                               T.C. Memo. 2017-39



                        UNITED STATES TAX COURT



       JOANNE C. RUDDY AND JOSEPH C. RUDDY, JR., Petitioners v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



      Docket No. 14602-15L.                        Filed February 22, 2017.



      Joanne C. Ruddy and Joseph C. Ruddy, Jr., pro sese.

      William J. Gregg and Bartholomew Cirenza, for respondent.



                          MEMORANDUM OPINION


      LAUBER, Judge: In this collection due process (CDP) case, petitioners

seek review pursuant to section 6330(d)(1) of the determination by the Internal
                                         -2-

[*2] Revenue Service (IRS or respondent) to uphold a notice of intent to levy.1

The IRS has moved for summary judgment under Rule 121, contending that there

are no disputed issues of material fact and that its determination to sustain the levy

was proper as a matter of law. We agree and accordingly will grant the motion.

                                     Background

          The following facts are derived from the parties’ pleadings and motion pa-

pers, including the declarations and the exhibits attached thereto. Petitioners

resided in Maryland when they petitioned this Court.

      Petitioners filed on August 10, 2010, a joint Federal income tax return for

2009. A revenue agent (RA) in the Baltimore, Maryland, IRS office conducted an

examination of that return and determined a tax deficiency of $27,745 and an ac-

curacy-related penalty of $5,549. The RA prepared a notice of deficiency, ad-

dressed to petitioners jointly, setting forth this determination. The notice is dated

July 26, 2013, and has “CERTIFIED MAIL” imprinted at the top left corner.

      The RA mailed separate copies of the notice of deficiency to petitioner-

husband and petitioner-wife at an address on Forest Road in Cheverly, Maryland




      1
       All statutory references are to the Internal Revenue Code in effect at all
relevant times, and all Rule references are to the Tax Court Rules of Practice and
Procedure. We round all monetary amounts to the nearest dollar.
                                        -3-

[*3] (Forest Road address).2 Petitioners concede that the Forest Road address was

their last known address. The RA concurrently mailed two substantially identical

notices of deficiency for 2009 to petitioners at another address in Cheverly,

Maryland (64th Avenue address).

      The RA placed each notice of deficiency in a separate envelope, which had

a transparent or “look-through” window through which the address imprinted on

each notice would appear. Each envelope bore a distinct 20-digit U.S. Postal Ser-

vice (USPS) certified mail number evidencing that each envelope was sent by cer-

tified mail. The record includes copies of all four notices of deficiency and copies

of the four envelopes in which the notices were mailed. All four envelopes were

returned to the IRS as undeliverable on August 20, 2013.

      Respondent included with his summary judgment motion copies of two

USPS Forms 3877. These show that four articles, with certified mail numbers

matching those on the four envelopes, were received by the USPS in Baltimore,

Maryland, on July 26, 2013. The Forms 3877 show that two of the articles were

      2
       Section 6212(b)(2) provides that, where a joint return was filed, the IRS
may send a single joint notice of deficiency. However, the IRS is required,
“whenever practicable,” to send any notice relating to a joint return separately to
each spouse. Internal Revenue Service Restructuring and Reform Act of 1988,
Pub. L. No. 105-206, sec. 3201(d), 112 Stat. at 740; see also Internal Revenue
Manual pt. 4.10.1.6.8 (Feb. 24, 2015) (entitled “Separate Notice Requirements for
Joint Returns”).
                                         -4-

[*4] sent to petitioners at the Forest Road address, and that two of the articles were

sent to petitioners at the 64th Avenue address. Each Form 3877 is signed by a

USPS employee, bears the stamp of the USPS facility in Baltimore, Maryland, and

confirms that the number of items received by USPS equaled the number of items

listed on each Form 3877.

      Respondent also included with his summary judgment motion a USPS “Pro-

duct & Tracking Information” sheet for the notice of deficiency sent to petitioner-

wife at the Forest Road address. This document shows that the notice left the

USPS facility on July 27, 2013; that a delivery was attempted that same day; and

that a notice of attempted delivery was left for petitioner-wife at the Forest Road

address.

      Petitioners did not petition this Court for review of those notices, and on

December 20, 2013, the IRS assessed the tax and penalty for 2009. In an effort to

collect this outstanding liability the IRS timely sent petitioners a Notice of Intent

to Levy and Your Right to a Hearing. They timely requested a CDP hearing.

      A settlement officer (SO) from the IRS Appeals Office wrote petitioners to

acknowledge receipt of their hearing request and to inform them that he had

scheduled a telephone CDP hearing for November 18, 2014. The SO informed

petitioners that, if they wanted a collection alternative, they should provide a
                                         -5-

[*5] completed Form 433-A, Collection Information Statement for Wage Earners

and Self-Employed Individuals. Petitioners supplied no documents before the

hearing.

      During the CDP hearing petitioners argued that the levy was invalid on the

theory that the IRS had made the assessment after the period of limitations for as-

sessment had expired. See sec. 6501. Since petitioners had filed their 2009 return

on August 10, 2010, the three-year limitations period was originally set to expire

on August 10, 2013. However, upon proper mailing of the notice of deficiency,

that period was extended until January 7, 2014. See sec. 6503(a)(1). Because the

IRS had assessed the tax on December 20, 2013, the SO determined that the as-

sessment was timely.3

      Petitioners and the SO held multiple calls and exchanged multiple letters

and faxes during the next few months. Petitioners continued to argue that the

assessment period of limitations had expired, principally by questioning whether

the notices of deficiency had been properly mailed. In response to that argument,

the SO retrieved and sent petitioners copies of the first pages of the four notices of

      3
       A question arose during the CDP hearing as to whether petitioners had
signed a Form 872, Consent to Extend the Time to Assess Tax, that extended the
assessment period of limitations even further. The SO informed petitioners that he
did not need to resolve that question because the December 20, 2013, assessment
was timely regardless of whether petitioners had signed a Form 872.
                                        -6-

[*6] deficiency and of the envelopes in which they had been mailed. When

petitioners continued to express dissatisfaction with this evidence and proposed no

collection alternative, the SO concluded that further discussions would be

fruitless. On May 6, 2015, the IRS issued petitioners a notice of determination

sustaining the levy.

      Petitioners timely petitioned this Court for review of this determination. In

their petition, petitioners acknowledged that the Forest Road address was the ad-

dress shown on their 2009 income tax return, was their current address, and was at

all relevant times their last known address. Their sole contention was that, be-

cause the IRS assertedly had not sent a notice of deficiency to this address, the

assessment period of limitations had expired. Respondent moved for summary

judgment, and petitioners filed an objection.

                                     Discussion

A.    Summary Judgment

      The purpose of summary judgment is to expedite litigation and avoid un-

necessary and time-consuming trials. Fla. Peach Corp. v. Commissioner, 90 T.C.

678, 681 (1988). The Court may grant summary judgment when there is no genu-

ine dispute as to any material fact and a decision may be rendered as a matter of

law. Rule 121(b); Sundstrand Corp. v. Commissioner, 98 T.C. 518, 520 (1992),
                                          -7-

[*7] aff’d, 17 F.3d 965 (7th Cir. 1994). In deciding whether to grant summary

judgment, we construe factual materials and inferences drawn from them in the

light most favorable to the nonmoving party. Sundstrand Corp., 98 T.C. at 520.

However, where the moving party properly makes and supports a motion for

summary judgment, “an adverse party may not rest upon the mere allegations or

denials of such party’s pleading,” but must set forth specific facts, by affidavit or

otherwise, showing that there is a genuine dispute for trial. Rule 121(d).

      In light of respondent’s motion, the supporting affidavit, the administrative

record attached as exhibits to that affidavit, and petitioner’s filings, we find that

there exists no dispute as to any material fact and that summary adjudication is ap-

propriate.

B.    Standard of Review

      Petitioners have not challenged the amount of their underlying tax liability

for 2009, and we accordingly review the IRS determination for abuse of discretion

only. See Goza v. Commissioner, 114 T.C. 176, 181-182 (2000). Abuse of dis-

cretion exists when a determination is arbitrary, capricious, or without sound basis

in fact or law. See Murphy v. Commissioner, 125 T.C. 301, 320 (2005), aff’d, 469

F.3d 27 (1st Cir. 2006).
                                         -8-

[*8] In deciding whether the SO abused his discretion in sustaining the collec-

tion action we consider whether he: (1) properly verified that the requirements of

any applicable law or administrative procedure have been met; (2) considered any

relevant issues petitioners raised; and (3) considered whether “any proposed col-

lection action balances the need for the efficient collection of taxes with the

legitimate concern of * * * [petitioners] that any collection action be no more

intrusive than necessary.” See sec. 6330(c)(3). The only issue petitioners raised,

at the CDP hearing or in their petition, is whether the SO properly verified that the

tax was properly assessed, given their assertion that the IRS failed to send them a

notice of deficiency for 2009.

C.    Analysis

      Under section 6501(a), the IRS is generally required to assess a tax within

three years after a tax return is filed. The assessment period of limitations is tolled

when the IRS mails a notice of deficiency to the taxpayer under section 6212(a).

Sec. 6503(a). The assessment period of limitations is tolled for 90 days once a

notice of deficiency has been mailed and then for an additional 60 days if the

taxpayer has failed to petition the Tax Court within that time. Secs. 6213(a),

6503(a); Dritz v. Commissioner, T.C. Memo. 1969-175, aff’d, 427 F.2d 1176 (5th

Cir. 1970). If a notice of deficiency was properly mailed to petitioners, the period
                                         -9-

[*9] of limitations on assessment, originally set to expire on August 10, 2013, was

extended by 150 days, to January 7, 2014. The December 20, 2013, assessment

was thus timely so long as the notice of deficiency was properly mailed.

      Section 6212(a) provides that the IRS may “send notice of such deficiency

to the taxpayer by certified mail or registered mail.” Actual receipt of the notice

by the taxpayer is not required to establish the validity of an assessment. See, e.g.,

Keado v. United States, 853 F.2d 1209, 1211-12 (5th Cir. 1988); Cohen v. United

States, 297 F.2d 760, 772 (9th Cir. 1962). However, the IRS must present per-

suasive evidence that the notice of deficiency was actually mailed to the taxpayer

on a particular date before it can rely on a mailing to toll the period of limitations.

August v. Commissioner, 54 T.C. 1535, 1536-37 (1970).

      A properly completed USPS Form 3877 represents direct documentary evi-

dence of the date and fact of mailing and demonstrates IRS compliance with its

established procedures for sending deficiency notices. Keado, 853 F.2d at 1212-

13; Magazine v. Commissioner, 89 T.C. 321, 327 (1987); Cataldo v. Commission-

er, 60 T.C. 522 (1973), aff’d, 499 F.2d 550 (2d Cir. 1974). Exact compliance with

the Form 3877 mailing procedures raises in favor of the IRS a presumption of

official regularity that shifts the burden of going forward to the taxpayer. United

States v. Zolla, 724 F.2d 808, 810 (9th Cir. 1984); United States v. Ahrens, 530
                                        - 10 -

[*10] F.2d 781, 784 (8th Cir. 1976). A taxpayer may rebut this presumption by

affirmatively showing that the IRS failed to follow its established procedures. A

properly completed Form 3877 by itself is generally sufficient, absent evidence to

the contrary, to establish that the notice was properly mailed to the taxpayer.

Zolla, 724 F.2d at 810; Ahrens, 530 F.2d at 785-786; Coleman v. Commissioner,

94 T.C. 82, 90-91 (1990).

      Even without the presumption of official regularity, the IRS can still prevail

so long as it provides “otherwise sufficient” evidence of mailing. Welch v. United

States, 678 F.3d 1371, 1377 (Fed. Cir. 2012). Broadly speaking, the more docu-

mentation the IRS presents, the less likely it is that minor errors or omissions will

defeat its proffer. And when “the existence of a notice of deficiency is not in

dispute,” as is the case here, all that is required is “evidence corroborating an

actual timely mailing of the notice of deficiency.” Id. at 1378-79.

      Here, respondent has supplied copies of two USPS Forms 3877 showing

that a total of four articles, with certified mail numbers matching those on the four

envelopes, were received by the USPS in Baltimore, Maryland, on July 26, 2013.

That date matches the date on the notices of deficiency. Each Form 3877 is signed

by a USPS employee and bears the stamp of the USPS facility in Baltimore, Mary-

land. One of the Forms 3877 shows that two articles were addressed to petitioners
                                        - 11 -

[*11] at the Forest Road address, which they concede was their last known

address.4

      These Forms 3877 give rise to a presumption of official regularity, and peti-

tioners have not rebutted this presumption by showing that the IRS failed to follow

its established procedures. Petitioners allege as a defect that the certified mail

numbers matching those on the Form 3877 are imprinted, not on the notices, but

on the envelopes. However, as we noted in Garrett v. Commissioner, T.C. Memo.

2015-228, at *6, there is “no authority that establishes that a notice of deficiency

sent by certified mail must bear the certified mail number.”

      Here, the notices of deficiency are imprinted with the words “CERTIFIED

MAIL”; the notices bear the same date as the Forms 3877; the certified mail num-

bers on the envelopes match those on the Forms 3877; and one of the Forms 3877

establishes that separate notices were sent to petitioner-husband and petitioner-

wife at what they concede was their last known address. We thus hold here, as we

did in Garrett, that the Forms 3877 are sufficient as a matter of law to establish the




      4
       Petitioners assert that the Forms 3877 are incomplete because they are “not
signed by a Postal employee and do not indicate the number of pieces of mail that
the Postal employee received.” Both assertions are incorrect. Each Form 3877 is
signed by a USPS employee and indicates that the “total number of pieces listed
by sender (8)” matches “the total number of pieces received at post office (8).”
                                         - 12 -

[*12] validity of the assessments. See id. at *7 (ruling that “the certified mail list

evidences that the notice of deficiency was mailed to” the taxpayer).

      Even if the presumption of official regularity were somehow thought inap-

plicable here, respondent would still prevail because he has provided “otherwise

sufficient” evidence of mailing. See Welch, 678 F.3d at 1377. Apart from the

Forms 3877, respondent has supplied mailing envelopes bearing the four certified

mail numbers that appear on the Forms 3877. He has also supplied a USPS

Product & Tracking Information sheet confirming that the notice of deficiency

sent to petitioner-wife at the Forest Road address departed the USPS facility on

July 27, 2013, and was delivered that same day. Collectively, this evidence

convinces us that the notices of deficiency were mailed to petitioners at their last

known address on July 26, 2013. See Cropper v. Commissioner, 826 F.3d 1280,

1286 (10th Cir. 2016) (holding that proof of mailing was “otherwise sufficient”

where IRS produced copies of the deficiency notices, the defects in the USPS

Forms 3877 were minor, and the Forms 3877 were datestamped with the date on

which the notices were submitted to USPS), aff’g T.C. Memo. 2014-139; Welch,
                                       - 13 -

[*13] 678 F.3d at 1379-80 (affirming summary judgment for the IRS despite

absence of a Form 3877).5

      Finally, petitioners note that one of the IRS transcripts of their 2009 account

does not specify the date on which the notice of deficiency was mailed. That is

true, and this may have constituted an arguable irregularity in the assessment pro-

cess. But the remedy that petitioners seek (invalidation of the assessment) is im-

proper. In the event of such an irregularity, the IRS and the Court are required “to

examine underlying documents in addition to the tax transcripts,” such as the no-

tices of deficiency, the envelopes in which they were mailed, and the certified

mailing list. See Hoyle v. Commissioner, 131 T.C. 197, 205 n.7 (2008); Meyer v.

Commissioner, T.C. Memo. 2013-268, at *15-*16 & n.10. Although it is not clear

that the circumstances required the SO to examine such underlying documents

here, he did so and we have done the same. These underlying documents establish

the mailing of the notices of deficiency to petitioners’ last known address.

      In sum, we conclude that the SO properly verified that the notices of defi-

ciency were properly mailed to petitioners at their last known address and hence


      5
        Petitioners note that the envelopes do not themselves contain petitioners’
address. This is not a defect: the envelopes are “look-through” envelopes, such
that the address imprinted on the notice would show through the window. See
Noyes v. Commissioner, T.C. Memo. 2017-27, at *9 & n.4.
                                       - 14 -

[*14] that the tax for 2009 was timely assessed. Finding no abuse of discretion in

this or in any other respect, we will grant summary judgment for respondent

sustaining his determination to uphold the levy.

      To implement the foregoing,


                                                An appropriate order and decision

                                      will be entered.
