                        T.C. Memo. 1998-339



                      UNITED STATES TAX COURT



         JAMES A. AND MURIEL M. ANDREWS, Petitioners v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 18670-96.               Filed September 23, 1998.



     Bernard S. Mark and Richard S. Kestenbaum, for petitioners.

     Catherine R. Chastanet, for respondent.



                        MEMORANDUM OPINION


     GALE, Judge:   This case is before the Court on petitioners’

and respondent’s motions to dismiss for lack of jurisdiction.

The issue is whether the notice of deficiency in this case was

mailed to petitioners’ “last known address” for purposes of
                                - 2 -


section 6212(b)(1).1   Respondent argues that the notice of

deficiency in this case was mailed to petitioners’ last known

address and that the petition was untimely because it was not

filed within 90 days after the notice of deficiency was mailed.

Petitioners argue that the notice of deficiency is invalid

because it was not mailed to petitioners’ last known address and

that the 3-year period of limitations on assessment has run.    A

hearing was held on the motions, and the parties submitted

memoranda of law in support of their motions.2   We find that the

notice was mailed to the last known address and therefore grant

respondent’s motion and deny petitioners’ motion.

     On their petition, petitioners listed their address as c/o

G. Braun Oyster Co., P.O. Box 971, Cutchogue, New York 11935,

which is the workplace of petitioner James A. Andrews

(petitioner).   Petitioners have resided since 1988 at 772 Indian

Neck Lane, Peconic, New York.   Their correct mailing address

since 1987, when they obtained their current post office box, has

been P.O. Box 227, Peconic, New York 11958 (the Box 227 address).


     1
       Unless otherwise noted, all section references are to the
Internal Revenue Code.
     2
       In their motion to dismiss, petitioners initially argued
that respondent’s motion to dismiss was untimely and that the
case should be dismissed in petitioners’ favor on that basis. At
the hearing, petitioners withdrew this argument. The parties
agreed at the hearing, and argue on brief, that the issue in the
case is whether the notice of deficiency was sent to petitioners’
last known address.
                                 - 3 -


The U.S. Postal Service does not deliver mail to petitioners at

their residence; instead, petitioners obtain their mail from P.O.

Box 227 at the Peconic, New York, branch of the U.S. Postal

Service.    However, mail addressed to them at 772 Indian Neck

Lane, Peconic, New York, is put into P.O. Box 227.

     On April 2, 1996, respondent mailed a notice of deficiency

with respect to petitioners’ 1992 taxable year to them by

certified mail at the Box 227 address.3    The address on

petitioners’ 1992 and 1993 tax returns was the Box 227 address.

The address on their timely filed 1994 return, the last return

they filed before the notice of deficiency was mailed, was as

follows:     772 Indian Neck Lane, P.O. Box 227, Peconic, New York

11958.     In January and February 1996, petitioners received

certified mail from the IRS at the Box 227 address.     Petitioners

failed to include an address on their 1995 return, which was

filed on or about April 12, 1996.

     In February 1996, petitioner and petitioners’ accountant,

Cyril Bezkorowajny, met with a revenue agent with respect to an

examination he was conducting of an employee benefit plan in

which petitioner participated.     From that time on, petitioner and

Mr. Bezkorowajny were aware that it was likely that petitioners

would be receiving a notice of deficiency with respect to the


     3
       The notice was dated Apr. 3, 1996, but was actually mailed
on Apr. 2.
                               - 4 -


1992 taxable year.   Petitioners and Mr. Bezkorowajny also were

aware that the 3-year period of limitations with respect to the

1992 taxable year would shortly expire.4

     On March 5, 1996, slightly less than a month before the

mailing of the notice of deficiency, Mr. Bezkorowajny hand-

delivered two documents to the IRS Taxpayer Service Center on

Fulton Street in Brooklyn, New York.    The first document was a

letter, over Mr. Bezkorowajny’s signature, requesting certain

publications and a transcript of petitioners’ account and asking

the following:

     Could you send this information to them [i.e.,
     petitioners] and all future mail as soon as possible at
     the current address of: James A. & Muriel M. Andrews
     c\o G. Braun Oyster Co. P.O. Box 971 Cutchogue, N.Y.
     11935 [the Braun Co. address].

As previously noted, the Braun Co. address is the mailing address

for petitioner’s place of employment.    The letter was addressed

to the “District Director” and did not contain the examining

agent’s name or advise that petitioners were currently under

audit, stating instead that “My client is trying to determine his

tax and * * * needs a transcript of his account for the year

1992.”   The second document, attached to the letter, was a Form

     4
       In January 1996, respondent sought petitioners’ consent to
extend the period of limitations for 1992, advising in a letter
that it would expire soon. Petitioners responded that same month
by seeking to narrow the scope of the consent. There is no
evidence in the record that petitioners ever consented to an
extension, and they allege in the petition that the 3-year period
of limitations expired on or about Apr. 15, 1996.
                                - 5 -


2848, Power of Attorney and Declaration of Representative,

executed by petitioners giving power of attorney to Mr.

Bezkorowajny.   (We will refer to the letter as the March 5 letter

and the power of attorney form as Form 2848.)   The Form 2848

contained the following preprinted sentence:    “Notices and other

written communications will be sent to the first representative

listed in line 2.”   This sentence was altered to read as follows:

“Notices and other written communications will be sent to the

taxpayer listed in line 1.   No copies to be sent to

Representative stated above.”   Line 1 of the Form 2848 contained

petitioners’ names and the Box 227 address.

     According to Mr. Bezkorowajny, a certified public accountant

and former IRS Appeals officer, he hand-delivered the two

documents to the Taxpayer Service Center in Brooklyn in order to

comply with Rev. Proc. 90-18, 1990-1 C.B. 491, 492, which

contains the following instructions:

     If a taxpayer no longer wishes the address of record to
     be the one shown on the most recently filed return,
     * * * clear and concise written notification of a
     change of address must be sent to the Internal Revenue
     Service Center serving the taxpayer’s old address or to
     the Chief, Taxpayer Service Division in the local
     district office. * * *

Rev. Proc. 90-18, supra, also provides as follows:

     If a Service employee contacts a taxpayer in connection
     with the filing of a return or an adjustment in the
     taxpayer’s account, the taxpayer may provide clear and
     concise written notification of a change of address to
                                - 6 -


     the Service employee who initiated the contact.    * * *

     In response to the March 5 letter, the IRS sent a form

letter, Letter 1721(DO), dated March 13, 1996, to petitioners at

the Braun Co. address.    The letter indicated that the requested

transcript of petitioners’ account was enclosed.    In addition, in

a section in the form letter designed for nonstandard notices,

the following was written:

     YOUR 1992 RETURN IS BEING AUDITED. IF YOU OWE ANY
     MONEY YOU WILL RECEIVE A BILL. WE ARE ENCLOSING THE
     PUBLICATIONS YOU HAVE REQUESTED AND A FORM 8822 FOR A
     CHANGE OF ADDRESS. PLEASE RETURN FORM IN ENCLOSED
     ENVELOPE IF YOU WANT ADDRESS CHANGED.

Petitioners received the form letter but did not respond to it.

     As previously noted, the notice of deficiency was mailed on

April 2, 1996.   On April 4, 1996, the Peconic, New York, branch

of the U.S. Postal Service received the envelope containing the

notice of deficiency.    Also on April 4, the Peconic postmaster

put a notice of delivery of certified mail, PS Form 3849, into

P.O. Box 227.    When the notice of deficiency was not claimed by

petitioners, the postmaster put a second notice of delivery of

certified mail into P.O. Box 227 on May 11.    The notices of

delivery indicated that the certified mail was from the IRS.

Neither notice of delivery was responded to, and as a result, on

or after May 20, the envelope containing the notice of deficiency

was marked “unclaimed” and returned to the IRS.    Petitioner

testified that petitioners never received any mail from the IRS
                                - 7 -


or any notices of delivery of certified mail from the IRS after

the March 5 letter.

     The notice of deficiency had been prepared and mailed by IRS

employee Janet Mak.    Before Ms. Mak mailed the notice of

deficiency, she verified petitioners’ mailing address by

examining addresses of correspondence in the administrative file

and by checking the Integrated Data Retrieval System (IDRS), a

computer database used by the IRS.      Ms. Mak was not aware of any

other computer systems maintained by the IRS that would contain

petitioners’ address.    Further, IDRS was the only system to which

she had access.    If the address in the file and the address in

IDRS were different, it was Ms. Mak’s procedure to send a notice

to each address.    When Ms. Mak prepared the notice of deficiency,

the administrative file contained copies of the documents that

had been sent by certified mail to, and claimed and received by,

petitioners at the Box 227 address in January and February 1996.

Moreover, when Ms. Mak prepared the notice of deficiency, IDRS

showed the Box 227 address as petitioners’ address.     Ms. Mak was

not aware of the existence of the March 5 letter or the Form 2848

when she determined where to mail the notice of deficiency.

     The IRS received the unclaimed envelope containing the

notice of deficiency on May 28.    When Ms. Mak received the

unclaimed envelope, she checked IDRS, and it showed a different

address; namely, petitioners’ street address, 772 Indian Neck
                               - 8 -


Lane, Peconic, New York.   Ms. Mak then sent a copy of the notice

of deficiency to petitioners’ street address at Indian Neck

Lane,5 with a cover letter dated May 31 stating the following:

     Enclosed is the statutory notice of deficiency that was
     mailed to you on April 03, 1996 and was returned to us
     unclaimed.

     It has come to our attention that your address has
     changed after the statutory notice of deficiency was
     mailed to your last known address as of April 03, 1996.


A notice of delivery of certified mail was put into petitioners’

P.O. Box 227 notifying petitioners of the May 31 mailing.

Petitioner testified that petitioners did not receive this notice

of delivery of certified mail from the IRS.

     According to petitioner and Mr. Bezkorowajny, they did not

discover that a notice of deficiency had been issued, and did not

receive a copy of it, until July 1996.   Mr. Bezkorowajny

testified that he was representing other employees at George

Braun Oyster Co., and he knew that they had been issued notices

of deficiency with respect to the same employee benefits issue

that was an issue in petitioners’ audit.   Mr. Bezkorowajny

testified that by July, when petitioner still had not received a

notice of deficiency, Mr. Bezkorowajny called Ms. Mak and asked

for copies of any papers sent to petitioners.   He further


     5
       Ms. Mak included the ZIP code 11958-0227. The last four
digits of this ZIP code represented petitioners’ P.O. box number
at the Peconic, N.Y., branch of the U.S. Postal Service.
                                - 9 -


testified that, when he received a copy of the notice of

deficiency and the May 31 letter, he advised petitioners that

they had 90 days from May 31 to file a petition.

Discussion

     When the Commissioner determines a deficiency in income tax,

he may send a notice of deficiency by certified or registered

mail to the taxpayer at his last known address.     Sec. 6212(a) and

(b)(1).    The “last known address” is the address where the

Commissioner reasonably believed the taxpayer wished to be

reached.   Follum v. Commissioner, 128 F.3d 118, 119 (2d Cir.

1997), affg. per curiam T.C. Memo. 1996-474; Monge v.

Commissioner, 93 T.C. 22, 27-28 (1989).     If mailed to the last

known address, the notice is valid even if not received by the

taxpayer and even if the Commissioner later receives information

showing that the taxpayer resided at a different address.      See

Tadros v. Commissioner, 763 F.2d 89 (2d Cir. 1985); Abeles v.

Commissioner, 91 T.C. 1019 (1988).      The Commissioner is entitled

to treat the address shown on the taxpayer’s most recently filed

and properly processed return as the taxpayer’s last known

address, absent clear and concise notification of an address

change.    Follum v. Commissioner, supra at 119-120; Abeles v.

Commissioner, supra at 1035.

     The Court of Appeals for the Second Circuit, where an appeal

in this case would lie, has held that the Commissioner has:
                              - 10 -


     an obligation to exercise reasonable diligence to
     ascertain the taxpayer’s correct address if prior to
     mailing the deficiency notice [he] has become aware
     that the address last known to the agency may be
     incorrect. * * * [Follum v. Commissioner, supra at
     119-120.]

The Court of Appeals recently applied this standard in Sicari v.

Commissioner, 136 F.3d 925 (2d Cir. 1998), revg. and remanding

T.C. Memo. 1997-104, in which it found that the Commissioner had

failed to exercise reasonable diligence where, before mailing the

deficiency notice to the old address, he had received several

indications that the taxpayers had a new address and had himself

entered it into a database and used it in two letters to the

taxpayers as well as in a filing in the taxpayer husband’s

bankruptcy case.   Moreover, strictly speaking the “old” and “new”

addresses at issue in Sicari were not for different locations;

the “new” address was merely a more precise refinement of the

“old” one (involving the addition of a box number), and the Court

of Appeals concluded that the identity of the two addresses would

have been “apparent” upon their comparison if the Service had

conducted a diligent search of all its databases.

     In the instant case, we believe that respondent exercised

reasonable diligence to ascertain petitioners’ correct address in

the circumstances.   We note first that the instant case is

distinguishable from Sicari in critical respects.   In Sicari,

over 3 months prior to mailing the deficiency notice to the “old”

address, the Commissioner had received a formal notification of
                              - 11 -


the taxpayer husband’s bankruptcy filing employing the “new”

address, and the Commissioner had at that time entered the “new”

address in a database and sent two letters to the taxpayers at

the “new” address.   That the “old” and “new” addresses were the

same location was deemed “apparent” in Sicari, taking into

account all the information in the Service's files.   In the

instant case, less than 30 days prior to mailing the notice,

respondent received petitioners’ March 5 submissions, consisting

of two sets of contradictory instructions regarding the address

to which they wished correspondence to be sent:   (1) A power of

attorney form specifically altered to indicate that

correspondence should be sent to the previously used old address

(the Box 227 address), and (2) an attached cover letter directing

that certain requested information and “future mail” be sent to a

new, different address (the Braun Co. address).   In response,

respondent promptly (8 days later) sent a letter to petitioners

at the new Braun Co. address advising that petitioners were under

audit and that if they wished to effect a change of address, they

should return an enclosed Form 8822, Change of Address.   Although

petitioners received this letter, they did not respond to it.

Less than 3 weeks later, on April 2, 1996, with the 3-year period

of limitations about to expire, respondent mailed the notice of

deficiency to the old Box 227 address.
                               - 12 -


     Given the conflicting information submitted to respondent by

petitioners, respondent’s efforts at clarification, and

petitioners’ failure to respond, we believe that respondent

exercised reasonable diligence in attempting to ascertain

petitioners’ correct address, particularly in light of the brief

period between the time respondent first became aware of a

discrepancy in the addresses and the time when the 3-year period

of limitations would expire.   Unlike Sicari, the identity of the

two addresses of which respondent was aware herein would not have

been “apparent” upon comparison.   Also, there is no evidence

regarding which, if any, database maintained by respondent had

been modified to reflect the Braun Co. address.   The only

evidence of respondent’s use of the Braun Co. address was his

letter seeking clarification of petitioners’ conflicting address

instructions.   Given the ambiguity introduced by those

instructions, we do not believe that respondent’s continued use

of the old Box 227 address constitutes a lack of reasonable

diligence.   As the Court of Appeals stated in Sicari:

     faced with two addresses corresponding to different
     locations * * * the Service could not be faulted for
     using the old address under circumstances where it had
     no particular reason to know at which of the two
     different locations the taxpayer was living. * * *
     [Sicari v. Commissioner, supra at 929-930.]

Nor was respondent required to send the notice to both addresses.

“[R]easonable diligence does not require that the IRS send

duplicate notices to every address of which it has knowledge.”
                              - 13 -


Armstrong v. Commissioner, 15 F.3d 970, 974 (10th Cir. 1994)

(quoted in Sicari v. Commissioner, supra at 930), affg. T.C.

Memo. 1992-328.   In the circumstances, we believe the Box 227

address remained the last known address for purposes of section

6212(b)(1).

     It follows that respondent cannot be faulted for failing to

make the Braun Co. address available to the person responsible

for mailing the notice of deficiency or otherwise failing to

enter the Braun Co. address in his databases.   This is not a case

where “the tax collector neglects to tell his right hand what his

left is doing”, Crum v. Commissioner, 635 F.2d 895, 900 (D.C.

Cir. 1980), but instead is a case where the tax collector, after

exercising reasonable diligence, “[has] no particular reason to

know”, Sicari v. Commissioner, supra at 930, which of two

addresses is the one to which the taxpayer wishes the notice

sent.   We also note that the only address instructions actually

signed by petitioners, namely, the instructions given on the Form

2848, were to use the Box 227 address.

     Petitioners failed to give “clear and concise notification”

of a change of address from the Box 227 address used on their

most recently filed and properly processed return.   Follum v.

Commissioner, 128 F.3d at 119-120; Abeles v. Commissioner, 91

T.C. at 1035.   Under the facts of this case, to the extent that

respondent’s awareness of discrepancies in petitioners’ address
                              - 14 -


preferences may have imposed on him any further obligation of

reasonable diligence, we believe he met that burden under the

standard applied by the Court of Appeals for the Second Circuit.

Cf. Sicari v. Commissioner, 136 F.2d 925 (2d Cir. 1998); Tadros

v. Commissioner, 763 F.2d 89 (2d Cir. 1985).

     Our conclusion is reinforced in this case by the actions of

petitioners and their authorized representative, Mr.

Bezkorowajny.   Mr. Bezkorowajny claims that he hand-delivered the

March 5 letter and power of attorney to the Taxpayer Service

Center in Brooklyn because he was endeavoring to comply with Rev.

Proc. 90-18, 1990-1 C.B. 491, which establishes procedures for

taxpayers to make a change of address, and because he wanted to

make certain that the agent auditing petitioners’ return would

receive the change of address “in time”--which we take to mean

before issuance of the notice or expiration of the 3-year period

of limitations, which was near.   The problem with Mr.

Bezkorowajny’s explanation, as we see it, is that Rev. Proc. 90-

18, supra, provides a considerably more direct means of notifying

the examining agent of an address change when a taxpayer is under

audit.   As an alternative to notice to the service center, Rev.

Proc. 90-18, supra, allows a taxpayer to effect a change of

address by notifying the IRS employee who has initiated contact

with him.   If Mr. Bezkorowajny, a former IRS Appeals officer, had

as his goal the prompt notification of the examining agent, it is
                              - 15 -


curious that he did not notify the agent directly, as provided

for in Rev. Proc. 90-18, supra.   Instead, his letter was

addressed to the district director and did not mention either the

examining agent’s name or the fact that petitioners were

currently under audit.

     More problematic is the simultaneous submission to the

service center of mutually contradictory instructions regarding

the address to which correspondence should be sent, when the

pendency of a notice of deficiency was known to petitioners and

Mr. Bezkorowajny.   The fact that the correspondence provisions of

the power of attorney form were specifically altered to request

that correspondence be sent to petitioners at the Box 227

address, while an accompanying letter of the same date was

drafted to direct that correspondence be sent to the Braun Co.

address, leads us to conclude that the address instructions were

in patent conflict.   In a similar vein, petitioners have offered

no explanation of their failure to respond to respondent’s March

13 letter seeking clarification of their intentions regarding an

address change.   We also note that approximately 1 month after

respondent sought this clarification, petitioners filed their

1995 return and left the address section thereon blank.     We

believe it was at least foreseeable by petitioners and Mr.

Bezkorowajny that their March 5 submissions would result in

confusion regarding the address to which they wished the notice
                               - 16 -


of deficiency to be sent, and they subsequently avoided obvious

opportunities to clarify the confusion.   On this record,

respondent was entitled to treat the Box 227 address as

petitioners’ last known address for purposes of section

6212(b)(1).

     For a final argument, petitioners assert that the mailing of

the copy of the notice of deficiency on May 31 constituted an

abandonment of the original notice of deficiency, giving

petitioners 90 days from May 31 in which to file a petition.

Petitioners rely on Eppler v. Commissioner, 188 F.2d 95, 98 (7th

Cir. 1951).   In Eppler, on June 3 the Commissioner mailed a

notice of deficiency by registered mail to the taxpayer’s former

address.   On June 16, after the notice was returned

undeliverable, the Commissioner remailed it by registered mail to

the taxpayer’s work address.   The taxpayer filed a petition on

September 14, within 90 days of the second mailing but more than

90 days after the first mailing.   The Court of Appeals for the

Seventh Circuit held that the taxpayer had 90 days after the

second mailing in which to file a petition.   Petitioners argue

that under Eppler, they have 90 days from the May 31 mailing of

the copy of the notice in which to file a petition.    However,

both the Court of Appeals for the Second Circuit and the Tax

Court have held Eppler to be inapplicable where the first mailing

was sent to the taxpayer’s last known address, Pfeffer v.
                               - 17 -


Commissioner, 272 F.2d 383 (2d Cir. 1959), affg. a Memorandum

Opinion of the this Court; James v. Commissioner, T.C. Memo.

1990-128, as we have held was done in the instant case.     As the

Court of Appeals for the Second Circuit recently observed:

     After a proper mailing of the notice by the IRS, its
     remailing of the notice to a new address after receipt
     of information that the address it used had become
     inoperative does not afford the taxpayer a revived or
     extended opportunity to seek a redetermination in tax
     court. * * * [Follum v. Commissioner, supra at 120.]

Thus, we hold that respondent did not abandon the original notice

of deficiency dated April 3 and mailed April 2, 1996.     Since the

notice of deficiency was sent to petitioners at their last known

address within the meaning of section 6212(b)(1) and the petition

in this case was not filed until August 27, 1996, well over 90

days after either April 2 or 3, 1996, the petition was not timely

filed under section 6213(a).   Thus, we lack jurisdiction in this

case.

     For the reasons set out above, petitioners’ motion to

dismiss will be denied and respondent’s motion to dismiss will be

granted.   To reflect the foregoing,

                                       An appropriate order of

                               dismissal for lack of jurisdiction

                               will be entered.
