In the age of coronavirus, responding to notices from governmental agencies, especially the Internal Revenue Service, couldn’t be more important. Recently, the U.S. Tax Court sustained an appeal from a taxpayer who received a statutory notice just four days before the 30-day statutory response requirement to submit a challenge of the delinquency to the IRS due to a mailing error (Wiley Ramey v. Commissioner, 156 T.C. No. 1 (2021)).
The IRS mailed a notice of intent to levy (the “Notice”) using the taxpayer’s actual and last known address. The Notice was mailed via the United States Postal Service (USPS) by certified mail, return receipt requested. The Notice included the “standard” verbiage related to the taxpayer’s right to request a hearing under Section 6330 of the IRC within 30 days of the date of the notice. Unfortunately, the taxpayer shared a joint mailing address with other companies, so that the Notice was not received expressly by the taxpayer until only four days before the statutory deadline was scheduled to pass. The taxpayer filed his request for a hearing on the Notice but unfortunately did not file such a notice until after the 30 days had already passed. The IRS Office of Appeals determined that the request for a hearing was untimely due to failure to comply with the statutory deadline and therefore sustained the determination of an assessment. The taxpayer subsequently filed an appeal with the U.S. Tax Court, pro se.
The Internal Revenue Code provides the statutory requirements that the IRS must follow in order to levy against a taxpayer for outstanding liabilities. Prior to initiating a levy, the IRS must provide notice to the Taxpayer of such intent. Under Section 6330(a)(2), the IRS may provide notice to a taxpayer by either (A) providing in person, (B) leaving at the dwelling or usual place of business of such person, or (C) sent by certified or registered mail, return receipt requested, to such person’s last known address.
The taxpayer argued that since neither the taxpayer nor a representative of the taxpayer had signed for the Notice, the clock did not start until the taxpayer had constructively received the notice. However, the court found that the role of the IRS in sending notices is solely to ensure that the notice has been placed into the hands of the USPS either certified or registered mail, with a return receipt to the last known address of the taxpayer. If the IRS has completed these steps, then it has met its statutory requirements. “Actual receipt is not a prerequisite to the validity of the CDP [n]otice.” (see Sec. 301.6330-1(a)(3), Q&A-A9, Proced. & Admin. Regs. Section 301.6330-1(c)(3) Example (3)). I think it is important to note that other federal courts have created exceptions to this general requirement.
We have all heard the horror stories about the USPS failing to deliver ballots and Christmas presents; in fact, a Christmas present we ordered this year didn’t arrive until a month-and-a-half after it was supposed to be delivered. A recent article in the Philadelphia Inquirer stated that package delivery from the USPS had drastically dropped in comparison to other periods. The article suggested that more than one million packages had been delayed by 30 days or more.
With this recent ruling, taxpayers need to ensure that they respond to notices received by the IRS in a timely fashion. If a notice is received after the statutory deadline due to an error by the USPS or the IRS, taxpayers need to seek counsel from a tax professional in order to better understand their options. If you have any questions related to compliance with IRS statutory requirements or understanding of your rights, please feel free to reach out to our Tax Practice Group, including Demetrius Robinson at (614) 427-5749 or djr@kjk.com.
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