                         T.C. Memo. 1999-410



                       UNITED STATES TAX COURT



               ANTHONY AND ESTHER SICARI, Petitioners v.
             COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 11761-95.                  Filed December 16, 1999.



     Sheldon Eisenberger, Richard L. Herzfeld, and Cris Alcamo,

for petitioners.

     Wendy Sands, Paul Darcy, and Theodore Leighton, for

respondent.



                   SUPPLEMENTAL MEMORANDUM OPINION

     DAWSON, Judge:    This case was assigned to Special Trial

Judge Norman H. Wolfe pursuant to Rules 180, 181, and 183.    All

Rule references are to the Tax Court Rules of Practice and

Procedure.    All section references are to the Internal Revenue
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Code in effect at the time the petition was filed, unless

otherwise indicated.    The Court agrees with and adopts the

opinion of the Special Trial Judge, which is set forth below.

               OPINION OF THE SPECIAL TRIAL JUDGE

     WOLFE, Special Trial Judge:     This matter is before us on

remand from the Court of Appeals for the Second Circuit.    In

Sicari v. Commissioner, T.C. Memo. 1997-104 (Sicari I) we granted

respondent's motion to dismiss for lack of jurisdiction on the

ground that respondent had properly mailed the notice of

deficiency by certified mail to petitioners' last known address

and that petitioners had failed to file a timely petition for a

redetermination of income tax deficiencies.    The Court of Appeals

for the Second Circuit has concluded that we erred in holding

that the notice was mailed to petitioners' last known address and

has vacated our decision and ordered us to make findings whether

the notice of deficiency, regardless of improper addressing,

actually was delivered to petitioners.    See Sicari v.

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

T.C. Memo. 1997-104.   We find that the statutory notice was not

actually delivered to petitioners.

Background

     The background of this case was summarized in Sicari I and

we incorporate that statement of background without repetition,
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except as to certain matters directly bearing on the issue of

actual delivery.

     On October 9, 1992, respondent issued to petitioners by

certified mail, return receipt requested, a statutory notice of

deficiency (the statutory notice) addressed as follows:      Mr.

Anthony Sicari and Mrs. Esther Sicari, Route 208, Gardiner, NY

12525 (the route 208 address).

     During 1992, the Postal Service had changed petitioners'

permanent mailing address to the following address:      871 Route

208, Gardiner, NY 12525.   Early in 1992, the postmaster of

Gardiner, New York, Marianne Walker (Walker), issued notices

explaining the address changes and notifying Gardiner Postal

Service customers that regardless of the changes, all mail would

be delivered without interruption.       In fact, the Gardiner Postal

Service delivered mail to customers even if it was addressed to

the route 208 address throughout 1992 and up to the time of

trial.   In October 1992, the Postal Service treated mail

addressed to the route 208 address as properly addressed.

     In 1992, Theresa Williams (Williams) was the letter carrier

for the postal route that includes route 208 and the Sicari

residence.   She worked throughout the month of October 1992

without missing a day for sick leave or vacation.      She was well

acquainted with the location of the Sicari residence.      During

1992, if items of certified mail were addressed to petitioners at
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the route 208 address, Williams would deliver them to

petitioners.

     Williams does not remember the envelope containing the

statutory notice.   She is unable to recall whether she delivered

this particular piece of mail.

     On November 10, 1992, the envelope containing the statutory

notice was returned, unopened, to respondent.     The envelope bore

a "Returned to Sender" stampmark in red ink, and the "REASON

CHECKED" for return was "Unclaimed".     Additionally, the words

"Return unclaimed" had been handwritten, by Walker, at the top of

the envelope.   The envelope also listed three dates.    Two of

these dates purported to be the dates on which Williams had

delivered to petitioners notices informing them that they needed

to come to the Post Office to claim the envelope.    The last date

indicates the date on which the envelope was returned to

respondent.    The date of the "1st Notice" was listed as "9-24",

presumably a reference to September 24, 1992.     This date preceded

the date of the enclosed notice of deficiency by more than 2

weeks.   The date on the "2nd Notice" was listed as "10-16", and

the date of return was listed as "10-19".

     Respondent made no further effort to contact petitioners

concerning the tax deficiencies.

     One of petitioners' accountants and tax advisers, Noreen

Masztal, C.P.A., testified that in mid-1992 she warned
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petitioners to anticipate the statutory notice.   She stated that

she repeatedly spoke with petitioner Anthony Sicari (petitioner)

about the importance of the statutory notice and repeatedly

emphasized that he should call her as soon as he received it.

According to her, petitioner several times denied receiving the

statutory notice and assured her that he would call her as soon

as he received it.

     Petitioner confirmed the accountant's testimony and denied

receiving the statutory notice of deficiency until June 1995,

when he met with an Internal Revenue agent to discuss an

unrelated matter.    Petitioner Esther Sicari also stated that she

never had failed to accept certified mail or pick up such mail in

response to a notice.   Petitioners commenced the present action

on June 30, 1995, by filing a petition for redetermination of the

deficiencies, and thereafter respondent filed the motion to

dismiss for lack of jurisdiction.

Discussion

     The opinion of the Court of Appeals for the Second Circuit

is that in this case respondent did not satisfy the requirements

of section 6212 for mailing of a notice of deficiency to the

taxpayer's last known address by certified or registered mail.

Nevertheless, as the Court of Appeals states, the notice here

would be considered valid if the taxpayers received actual notice

of the deficiencies and were not prejudiced in timely filing
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their petition.    See Sicari v. Commissioner, 136 F.3d 925 (2d

Cir. 1998), (citing Pugsley v. Commissioner, 749 F.2d 691, 692-

693 (11th Cir. 1985)); see also Frieling v. Commissioner, 81 T.C.

42, 53 (1983).    There is a strong presumption in the law that a

properly addressed letter will be delivered, or offered for

delivery, to the addressee.   See Hoffenberg v. Commissioner, 905

F.2d 665, 666 (2d Cir. 1990), affg. T.C. Memo. 1989-676; Mulder

v. Commissioner, 855 F.2d 208, 212 (5th Cir. 1988), revg. T.C.

Memo. 1987-363; Zenco Engineering Corp. v. Commissioner, 75 T.C.

318, 323 (1980), affd. 673 F.2d 1332 (7th Cir. 1981).   This

presumption can be rebutted with a showing of postal mishandling.

See Mulder v. Commissioner, supra (lack of return receipt for

deficiency notice indicates Postal Service mishandled the

notice); Estate of McKaig v. Commissioner, 51 T.C. 331 (1968)

(envelope was diverted by the   Post Office); Violette v.

Commissioner, T.C. Memo. 1994-173 (envelope with notation

indicating "First Notice, 1-30-83", which preceded issuance of

the notice of deficiency dated 01-27-86, "suggests a lack of

attention to detail that we are unwilling to overlook under such

circumstances".)   Here we must determine whether, given the

strong presumption of delivery, there was actual delivery of the

notice of deficiency.

     Although the envelope containing the notice of deficiency

was received by the Gardiner Post Office and was treated by the
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Postal Service as properly addressed, we are not convinced that

the notice actually was delivered to petitioners.    The envelope

that contained the notice of deficiency indicates that there was

some postal mishandling.

     The date of "First Notice" precedes the issuance of the

notice of deficiency.    The envelope reflects an initial delivery

attempt on September 24, 1992.    The notice of deficiency was

issued on October 9, 1992.    The first notice of delivery date

precedes the date of issuance by 2 weeks, and plainly this

circumstance evidences mishandling of this item by the postal

authorities.

     The return date does not correspond with proper mail

handling procedure as provided by postal regulations.    Postal

regulations provide:

     The carrier must leave a notice of arrival * * * if the
     carrier cannot deliver the certified article for any
     reason. The article is brought back to the post office
     and held for the addressee. If the article is not
     called for within 5 days, a final notice is issued. If
     the article is not called for or redelivery of the
     article is not requested, it must be returned after 15
     days, unless the sender specifies a lesser number on
     the mailpiece. Domestic Mail Manual sec. 912.55.

     The statutory notice of deficiency was mailed by respondent

on October 9, 1992.    If the first attempted delivery was on

October 10, 1992, the envelope did not have to be returned until

October 26, 1992.   The markings on the envelope indicate that the

envelope was returned on October 19, 1992.    The envelope was not
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handled pursuant to the postal regulations, and this is further

evidence of postal mishandling.

     Williams testified that she could not recall delivering this

particular piece of mail.   Such a lack of recollection may seem

entirely appropriate in view of the large number of items handled

each day by a letter carrier.   Here the item was certified and

supposedly went out for delivery several times before return to

the sender with markings that are chronologically impossible.

     In sum, the letter carrier has no recollection of the item;

at least one of the stampings on the envelope is at best

inaccurate; and the postal authorities failed to follow their own

regulations concerning the handling of certified mail.    There is

evidence of irregularity in the Postal Service's handling of the

item here and, with respect to the issue of actual delivery,

those irregularities are too significant to be ignored.

     Additionally, both petitioners have testified that they did

not receive the certified mail delivery they were awaiting.

Anthony Sicari was explicit and emphatic in his testimony that he

had been told to await the deficiency notice and call his tax

advisers immediately upon the receipt of such a document.   One of

his accountants, Noreen Masztal, testified that she had explained

to Mr. Sicari that the 90-day letter should be expected and that

in their own interests the Sicaris should act on it promptly.
                               - 9 -

     The Sicaris deny actual receipt although they were expecting

the 90-day letter.   The letter carrier does not remember

delivering the letter.   Postal procedures were not followed, and

the actual envelope is mismarked.   The address employed by

respondent, while it generally should have resulted in delivery

of the mail, was not the taxpayers' last known address.

     Under all these circumstances, we find that actual delivery

was not accomplished.

     Accordingly, based upon the facts and circumstances of this

case, we will deny respondent's motion to dismiss for lack of

jurisdiction and will dismiss for lack of jurisdiction on the

ground that no valid notice of deficiency was ever issued or

delivered to petitioners.



                                       An appropriate order will

                               be issued.
