                        T.C. Memo. 2000-310



                      UNITED STATES TAX COURT



                 AUDREY CARLISLE, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent


     Docket No. 12862-99.                 Filed September 28, 2000.


     Audrey Carlisle, pro se.

     Nguyen-Hong Hoang, for respondent.


                        MEMORANDUM OPINION


     NAMEROFF, Special Trial Judge:   By separate notices of

deficiency dated February 3, 1999, respondent determined

deficiencies in petitioner’s 1995 and 1996 Federal income tax of

$2,376 and $2,763, respectively.   Unless otherwise indicated,

section references are to the Internal Revenue Code in effect for

the years in issue.

     This matter is before the Court on the parties’ cross-

motions to dismiss for lack of jurisdiction.    Petitioner’s motion
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is premised on the ground that respondent failed to send valid

notices of deficiency to her last known address.    Respondent’s

motion is premised on the ground that petitioner failed to file a

timely petition in response to a valid notice.   Because the

jurisdiction of this Court is limited by statute and attaches

only upon the issuance of a valid notice of deficiency and the

timely filing of a petition, this case must be dismissed for lack

of jurisdiction.   The only question is on whose motion it will be

dismissed.   Where jurisdiction is lacking because of the

Commissioner’s failure to issue a valid notice of deficiency, we

dismiss on that ground, rather than on the ground that the

taxpayer failed to file a timely petition.   See Shelton v.

Commissioner, 63 T.C. 193 (1974); O’Brien v. Commissioner, 62

T.C. 543, 548 (1974); Heaberlin v. Commissioner, 34 T.C. 58, 59

(1960); see also Brannon’s of Shawnee, Inc. v. Commissioner, 69

T.C. 999 (1978) (the Court has jurisdiction to decide issues

regarding its jurisdiction).

Background

     Petitioner’s tax returns for 1995 and 1996 were under

examination by the Internal Revenue Service (IRS) in 1998.

Petitioner’s case was assigned to Vicki Murdock, a tax-examining

assistant at the IRS Ogden, Utah, Service Center.    Ms. Murdock

handled petitioner’s case from April 1998 to July 1999.
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     Before September 1998, petitioner resided at 7500 Crescent

Avenue, Apartment 125, Buena Park, California (the Crescent

Avenue address), which was her brother’s residence.    The Crescent

Avenue address was the address on petitioner’s 1997 Federal

income tax return filed in 1998.   By letter dated September 19,

1998, petitioner informed the IRS that she had moved to 370 North

Oak Street, Orange, California (the Oak Street address).1

Respondent made this address change in the IRS taxpayer address

database.

     On October 26, 1998, respondent received a letter from

petitioner dated October 16, 1998.2    The letterhead of this

letter reflects petitioner’s address as 130 West Adele Street,

Apartment F, Anaheim, California (the Adele Street address).

There is no statement in petitioner’s letter that there was a

change of address.   Respondent did not make an address change in

the database for petitioner’s address.    On November 12, 1998, Ms.

Murdock received another letter3 from petitioner dated

October 29, 1998, which also reflects the Adele Street address in



     1
        Petitioner sent this letter to the IRS Service Center in
Fresno, California, and it was transferred to Ms. Murdock.
     2
        This letter was also sent to the Service Center in
Fresno, California, and refers to petitioner’s disagreement with
the changes proposed by respondent.
     3
        In this letter, petitioner states her disagreement with
the examination report.
                                - 4 -

the letterhead.    There is no statement in the letter indicating a

change of address, and respondent did not make such a change.

     According to notes taken by Ms. Murdock, she attempted to

call petitioner three times in December 1998 and twice in January

1999.    The number she called was that of petitioner’s brother.

On January 8, 1999, Ms. Murdock left a message on the answering

machine4 for petitioner.   In her notes Ms. Murdock wrote:   “Left

message if she does not contact us by 1-12 we’ll send 90 day

letter.”

     By letter dated January 20, 1999, the IRS sent petitioner a

form letter to the Crescent Avenue address thanking her for her

correspondence dated November 12, 1998.    The letter stated that

the IRS had not yet reviewed the information she sent but would

contact her within 60 days to let her know what action would be

taken.    The letter was signed by the Chief of the Fresno Service

Center Examination Branch.

     In early January 1999,5 petitioner received her 1998 Form

1040A instructions booklet (tax booklet).    This tax booklet was

mailed to the Adele Street address.

     On February 3, 1999, respondent mailed 1995 and 1996 notices

of deficiency to the Oak Street address by certified mail.    These

     4
        Ms. Murdock testified that petitioner identified herself
on the outgoing answering machine greeting.
     5
        Petitioner believes that she received her tax booklet
between Jan. 2 and 7, 1999.
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notices were returned to respondent in late February as

unclaimed.

     On March 13, 1999, respondent received petitioner’s 1998

income tax return, which reflected the Adele Street address.      At

that time, respondent updated his database to show the Adele

Street address for petitioner.

     In April 1999, petitioner’s case was sent back to Ms.

Murdock.    While looking through petitioner’s file, Ms. Murdock

noticed the Adele Street address on the letterhead of

petitioner’s prior letters.    Ms. Murdock checked the database and

noticed that petitioner’s address had been updated.    On April 23,

1999, Ms. Murdock caused a letter to be sent to petitioner at the

Adele Street address, transmitting copies of the notices of

deficiency and explaining that the 90-day statutory period for

filing a petition with the Tax Court was not extended.    The 90-

day period within which to timely file a petition with this Court

expired May 4, 1999.    Petitioner filed her petition on July 20,

1999.

     Petitioner alleges that on January 11, 1999, she sent

another letter to respondent stating a change of address to the

Adele Street address.    Respondent claims that letter was never

received.    Petitioner’s copy of that purported letter appears to

have been written on stationery or notepaper which is different

from all her other correspondence in the file.    Moreover, the
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formatting and style of the message contained therein is likewise

different from her previous letters.

     Petitioner further alleges that she called Ms. Murdock’s

office in January 1999 and was told that Ms. Murdock was no

longer handling her case.   Petitioner claims that when she spoke

to the secretary who answered the phone, she identified herself

with her Social Security number and the Adele Street address.

Lastly, petitioner contends that since she received her tax

booklet in early January at the Adele Street address, respondent

knew of this address before the notices of deficiency were issued

in February.

     Respondent contends that the notices of deficiency were sent

to petitioner’s last known address, and petitioner failed to

petition the Court within the statutory period.   Respondent

argues that petitioner’s October 1998 and November 1998 letters

did not provide “clear and concise” notice of an address change.

Testimony of Mitchell Farah

     During the first hearing on this matter, the Court

questioned how respondent was able to send the tax booklet for

1998 to petitioner’s Adele Street address.   Respondent

subsequently moved to reopen the record to answer this concern

(which motion was granted), and a second hearing was held.

Respondent called Mitchell Farah (Mr. Farah) as a witness.     Mr.

Farah is the manager of the mailouts and composition section of
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the tax products branch of the IRS in Washington, D.C.      As part

of his job, Mr. Farah supervises the employees who are

responsible for the administration of contracts with private

print vendors (vendors).   The IRS contracts with the vendors to

mass produce and mail to taxpayers the tax forms and instructions

booklets such as the one received by petitioner.    Pursuant to

these contracts, the taxpayers’ addresses are downloaded from the

IRS’s master file database at Martinsberg, W. Va.    This

information is stored on cassettes and sent to the vendors.     The

vendors contract with a National Change of Address (NCOA)

licensee which has access to the NCOA file that the U.S. Postal

Service maintains in Memphis, Tennessee.   The NCOA licensee

matches the names and addresses from the IRS master file with the

NCOA database.   Old addresses are replaced with new addresses

that were submitted to the post office, and they are stored on

the cassette.

     Mr. Farah testified that neither the NCOA licensee nor the

vendor notifies the IRS about the changed addresses.    The vendors

use the new addresses for the mailing of the tax booklets, and

the new addresses are printed on labels inside the booklets for

the taxpayers’ use in filing their returns.   Each label is coded

to reflect that a change of address has occurred.    When the IRS

receives a return with a preprinted label reflecting a new

address, it makes the address change in its master file.
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       All of the tapes with the updated addresses used by the

vendor are returned to the IRS within 30 days of the last mailing

of the booklets.    The IRS does not use the tapes to update its

taxpayer address database.    Mr. Farah stated that the IRS deletes

the information and reuses the tapes.    When this occurs is not

included in the record, but he further testified that on rare

occasions, the IRS may check its database to locate a taxpayer’s

address and ask the vendor to which address the vendor sent the

tax booklet if a taxpayer who did not receive a tax booklet

notifies a congressperson who in turn makes an inquiry to the

IRS.    According to Mr. Farah this is the only time that the IRS

considers the information from the NCOA for a change of address.

       The record includes a document entitled “Specifications for

Contract Printing and Binding of the 1998 Individual Income Tax

Packages 1040A-1 & 1040A-2” (the contract).    Paragraph 5.1 of the

contract entitled “Furnished Cartridges” states:

       IRS will furnish the contractor with address cartridges,
       sorted by zip code. * * * Contractor is responsible for
       taking the IRS raw data file and passing the file against
       the National Change of Address (NCOA) file using standard
       matching logic, providing the IRS with magnetic cartridges
       containing the following: a separate listing of new move
       addresses and incomplete addresses (nixies). Nixies are not
       to be mailed. Each new move address must be referenced with
       its corresponding old address, including the check digit,
       social security number, service code number, and package
       code, to allow comparison by the IRS. In addition,
       contractor must provide all applicable NCOA reports, by IRS
       service center, and provide a printout of 100 records, any
       service center, for moves and nixies, for analysis.
                                 - 9 -

     Paragraph 5.1.5 entitled “New Move Address Indicators”

states as follows: “Image, on the “Taxpayer’s Name and Address

label”, “#” symbols horizontally and vertically, to identify each

new move address.”   Petitioner’s preprinted label attached to her

1998 income tax return was imaged with the “#” symbols to

indicate a new move address.

     According to the schedule in the contract, delivery of the

tax booklets to the post office (called phase 1) was to occur

January 4, 1999, with phase 2 to occur January 14, 1999.    Mr.

Farah testified that the tapes were returned to the IRS around

the end of February.

Discussion

     Section 6212(a) expressly authorizes the Commissioner, after

determining a deficiency, to send a notice of deficiency to the

taxpayer by certified or registered mail.    It is sufficient for

jurisdictional purposes if the Commissioner mails the notice of

deficiency to the taxpayer's “last known address”.    Sec. 6212(b);

Frieling v. Commissioner, 81 T.C. 42, 52 (1983).     If a notice of

deficiency is mailed to the taxpayer's last known address, actual

receipt of the notice is immaterial.     See King v. Commissioner,

857 F.2d 676, 679 (9th Cir. 1988), affg. 88 T.C. 1042 (1987);

Yusko v. Commissioner, 89 T.C. 806, 810 (1987); Frieling v.

Commissioner, supra at 52.     The taxpayer, in turn, has 90 days

from the date the notice of deficiency was mailed to file a
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petition in this Court for a redetermination of the deficiency.

See sec. 6213(a).

     Neither the Internal Revenue Code nor the regulations

promulgated thereunder define the phrase “last known address”.

However, this Court has defined the phrase to mean “the

taxpayer’s last permanent address or legal residence known by the

Commissioner, or the last known temporary address of a definite

duration to which the taxpayer has directed the Commissioner to

send all communications during such period.”   Brown v.

Commissioner, 78 T.C. 215, 218 (1982).   In general, that address

will be the address reflected on the taxpayer’s most recently

filed Federal income tax return, absent clear and concise

notification of a different address.   See Abeles v. Commissioner,

91 T.C. 1019, 1035 (1988); Weinroth v. Commissioner, 74 T.C. 430,

435 (1980); Alta Sierra Vista, Inc. v. Commissioner, 62 T.C. 367,

374 (1974), affd. without published opinion 538 F.2d 334 (9th

Cir. 1976).   The taxpayer has the burden of proving that the

notice of deficiency was not sent to her last known address.    See

Yusko v. Commissioner, supra at 808.

     Once the Commissioner becomes aware of an address other than

the one on the taxpayer’s return, the Commissioner must exercise

reasonable care and due diligence in ascertaining the correct

address.   See Pyo v. Commissioner, 83 T.C. 626 (1984).   Whether

the Commissioner has done so is a question of fact.   See Weinroth
                               - 11 -

v. Commissioner, supra.    Although the Commissioner must exercise

reasonable diligence in ascertaining the taxpayer’s correct

address, the burden necessarily falls upon the taxpayer to keep

the Commissioner informed of her correct address.     See Ramirez v.

Commissioner, 87 T.C. 643 (1986); Alta Sierra Vista, Inc. v.

Commissioner, supra.    As we have stated:   “When a taxpayer

changes his address it is he who must notify the Commissioner of

such change or else accept the consequences”.     Alta Sierra Vista,

Inc. v. Commissioner, supra at 374.

     In this case, petitioner timely notified respondent of her

change of address from Crescent Avenue, the address on her 1997

tax return, to Oak Street, the address to which the notices of

deficiency were mailed.    The first question to be resolved is

whether the October and November letters effected a change of

address because of the Adele Street address appearing in the

handwritten letterhead.   This Court has held that an address

written in the letterhead of a taxpayer’s correspondence, without

more, will not constitute a clear and concise notification to the

IRS of a change of address.    See id.; Sanderson v. Commissioner,

T.C. Memo. 1987-81.    The taxpayer must advise the IRS that the

new address is to be used in the future.     Therefore, respondent

properly mailed the notices of deficiency to petitioner’s last

known address.
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     We have considered petitioner’s contentions that she advised

respondent of her Adele Street address in her January 1999 letter

and by telephone and conclude that she has not established those

facts by a preponderance of the evidence.

     Finally, we are not persuaded that respondent knew or should

have known about the Adele Street address as a result of the

procedures pertaining to the mailing of the tax booklets for

1998, inasmuch as the undisputed evidence reflects that the

updated tapes were not returned to the IRS until the end of

February 1999.   Similarly, petitioner’s filing of her 1998 return

reflecting her Adele Street address was too late to affect the

mailing of the notices of deficiency.   Moreover, the fact that

respondent sent petitioner copies of the notices of deficiency in

April 1999 does not invalidate the February mailing, constitute a

new mailing, or enlarge the period for timely filing a petition

with this Court.

     Although petitioner cannot pursue her case in this Court,

she is not without a remedy.   In short, petitioner may pay the

tax, file a claim for refund with the Internal Revenue Service,

and if the claim is denied, sue for a refund in the U.S. District
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Court or the U.S. Court of Federal Claims.   See McCormick v.

Commissioner, 55 T.C. 138, 142 (1970).



                                   An order will be entered

                              granting respondent’s motion to

                              dismiss for lack of jurisdiction

                              and denying petitioner’s motion to

                              dismiss.
