                              T.C. Memo. 2014-218



                        UNITED STATES TAX COURT



                    KIM REINHART, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent.



      Docket No. 25917-11L.                        Filed October 16, 2014.



      Mitchell I. Horowitz and Micah G. Forgarty, for petitioner.

      Miriam C. Dillard, for respondent.



            MEMORANDUM FINDINGS OF FACT AND OPINION


      KERRIGAN, Judge: The petition in this case was filed in response to a

Decision Letter Concerning Equivalent Hearing under Section 6320 and/or 6330

of the Internal Revenue Code (decision letter) upholding a collection action

regarding a notice of Federal tax lien (NFTL) filed on March 15, 2011, for the tax
                                          -2-

[*2] period ending June 30, 1992. The parties have stipulated that petitioner

timely requested a collection due process (CDP) hearing as to the March 15, 2011,

NFTL, that the settlement officer should have issued a notice of determination

rather than a decision letter, and that the decision letter should be treated as a

notice of determination under section 6330(d)(1) for jurisdictional purposes. See

Craig v. Commissioner, 119 T.C. 252, 259 (2002).

      The issue for consideration is whether respondent is time barred from

collecting a trust fund recovery penalty for the tax period ending June 30, 1992

(1992 trust fund recovery penalty).

      Unless otherwise indicated, all section 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.

                                FINDINGS OF FACT

      Some of the facts have been stipulated and are found accordingly. The

parties’ stipulations of facts, with accompanying exhibits, are incorporated herein

by this reference.
                                         -3-

[*3] Petitioner and her husband, Byron Hatcher, were married in 1991 and

remain married. The mailing address used at the time of filing this petition is a

mailbox at a Pack Mart shipping business in Sebastian, Florida.

      Petitioner was born in the United States and spent her childhood in the

United States. Petitioner attended, but did not complete, college. Petitioner began

her career in the early 1990s providing secretarial services including accounting

and bookkeeping services.

      In the early 1990s petitioner had a secretarial and bookkeeping services

company in Daytona, Florida. This business lasted until 1996. Petitioner worked

full time for her company, and she had no clients outside the United States.

      In late 1996 petitioner’s husband and Mr. Uhrig, a friend and business

associate of petitioner, began a business venture called American Barristers which

provided trust formation and incorporation services. Some of the business entities

were incorporated in the Carribean. Petitioner handled the accounting aspects of

these entities and trusts. Petitioner also performed bookkeeping services for Mr.

Uhrig.

      Petitioner had ownership interests in several entities, including Equity

Mutual Funding, Inc. Petitioner had signature authority for a bank account of
                                        -4-

[*4] Prudential Trustees and initiated numerous transfers of funds by mail,

telephone, and facsimile.

      In February 1991 petitioner and her husband purchased a home in Ponce

Inlet, Florida, where they resided until the home was sold in May 1994. Petitioner

moved into a condominium in Daytona Beach, Florida, which was purchased in

May 1994 and sold in 1997. From 1999 until 2002 petitioner resided in a

townhouse in Grant, Florida. In June 2002 petitioner moved to a boat that she and

her husband owned and moored in City of Fort Pierce, Florida. Petitioner resided

there until Hurricane Frances destroyed the boat in 2004. Petitioner did not use

the boat to travel. In 2002 petitioner’s husband rented an apartment in the

Bahamas.

      After Hurricane Frances destroyed her and her husband’s boat, petitioner

moved into a condominium in Sebastian, Florida, owned by her in-laws. In

November 2004 petitioner purchased a condominium in Vero Beach, Florida, and

she moved into this condominium in May 2005 when construction was completed.

In September 2006 petitioner purchased a recreational vehicle kept at Lake Marian

Paradise in Kenansville, Florida, until May 2011.

      On July 15, 1993, respondent assessed the 1992 trust fund recovery penalty

against petitioner for $59,374. This penalty is associated with one of petitioner’s
                                           -5-

[*5] clients who added her as a signatory to its bank account. On July 26, 1993,

respondent filed a notice of lien against petitioner in Volusia County, Florida. The

notice of lien stated that “unless notice of lien is refiled by * * * [August 14,

2002], this notice shall constitute the certificate of release of lien as defined in

IRC 6325(a).” Respondent did not refile the notice of lien by August 14, 2002,

and the notice of lien was automatically released. On or around December 30,

2010, respondent filed a Form 12474-A, Revocation of Certificate of Release of

Federal Tax Lien, in Volusia County, Florida, with respect to the 1992 trust fund

recovery penalty.

      Petitioner and her husband filed a joint Federal income tax return for 2001

in February 2004. That 2001 return was mailed from the Bahamas in August 2003

and lists a Bahamian mailing address for petitioner and her husband. Petitioner

and her husband’s 2002, 2003, and 2004 joint tax returns list the same Bahamian

mailing address. Petitioner’s 2004 joint tax return included a Schedule C-EZ, Net

Profit From Business, which listed a Bahamian mailing address for her consulting

business.

      On February 8, 2011, respondent mailed petitioner a Notice of Federal Tax

Lien Filing and Your Right to a Hearing under IRC 6320, informing her that

respondent had filed an NFTL with respect to the 1992 trust fund recovery
                                         -6-

[*6] penalty. This NFTL was not recorded in the county of petitioner’s last known

address. On March 15, 2011, respondent mailed petitioner a second Notice of

Federal Tax Lien Filing and Your Right to a Hearing under IRC 6320, informing

her that respondent had filed an NFTL (this time, in the county of petitioner’s last

known address) with respect to the 1992 trust fund recovery penalty. This notice

was mailed to the mailbox at Pack Mart in Sebastian, Florida, and this address was

the last known address for petitioner.

      On April 18, 2011, petitioner submitted a timely Form 12153, Request for a

Collection Due Process or Equivalent Hearing (CDP hearing request), in response

to the March 15, 2011, NFTL. Petitioner alleged that the filing of the NFTL was

time barred.

      Between July and September 2011 petitioner and a settlement officer spoke

at least six times over the phone. For at least one of those conversations, the

settlement officer initiated the call and reached petitioner on her cell phone, which

had an area code that covered portions of central Florida.

      On August 22, 2011, petitioner and the settlement officer had a telephone

discussion during which petitioner stated that she had been unable to get her travel

records from the Department of Homeland Security. The settlement officer told

her that she did not need to provide those records to him but that he would
                                        -7-

[*7] consider other documentation, such as a utility bill, that showed a United

States address other than a mailbox. On September 14, 2011, the settlement

officer received from petitioner copies of summonses, a copy of her passport

pages, and other documentation.

      On September 21, 2011, petitioner and the settlement officer held a

telephone CDP hearing. The settlement officer told petitioner that he had

reviewed the documents she gave him and none of the documents proved that she

resided in the United States.

      Respondent’s administrative record include travel dates for petitioner from

Department of Homeland Security records. These travel records show the

following:

                  Arrival/Departure                   Date
              Arrival in Fla.                       1/16/2001
              Arrival in Fla.                       2/19/2001
              Arrival in Fla.                        5/5/2001
              Arrival in Fla.                       6/20/2001
              Arrival in Fla.                       9/24/2001
              Arrival in Fla.                       3/25/2002
              Arrival in Fla.                       5/27/2002
              Arrival in Fla.                       6/17/2002
              Arrival in Fla.                       6/30/2002
                         -8-

[*8] Arrival in Fla.            7/27/2002
Arrival in Fla.                 8/18/2002
Arrival in Fla.                  9/3/2002
Arrival in Fla.                  9/5/2002
Arrival in Fla.                 9/28/2002
Arrival in Fla.                11/11/2002
Arrival in Fla.                11/13/2002
Arrival in Fla.                 12/1/2002
Arrival in Fla.                 12/4/2002
Departure to Nassau            12/13/2002
Arrival in Fla.                12/14/2002
Arrival at Hopkins
 International (Cleveland,
 Ohio) from Dorval
 Montreal                      12/31/2002
Departure to Nassau              1/8/2003
Departure to Nassau             1/14/2003
Departure to Nassau             1/24/2003
Arrival in Fla.                 1/29/2003
Departure to Nassau             2/27/2003
Arrival in Fla.                  3/7/2003
Departure to Nassau              4/6/2003
Arrival in Fla.                 4/11/2003
Departure to Nassau             4/16/2003
Arrival in Fla.                  5/1/2003
                           -9-

[*9] Departure to Nassau         5/21/2003
Arrival in Fla.                   6/5/2003
Departure to Nassau              6/23/2003
Arrival in Fla.                  7/14/2003
Departure to Nassau              8/16/2003
Arrival in Fla.                  8/23/2003
Departure to Nassau               9/7/2003
Arrival in Fla.                  9/14/2003
Departure to Nassau              9/28/2003
Arrival in Fla.                  10/3/2003
Departure to Nassau              11/2/2003
Arrival in Fla.                  11/6/2003
Departure to Nassau              12/1/2003
Arrival in Fla.                  12/5/2003
Arrival in Fla.                  2/10/2004
Arrival in Fla.                   3/2/2004
Arrival in Fla.                   4/8/2004
Departure to Nassau              4/30/2004
Arrival in Fla.                  5/10/2004
Departure to Nassau              6/16/2004
Arrival in Fla.                   7/1/2004
Departure to Nassau              7/29/2004
Arrival in Fla.                  8/30/2004
Departure to Nassau              8/25/2004
                        -10-

[*10] Departure to Nassau       8/31/2004
Arrival in Fla.                 8/30/2004
Arrival in Fla.                  9/1/2004
Arrival in Fla.                 9/29/2004
Arrival in Fla.                 10/8/2004
Departure to Nassau             11/4/2004
Arrival in Fla.                11/16/2004
Departure to Nassau             12/2/2004
Arrival in Fla.                 12/8/2004
Departure to Nassau              1/3/2005
Arrival in Fla.                 1/11/2005
Departure to Nassau             2/10/2005
Arrival in Fla.                 2/17/2005
Departure to Nassau              3/6/2005
Arrival in Fla.                  3/8/2005
Arrival in Fla.                  5/2/2005
Departure to Nassau             5/18/2005
Arrival in Fla.                 5/25/2005
Departure to Nassau             6/23/2005
Departure to Nassau             6/26/2005
Arrival in Fla.                  7/7/2005
Departure to Nassau             9/12/2005
Arrival in Fla.                 9/16/2005
Departure to Nassau            10/31/2005
                        -11-

[*11] Arrival in Fla.           11/5/2005
Departure to Nassau             10/5/2006
Arrival in Fla.                10/10/2006
Departure to Nassau            11/27/2006
Arrival in Fla.                11/30/2006
Arrival in Fla.                 1/31/2007
Departure to Nassau             1/24/2007
Arrival in Fla.                 1/31/2007
Departure to Nassau             3/1/2007
Arrival in Fla.                3/12/2007
Departure to Nassau            3/29/2007
Arrival in Fla.                 5/4/2007
Departure to Nassau            5/21/2007
Arrival in Fla.                 6/4/2007
Departure to Nassau            6/17/2007
Arrival in Fla.                6/28/2007
Departure to Nassau             7/3/2007
Arrival in Fla.                7/13/2007
Departure to Nassau            7/22/2007
Arrival in Fla.                 8/7/2007
Departure to Nassau            8/24/2007
Arrival in Fla.                 9/1/2007
Departure to Nassau            9/27/2007
Arrival in Fla.                10/5/2007
                         -12-

[*12] Departure to Nassau        11/5/2007
Arrival in Fla.                 11/17/2007
Departure to Nassau             11/30/2007
Arrival in Fla.                 12/13/2007
Departure to Nassau              1/15/2008
Arrival in Fla.                  1/26/2008
Departure to Nassau              2/17/2008
Arrival in Fla.                  2/29/2008
Departure to Nassau              3/27/2008
Arrival in Fla.                   4/6/2008
Departed to Zurich,
 Switzerland                     4/13/2008
Arrived in FL from
 Zurich                          4/30/2008
Departure to Nassau               5/1/2008
Arrival in Fla.                   5/9/2008
Departure to Nassau              5/26/2008
Arrival in Fla.                   7/2/2008
Departure to Nassau              7/22/2008
Arrival in Fla.                   8/7/2008
Departure to Nassau              8/14/2008
Arrival in Fla.                   9/2/2008
Departure to Amsterdam
 from Tenn.                      9/18/2008
                         -13-

[*13] Arrival in Tenn.
 from Amsterdam                  10/2/2008
Departure to Nassau             10/14/2008
Arrival in Fla.                 10/29/2008
Departure to Santo
 Domingo                        11/29/2008
Arrival in Fla. from Santo
 Domingo                        12/10/2008
Departure to Santo
 Domingo                        12/28/2008
Arrival in Fla. from Santo
 Domingo                          1/5/2009
Arrival in Fla.                  2/28/2009
Departure to Nassau              2/23/2009
Departure to Nassau              3/30/2009
Arrival in Fla.                   5/6/2009
Departure to Nassau              5/28/2009
Arrival in Fla.                  7/23/2009
Departure to Nassau              8/11/2009
Arrival in Fla.                  8/17/2009
Arrival in Fla.                 10/20/2009
Departure to Nassau              11/8/2009
Arrival in Fla.                 11/13/2009
Departure to Nassau              12/5/2009
Arrival in Fla.                 12/16/2009
Departure to Nassau             12/31/2009
                                         -14-

              [*14] Arrival in Fla.                  1/13/2010
              Departure to Nassau                    2/17/2010
              Arrival in Fla.                        2/20/2010
              Departure to Nassau                      4/6/2010
              Arrival in Fla.                          5/6/2010
              Departure to Nassau                    5/18/2010
              Arrival in Fla.                          7/2/2010
              Departure to Nassau                    7/10/2010

      On August 7, 2006, petitioner signed a declaration submitted to the U.S.

District Court for the Southern District of Florida stating that petitioner and her

husband lived in Nassau, Bahamas, and that the Vero Beach, Florida, residence

never was intended to be their residence.

      On October 13, 2011, respondent issued to petitioner the decision letter

sustaining the filing of the NFTL.

                                      OPINION

I.    Evidentiary Issue

      Respondent objected to Exhibit 47-J, an Internal Revenue Service (IRS)

memorandum regarding petitioner’s husband with respect to a different tax matter,

on the grounds of hearsay and attorney-client privilege. On February 3, 2014,

respondent filed a status report providing information and exhibits pertaining to
                                          -15-

[*15] respondent’s objection on the ground of attorney-client privilege.

Respondent withdrew the attorney-client privilege objection in respondent’s

posttrial answering brief and raised a relevance objection to Exhibit 47-J.

      Respondent contends that Exhibit 47-J is irrelevant because it does not

reference the specific tax periods of petitioner’s separate liabilities, the total

amount due, or the collection actions taken by respondent. Petitioner contends

that the exhibit bears strong probative value in establishing how actively

respondent was actually trying to collect petitioner’s tax liabilities before the

period of limitations expired.

      Evidence is relevant if it has any tendency to make a fact more or less

probable than it would be without the evidence and the fact is of consequence in

determining the action. Fed. R. Evid. 401. Exhibit 47-J concerns petitioner’s

husband with respect to a different tax matter and is not relevant to collection of

the 1992 trust fund recovery penalty. Therefore, Exhibit 47-J is not admitted.

II.   Trust Fund Recovery Penalty

      Section 6672(a) imposes a penalty--commonly referred to as the trust fund

recovery penalty--for willfully failing to collect, account for, and pay over income

and employment taxes of employees. This penalty is assessed and collected in the

same manner as taxes against a person who is “an officer or employee of a
                                        -16-

[*16] corporation * * * who as such officer, [or] employee * * * is under a duty to

perform”, in this case, the duties to which section 6672 refers. Sec. 6671. Such

persons are referred to as “responsible persons”, a term which may be broadly

applied. Mason v. Commissioner, 132 T.C. 301, 321 (2009).

III.   CDP Generally

       Section 6320(a)(1) requires the Secretary to provide written notice to a

taxpayer when the Secretary has filed an NFTL against the taxpayer’s property and

property rights. See also sec. 6321. Additionally, the Secretary must notify the

taxpayer of his or her right to a collection due process hearing. Sec. 6320(a)(3)(B)

and (C).

       If the taxpayer requests a CDP hearing, the hearing is conducted by the

Appeals Office. Sec. 6320(b)(1). At the hearing the taxpayer may raise any

relevant issue relating to the unpaid tax or the proposed collection action. Secs.

6320(c), 6330(c)(2)(A). Once the settlement officer makes a determination, the

taxpayer may appeal the determination to this Court. Secs. 6320(c), 6330(d)(1).

       Section 6330(d)(1) provides this Court with jurisdiction to review an appeal

from the Commissioner’s determination to proceed with collection activity.

Respondent admitted that the settlement officer should have issued a Notice of

Determination Concerning Collection Action(s) under Section 6320 and/or 6330
                                        -17-

[*17] (notice of determination) instead of the decision letter. Respondent

concedes that the decision letter should be treated as a notice of determination for

jurisdictional purposes.1 See Craig v. Commissioner, 119 T.C. at 259.

IV.   Petitioner’s Contention

      Petitioner contends that respondent is time barred from collecting the 1992

trust fund recovery penalty because the 10-year period of limitation expired under

section 6502(a)(1) on July 15, 2003. Section 6502(a)(1) provides generally that if

the assessment of any tax imposed by the code is made within the relevant period

of limitation, then the tax may be collected by levy as long as the levy is made

within 10 years after the assessment. The amount of any tax imposed generally

must be assessed within three years after the tax return is filed. Sec. 6501(a). The

parties do not dispute that the July 15, 1993, assessment took place within the

three-year period of limitations for assessment.




      1
        Respondent acknowledges that the February 8, 2011, notice and NFTL
were not mailed to petitioner’s last known address. Respondent acknowledges
also that the March 15, 2011, notice and NFTL constitute a “substitute CDP
notice”. See sec. 301.6320-1(b)(2), Q&A-B3, (c)(3), Example (4), Proced. &
Admin. Regs. As a result, petitioner’s request for a CDP hearing was timely and
the settlement officer erred in treating petitioner’s CDP hearing as an equivalent
hearing and issuing a decision letter instead of a notice of determination.
                                        -18-

[*18] V.     Burden of Production and Proof

      The bar of the statute of limitations is an affirmative defense, and the party

raising this defense must specifically plead it and prove it. Rules 39, 142(a)(1);

Hoffman v. Commissioner, 119 T.C. 140, 146 (2002). Consequently, a taxpayer

who raises the 10-year period of limitations as an affirmative defense must

establish a prima facie case that the period of limitations on collection has expired

by proving that the Commissioner filed the NFTL after the expiration of the period

of limitations on collection. Jordan v. Commissioner, 134 T.C. 1, 5-6 (2010). If

the taxpayer establishes such a prima facie case, the burden of production then

shifts to the Commissioner to prove that an exception to the period of limitations

applies. See sec. 6502(a)(2); Jordan v. Commissioner, 134 T.C. at 6. The burden

of proof, i.e., the ultimate burden of persuasion, never shifts from the party who

pleads the bar of the period of limitations on collection. Jordan v. Commissioner,

134 T.C. at 6.

      The March 15, 2011, NFTL was filed well beyond 10 years after the June

15, 1993, date upon which petitioner’s 1992 trust fund recovery penalty liability

was assessed. Petitioner has established a prima facie case that the statute of

limitations precludes respondent from collecting the 1992 trust fund recovery

penalty. See Jordan v. Commissioner, 134 T.C. at 5 (holding that the reasoning of
                                        -19-

[*19] a case regarding the three-year period of limitations on assessment also

applies to the 10-year period of limitations on collection); Hoffman v.

Commissioner, 119 T.C. at 146 (finding that the taxpayer established a prima facie

case that the relevant assessment was made outside the three-year period of

limitations under section 6501(a)). The burden of production shifts to respondent.

See Hoffman v. Commissioner, 119 T.C. at 146. Respondent must introduce

evidence that collection is not barred by the 10-year period of limitations. See id.

If respondent makes such a showing, the burden of going forward with the

evidence shifts back to petitioner. See id. Notwithstanding the shifting of the

burden of going forward, the burden of proof remains with petitioner. See id.

VI.   Standard of Review

      Where the validity of the underlying tax liability is properly at issue, we

review the determination de novo. Sego v. Commissioner, 114 T.C. 604, 609-610

(2000); Goza v. Commissioner, 114 T.C. 176, 181-182 (2000). Where the validity

of the underlying tax liability is not properly at issue, we review the determination

for abuse of discretion. Hoyle v. Commissioner, 131 T.C. 197, 200 (2008); Goza

v. Commissioner, 114 T.C. at 182.

      We have held that a challenge to the 10-year period of limitations on

collection is a challenge to the underlying liability. E.g., Jordan v. Commissioner,
                                         -20-

[*20] 134 T.C. at 8; Hoffman v. Commissioner, 119 T.C. at 145; Boyd v.

Commissioner, 117 T.C. 127, 130 (2001). Because it is a challenge to the

underlying liability, a taxpayer may dispute the underlying liability at the Appeals

Office hearing (and have such a dispute reviewed by this Court) only if the

taxpayer did not receive a statutory notice of deficiency for such tax liability or did

not otherwise have an opportunity to dispute it. Sec. 6330(c)(2)(B). Petitioner

had no prior opportunity to raise the issue of the underlying liability on the basis

of the expiration of the 10-year period of limitations on collection. See Jordan v.

Commissioner, 134 T.C. at 8. Therefore, we will review de novo2 whether the

period of limitations under section 6502 expired as to collection of the 1992 trust

fund recovery penalty.

      Under a de novo standard of review, we consider all of the relevant

evidence introduced at trial. Respondent contends that the Court should not

consider any evidence that was not in the administrative record at the time of the

Appeals hearing. See Murphy v. Commissioner, 469 F.3d 27 (1st Cir. 2006), aff’g


      2
       Respondent argues, on the basis of Roberts v. Commissioner, T.C. Memo.
2004-100, that the abuse of discretion standard is the applicable standard of
review. Roberts is factually distinguishable from this case. Moreover, because
Jordan v. Commissioner, 134 T.C. 1 (2010), Hoffman v. Commissioner, 119 T.C.
140 (2002), and Boyd v. Commissioner, 117 T.C. 127 (2001), are directly on
point, we follow them. See Jordan v. Commissioner, 134 T.C. at 8 n.6.
                                        -21-

[*21] 125 T.C. 301 (2005). Since this is a de novo review, we will consider all

evidence and not just the administrative record. Jordan v. Commissioner, 134 T.C.

at 9.

VII. Period of Limitations on Collection

        A.    Statutory Framework

              1.    Code

        Section 6502 provides that “[w]here the assessment of any tax imposed by

this title has been made within the period of limitation properly applicable thereto,

such tax may be collected by levy or by a proceeding in court, but only if the levy

is made or the proceeding begun--(1) within 10 years after the assessment of the

tax”. Section 6503(c) provides that “[t]he running of the period of limitations on

collection after assessment prescribed in section 6502 shall be suspended for the

period during which the taxpayer is outside the United States if such period of

absence is for a continuous period of at least 6 months.”

              2.    Regulations

        Section 301.6503(c)-1(b), Proced. & Admin. Regs., provides:

        The running of the period of limitations on collection after
        assessment prescribed in section 6502 * * * is suspended for the
        period * * * during which the taxpayer is absent from the United
        States if such period is a continuous period of absence from the
        United States extending for 6 months or more. * * *. The taxpayer
                                         -22-

      [*22] will be deemed to be absent from the United States for purposes
      of this section if he is generally and substantially absent from the
      United States, even though he makes casual temporary visits during
      the period. * * *

      B.     Parties’ Arguments

      Respondent contends that section 301.6503(c)-1(b), Proced. & Admin.

Regs., is a valid interpretation of section 6503(c) because the phrase “continuous

period” is sufficiently vague, such that Congress did not directly speak to the

precise issue, and the interpretation of section 301.6503(c)-1(b), Proced. &

Admin. Regs., is not arbitrary, capricious, or manifestly contrary to the statute.

See Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 842-

844 (1984) (holding that an agency’s interpretation of a statute is given deference

if (1) Congress has not directly spoken to the precise question at issue and (2) the

agency’s chosen interpretation is reasonable and not arbitrary or capricious in

substance or manifestly contrary to the statute); see also Carlebach v.

Commissioner, 139 T.C. 1, 9-10 (2012). In particular, respondent notes that

“continuous” does not necessarily mean “uninterrupted”. Respondent further

contends that petitioner resided in the Bahamas and any traveling she did to the

United States during the six-month periods consisted of casual and temporary

visits, such that the period of limitations was tolled.
                                         -23-

[*23] Petitioner contends that section 6503(c) is not ambiguous and therefore, the

statute must be applied according to its plain meaning. See Nat’l Cable &

Telecomms. Ass’n v. Brand X Internet Servs., 545 U.S. 967 (2005). Petitioner

further contends that section 301.6503(c)-1(b), Proced. & Admin. Regs., is

invalid. See United States v. Nesline, 590 F. Supp. 884 (D. Md. 1984).

      C.     Discussion

      There is no need to decide whether section 301.6503(c)-1(b), Proced. &

Admin. Regs., is valid. Assuming, for the sake of argument, that the regulation is

valid, the record nevertheless does not support respondent’s claim that petitioner

was generally and substantially absent for six-month periods and made only casual

and temporary visits to the United States.

      D.     Petitioner’s Positions

      Petitioner provided testimony concerning where she lived throughout the

relevant period. Petitioner testified that she lived in Grant, Florida, from

approximately 1999 through June 2002, and then she lived in Fort Pierce, Florida,

on a boat. Petitioner testified that Hurricane Frances destroyed the boat on

September 6, 2004. Petitioner testified that after the boat was destroyed, she

stayed with her in-laws in Sebastian, Florida, for about four months. Mr. Uhrig

testified that petitioner lived in her in-laws condominium in Sebastian, Florida,
                                         -24-

[*24] after the hurricane. Petitioner provided documents from the City of Fort

Pierce Financing Department that showed fees associated with the docking of

petitioner’s boat. These documents show the last name of petitioner’s husband

and an address in Nassau, Bahamas. Petitioner testified that the address was an

address that her husband was using at the time and she would pick up the

statements in person. Petitioner testified that she purchased a condominium at the

end of 2004 in the name of Culver P. Holding, Inc., and she moved into it in the

spring of 2005.

      Petitioner testified that she originally bought the condominium as a real

estate investment that she would fix up and sell. This condominium has not been

sold, and petitioner testified that the Government placed an alter ego lien on the

property.

      Petitioner testified that she owned, in addition to the above property, a

recreational vehicle which was kept at Lake Marian Paradise in Kenansville,

Florida. This vehicle was purchased in 2006, and petitioner placed this vehicle in

storage in 2011. Petitioner testified that she stayed at this vehicle on a continuing

basis from September 2006 to 2011, and she provided receipts from Lake Marian

Paradise which show August 17, 2006, as the check-in date and November 30,
                                         -25-

[*25] 2011, as the check-out date. This vehicle was purchased through a company

that petitioner owned.

      Petitioner testified that she obtained a mailbox at the Pack Mart in

Sebastian, Florida, because her property in Grant, Florida, on Highway 1 had a

mailbox that was frequently hit by cars. Petitioner testified that Pack Mart

provided a more secure location for receiving mail and that she has had the

mailbox since 1999 or 2000.

      Petitioner testified that she became ill in 2004 while in the Bahamas and she

was treated at Doctors Hospital in the Bahamas. Petitioner testified that she had

her followup care in Florida.

      Petitioner testified that her husband rented a furnished one-bedroom

apartment in Nassau, Bahamas, and the lease was from September 2002 until

February 2012. Petitioner testified that she did not travel as often as her husband

but would travel to Nassau for two to three days at a time. Petitioner testified that

she considered herself to reside in the United States; and to support her position,

petitioner provided a Florida driver’s license and proof of automobile insurance.

Petitioner testified that she had health insurance in the United States.

      Mr. Uhrig testified that petitioner was living in Grant, Florida, in the 1990s

and early 2000s and that she lived on a boat in Fort Pierce, Florida, in 2004. He
                                        -26-

[*26] testified that petitioner spent more time in the United States than her

husband and that she was in the United States more than she was in the Bahamas.

      Department of Homeland Security documents showed that petitioner

traveled frequently between Florida and Nassau, Bahamas, from 2000 to 2010.

Petitioner testified that sometimes she would be through customs and because of

the weather or a mechanical failure the flight would be canceled. This would

result in passport records’ showing consecutive arrivals. Petitioner provided

copies of pages from her passport for relevant years. Petitioner testified that she

has not left the United States since February 8, 2012, and she has been residing at

the Vero Beach condominium that she purchased in 2004.

      In June 2001 petitioner received documents from the Department of

Homeland Security pursuant to her Freedom of Information Act Request.

According to these records and her passport records, petitioner was never out of

the United States for a six-month period. According to these records, petitioner

was outside the United States for 35 days in 1997, 16 days in 1998, 10 days in

1999, 16 days in 2000, 34 days in 2001, 102 days in 2002, and 116 days in 2003.

      Petitioner testified that in the early 1990s she had a secretarial business that

offered accounting and bookkeeping services. This business was in Daytona,

Florida, and petitioner was the owner-operator. This business continued until the
                                          -27-

[*27] mid-1990s, and petitioner did not have any customers outside the United

States. Petitioner testified that this business was not outside the United States, but

she was not able to name specific customers. After this business ended petitioner

with her husband invested in real estate.

      Petitioner testified that she had a working relationship with Mr. Uhrig, who

had a business relationship with her husband. Mr. Uhrig had a law firm called

American Barristers in Orlando, Florida, and petitioner provided accounting

services, including management of his Interest on Lawyer Trust Accounts.

American Barristers also had a separate office in the Bahamas. Petitioner testified

that she was doing this work through 2004 and that she had other customers in

Florida, but she did not identify them.

      Mr. Uhrig testified that he owned a law firm called American Barristers and

there was also a Bahamian corporation called American Barristers. Mr. Uhrig

testified that petitioner performed administrative and bookkeeping services until

2004. Mr. Uhrig explained that as part of petitioner’s responsibilities she would

come to Orlando every couple of weeks and they would often go to First National

Bank in Winter Park, Florida, which held the trust accounts.

      Petitioner testified that from 2002 to 2004 she was involved in closings

related to the Atlantis Trust Fund and was responsible for making disbursements
                                        -28-

[*28] to the noteholders. Petitioner testified that some of the accounts that she

worked on were moved to Equity Mutual Fund, Inc. Petitioner testified that she

would physically go to the bank to request a wire transfer or a check and that the

bank was in Fort Pierce, Florida. Petitioner explained that to make a wire transfer,

she would meet with customer service and fill out a form which required her

signature. In addition, petitioner explained that a counter credit, which was an

item on her Bank of America statements for Equity Mutual Fund, Inc., required

her to go to the bank in person. Her Bank of America statements for 2003, 2004,

and 2005 showed counter credits.

      Petitioner testified that she had a debit account for her Equity Mutual Fund,

Inc. account and that she was the only one who used the card. Petitioner testified

that she never used this card outside the United States.

      Petitioner testified that during a 2006 deposition before the Department of

Justice she testified that her address was in the Bahamas. She testified that the

deposition pertained to her husband’s tax case, and she explained that she believed

it to be a general question about where she lived with her husband. She also

explained that she answered “five years” in reference to how long she lived in the

Bahamas, meaning that they had the apartment for five years. Petitioner testified
                                       -29-

[*29] that she was not asked whether she lived continuously in the Bahamas or

whether she had other residences.

      Petitioner testified that her husband was the primary taxpayer and she

signed their tax returns as the spouse. In regard to the Bahamian address,

petitioner testified that her husband wanted to use the Bahamian address because

that was “where he was coming and going from.” Petitioner further explained that

her husband wanted to be sure that he received everything regarding their tax

returns.

      E.    Respondent’s Position

      Respondent contends that petitioner was continuously outside the United

States from 2002 until sometime in 2012 and that the running of the period of

limitations was suspended. Respondent argues that the tolling period began in

2002 and did not cease thereafter until 2012. To support respondent’s argument

respondent contends that petitioner provided them with mail service facility

addresses or Bahamian addresses. Respondent further contends that petitioner’s

2006 signed deposition stated that she lived in the Bahamas.

      Respondent argues that even though petitioner made visits to the United

States from her residence in the Bahamas, she has not demonstrated how these

visits are more than casual temporary visits. Respondent contends that the
                                         -30-

[*30] Department of Homeland Security and passport records cannot be relied

upon to show all of petitioner’s international travel.

      Respondent contends that petitioner’s estimate of days spent outside the

United States is unreliable. Respondent supports this contention with evidence

that petitioner performed financial transactions via mail and wire.

      A IRS revenue officer, Rachel Koenig, testified that Department of

Homeland Security records are incomplete and that they do not always list the

departures. She further testified that these records were accurate as they related to

specific departures and arrivals.

VIII. Conclusion

      Petitioner provided credible testimony about where she lived, and the

testimony of Mr. Uhrig corroborated her testimony. Petitioner provided testimony

and supporting evidence that she retained a residence in Florida and did not have a

permanent residence in the Bahamas. She testified that frequently she visited her

husband in the Bahamas, and Department of Homeland Security records show

frequent visits to the Bahamas.

      Petitioner provided testimony to explain the discrepancies about her

address. From the evidence, we conclude petitioner lived in the United States and
                                         -31-

[*31] traveled back and forth to the Bahamas. It appears that petitioner’s husband

moved to the Bahamas, but his residence is not at issue in this case.

      Respondent’s arguments and evidence were not persuasive that petitioner

moved to the Bahamas beginning in 2002 and from 2002 through 2012 was

generally and substantially outside the United States and made only casual

temporary visits to the United States. Petitioner’s conducting of financial

transactions by mail or wire does not prove that she was outside of the United

States. Respondent relies on the fact that petitioner rented a mailbox. The use of a

mailbox does not indicate that petitioner resided outside the United States. The

Department of Homeland Security records show consistent travel to and from the

United States.

      The credible evidence of record fails to establish that petitioner was outside

the United States for any continuous period of at least six months from 2002

through June 15, 2003, including casual and temporary visits. Petitioner

convincingly testified, and the evidence of record reflects, that petitioner resided

and worked in the United States and was never generally and substantially outside

the United States from 2002 through 2012. We conclude that when respondent

filed the NFTL the 10-year period of limitations had expired with respect to the

1992 trust fund recovery penalty.
                                       -32-

[*32] Any contentions we have not addressed are irrelevant, moot, or meritless.

      To reflect the foregoing,


                                              Decision will be entered

                                     for petitioner.
