Court Opinion

ID: 9479587
Source: CourtListenerOpinion
Date Created: 2023-08-05 07:22:32.92156+00
Date Added: 2024-06-11T17:47:08.117683
License: Public Domain

SCHROEDER, Circuit Judge,
dissenting:
The majority’s decision in this case will make the administration of the law for the future more burdensome.
Congress has declared that when the IRS, by appropriate means, sends a notice of deficiency to the taxpayer’s last known address, the notice is effective regardless of whether the taxpayer actually receives it. See 26 U.S.C. § 6212(b)(1) (1982); United States v. Zoila, 724 F.2d 808, 810 (9th Cir.), cert. denied, 469 U.S. 830, 105 S.Ct. 116, 83 L.Ed.2d 59 (1984). An IRS mailing of a notice to an attorney can be as effective as a mailing to the taxpayer’s “last known address,” but only when the taxpayer requests that all communications be mailed directly to the attorney. See D'Andrea v. Commissioner, 263 F.2d 904, 907 (D.C.Cir.1959); Reddock v. Commissioner, 72 T.C. 21, 24 (1979). A limited power of attorney, requesting that copies of correspondence be sent to the taxpayer’s attorney or other agent, does not effect a change of the taxpayer’s last known address, and notice to the attorney does not constitute valid notice to the taxpayer. See McDonald v. Commissioner, 76 T.C. 750, 753 (1981); Houghton v. Commissioner, 48 T.C. 656, 661 (1967).
In our court’s prior decisions, we have recognized that the IRS may provide valid notice to the taxpayer by personally delivering a copy of the notice to the taxpayer, see Tenzer v. CIR, 285 F.2d 956, 958 (9th Cir.1960), or by mailing the notice to an address other than the taxpayer’s last known address if the notice actually reaches the taxpayer through the mail, see Clodfelter v. CIR, 527 F.2d 754, 756 (9th Cir.1975). But we have squarely, and correctly, held that the agent of the taxpayer cannot provide notice by informing the taxpayer that the agent has received a copy of a misaddressed notice. Mulvania v. CIR, 769 F.2d 1376, 1380-81 (9th Cir.1985).
In this case, the IRS did not mail the notice to the taxpayer’s last known address. The taxpayer did not designate his attorney to be the recipient of all communications from the IRS. In this case, as in Mulvania, the only notice the taxpayer received was from his agent, not from the *1240IRS. Yet the majority holds that the notice was as valid as if the IRS had correctly addressed the original mailing. It distinguishes Mulvania on the ground that here the agent provided the taxpayer with an actual physical copy of the notice, whereas in Mulvania the agent did not.
Until today’s decision, the lines were drawn with clarity; if the IRS did not itself provide actual notice to the taxpayer or mail the notice to the taxpayer’s last known address, the notice was invalid. We now depart from that line, and hold that in some circumstances notice can be provided by the taxpayer’s own attorney, rather than the IRS. The inquiry now must shift from what IRS records show, to the nature of communications between tax advisors and clients. This decision opens up the prospect of costly and time-consuming litigation probing sensitive relationships. It provides a disincentive for accurate record keeping on the part of the IRS, and will impede communication between tax advis-ors and their clients.
The benefit from salvaging a few misdirected notices is not worth this high price. In my view, Chief Judge Goodwin aptly summarized the relevant policy concerns in his opinion in Mulvania:
It is better for the government to lose some revenue as the result of its clerical error than to create uncertainty. If [the taxpayer’s agent], either intentionally or unintentionally, had not informed Mulva-nia of the receipt of the copy of the notice of deficiency, then Mulvania would not have received any notification of the deficiency. Tax law requires more solid footings than the happenstance of a tax adviser telephoning a client to tell him of a letter from the IRS.
We conclude that, where a notice of deficiency has been misaddressed to the taxpayer or sent only to an adviser who is merely authorized to receive a copy of such a notice, actual notice is necessary but not sufficient to make the notice valid. The IRS is not forgiven for its clerical errors or for mailing notice to the wrong party unless the taxpayer, through his own actions, renders the Commissioner’s errors harmless.
769 F.2d at 1380-81.
Today’s decision is contrary to the spirit, if not the letter, of that decision and of the law as Congress intended it to operate. I therefore respectfully dissent.