                        T.C. Memo. 1996-440



                      UNITED STATES TAX COURT



          ROBERT D. AND ANNE T. LEWIS, Petitioners v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 11282-95.                Filed September 25, 1996.



     Woodford Gregory Rowland, for petitioners.

     Patricia Montero, for respondent.



                        MEMORANDUM OPINION


     DAWSON, Judge:   This case was heard by Special Trial Judge

D. Irvin Couvillion pursuant to the provisions of section

7443A(b)(4)1 and Rules 180, 181, and 183.     The Court agrees with


1
     Unless otherwise indicated, section references are to the
Internal Revenue Code in effect for the years at issue. All Rule
references are to the Tax Court Rules of Practice and Procedure.
                                - 2 -


and adopts the opinion of the Special Trial Judge, which is set

forth below.

                 OPINION OF THE SPECIAL TRIAL JUDGE

       COUVILLION, Special Trial Judge:    This case is before the

Court on petitioners' Motion to Dismiss for Lack of Jurisdiction,

on the ground that no valid notice of deficiency was mailed to

petitioners, and respondent's cross Motion to Dismiss for Lack of

Jurisdiction, on the ground that the petition was not timely

filed under section 6213(a).   A hearing was held on the motions,

at which time evidence was adduced.     In addition, some of the

facts were stipulated, and those facts with the annexed exhibits

are so found and are incorporated herein by reference.      In the

notice of deficiency, respondent determined the following

deficiencies and additions to tax with respect to petitioners'

tax years as indicated:


                                        Additions to Tax
Year       Deficiency     Sec. 6651       Sec. 6653(a)1    Sec. 6661
1982         $1,912           $478              $96            --
1983         39,739          9,935            1,987          $9,935
1984         58,887         14,722            2,944          14,722
1985         13,453          3,363              673           3,363
1986         50,112         12,528            2,506          12,528
1987            626            157               31            --
1
  Additions to tax (50 percent of interest due) under sec.
6653(a)(1)(B) and/or sec. 6653(a)(2) will be determined.


At the time the petition was filed, petitioners' legal residence

was Central Point, Oregon; however, the motions before the Court
                               - 3 -


involve a home and an address at 1222 Grand Avenue, San Rafael,

California (the Grand Avenue address).




Background

     Petitioners, husband and wife, filed their 1982 through 1991

Federal income tax returns with the Internal Revenue Service

(IRS) Center at Fresno, California, listing the Grand Avenue

address on each of these returns.   Petitioners have maintained a

residence at this address since 1961.    Sometime in 1988,

respondent began an audit of petitioners' 1982 through 1987

returns.   During the course of the audit, which continued until

the latter part of 1990, the revenue agent assigned to the audit

telephoned, interviewed petitioners, and examined their records

at the Grand Avenue address.   As part of the audit, the revenue

agent also received letters from and spoke with petitioners'

attorneys to verify the purpose and amount of legal expenses

claimed on petitioners' returns for legal services these

attorneys had provided petitioners.    These attorneys, however,

did not represent petitioners in connection with the audit of

petitioners' returns.   In August 1990, the revenue agent made

proposed adjustments to petitioners' returns.    By letter dated

November 10, 1990, petitioners protested these proposed

adjustments.   Thereafter, the Appeals Division of the IRS took
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over the audit, and the case was assigned to an Appeals Officer.

The Appeals Officer, who eventually caused a statutory notice of

deficiency to be issued, contacted petitioners by mail and by

telephone and held a conference with petitioner Robert D. Lewis

(Mr. Lewis) at the Grand Avenue address.     Mr. Lewis purported to

represent petitioners at all times during the audit of their

income tax returns.   Petitioners were not represented by an

attorney or by any other third party at any time in connection

with the audit.   Accordingly, petitioners did not provide either

the revenue agent or the Appeals Officer with a power of attorney

authorizing a third party to represent them in the audit.     At no

time during the audit did petitioners notify either the revenue

agent or the Appeals Officer of any change of address.

     On April 14, 1994, respondent sent to petitioners, by

certified mail, a notice of deficiency (or deficiency notice)

addressed to the Grand Avenue address.2    Shortly thereafter, the

deficiency notice was returned undelivered by the post office

with the envelope marked "Unclaimed".     The returned envelope

indicates that the U.S. Postal Service attempted to deliver the

deficiency notice twice, and returned it to respondent on May 4,

1994.   After the notice of deficiency was returned, respondent


2
     The Court notes that petitioners executed Forms 872-A,
Special Consent to Extend the Time to Assess Tax, for each of the
taxable years at issue, which consent was still in effect on
April 14, 1994.
                                 - 5 -


did not send a copy of the deficiency notice to petitioners by

ordinary mail, did not attempt to telephone petitioners regarding

the deficiency notice, and did not attempt to contact any of the

attorneys who had previously been contacted by respondent's

agent.

     The parties agree that petitioners did not receive the

deficiency notice because they were in Oregon and not at the

Grand Avenue address in California at the time the deficiency

notice was mailed.   Beginning in 1992, about 2 years prior to

issuance of the deficiency notice, petitioners began dividing

their time between the Grand Avenue address and their residence

in Oregon due to the health of petitioner Anne T. Lewis.

Petitioners, however, never informed respondent that they would

not be at the Grand Avenue address at or near the time the

deficiency notice was sent.   Nor did petitioners take any

measures to have anyone monitor their mail at the Grand Avenue

address during their absences.

     On or about April 26, 1995, petitioners obtained a copy of

the deficiency notice pursuant to a Freedom of Information Act

request.   Thereafter, on June 26, 1995, petitioners filed their

petition with this Court, which date was 438 days after the

deficiency notice was mailed.    If the deficiency notice was

mailed to petitioners' last known address, the period for filing
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a petition with this Court expired on July 13, 1994, which is 90

days from the date of the deficiency notice.      Sec. 6213(a).

Discussion

     It is well settled that, in order to maintain an action in

this Court, there must be a valid notice of deficiency and a

timely filed petition.    Abeles v. Commissioner, 91 T.C. 1019,

1025 (1988).    Section 6212(a) authorizes the Secretary or his

delegate, upon determining that there is a deficiency in income

tax, to send a notice of deficiency "to the taxpayer by certified

mail or registered mail."    Section 6212(b)(1) provides that a

notice of deficiency, with respect to any income tax, "shall be

sufficient" if it is "mailed to the taxpayer at his last known

address".    Respondent is entitled to treat the address on the

taxpayer's most recently filed return as the last known address

absent "clear and concise notification" of a new address.         Abeles

v. Commissioner, supra at 1035; see also United States v. Zolla,

724 F.2d 808, 810 (9th Cir. 1984).      Where respondent, before

mailing a notice of deficiency, becomes aware of an address other

than the one on the taxpayer's return, respondent must exercise

reasonable care and due diligence in ascertaining the taxpayer's

correct address.    Monge v. Commissioner, 93 T.C. 22, 33-34

(1989).

     Petitioners agree that the notice of deficiency was mailed

to their last known address.    They contend, however, that:
                                 - 7 -


(1) Respondent had a due process obligation to provide actual

notice of the deficiency notice, and (2) respondent did not

exercise due diligence in ensuring actual notice to them.

Petitioners cite Tulsa Professional Collection Servs., Inc. v.

Pope, 485 U.S. 478 (1988), in support of their first contention.

In support of their second contention, petitioners argue that

respondent should have sent a copy of the deficiency notice by

ordinary mail, or should have contacted either petitioners or

their attorney by telephone.    Petitioners aver they had a

telephone answering machine at their Grand Avenue address where a

message could have been left by respondent's agent that a notice

of deficiency had been mailed and returned to respondent

undelivered.

     As a general rule, the Commissioner has no duty to

effectuate delivery of the notice after it is mailed.     Monge v.

Commissioner, supra at 33.     The legislative history of the last

known address rule suggests that Congress considered but rejected

requiring actual receipt of the notice because such a requirement

would impose an almost impossible burden on the IRS to prove

actual receipt and to keep track of the whereabouts of all

taxpayers.   See H. Rept. 2, 70th Cong., 1st Sess. (1927), 1939-1

C.B. (Part 2) 384, 399; S. Rept. 960, 70th Cong., 1st Sess.

(1928), 1939-1 C.B. (Part 2) 409, 430.    Instead, Congress adopted

the "last known address" rule, thus giving the IRS a safe harbor:
                               - 8 -


a notice sent to the last known address is valid whether or not

the taxpayer actually receives it.     See, e.g., United States v.

Zolla, 724 F.2d at 810.   Nothing in the Code required respondent

to take additional steps to effectuate delivery of the instant

notice of deficiency after it was returned undelivered by the

post office.   King v. Commissioner, 857 F.2d 676, 681 (9th Cir.

1988), affg. 88 T.C. 1042 (1987); Armstrong v. Commissioner, 15

F.3d 970 (10th Cir. 1994), affg. T.C. Memo. 1992-328; Pfeffer v.

Commissioner, 272 F.2d 383 (2d Cir. 1959); Monge v. Commissioner,

supra; McCart v. Commissioner, T.C. Memo. 1992-3, affd. without

published opinion 981 F.3d 1247 (3d Cir. 1992).    As a

consequence, petitioners' arguments that respondent had an

obligation to provide actual notice and that respondent did not

exercise due diligence must fail.

     With respect to petitioners' reliance on Tulsa Professional

Collection Servs., Inc. v. Pope, supra, the Court finds that case

to be distinguishable from this case.    The Tulsa case involved a

"nonclaim" provision of the Oklahoma Probate Code, under which a

creditor's claim against a decedent's estate would be completely

extinguished unless the claim was presented to the executor or

executrix within 2 months after the publication of notice of the

beginning of probate proceedings.    The creditor in that case,

having failed to meet that 2-month deadline, successfully argued

that notice by publication was insufficient to protect the
                               - 9 -


creditor's property interest, and that actual notice was required

to satisfy the creditor's right of due process.     In the present

case, by contrast, where respondent mailed the deficiency notice

to petitioners' last known address, actual notice of the income

tax deficiencies was not required.     Unlike the creditor in Tulsa,

whose claim would have been totally extinguished under the

Oklahoma Probate Code, petitioners have alternative routes for

pursuing their claims because the Tax Court is not the sole venue

for litigation of a tax liability.     The fact that taxpayers can

pay a deficiency, file an administrative claim for refund, and if

the claim is disallowed, bring an action for a refund in Federal

District Court or the Court of Federal Claims provides sufficient

due process.

     The Court also notes, with respect to petitioners' argument

that their attorney should have been notified, the record in this

case is clear that, at all times during the audit of their

returns, Mr. Lewis, and not an attorney, purported to represent

petitioners.   No powers of attorney were ever filed with

respondent authorizing a third party to represent petitioners.

The only contact respondent had with petitioners' attorneys was

to verify legal expenses claimed on petitioners' returns.    This

communication did not rise to the level of client representation

such that a power of attorney was required, nor did petitioners

ever execute a power of attorney.    Moreover, this Court has held
                                - 10 -


that, even if a taxpayer directs that a copy of all

communications be sent to the taxpayer's agent, the notice of

deficiency is valid where it was mailed directly to the taxpayer

at the taxpayer's last known address, even though a copy was not

sent to the taxpayer's agent.    McDonald v. Commissioner, 76 T.C.

750 (1981); Allen v. Commissioner, 29 T.C. 113 (1957); Madsen v.

Commissioner, T.C. Memo. 1988-179.

     The petition in this case was filed with the Court on

June 26, 1995, 438 days after the date the deficiency notice was

mailed.   Section 6213(a) provides, in pertinent part, that a

petition must be filed with the Tax Court within 90 days from the

date a statutory notice of deficiency is mailed to a taxpayer

residing in the United States.    This Court has no jurisdiction if

a petition is filed beyond the prescribed 90-day time period.

Pyo v. Commissioner, 83 T.C. 626, 632 (1984).      Since the petition

here was not filed within 90 days from the date the notice of

deficiency was mailed, the Court has no jurisdiction over the

case.

     Accordingly, respondent's motion to dismiss for lack of

jurisdiction will be granted, and petitioners' motion will be

denied.



                                          An appropriate order will

                                     be entered.
