Terrell v. Commissioner
2010 U.S. App. LEXIS 22657
| 5th Cir. | 2010Background
- Terrell seeks innocent spouse relief and filed Form 8857; the IRS assessed over $660,000.
- Initial Notice of Final Determination was mailed April 6, 2007 to North Richland Hills address and later undeliverable.
- IRS sent preliminary notices and the final Notice despite USPS undeliverability; Terrell moved addresses to Dallas.
- IRS re-mailed the Notice to Dallas on May 14, 2007 after discovering the Dallas address, Terrell received it mid-May.
- Terrell filed Tax Court petition on July 13, 2007, within 90 days of the May 14 Notice but outside 90 days of the April 6 Notice.
- Tax Court dismissed for lack of jurisdiction; Fifth Circuit reverses and remands for merits.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Was the April 6, 2007 Notice mailed to the last known address? | Terrell argues IRS failed reasonable diligence. | Terrell's last known address was on file and reasonable diligence was met. | No; IRS failed reasonable diligence; not mailed to last known address. |
| When did the 90-day petition period commence? | Period began in mid-May upon actual receipt of the re-sent notice. | Period began April 6; ninety days runs from mailing date. | The period begins May 14 (re-sent notice); petition timely. |
Key Cases Cited
- Mulder v. Comm'r, 855 F.2d 208 (5th Cir. 1988) (reasonable diligence required; last known address rule with undelivered notices)
- Pomeroy v. United States, 864 F.2d 1191 (5th Cir. 1989) (IRS must exercise diligence when address may be incorrect)
- Ward v. Comm'r, 907 F.2d 517 (5th Cir. 1990) (whether notice was mailed to last known address reviewed for fact-findings)
- Mulvania v. Comm'r, 769 F.2d 1376 (9th Cir. 1985) (notice becomes null and void when returned undeliverable)
- Sicari v. Comm'r, 136 F.3d 925 (2d Cir. 1998) (delivery of envelope can satisfy notice requirements in some circuits)