It's going to take quite a while for him to pay off $800,000 plus the additional interest and penalties which have accrued. He though he was being coy by ignoring the mail; now he gets to watch his money get express delivery treatment until his IRS levy is satisfied.
Significant excerpts:
Petitioner failed to file income tax returns for his 2001, 2002, 2003, 2004,
2005, 2006, and 2007 tax years (years in issue). Respondent therefore prepared a
substitute for return with respect to each of the years in issue. On February 16,
2010, via certified mail, respondent mailed to petitioner a notice of deficiency with
respect to each of the years in issue (collectively, notices of deficiency). As
shown on the U.S. Postal Service (USPS) Form 3877, respondent mailed separate
copies of the notices of deficiency to petitioner’s post office box and to his street
address in Cordova, Tennessee. The post office box address is the address
petitioner used in his correspondence with the Appeals Office and with this Court.
On February 18, 2010, Henry Allen Quarles, a mail carrier for the USPS
who testified at trial, unsuccessfully attempted to deliver the certified mail to
petitioner’s street address. According to the USPS.com “Track & Confirm”
printout in the trial record, Mr. Quarles prepared a USPS Form 3849, Delivery
Notice/Reminder/Receipt, and placed it on top of petitioner’s mail in his mailbox.
Although a second Form 3849 was issued, petitioner did not claim the certified mail,
and on March 15, 2010, it was marked “unclaimed” and returned to respondent.
Also on February 18, 2010, Lucy Burch, a sales service associate at the
USPS office in Cordova, Tennessee, who testified at trial, prepared a USPS Form
3849 and placed it in petitioner’s post office box, alerting him to pick up
certified mail sent from the Internal Revenue Service (IRS). On or about
February 25, 2010, Ms. Burch prepared a USPS Form 3849 and placed it in
petitioner’s post office box because he had not yet retrieved the certified mail.
Petitioner did not retrieve the certified mail, and on March 15, 2010, it was marked
“unclaimed” and returned to respondent.
On or about November 22, 2010, respondent mailed to petitioner a Final
Notice of Intent to Levy and Notice of Your Right to a Hearing, advising him that
respondent intended to levy to collect his unpaid tax liabilities, penalties, and
interest for the years in issue, which at the time totaled almost $800,000.
Petitioner asserts that he never had an opportunity to dispute the existence
or amounts of the underlying tax liabilities for the years in issue. He contends that
he never received notices of deficiency for the years in issue. Respondent
contends that the notices of deficiency were properly mailed by certified mail to
petitioner’s addresses but that petitioner did not claim the notices after several
attempts at delivery by the USPS. We must consider whether the fact that the
notices were unclaimed means that petitioner “did not receive any statutory notice
of deficiency * * * or did not otherwise have an opportunity to dispute such tax
liability.”
Under section 6330(c)(2)(B), the receipt of a notice of deficiency, not its
mailing, is the relevant event. Kuykendall v. Commissioner, 129 T.C. 77, 80
(2007); Conn v. Commissioner, T.C. Memo. 2008-186, 2008 WL 2986391, at *2;
Tatum v. Commissioner, T.C. Memo. 2003-115, 2003 WL 1918914, at *3.
However, a taxpayer may not avoid actual receipt by deliberately refusing delivery.
Sego v. Commissioner, 114 T.C. 604, 610-611 (2000). A taxpayer who refuses
delivery of a notice of deficiency is deemed to have received the notice. Id.; Rivas
v. Commissioner, T.C. Memo. 2012-20, 2012 WL 141745, at *4. The Court’s
determination of whether a taxpayer has received a notice of deficiency so as to
preclude a challenge to the underlying tax liability under section 6330(c)(2)(B) is
made “[o]n the preponderance of the evidence”. Sego v. Commissioner, 114 T.C.
at 611; see also Casey v. Commissioner, T.C. Memo. 2009-131, 2009 WL
1606226, at *4; Figler v. Commissioner, T.C. Memo. 2005-230, 2005 WL 2444045,
at *4.
In the absence of clear evidence to the contrary, the presumptions of official
regularity and delivery justify the conclusion that the statutory notice was sent and
that attempts to deliver were made. See Sego v. Commissioner, 114 T.C. at 611.
The Commissioner generally has prevailed in foreclosing challenges to the
underlying liability under section 6330(c)(2)(B) where he establishes that a notice of
deficiency was mailed to the taxpayer’s last known address and no factors are
present that rebut the presumption of official regularity and of delivery. Cyman v.
Commissioner, T.C. Memo. 2009-144, 2009 WL 1748863, at *4; see, e.g., Sego v.
Commissioner, 114 T.C. at 611; Clark v. Commissioner, T.C. Memo. 2008-155,
2008 WL 2471865, at *3-*4. A taxpayer’s self-serving testimony that he did not
receive the notice of deficiency, standing alone, is generally insufficient to rebut the
presumption. See Klingenberg v. Commissioner, T.C. Memo. 2012-292, 2012 WL
5035605, at *5; Casey v. Commissioner, 2009 WL 1606226, at *4; cf. Devlin v.
Commissioner, T.C. Memo. 2012-145, 2012 WL 1842441, at *3 n.8
Both USPS employees testified that the Cordova office always followed
USPS procedures, including the preparation and delivery of multiple USPS Forms
3849 at each of petitioner’s addresses. They also testified that, regarding either
petitioner’s post office box or his street address, petitioner never suspended service
or complained about not receiving his mail. Mr. Quarles testified that he did not
recollect mail ever piling up unclaimed in petitioner’s mailbox at his street address.
During cross-examination of the USPS employees at trial, petitioner attempted to
suggest that the USPS Forms 3849 might have been lost in the large volume of mail
or because of mishandling, but he provided no evidence to support those
suggestions. The USPS left a total of four USPS Forms 3849 at two different
addresses for petitioner, one of which was the address petitioner used in
correspondence with the Appeals Office and with this Court. The USPS office
in Cordova, Tennessee, held the certified mail for nearly a month. It is unlikely
that all four Forms 3849 were lost, mishandled by the USPS, or overlooked by
petitioner for the entire month. Petitioner’s contentions are neither compelling nor
convincing, and they do not rebut the presumption that the USPS employees
properly discharged their official duties.
Petitioner was given an opportunity to testify at trial, and he failed to
take advantage of that opportunity. On the preponderance of the evidence, we find
that petitioner either refused or deliberately failed to claim delivery of the notices of
deficiency for the years in issue and is, therefore, in either case, deemed to have
received them. Accordingly, the Appeals Office correctly determined that petitioner
was precluded from challenging the underlying tax liabilities at a section 6330
hearing, see Sego v. Commissioner, 114 T.C. at 611; Rivas v. Commissioner, 2012
WL 141745, at *5, and his underlying tax liabilities are not properly before the
Court, see Sego v. Commissioner, 114 T.C. at 611; Cyman v. Commissioner, 2009
WL 1748863, at *5.
Petitioner has not advanced any argument or introduced any evidence that
would allow us to conclude that the determination to sustain the levy was
arbitrary, capricious, or without sound basis in fact. The Appeals Office correctly
precluded petitioner from challenging the underlying liabilities. Petitioner did not
comply with Ms. Macaulay’s requests to submit tax returns, make estimated tax
payments, or submit a Form 433-A or any other financial information, or
otherwise offer a reasonable collection alternative. The Appeals Office
determined that the requirements of applicable law and administrative
procedure were met and concluded that the proposed levy appropriately balanced
the need for efficient collection of taxes with petitioner’s concerns regarding the
intrusiveness of the levy action. Therefore, we hold that the Appeals Office did not
abuse its discretion when it issued a notice of determination upholding the proposed
levy action.
