Court Opinion

ID: 4332788
Source: CourtListenerOpinion
Date Created: 2018-11-14 00:51:59.534006+00
Date Added: 2024-06-11T14:48:10.057619
License: Public Domain

114 T.C. No. 29

                 UNITED STATES TAX COURT

     ERIC E. AND DOROTHY M. SMITH, Petitioners v.
     COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No.   10571-99.                 Filed June 8, 2000.

     R sent to Ps a notice of deficiency but failed to stamp
a date in the section entitled “Last Day to File a Petition
With the United States Tax Court” (i.e., the petition date).
Ps received the notice prior to the expiration of the period
of limitations of sec. 6501, I.R.C., and Ps filed a petition
with this Court within the time prescribed in sec. 6213(a),
I.R.C.
     Held: Where R failed to put the petition date on the
notice, as required by sec. 3463(a) of the Internal Revenue
Service Restructuring and Reform Act of 1998, Pub. L. 105-
206, 112 Stat. 685, 767, and Ps nevertheless received the
notice and filed a petition in a timely manner, such notice
was sufficient to toll the period of limitations.

William Robert Lambert, for petitioners.

James E. Gehres and Mary Tseng Klaasen, for respondent.
                                - 2 -

                               OPINION

     FOLEY, Judge:   Respondent determined a deficiency of $18,222

and a section 6662(a) penalty of $3,644 relating to petitioners’

1995 Federal income tax.   The parties submitted this case fully

stipulated pursuant to Rule 122.    Unless otherwise indicated, all

section references are to the Internal Revenue Code (I.R.C.) in

effect for the year in issue, and all Rule references are to the

Tax Court Rules of Practice and Procedure.    After concessions,

the issue is whether the notice of deficiency is valid.

                             Background

     In April 1996, petitioners filed their 1995 return.    On

March 5, 1999, respondent sent to petitioners by certified mail,

a notice of deficiency relating to 1995.    Petitioners received

the notice in the middle of that month.    On April 29, 1999,

petitioners’ counsel informed the Internal Revenue Service (IRS),

by telephone, that the letter did not include a date in the

section of the letter entitled “Last Day to File a Petition With

the United States Tax Court” (the petition date).    Respondent

also failed to stamp a date in the section of the letter entitled

“Letter Date”.   On May 4, 1999, petitioners’ counsel received a

letter dated April 30, 1999, in which the IRS 90 Day Coordinator

wrote that “it appears the clerk failed to stamp the notice

mailed to your client.”    Accompanying this letter was a copy of
                               - 3 -

the notice with “March 5, 1999" stamped as the “Letter Date”, and

“June 3, 1999" stamped as the petition date.   On June 3, 1999,

petitioners, then residents of Aurora, Colorado, mailed their

petition, which was filed by the Court on June 9, 1999.

                            Discussion

     Section 6212(a) provides that if the Commissioner determines

a deficiency in income tax, “he is authorized to send notice of

such deficiency to the taxpayer by certified mail or registered

mail.”   Section 6213(a) provides that a taxpayer has 90 days

after the mailing of the notice to file his petition for

redetermination of the deficiency with the Tax Court.   These

provisions were designed to afford a taxpayer notice of the

Commissioner’s determination and an opportunity to litigate the

validity of such determination in this Court without first paying

the deficiency.   See McKay v. Commissioner, 89 T.C. 1063, 1067

(1987), affd. 886 F.2d 1237 (9th Cir. 1989).

     The Internal Revenue Service Restructuring and Reform Act of

1998 (Act), Pub. L. 105-206, sec. 3463(a), 112 Stat. 685, 767

provides:

     The Secretary of the Treasury or the Secretary’s
     delegate shall include on each notice of deficiency
     under section 6212 of the Internal Revenue Code of 1986
     the date determined by such Secretary (or delegate) as
     the last day on which the taxpayer may file a petition
     with the Tax Court.
                                 - 4 -

While section 3463(a) of the Act does not amend section 6212, or

any other provision of the I.R.C., this section of the Act

applies to notices mailed after December 31, 1998, and has the

force of law.    See United States Natl. Bank v. Independent Ins.

Agents of Am., Inc., 508 U.S. 439, 448 (1993)(stating that an

uncodified provision shall have the force of law as long as the

provision is in the Statutes at Large).

     Petitioners contend that the failure to include the petition

date, pursuant to section 3463(a) of the Act, rendered the notice

invalid.   Thus, they contend that the section 6501 period of

limitations was not tolled, and as a result, they are not liable

for the deficiency or penalty.    Respondent contends that the

omission of the petition date was a “technical but harmless

violation” of the Act and the notice was valid because

petitioners received it without prejudicial delay.    Respondent

further contends that the notice, pursuant to section 7522(a), is

not invalid.    Section 7522 applies to notices of deficiency

described in section 6212, and provides:

          Any notice to which this section applies shall
     describe the basis for, and identify the amounts (if
     any) of, the tax due, interest, additional amounts,
     additions to the tax, and assessable penalties included
     in such notice. An inadequate description under the
     preceding sentence shall not invalidate such notice.
     [Emphasis added.]
                              - 5 -

     While we agree with respondent’s conclusion, we reject his

contention relating to section 7522.   The petition date is not

mentioned in section 7522, and, thus, this section is not

determinative.

     The Court of Appeals for the Tenth Circuit, to which an

appeal would lie, has stated that a “‘notice of deficiency that

is actually received without delay prejudicial to the taxpayer’s

ability to petition the Tax Court is sufficient to toll the

statute of limitations as of the date of mailing.’”     Scheidt v.

Commissioner, 967 F.2d 1448, 1450-1451 (10th Cir. 1992)(quoting

Borgman v. Commissioner, 888 F.2d 916, 918 (1st Cir. 1989), affg.

T.C. Memo 1984-503), affg. T.C. Memo. 1985-235; see secs.

6501(a), 6503(a)(1).

     Respondent mailed, and petitioners received, the notice

prior to the expiration of the period of limitations.    Moreover,

petitioners filed a petition in a timely manner.   We hold that

where respondent failed to put the petition date on the notice,

and petitioners nevertheless received the notice and filed a

petition in a timely manner, such notice was valid.

     We note that while Congress, in section 3463(a) of the Act,

provided that the IRS “shall include” the petition date on each

notice, Congress failed to prescribe what consequences result
                                 - 6 -

from failure to include such date.       Contentions we have not

addressed are irrelevant, moot, or meritless.

     To reflect the foregoing,

                                              Decision will be entered

                                         for respondent.