 77_fedappx_356 6th cir 501_f2d_1145 1st cir pulis v u s elec tool co p 2d okla in texas however de_facto mergers are considered to be against public policy see eg 946_fsupp_485 n d tex mudgett v paxson mach co s w 2d tex app 13th writ ref ’d n r e texas courts have also refused to apply the doctrine_of mere continuation see eg med designs inc v shannon gracey ratliff miller l l p s w 2d tex ct app 2d mudgett s w 2d pincite certainly if the de_facto merger doctrine is contrary to the public policy of our state so must be the mere continuation doctrine lastly there is some dispute in texas courts as to whether texas recognizes a fraudulent transfer exception to the gen- eral rule_of successor nonliability see 511_br_812 bankr n d tex but see ford bacon davis llc v travelers ins co wl at s d tex aff ’d 635_f3d_734 5th cir thus in texas an acquiring entity is not a suc- cessor in interest unless it expressly agrees to assume the liabilities of the other party in the transaction tft galveston portfolio did not expressly assume the liabilities of the other six partnerships accordingly under texas law tft galveston portfolio is not a successor_in_interest to the six partnerships listed on the notices iii classification of workers sec_3111 and sec_3301 impose taxes on employers under the federal_insurance_contributions_act fica and the fed- eral unemployment tax act futa sec_3101 imposes on employees under fica a tax based on their wages paid which the employer is required to collect under sec_3102 under sec_3402 and sec_3403 employers are liable for with- holding from their employees’ wages the employees’ shares of federal_income_tax in addition to the successor liabilities respondent determined that tft galveston portfolio’s interest in we find that even if texas does accept the fraud exception there is no evidence to support its application here united_states tax_court reports workers were employees for purposes of employment_taxes and thus that tft galveston portfolio is liable for with- holding the proper amounts of tax under sec_3101 sec_3111 sec_3301 and sec_3402 tft galveston portfolio challenges respond- ent’s classification of the individuals listed in the notice_of_determination as employees tft galveston portfolio maintains that these individuals were independent contrac- tors and thus it was not responsible for withholding employ- ment taxes a burden_of_proof we presume that a worker classification determination made by the commissioner is correct but a taxpayer may rebut that presumption by demonstrating by a preponder- ance of the evidence that the determination was erroneous rule a 290_us_111 77_f3d_236 8th cir applying this standard to a worker classifica- tion determination 117_tc_263 b common_law test whether an employer-employee relationship exists in a particular situation is a question of fact weber v commis- sioner 103_tc_378 aff ’d per curiam 60_f3d_1104 4th cir for the purposes of employment_taxes the term employee includes any individual who under the because we hold that petitioner is not a successor_in_interest to the other six partnerships the following analysis pertains only to the workers listed on the notice sent to petitioner on date for the fourth quarter of tax_year these include jerry adams maintenance super- visor johnny puentes robert thorpe francisco cedillo jaime rosales roller delgado hector martinez joel romero john russo ron baltrusk francisco flores joshua wagner allen jacobs oscar loir collectively maintenance workers lestie adams kelli grant cheryl mohr jason wolfe kelli grant christina gerrior kimberly wilkins linda bradley randi jensen collectively apartment managers with respect to the other names listed on the notice such as elizabeth bonds delores guamelo eric puentes carla carcano maria martinez karla carcano melinda ruiz anita jones and bobby harris respondent concedes that they were not petitioner’s employees during the period at issue and payments made to them did not subject tft galveston portfolio to employment_tax liabilities tft galveston portfolio ltd v commissioner usual common_law rules applicable in determining the employer-employee relationship has the status of an employee sec_3121 accord sec_3306 ewens miller inc v commissioner t c pincite sec_31_3121_d_-1 employment_tax regs defines the common_law employer-employee relationship as follows generally such relationship exists when the person for whom services are performed has the right to control and direct the individual who per- forms the services not only as to the result to be accomplished by the work but also as to the details and means by which that result is accom- plished that is an employee is subject_to the will and control of the employer not only as to what shall be done but how it shall be done in this connection it is not necessary that the employer actually direct or control the manner in which the services are performed it is sufficient if he has the right to do so the right to discharge is also an important factor indicating that the person possessing that right is an employer other factors characteristic of an employer but not necessarily present in every case are the furnishing of tools and the furnishing of a place to work to the individual who performs the services in general if an individual is subject_to the control or direction of another merely as to the result to be accomplished by the work and not as to the means and methods for accomplishing the result he is an independent_contractor in deciding whether a worker is a common_law_employee or an independent_contractor this court considers the degree of control exercised by the principal which party invests in the work facilities used by the individual the opportunity of the individual for profit or loss whether the principal can discharge the individual whether the work is part of the principal’s regular business the permanency of the relationship and the relationship that the parties believed that they were creating weber v commissioner t c pincite all of the facts and cir- cumstances of each case are considered and no single factor is dispositive id while no single factor is dispositive the degree of control exercised by the principal over the details of the individual’s work is one of the most important factors in determining whether a common_law employment relationship exists see eg 538_us_440 104_tc_140 all that is necessary however is that the prin- united_states tax_court reports cipal have the right to control the details of the individual’s work ewens miller inc v commissioner t c pincite c analysi sec_1 degree of control the principal’s degree of control_over the details of the agent’s work is one of the most important factors in deter- mining whether an employment relationship exists see clackamas gastroenterology assocs p c u s pincite weber v commissioner t c pincite the degree of con- trol necessary to find employee status varies according to the nature of the services provided weber v commissioner t c pincite when the nature of the work is more inde- pendent a lesser degree of control by the principal may still result in a finding of an employer-employee relationship robinson v commissioner tcmemo_2011_99 aff ’d 487_fedappx_751 3d cir tft galveston portfolio through mr teachworth con- trolled nearly every aspect of the work performed by the apartment managers he unilaterally established the com- pensation paid to the managers and he set their working hours and duties in determining how to handle vacancies at the complexes the managers had to consult with mr teachworth and they had to gain his approval to return security deposits to departing tenants he set the community rules and regulations and determined the rent at the prop- erties and the managers had no authority to alter the rents without his approval tft galveston portfolio through mr teachworth con- trolled the work performed by mr adams because mr adams was the maintenance supervisor his duties included supervising the various maintenance workers performing general repairs and maintenance and executing large maintenance projects as needed mr adams had a small degree of latitude in his work however at trial he testified that he had to seek approval from mr teachworth before performing any maintenance job that was not routine or small thus the discretion allowed to mr adams in per- forming his work was severely limited the maintenance workers including those who performed more specialized or skilled work and those who provided tem- tft galveston portfolio ltd v commissioner porary services were all supervised by mr adams mr adams along with the apartment managers had the authority delegated by mr teachworth to give instructions to any maintenance worker regarding what to do and how to do it mr adams however was ultimately responsible for making sure the maintenance jobs were completed addition- ally mr adams set the maintenance workers’ hours and if needed could call workers from the various complexes to come help on a certain project ultimately though all maintenance projects were subject_to the final approval of mr teachworth to retain the requisite degree of control_over an employee the employer need not direct the employee’s every move it is sufficient if he has the right to do so weber v commis- sioner t c pincite see sec_31_3401_c_-1 employ- ment tax regs although some of the workers had some lati- tude in how they performed their duties ultimately mr teachworth was the boss and had final authority on all the work performed at the properties accordingly this factor weighs heavily towards a finding that tft galveston port- folio’s workers were in fact employees and not independent contractors investment in facilities and opportunity for profit or loss the fact that a worker has no investment in the facilities used in the work is indicative of an employer-employee rela- tionship ewens miller inc v commissioner t c pincite conversely the fact that a worker provides his or her own tools generally indicates the worker is an independent_contractor id when workers have no opportunities for profit or loss they are more like employees than independent con- tractors see d r fin servs inc v commissioner tcmemo_2011_252 slip op pincite the workers had little if any financial investment in tft galveston portfolio’s business and they were never at risk of suffering a personal financial loss the work was all per- formed on site at the apartment properties tft galveston portfolio provided most of the office equipment and supplies used by the apartment managers and set up a petty cash fund to cover any incidental_expenses incurred the man- agers all received fixed salaries with the exception of a small united_states tax_court reports performance-based bonus available to some of them as part of their compensation or as a condition_of_employment the managers were provided with on-site housing and had their utilities expenses paid mr adams the maintenance supervisor supplied some of his own tools and equipment they were not purchased or used specifically or exclusively for tft galveston portfolio’s business however this factor alone is not determinative in contrast tft galveston portfolio provided and paid for all the required maintenance materials through charge accounts mr teachworth maintained at local hardware stores additionally any incidental_expenses the workers incurred were reimbursed by mr teachworth finally the workers never had an opportunity for financial profit aside from their salaries although the maintenance workers could increase their earnings through working addi- tional hours they could not increase their hourly rate of pay which was unilaterally set by mr teachworth thus the workers were never at risk of personal financial loss due to the services they provided accordingly this factor weighs towards a finding that tft galveston portfolio’s workers were in fact employees and not independent contractors right to discharge tft galveston portfolio through mr teachworth had the right to terminate the service of any of the workers at any time without financial penalties the workers could also quit at any time at no point did any of the workers enter into a contract or agreement that would bind tft galveston portfolio or the workers accordingly this factor weighs towards a finding that the workers were in fact employees and not independent contractors workers part of petitioner’s regular business tft galveston portfolio’s sole business activity was the operation of the apartment properties the workers all played a crucial role in its operation and financial success the apartment managers’ primary responsibility was to fill the vacancies and the financial success of the properties depended on their maximizing the occupancy of the prop- erties the maintenance supervisor and the workers were tasked with responding to tenants’ maintenance problems tft galveston portfolio ltd v commissioner and work orders thus the workers all played an integral role in the business by keeping vacancies to a minimum maintaining the physical integrity of the properties and pro- viding security thereby preserving tenant satisfaction see 900_f2d_49 5th cir accordingly this factor weighs towards a finding that the workers were in fact employees and not independent contractors permanency of working relationship a transitory work relationship may weigh in favor of inde- pendent contractor status ewens miller inc v commis- sioner t c pincite the evidence tends to show a con- tinuing relationship between the workers and tft galveston portfolio accordingly this factor weighs towards a finding that the workers were in fact employees and not independent contractors the parties’ perception of the relationship none of the workers had independent_contractor agree- ments or written contracts the workers did not submit bids for services there is no evidence that any of the workers advertized their services to the public nor did they work for any other companies during the period at issue although mr adams occasionally performed maintenance and repair work outside of his job with tft galveston portfolio that work was done in his spare time and was not part of his full- time job where he worked an average of hours per week and was on call hours a day days a week that other work is not at issue even if it was mr teachworth’s intention to create a legiti- mate independent_contractor relationship with the workers such an intention does not carry much weight when the common_law factors compel a finding that an employer- employee relationship exists see kumpel v commissioner tcmemo_2003_265 slip op pincite accordingly this factor weighs towards a finding that tft galveston portfolio’s workers were in fact employees and not independent contrac- tors united_states tax_court reports conclusion after considering the record and weighing all of the fac- tors we conclude that the workers were employees during the period at issue none of the relevant factors suggest that the workers were independent contractors and many of the factors evidence an employer-employee relationship for instance the workers were all ultimately subject_to the direc- tion and control of mr teachworth he hired them and set their hours and wages they had no financial investment in the work they performed they bore no risk of financial loss and they did not participate in tft galveston portfolio’s profits in any way finally the fact that tft galveston port- folio and mr teachworth did not think they were creating an employment relationship with the workers is not persuasive when the common_law factors weigh towards an employment relationship we think these factors sufficiently establish that the workers were properly classified as employees of tft gal- veston portfolio therefore we hold tft galveston portfolio liable for the employment_taxes determined for the fourth quarter of regarding the employees iv additions to tax and penalties a burden_of_proof the commissioner bears the burden of production with respect to an individual’s liability for additions to tax and penalties see sec_7491 to meet that burden the commis- sioner must produce sufficient evidence indicating that it is appropriate to impose the penalty see 116_tc_438 however sec_7491 does not shift the burden_of_proof which remains on the individual see higbee v commissioner t c pincite- sec_7491 is not entirely instructive as to whether the section imposes the initial burden on the commissioner when the taxpayer is an entity that has petitioned this court under sec_7436 by its terms sec_7491 applies only to the liability of any individual for penalties see palmer in contrast sec_7491 which provides the general_rule for shifting the burden_of_proof to the commissioner in certain circumstances applies tft galveston portfolio ltd v commissioner ranch holdings ltd v commissioner tcmemo_2014_79 palm canyon x invs llc v commissioner tcmemo_2009_288 santa monica pictures llc v commissioner tcmemo_2005_104 we need not resolve any potential uncertainty even if we assume that respondent has the initial burden of production we are satisfied that he has carried it therefore the burden remains with petitioner to prove the penalty determinations are incorrect see higbee v commissioner t c pincite- b additions to tax respondent determined that tft galveston portfolio is liable for additions to tax under sec_6651 for its failure_to_file forms and for employment_taxes for the period at issue and under sec_6651 for failure to pay the amount of tax shown on the sfrs sec_6651 imposes an addition_to_tax for failure to timely file a return unless the taxpayer shows that such failure was due to reasonable_cause and not willful neglect sec_6651 imposes an addition_to_tax for failure to pay the amount of tax_shown_on_the_return on or before the date prescribed unless the taxpayer can establish that the failure is due to reasonable_cause and not due to willful neglect tft galveston portfolio filed no employment_tax return for the period at issue accordingly we conclude that respondent produced sufficient evidence to show that the sec_6651 addition_to_tax is appropriate although the issues in this case are somewhat technical tft galveston portfolio has not produced any evidence demonstrating a good-faith effort to comply with the law and determine the correct treatment of the workers therefore we find that the failure_to_file was not due to reasonable_cause and hold tft gal- veston portfolio liable for the sec_6651 addition_to_tax in ascertaining the liability of a taxpayer the addition_to_tax is equal to of the amount of the tax required to be shown on the return if the failure_to_file is not for more than one month an additional is imposed for each month or fraction thereof in which the failure_to_file continues to a maximum of of the tax the addition_to_tax is imposed on the net amount due sec_6651 b 120_tc_163 n united_states tax_court reports as stated tft galveston portfolio did not file an employ- ment tax_return however respondent prepared a valid sfr under sec_6020 pursuant to sec_6651 an sfr is treated as the taxpayer’s return for purposes of deter- mining the sec_6651 addition_to_tax respondent presented evidence showing that tft galveston portfolio did not make any_tax payments during the period at issue accordingly we conclude that respondent has produced suffi- cient evidence to show that the sec_6651 addition_to_tax is appropriate tft galveston portfolio has not produced sufficient evidence demonstrating that the failure to pay the appropriate amount was due to reasonable_cause therefore we hold tft galveston portfolio liable for the sec_6651 addition_to_tax c penalty under sec_6656 if a taxpayer is more than days late in depositing employment_taxes sec_6656 imposes a penalty sec_6656 see also ewens miller inc v commissioner t c pincite the taxpayer is not liable for the sec_6656 pen- alty if the late deposit was due to reasonable_cause and not due to willful neglect sec_6656 tft galveston portfolio is liable for a penalty under sec_6656 respondent showed that tft galveston portfolio did not deposit employ- ment taxes see ramirez v commissioner tcmemo_2007_346 finding that the irs met its burden where sec_7491 undisputedly applied by showing that the employer made no deposits tft galveston portfolio did not show that it had reasonable_cause for failing to deposit employment_taxes in reaching our holdings herein we have considered all arguments the parties made and to the extent we did not mention them above we conclude they are moot irrelevant or without merit tft galveston portfolio ltd v commissioner to reflect the foregoing and the settled issues decisions will be entered for petitioners in docket nos and decision will be entered under rule in docket no f


acknowledged significant advice may be disseminated office_of_chief_counsel internal_revenue_service memorandum cc dom fs tl-n-999-98 proc bgdusenberry date jul sca released to district_counsel brooklyn cc ner brk attention tkerrigan from assistant chief_counsel field service cc dom fs subject significant service_center advice request re certificate of mailing this memorandum is in response to your request for significant service_center advice dated date facts the taxpayer_advocate at the brookhaven service_center received an inquiry via facsimile from a tax practitioner who attended a recent tax symposium sponsored by the service_center according to the practitioner’s notes the director of the service_center stated that there were other acceptable methods to prove mailing besides registered and certified mail the practitioner indicated that the director used the certificate of mailing as an example of a less expensive alternative method subsequent to the symposium the practitioner contacted the united_states postal service and was advised that their employees have been instructed to inform customers that a certificate of mailing is not acceptable proof of mailing with respect to documents sent to the internal_revenue_service therefore the practitioner requests written clarification of the internal revenue service’s position with respect to the use of certificates of mailing for purposes of establishing the timely filing of tax returns issue whether a u s postal service certificate of mailing form is an acceptable method to prove the date of mailing a tax_return for purposes of the timely mailing treated as timely filing provisions of sec_7502 conclusion unlike a receipt for certified or registered mail a u s postal service certificate of mailing form does not conclusively prove the date of mailing of a tax_return and is inadmissible to contradict an untimely postmark appearing on the envelope in which a return is mailed however a certificate of mailing is admissible to help establish the mailing date of a tax_return if a postmark on the envelope in which a return is mailed is missing or illegible finally depending on the judicial circuit in which taxpayers reside a certificate of mailing may be inadmissible to prove timely mailing in cases of nondelivery of the return to the service discussion sec_7502 provides in relevant part that if a properly addressed postage prepaid envelope or wrapper containing a return is deposited in the mail in the united_states and bears a united_states postmark date which is on or before the last date for filing the postmark date will be deemed to be the filing_date where the return is received after the due_date in general where a legible united_states postmark date appears on the envelope or wrapper no extrinsic evidence may be introduced to prove the time that the postmark stamp was made 76_tc_963 572_f2d_212 9th cir aff'g tcmemo_1976_383 see also 254_f2d_277 9th cir cert dismissed 358_us_30 46_tc_499 sec_7502 of the internal_revenue_code sets forth exceptions to this rule one exception permitted by sec_7502 applies to registered mail in the case of registered mail the date of registration is deemed the postmark date sec_7502 sec_7502 also excepts certified mail from the general_rule with respect to certified mail the postmark date on the sender's receipt is deemed the postmark date sec_7502 sec_301_7502-1 sec_7502 which was added by the taxpayer bill of right sec_2 p l provides another exception to the general_rule of sec_7502 sec_7502 authorizes taxpayers to use designated private delivery services to meet the timely mailing timely filing rule for filing documents and returns taxpayers are required to strictly comply with the statutory requirements in order to obtain the benefits of the timely mailing treated as timely filing provisions of sec_7502 the absence of a showing that a return was sent by registered or certified mail creates a conclusive statutory presumption that the postmark date on the envelope is controlling estate of moffat v commissioner supra t c pincite the use of registered or certified mail allows taxpayers to avoid the hazard that the united_states postal service will not properly postmark the envelope in which the return was contained accordingly taxpayers who opt to use a certificate of mailing instead of certified or registered mail bear the risk that a return mailed by ordinary mail might bear a postmark date later than the last date prescribed for filing of the return since the use of certificates of mailing is not specifically provided for by the statutory language of sec_7502 such certificates do not afford taxpayers with the same protections as registered and certified mail unlike a registered or certified mail receipt a timely postmarked certificate of mailing would be inadmissible to contradict an untimely postmark appearing on the envelope in which a return or other documetn was mailed see haaland v commissioner tcmemo_1984_335 tax_court explicitly rejected evidence in the form of a certificate of mailing to rebut an untimely postmark stamped on the envelope of a petition sec_301_7502-1 states in relevant part that i f the postmark on the envelope or wrapper is not legible the person who is required to file the document has the burden of proving the time when the postmark was made where the postmark is omitted or illegible the tax_court has accepted evidence regarding the time of mailing other than a certified mail receipt see 65_tc_548 nonacq 1977_2_cb_3 reugsegger v commissioner 68_tc_463 novick v commissioner tcmemo_1977_292 krellman v commissioner tcmemo_1979_367 felt v commissioner tcmemo_1978_286 elliot v commissioner tcmemo_1990_257 in this situation a certificate of mailing may be admitted by a court as support for the contention that a return was mailed on a given date however the certificate of mailing would not be conclusive on this point and a court may request more evidence corroborating the certificate of mailing where a return is lost or undelivered it is the service’s position that only evidence of registration or certification as provided in sec_7502 will allow the taxpayer to take advantage of the timely mailing as timely filing provision the service takes the position that the statutory language of sec_7502 requires actual delivery under sec_7502 or prima facie evidence of delivery by the taxpayer under sec_7502 accordingly absent evidence of registration or certification taxpayers bear the risk of loss as to all returns which the service has not actually received however the u s circuit courts of appeals do not agree respecting this issue the eighth circuit in 909_f2d_1155 8th cir reh'g denied en_banc u s app lexis 8th cir date held that the common_law presumption of receipt of a properly mailed document is not completely displaced by sec_7502 therefore the taxpayer could rely on the common_law presumption that a properly mailed document is actually received and offer proof of the postmark date where the estate_tax_return was not sent via certified or registered mail and was not actually received by the service the court_of_appeals held that a certified or registered mail receipt is not the exclusive means of proving the postmark date in the absence of actual delivery of the document however the court acknowledged the narrowness of its holding by stating that the taxpayer must offer direct proof of the postmark date and not merely evidence of mailing in order to obtain the benefit of the timely mailing timely filing rule accord 966_f2d_487 9th cir sec_7502 is not exclusive means of proving timely mailing in these circuits the common_law presumption of delivery continues to exist and is merely supplemented by the safe_harbor statutory mail box rule under the common_law mailbox rule proof of proper and timely mailing of a document raises a rebuttable_presumption that it is timely received by the addressee 111_us_185 285_us_427 in this case testimony of a postal employee regarding the postmark date stamped on the envelope containing the estate’s return and testimony from the return preparer concerning the date on which the return was deposited in the mail were held sufficient to establish that the return was timely mailed and therefore properly filed although the service disagrees with the eighth circuit’s holding in this case and a direct conflict between the circuits was presented the solicitor general declined to authorize certiorari in light of the stated limitations of the holdings and the absence of affirmative evidence of nonreceipt by the service see estate of wood v commissioner aod cc-1991-024 date direct evidence that the taxpayer saw postal clerk postmark the envelope and place it in the mail was held sufficient to establish the date of the postmark evidence that the taxpayer’s return had not been received by the service was held insufficient to rebut the presumption of timely delivery under the common_law mailbox rule compare lewis v united_states u s t c big_number th cir direct evidence of application of postmark stamp by postal employee not necessarily required under anderson holding provided for in sec_7502 therefore a certificate of mailing may provide evidence of timely mailing in the eighth and ninth circuits even where the return or other statement is never received by the service in contrast both the sixth circuit and second circuit have rejected the common_law mailbox rules in situations where a taxpayer is relying on sec_7502 and have held that absent actual delivery of the document evidence of proper mailing is not admissible except as provided in sec_7502 784_f2d_728 6th cir 71_f3d_1228 6th cir cert_denied 116_sct_2547 909_f2d_148 6th cir 599_f2d_44 2d cir cert_denied 444_us_1015 therefore taxpayers residing in these circuits who do not avail themselves of the safeguards provided in sec_7502 and fail to send their tax returns by registered or certified mail are precluded from presenting any extrinsic evidence including presumably a certificate of mailing to obtain the benefit of sec_7502 if the return is not received by the service sec_7502 extended the protection of the general_rule of sec_7502 to private delivery services in notice_97_26 i r b p date the service designated certain specified delivery services provided by the airborne express company dhl corporation federal express and united parcel service and announced that it would accept documents delivered by these companies under the conditions specified in the notice as timely filed however these services are generally more expensive that the services of the united_states postal system in order to eliminate the risk that a return mailed by ordinary mail might not bear a postmark dated on or before the last date prescribed for filing or that a properly addressed tax_return might be lost in the mail congress developed a statutory scheme in sec_7502 which provides for acceptance of the date of registered mail and the date stamped on the sender's receipt for certified mail as the postmark date although the postal service will provide at a lower price than registered or certified mail a certificate of mailing this certificate does not have the same indicia of reliability as registered and certified mail furthermore a certificate of mailing is not a unlike registered or certified mail a certificate of mailing provides evidence of mailing only in 65_tc_548 the tax_court noted the statute authorizes the secretary to provide by regulations the extent to which the rules applicable to statutorily recognized substitute for certified or registered mail therefore taxpayers who choose to obtain a certificate of mailing from the postal service instead of using either certified or registered mail do so at their own peril in conclusion unlike a receipt for certified or registered mail a certificate of mailing does not conclusively prove the date of mailing of a tax_return and is inadmissible to contradict an untimely postmark appearing on the envelope in which a return is mailed however a certificate of mailing may be admissible to help establish the mailing date of a tax_return if a postmark on the envelope in which a return is mailed is missing or illegible finally depending on the judicial circuit in which taxpayers reside a certificate of mailing may be inadmissible to prove timely mailing in cases of nondelivery of the return to the service taxpayers who are unwilling to accept this risk of an untimely postmark or nondelivery of a return should send their returns by certified or registered mail which allows taxpayers to rely on the registered or certified mail receipt as conclusively establishing the postmark date and as prima facie evidence of delivery of the return to the service see sec_301_7502-1 d registered mail also apply to certified mail however the certificate of mailing employed by petitioner in this case is not the same as certified mail certified mail provides a numbered receipt to the sender the receipt bears the same number as the certified mail sticker attached to the article similarly a number receipt is issued for registered mail certificates of mailing on the other hand are generally not numbered thus a certificate of mailing while providing evidence of mailing does not indicate that a particular item was mailed but only that an item was mailed to an addressee sylvan v commissioner t c pincite n the united_states postal service’s current fee schedule is as follows registered mail dollar_figure certified mail dollar_figure certificate of mailing dollar_figure if you have any questions or require additional information please call blaise g dusenberry at deborah a butler assistant chief_counsel field service by s richard g goldman special counsel tax practice and procedure procedural branch


internal_revenue_service number info release date index number ------------------------------------ ---------------------------------------- -------------------- --------------------------------- - department of the treasury washington dc person to contact -------------- id no ------------- telephone number --------------------- refer reply to cc psi b01 - genin-105306-04 date march ------------------------------------ taxpayer dear --------------- we are responding to a letter on behalf of the taxpayer dated date requesting a late s election effective date according to the records at the service_center the taxpayer has an s election effective date as requested we hope that the above information proves helpful s dianna k miosi sincerely yours dianna k miosi chief branch associate chief_counsel passthroughs and special industries