Lead Opinion
On April 7, 1977 the IRS issued a notice of deficiencies and fraud penalties with respect to appellant’s 1972 and 1973 income
Appellant claims he did not receive the notice of deficiency. The tax court found appellant received a copy of the notice from his attorney, Herbert D. Sturman, in ample time to file a timely petition for review in the tax court. That factual finding is not clearly erroneous. See Mayors v. Commissioner,
As the government points out, the finding was confirmed by contemporaneous documentary evidence — including Stur-man’s letter of April 13, 1977 to the government acknowledging receipt of the deficiency notice — and by the fact that although appellant denied receipt of the notice, he attached a copy to his petition for review.
Appellant contends the tax court erred in receiving Sturman's testimony over appellant’s objection based on the attorney-client privilege. The privilege forbids testimony that “would in any way convey the substance of confidential professional communications between [a client] and his attorney.” In re Osterhoudt,
Appellant suggests Sturman is biased against him. There is no evidence in the record to support the claim. In any event, bias goes to credibility, see United States v. Abel,
Appellant objects that Sturman was not listed as a witness in the government’s trial memorandum as required by a standing order of the tax court. Appellant was not prejudiced. The government’s memorandum indicated Sturman would be called as an impeachment witness if appellant testified, and appellant received a copy of the subpoena issued to Sturman several days before trial. He had ample opportunity to prepare to meet Sturman’s testimony.
Appellant contends the notice of deficiency was ineffective because it was not addressed to his “last known address” within the meaning of section 6212(b)(1). “Actual notice” is the central goal of this section. Clodfelter v. Commissioner, 527
Mulvania v. Commissioner,
Since appellant, unlike the taxpayer in Mulvania, had “actual notice without prejudicial delay” of the contents of the 1977 notice, through timely receipt of an exact copy of that notice, his petition filed eight years later was properly dismissed. Clodfelter,
AFFIRMED.
Dissenting Opinion
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,
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,
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
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.
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.