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Refusal to Pick Up Mail Precludes Ability to Schedule CDP Hearing and Contest Levy.
(Parker Tax Publishing July 11, 2014)

A taxpayer could not decline to retrieve his mail when he was reasonably able and had multiple opportunities to do so, and thereafter successfully contend that he did not receive a notice of deficiency for purposes of scheduling a collection due process hearing. Onyango v. Comm'r, 142 T.C. No. 24 (6/24/14).

Eric Onyango timely filed his 2006 tax return and reported a tax liability of approximately $1,600 on that return. He subsequently filed two amended returns for 2006 and the IRS issued a deficiency notice for that year. Eric's 2007 tax return was audited and the IRS issued a notice of deficiency for that year. An IRS Appeals Office sent a letter to Eric at his address of record and scheduled a meeting to discuss the proposed adjustments. Eric did not show up for the meeting. The IRS sent another letter advising Eric that if he did not contact the Appeals officer within 20 days, notices of deficiency would be issued for 2006 and 2007. Eric did not contact the Appeals Officer.

On several occasions, the U.S. Postal Service attempted, albeit unsuccessfully, to deliver to Eric a notice of deficiency that the IRS had mailed to him by certified mail, return receipt requested, and addressed to his legal residence. On at least two occasions the Postal Service left notices of attempted delivery of the certified mail which contained the notice of deficiency at the address of Eric's legal residence. In those notices, the Postal Service informed Eric that it had certified mail to deliver to him and that he had to sign a receipt for that mail before the Postal Service would deliver it to him. Eric declined to check on a regular basis his mailbox at his legal residence and to retrieve on a regular basis any Postal Service mail items delivered there. After several unsuccessful attempts to deliver the certified mail to Eric at his legal residence, the Postal Service returned it to the IRS.

In 2011, the IRS issued Eric a notice of federal tax lien filing which discussed his right to a hearing under Code Sec. 6320 for the tax years at issue. Eric sent the IRS Form 12153, Request for a Collection Due Process or Equivalent Hearing, with respect to the notice of federal tax lien filing, in which he requested a hearing. The only year for which Eric was contesting his tax liability was 2006. Subsequently, after Eric provided certain documentation to the IRS Appeals Officer, that officer spoke by telephone with Eric about the matter. Several months later, the IRS issued to Eric a notice of determination concerning collection action(s) under Code Sec. 6320 and/or Code Sec. 6330, in which the IRS sustained the tax lien filing.

Eric took his case to the Tax Court where the only issue before the court was whether Eric was entitled under Code Sec. 6330(c)(2)(B) to dispute his tax liability for 2006. Under Code Sec. 6330(c)(2)(B), a person may challenge at a hearing with the IRS the existence or amount of an underlying tax liability for any tax period if the person did not receive any statutory notice of deficiency for such tax liability or did not otherwise have an opportunity to dispute such tax liability. Eric argued that he was entitled under Code Sec. 6330(c)(2)(B) to contest the underlying tax liability because, although the IRS mailed the 2006-2007 notice of deficiency to him at his address of record, he did not receive that notice within the 90-day period during which he could have filed a petition with the court with respect to that notice. In support of that contention, Eric relied on his testimony before the court. The IRS countered that although the post office returned the 2006-2007 notice to the IRS after several unsuccessful attempts to deliver it to Eric, Eric "chose not to accept delivery." According to the IRS, Eric's testimony to the contrary was not credible and "should be given no weight."

The Tax Court agreed with the IRS and held that Eric could not decline to retrieve his mail when he was reasonably able and had multiple opportunities to do so, and thereafter successfully contend that he did not receive for purposes of Code Sec. 6330(c)(2)(B) a notice of deficiency. The court also rejected Eric's contention that he was entitled under Code Sec. 6330(c)(2)(B) to dispute the underlying tax liability to which the notice of deficiency pertained.

For a discussion of the rules relating to a collection due process hearing, see Parker Tax ¶260,540. (Staff Editor Parker Tax Publishing)

Disclaimer: This publication does not, and is not intended to, provide legal, tax or accounting advice, and readers should consult their tax advisors concerning the application of tax laws to their particular situations. This analysis is not tax advice and is not intended or written to be used, and cannot be used, for purposes of avoiding tax penalties that may be imposed on any taxpayer. The information contained herein is general in nature and based on authorities that are subject to change. Parker Tax Publishing guarantees neither the accuracy nor completeness of any information and is not responsible for any errors or omissions, or for results obtained by others as a result of reliance upon such information. Parker Tax Publishing assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect information contained herein.

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