An appropriate decision will be entered.
In an effort to collect P's unpaid tax liabilities, R prepared for P a Final Notice of Intent to Levy and Your Right to a Hearing (levy notice). R attempted to hand-deliver the levy notice during a field call on February 11 but was deterred by P's dog. Two days later R initiated the mailing of the levy notice by certified mail to P's last known address. R did not generate a new levy notice dated February 13; he enclosed in the envelope the original levy notice dated February 11. P received the levy notice on February 17. P completed Form 12153 requesting a collection due process (CDP) hearing for the tax years at issue and mailed it to R on either March 13 or 14. R received it on March 16, which was a Monday.
During the CDP hearing P argued that the period of limitations on collection of his tax liabilities had expired. P based this contention on the assertion that he intentionally had filed his request for a CDP hearing one day late, such that he was entitled only to an "equivalent hearing," which would not have suspended the period of limitations on collection. R contends that petitioner's request for a CDP hearing was in fact timely because it was filed within 30 days of the date on which the IRS mailed him the levy notice.
Before R may levy against a taxpayer's property, R must provide written notice of the proposed levy and inform the taxpayer of his right to an administrative hearing. A levy notice must be sent or delivered to the taxpayer "not less than 30 days before the day of the first levy."
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147 T.C. 179">*180 LAUBER,
Respondent contends that petitioner's2016 U.S. Tax Ct. LEXIS 22">*23 request for a CDP hearing was in fact timely because it was filed within 30 147 T.C. 179">*181 days of the date on which the IRS mailed him the notice of levy.
Some of the facts have been stipulated and are so found. The stipulation of facts and the attached exhibits are incorporated by this reference. Petitioner resided in Pennsylvania when he filed his petition.
In 1994 petitioner filed delinquent returns for 1986-1991. In October 1994 the IRS assessed the tax liabilities shown on those returns along with additions to tax under
With a view to collecting petitioner's outstanding liabilities, the IRS assigned a Revenue Officer (RO) to his case. The RO prepared a Letter 1058A, Final Notice of Intent to Levy and Notice of Your Right to a Hearing. The RO generated this levy notice using the IRS Integrated Collection System (ICS), which affixed February 11, 2009, as the date on the letter. The RO appended to the levy notice copies of IRS Publication 1, Your Rights as a Taxpayer; Publication 1660, Collection Appeal Rights; Publication 594, What You 147 T.C. 179">*182 Should Know About the IRS Collection Process; and Form 12153, Request for a Collection Due Process or Equivalent Hearing. The RO concurrently generated a separate Letter 1058A, concerning a joint income tax liability for 2001, that was addressed to petitioner's wife, Betty Hockenbury.
2016 U.S. Tax Ct. LEXIS 22">*25 The RO made a "field call" later that day in an effort to hand-deliver the two levy notices to petitioner's residence. He was deterred by a dog blocking the driveway; he left without delivering either notice, opting to send them by certified mail instead. The RO completed his other field calls that afternoon and went home without returning to his office.
On February 12 the RO conferred with an IRS colleague to ascertain whether a criminal investigation should be opened against petitioner. His colleague got back to him at the end of the day with a negative answer. On February 13 the RO prepared an envelope in which the levy notice for 1986-1991 was to be sent by certified mail to petitioner's last known address. The RO did not generate a new levy notice dated February 13; he simply enclosed in the envelope the original levy notice dated February 11, together with the Form 12153 and the three IRS publications listed above. He attached to the envelope U.S. Postal Service (USPS) Form 3800, Certified Mail Receipt, and USPS Form 3811, Certified Mail Return Receipt. On the Form 3800 he made the notation "L1058," standing for Letter 1058, and indicated that it was being "sent to Charles Weiss."2016 U.S. Tax Ct. LEXIS 22">*26 That same morning the RO prepared a similar levy notice concerning the 2001 joint tax liability addressed to petitioner's wife.
On February 13 the RO placed the envelopes containing the two levy notices, with USPS certified mail slips attached, in the outgoing mail bin at his office. He credibly testified that the office's standard operating procedure was to have outgoing mail picked up from that bin by support staff two or three times a day. The support staff would meter all outgoing mail and put it into a postal box outside the IRS office, to be picked up by USPS personnel. Because outgoing mail was stamped using a private postage meter, it did not receive a USPS postmark.
The date of the imprint of the private postage meter on the envelope in which each notice was mailed was February 13, 2009. After placing the two levy notices in the outgoing mail bin, the RO updated the Integrated Data Retrieval System 147 T.C. 179">*183 (IDRS) through ICS to indicate that the levy notices had been mailed to petitioner and to his wife on Friday, February 13, 2009.3 The IRS office in which the RO worked was closed the next three days for the weekend and for Presidents' Day. The U.S. Post Office to which mail from that2016 U.S. Tax Ct. LEXIS 22">*27 IRS office was taken was open on February 14, but was closed on February 15 and 16.
On February 17 petitioner's wife signed the USPS Form 3811 for each levy notice. Her signatures on these forms establish that the two levy notices were delivered to her, and that she received them, on that day. The certified mail numbers on the Forms 3811 that she signed match the certified mail numbers on the Forms 3800 that the RO completed. The RO subsequently made an updated IDRS entry confirming that he had "received return receipts back date stamped by Post Office on 2/17/2009 for Charles Weiss & Betty Hockenb[u]ry"; that "both return receipts are signed by B. Hockenb[u]ry"; and that the taxpayers had "accepted delivery" of the levy notices.
Petitioner's wife opened the envelopes, took out the enclosed documents, set them aside for her husband, and threw away the envelopes. When petitioner came home from work that day, he reviewed the levy notices and the IRS publications. By reading the publications, petitioner, who is an attorney, became2016 U.S. Tax Ct. LEXIS 22">*28 aware of the collection actions available to the IRS and of the alternatives potentially available to him. He understood the difference between a CDP hearing, which would entitle him to judicial review if he were dissatisfied, and an "equivalent hearing," in which any collection relief would be solely at the IRS' discretion. Petitioner did not have the ability in February 2009 to pay his Federal tax liabilities, which then exceeded $550,000. He understood that enforced IRS collection action would cause serious financial hardship and make it impossible for him and his wife to maintain their standard of living.
In response to the two levy notices petitioner prepared two Forms 12153, Request for Collection Due Process or Equivalent Hearing. One Form 12153 requested a hearing with 147 T.C. 179">*184 respect to petitioner's 1986, 1987, 1988, 1999, 2000, and 2001 tax years (1986 CDP Form). Petitioner was in a hurry to file the 1986 CDP Form and completed it at "the last minute"; he inadvertently listed tax years 1999-2001 instead of 1989-1991, the years actually covered by the levy notice.4 As his basis for requesting a CDP hearing he stated that he "can't pay the tax owed" and that "levy action will cause hardship."2016 U.S. Tax Ct. LEXIS 22">*29 He did not check the box captioned "Equivalent Hearing." He dated this form March 13, 2009.
The other Form 12153 requested a hearing with respect to the 2001 joint tax liability of petitioner and his wife (2001 CDP Form). As the basis for requesting a CDP hearing he stated that he and his wife "can't pay the tax owed" and that "levy action will cause hardship." He did not check the box captioned "Equivalent Hearing." He dated this form March 13, 2009.
Petitioner mailed one Form 12153 in an envelope postmarked March 13, 2009, and he mailed the other Form 12153 in an envelope postmarked March 14, 2009. The IRS received both Forms 12153 on Monday, March 16, 2009. After the envelopes were opened, the forms became separated2016 U.S. Tax Ct. LEXIS 22">*30 from their envelopes. In the absence of any identifying markings on the envelopes, the IRS was unable to determine which envelope had contained the 1986 CDP Form and which envelope had contained the 2001 CDP Form.
On April 13, 2009, the RO sent petitioner a letter noting that he had neglected to list tax years 1989-1991 on the 1986 CDP Form. Two weeks later, the SO received from petitioner a revised Form 12153, dated April 23, 2009, that listed the six years that were actually at issue. Petitioner on this revised form did not check the box captioned "Equivalent Hearing." He again stated as his basis for requesting a CDP hearing that he "can't pay the tax owed" and that "levy action will cause hardship."
147 T.C. 179">*185 A settlement officer (SO) was assigned to petitioner's case. The SO reviewed his tax transcripts for 1986-1991. She properly verified that: (1) the assessments for each year were properly made; (2) there was a balance due for each year; and (3) the tax bill for each year was mailed to petitioner's last known address within 60 days of each assessment.
The SO also verified that the statute of limitations did not bar collection of petitioner's 1986-1991 liabilities. The end of the 10-year2016 U.S. Tax Ct. LEXIS 22">*31 period specified in
The SO determined that the collection period of limitations remained open because petitioner had timely requested a CDP hearing. In making this determi-nation, the SO concluded that the critical date was not February 11, 2009, the date appearing on the levy notice, but the date on which that notice was actually mailed to petitioner. She examined the ICS history transcript maintained by the RO, which showed February 13, 2009, as the mailing date. She also examined the USPS forms in the administrative file. She concluded that the Form 3800 (completed by the RO on February 13) and the Form 3811 (signed by petitioner's wife on February 17) likewise pointed to February 13 as the mailing date, given that the IRS office was closed on the intervening three days. Although it was uncertain whether petitioner had mailed the 1986 CDP Form on March 13 or 14, the SO found it timely in2016 U.S. Tax Ct. LEXIS 22">*32 either event because both dates were within 30 days of February 13.
On November 25, 2009, the SO sent petitioner a letter informing him that his CDP hearing request for 1986-1991 had been received and was timely. She indicated that she had scheduled a telephone CDP hearing for January 22, 2010, and enclosed the forms petitioner would need to complete in order to seek a collection alternative. Petitioner communicated with the SO, by letter or telephone, three times during December 2009. On none of these occasions did he disavow his desire for a CDP hearing or assert that he wanted only an "equivalent hearing." 147 T.C. 179">*186 Petitioner retained Daniel Pilla, his current counsel, on January 15, 2010.
During the CDP hearing one week later Mr. Pilla contended that petitioner's CDP hearing request was untimely because the date appearing on the levy notice, February 11, 2009, controlled in determining whether petitioner had filed his request within the 30-day period specified in
The SO sought from IRS Chief Counsel a legal opinion concerning the timeliness issue. In December 2010 she received an opinion concluding that "the 30-day period for filing a CDP hearing request runs from the date the CDP notices were mailed." The SO telephoned Mr. Pilla to inform him of the IRS' position and asked whether petitioner sought a collection alternative. Mr. Pilla said he would give her an answer by April 29, 2011. On May 6, 2011, having received no further communication from petitioner or his counsel, the IRS sent petitioner a notice of determination sustaining the levy to collect his unpaid tax liabilities for 1986-1991. Petitioner timely petitioned this Court for review.
There is some uncertainty in our precedents as to whether a de novo standard of review applies where (as here) the controversy concerns a challenge to the 10-year collection period of limitations.6 Petitioner argues that his tax liability is uncollectible because the period of limitations on collection has expired. If that is so, respondent's proposed collection action would be impermissible under an abuse of discretion standard as well as under a de novo standard. Because we must decide whether the SO correctly determined that the limitations period had not expired, we would reach the same result regardless of which standard we applied.
A levy notice must be sent or delivered to the taxpayer "not less than 30 days before the day of the first levy."
"[I]f a hearing is requested under
"A taxpayer who fails to make a timely request for a CDP hearing is not entitled to a CDP hearing," but he may be afforded an "equivalent hearing."
The focus of the parties' dispute is whether petitioner filed the 1986 CDP Form within the 30-day period specified in
We have stated on several occasions that "the 30-day period in which a taxpayer may timely request an Appeals Office hearing begins on the day after the date of mailing" of a levy notice under
Although we have found no precedent that addresses the precise question involved here, a modest body of case law has developed on closely analogous questions. When considering the timeliness of notices of deficiency under
We recently applied the same line of reasoning in the CDP context.
In
Relying on the deficiency cases cited above, we held in We see no reason why the above-described rules governing our deficiency jurisdiction should not also govern our jurisdiction in CDP cases, thus allowing taxpayers the greatest opportunity, consistently with the statutory language, to obtain jurisdiction in our Court. We accordingly hold that the 30-day window prescribed by
This logic is equally applicable here. We will employ the same principle of construction to IRS notices issued under
In so ruling, we are guided by the proposition that, in determining whether we have jurisdiction over a given matter, this Court and the Courts of Appeals have given our jurisdictional provisions a broad, practical construction rather than a narrow, technical one.
147 T.C. 179">*192 Petitioner errs in contending that the regulations point to a different conclusion. They provide that a CDP hearing must be requested within the 30-day period commencing "the day after the date of the CDP Notice."
In deciding whether the SO erred in sustaining the proposed levy, the relevant question is whether she properly concluded that the 10-year period of limitations remained open. The answer to this question depends on whether the 1986 CDP Form was mailed by petitioner and/or received2016 U.S. Tax Ct. LEXIS 22">*45 by respondent within 30 days of the date on which the IRS mailed the levy notice.
Generally speaking, we have approved a settlement officer's reliance on tax transcripts to prove relevant facts.
The SO did more than check the tax transcripts. She verified the mailing date shown on the transcripts by consulting the ICS history transcript maintained by the RO, which showed that the Letter 1058 was mailed on February 13. She reviewed the Form 3800 that the RO completed on February 13; the certified mail number on that form matched the certified mail number on the Form 38112016 U.S. Tax Ct. LEXIS 22">*46 that petitioner's wife signed on February 17. The SO reasonably concluded that the Form 3811 bolstered her determination that the levy notice had been mailed on February 13, because the IRS office was closed on the intervening three days.11
The evidence at trial supported the SO's determination. The testimonial and documentary evidence established that the RO left the levy notice in the outgoing mail bin on February 13; that an IRS staff person collected the notice from the mail bin and ran it through a private postage meter, which imprinted February 13 as the date; and that IRS staff placed the notice into a postal box outside the IRS office for collection by USPS personnel later that afternoon.
While it seems plausible that USPS personnel collected the notice from the IRS postal box on February 13, the evidence does not conclusively establish that they deposited it into the U.S. mail that same day. But it is immaterial2016 U.S. Tax Ct. LEXIS 22">*47 to our conclusion whether the notice was actually mailed on February 13 or February 14. The SO correctly determined that February 147 T.C. 179">*194 13 was the
Petitioner cites cases like
Petitioner contends that the levy notice was fatally defective because it violated what he calls "the 'information' requirement" of
This argument faces several hurdles at the threshold. First, petitioner cites no authority for the proposition that Congress envisioned a sanction for the failure of an IRS notice to be drafted "in simple and nontechnical terms." Second, petitioner cites no authority for the proposition that
In any event, we have frequently upheld the validity of IRS notices even though there was a mismatch between the letter date and the mailing date. In
In a related vein, petitioner argues that the SO failed the verification requirement by paying insufficient heed to a section of the Internal Revenue Manual (IRM) cautioning that a levy notice should bear the same date as that on which it is mailed to the taxpayer.
Finally, petitioner contends that "equitable estoppel applies to bar respondent from * * * relying on a mail date of the notice other than February 11, 2009." Petitioner asserts that the IRS misled him "by misrepresentation or concealment" as to the existence of a fact--namely, the date on which the levy notice was mailed--and that he "suffered prejudice as a result." His claim of prejudice is based on the notion that, while he requested a CDP hearing, what he really wanted was an "equivalent hearing" that would not suspend the period of limitations on collection. Rather than check the "Equivalent Hearing" box on the 1986 CDP Form, petitioner asserts that he aimed to achieve this goal by intentionally filing his CDP request one day late, using the February 11 date appearing on the levy notice as his starting 147 T.C. 179">*197 point. He was prejudiced, he says, when his scheme was frustrated by the SO's conclusion that he was entitled to the CDP hearing he had asked for because commencement of the 30-day period was calculated by reference to the notice's mailing2016 U.S. Tax Ct. LEXIS 22">*53 date.
Petitioner's estoppel argument is unpersuasive.
Petitioner's testimony concerning prejudice, moreover, was wholly lacking in credibility. In February 2009 he could not pay his 1986-1991 Federal tax liabilities, which exceeded $550,000. He averred on the 1986 CDP Form that he "can't pay the tax owed" and that "levy action will cause hardship." Petitioner is an attorney; he studied the IRS publications he received; and he understood the difference between a CDP hearing and an "equivalent hearing." His testimony that he actually sought an "equivalent hearing" was implausible for at least four reasons: (1) he did not check the box for "Equivalent Hearing" despite two opportunities to do so; (2) the IRS during the pendency of an "equivalent hearing" could begin immediate collection action, which was the last thing petitioner wanted; (3) any relief2016 U.S. Tax Ct. LEXIS 22">*54 afforded by the IRS in an "equivalent hearing" would be purely discretionary and not subject to judicial review; and (4) the CDP hearing that he requested would entitle him to judicial review and defer IRS collection action indefinitely, thus achieving the goals he expressed in his hearing request. For all these reasons, we find no credible evidence to support his claim of prejudice.
In consideration of the foregoing,
1. All statutory references are to the Internal Revenue Code in effect at all relevant times. We round all dollar amounts to the nearest dollar.↩
2. The U.S. Bankruptcy Court for the Eastern District of Pennsylvania held that petitioner had attempted to evade or defeat his income tax liabilities for the 1988-1991 tax years.
3. The RO's entry for February 13 reads as follows: "RO Sent L1058 certified with Pub 594, Pub 1660 & Pub 1 Copy to Charles Weiss and Betty Hockenbury * * * LTR 1058 Delivery Status: Mailed."↩
4. There is nothing in the record to indicate that the IRS sent petitioner any notice relating to 1999 or 2000. We find that he intended to list tax years 1989 and 1990 on the 1986 CDP form and that he wrote 1999 and 2000 by mistake as a holographic error. We find that he made a similar holographic error on the 1986 CDP Form in writing 2001 instead of 1991. He did receive notice of a joint liability with his wife for 2001, but he mailed in a separate Form 12153 for that year.↩
5. Petitioner paid the 2001 joint income tax liability, totaling about $3,000, in early 2010.↩
6.
7. Petitioner's argument assumes that
8. Although petitioner on the 1986 CDP Form incorrectly listed tax years 1999-2001 rather than 1989-1991, he corrected this error by filing, on April 23, 2009, a revised Form 12153 listing 1986-1991, the six years covered by the levy notice to which he was responding. The parties do no dispute that the corrected Form 12153 relates back to the date on which the 1986 CDP Form was filed, so that petitioner is deemed to have requested a CDP hearing for tax years 1986-1991 ab initio. Petitioner was in a hurry to file the 1986 CDP Form and completed it at "the last minute." It is clear that he made a holographic error on the original Form 12153 and that he intended to request a CDP hearing for all six of the years covered by the levy notice, not for 1999-2000 (which were never at issue) or for 2001 (which he addressed in a separate Form 12153 submitted in response to the levy notice issued to his wife for that year).
9. Petitioner asserts that the date appearing on the levy notice must be deemed to be the mailing date "when there is a clear discrepancy and no other date was provided to the petitioner." To support that proposition he cites
10. For similar reasons petitioner errs in relying on
11. The SO testified that she had inquired whether a certified mail log existed, but the RO replied in the negative. At that time, the Internal Revenue Manual (IRM) did not require the creation of such a log when sending out levy notices.
12. For essentially the same reasons, petitioner errs in contending that the SO abused her discretion by declining to determine whether he had mailed the 1986 CDP Form on March 13 or (as he testified) on March 14. Both dates are within 30 days of February 13, the earliest date on which the levy notice could have been mailed. Moreover, regardless of when petitioner mailed the 1986 CDP Form, it was timely because the IRS received it on March 16, the due date as extended by
13. Petitioner asserts that the IRS publications accompanying the levy notice failed to alert him to the importance of the mailing date. That assertion is incorrect. Publication 1660 reads: "The IRS can't levy or seize your property within 30 days from the date this notice is
