                        T.C. Memo. 1996-460



                      UNITED STATES TAX COURT



             DOUGLAS JAMES CRAWFORD, Petitioner v.
         COMMISSIONER OF INTERNAL REVENUE, Respondent


     Docket No. 22057-95.                    Filed October 10, 1996.


     Douglas James Crawford, pro se.

     Stuart Spielman and Gordon L. Gidlund, for respondent.



                        MEMORANDUM OPINION

     PANUTHOS, Chief Special Trial Judge:     This case was assigned

pursuant to the provisions of section 7443A(b)(3) and Rules 180,

181, and 182.1




     1
        All section references are to the Internal Revenue Code
in effect for the years in issue, unless otherwise indicated.
All Rule references are to the Tax Court Rules of Practice and
Procedure.
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     This matter is before the Court on respondent's Motion to

Dismiss for Lack of Jurisdiction and to Strike as to the Taxable

Year 1990 and petitioner's Cross-Motion to Dismiss for Lack of

Jurisdiction as to the Taxable Year 1990.    Respondent contends

that this Court lacks jurisdiction over the taxable year 1990 on

the ground that petitioner failed to file his petition within the

90-day period prescribed in section 6213(a).    Petitioner counters

that jurisdiction is lacking as to the taxable year 1990 on the

ground that respondent failed to issue a valid notice of

deficiency under section 6212.    There being no dispute that we

lack jurisdiction over the taxable year 1990, we must resolve the

parties' dispute respecting the proper ground for dismissal.

Background

     On March 3, 1993, respondent mailed a notice to petitioner

proposing adjustments to his Federal income tax for 1990.    The

notice was mailed to petitioner at 4948 Crystal Drive, San Diego,

CA 92109-2062 (the Crystal Drive address).    The Crystal Drive

address is the address listed on petitioner's 1990 tax return,

which petitioner filed with respondent on April 15, 1991.    On or

about March 10, 1993, the envelope bearing the notice was

returned to respondent marked "RETURN TO SENDER UNABLE TO

FORWARD".

     On August 18, 1993, respondent mailed a notice of deficiency

to petitioner determining a deficiency of $3,101 in his Federal
                               - 3 -


income tax for 1990.   The notice of deficiency was mailed to

petitioner at the Crystal Drive address.    The envelope bearing

the notice of deficiency was returned to respondent marked

"UNABLE TO FORWARD".

     According to petitioner, he moved from the Crystal Drive

address on approximately September 1, 1991.    Petitioner further

asserts that he resided at 4875 Santa Cruz Avenue, San Diego, CA

92107 between that date until his move to 4776 Bayard Street, San

Diego, CA 92109 (the Bayard Street address) on February 1, 1992.

Petitioner notified respondent of his change of address to the

Bayard Street address sometime in March 1995.    Petitioner filed

his tax returns for 1991 and 1993 on July 21, 1995, listing his

address as the Bayard Street address.   Petitioner did not file a

tax return for 1992.   Consequently, petitioner's 1990 tax return

was the last tax return filed by petitioner prior to the issuance

of the notice of deficiency for 1990.   Petitioner did not provide

respondent with a notice of a new address during the period April

15, 1991, until March 1995.

     On August 10, 1995, respondent mailed a notice of deficiency

to petitioner determining a deficiency of $3,101 in his Federal

income tax for 1992, as well as an addition to tax under section

6651(a) in the amount of $775.25 and an addition to tax under

section 6654(a) in the amount of $135.20.    The notice of
                                - 4 -


deficiency for 1992 was mailed to petitioner at the Bayard Street

address.

     Petitioner provided the Court with copies of Forms 1099R,

1099-DIV, 1099-INT, and W-2 for 1992 reflecting the Bayard Street

address.   Respondent advised the Court that an underreporter

transcript in 1992 reflected four different addresses in

California for petitioner, none of which was the Crystal Drive

address.

     On October 27, 1995, petitioner filed a petition with the

Court seeking a redetermination of his tax liabilities for the

taxable years 1990 and 1992.2   The petition was delivered to the

Court in an envelope bearing a U.S. Postal Service postmark date

of October 24, 1995.   There is no dispute that the petition was

timely filed with respect to the notice of deficiency determining

a deficiency in petitioner's tax liability for 1992.

     After several months' delay (during which time respondent

conducted a search for the administrative file concerning

petitioner's 1990 tax year), respondent filed her motion to

dismiss for lack of jurisdiction and to strike as to the taxable

year 1990 asserting that petitioner failed to file his petition

within the 90-day period prescribed in section 6213(a).

Petitioner responded by filing his own motion to dismiss for lack


     2
        At the time of filing the petition herein, petitioner
resided in San Diego, California.
                                - 5 -


of jurisdiction as to the taxable year 1990 alleging that the

deficiency notice was not mailed to his correct address.

Petitioner subsequently filed a supplement to his motion.

     A hearing was conducted in this case in Washington, D.C.

Counsel for respondent appeared at the hearing and presented

argument in support of respondent's motion to dismiss.   During

the course of the hearing, counsel for respondent stated that

respondent could not demonstrate what, if any, steps were taken

to determine petitioner's correct address prior to the mailing of

the disputed notice of deficiency in August 1993.   Although

petitioner did not appear at the hearing, he did file a written

statement with the Court pursuant to Rule 50(c) in support of his

motion to dismiss.

Discussion

     This Court's jurisdiction to redetermine a deficiency

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

timely filed petition.   Rule 13(a), (c); Monge v. Commissioner,

93 T.C. 22, 27 (1989); Normac, Inc. v. Commissioner, 90 T.C. 142,

147 (1988).   Section 6212(a) expressly authorizes the

Commissioner, after determining a deficiency, to send a notice of

deficiency to the taxpayer by certified or registered mail.    It

is sufficient for jurisdictional purposes if the Commissioner

mails the notice of deficiency to the taxpayer's "last known

address".    Sec. 6212(b); Frieling v. Commissioner, 81 T.C. 42, 52
                                - 6 -


(1983).    If a notice of deficiency is mailed to the taxpayer at

the taxpayer's last known address, actual receipt of the notice

is immaterial.    King v. Commissioner, 857 F.2d 676, 679 (9th Cir.

1988), affg. 88 T.C. 1042 (1987); Yusko v. Commissioner, 89 T.C.

806, 810 (1987); Frieling v. Commissioner, supra at 52.      The

taxpayer, in turn, has 90 days from the date the notice of

deficiency is mailed to file a petition in this Court for a

redetermination of the deficiency.      Sec. 6213(a).

     Respondent mailed the notice of deficiency concerning

petitioner's tax liability for 1990 on August 18, 1993.     The

petition was postmarked October 24, 1995, and was filed by the

Court on October 27, 1995.   Given that the petition was neither

mailed nor filed prior to the expiration of the 90-day statutory

period for filing a timely petition with respect to the notice of

deficiency for 1990, it follows that we lack jurisdiction over,

and will strike, the portions of the petition relating to the

1990 taxable year.   Secs. 6213(a), 7502; Rule 13(a) and (c); see

Normac, Inc. v. Commissioner, supra.      The question presented is

whether dismissal should be premised on petitioner's failure to

file a timely petition under section 6213(a) or on respondent's

failure to issue a valid notice of deficiency under section 6212.

In this regard, we must decide whether respondent mailed the

notice of deficiency in question to petitioner's last known

address.
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     Although the phrase "last known address" is not defined in

the Internal Revenue Code or in the regulations, we have held

that a taxpayer's last known address normally is the address

shown on the taxpayer's most recently filed return, absent clear

and concise notice of a change of address.   Abeles v.

Commissioner, 91 T.C. 1019, 1035 (1988); see King v.

Commissioner, supra at 681.   The burden of proving that a notice

of deficiency was not sent to the taxpayer's last known address

is on the taxpayer.   Yusko v. Commissioner, supra at 808.

     The record in this case shows that respondent mailed the

notice of deficiency for 1990 to the address appearing on

petitioner's most recently filed tax return, and that petitioner

failed to provide respondent with clear and concise notice of his

change of address prior to the mailing of the disputed notice.

However, the Court of Appeals for the Ninth Circuit (the Circuit

to which this case is appealable) has held that where the

Commissioner is aware prior to issuing a notice of deficiency

that the address she intends to use is no longer the taxpayer's

correct address, the Commissioner is required to exercise

reasonable diligence in attempting to ascertain the taxpayer's

correct address.   See King v. Commissioner, supra at 681 n.8;

Wallin v. Commissioner, 744 F.2d 674 (9th Cir. 1984), revg. and

remanding T.C. Memo. 1983-52; Stroud v. Commissioner, T.C. Memo.

1992-666; see also Monge v. Commissioner, supra at 33; Taylor v.
                                - 8 -


Commissioner, T.C. Memo. 1988-152; Fernandez v. Commissioner,

T.C. Memo. 1987-557.   Whether respondent has exercised reasonable

diligence in this regard depends upon a consideration of all the

facts and circumstances.    King v. Commissioner, supra at 678-679.

     In Wallin v. Commissioner, supra, correspondence sent by the

Commissioner to the taxpayer at an address in Alaska shown on the

return for the year at issue was returned as undeliverable with

no forwarding address.    In an effort to obtain the taxpayer's

correct address prior to mailing a notice of deficiency, the

Commissioner subsequently made inquiries at the Anchorage Post

Office and the Alaska State Motor Vehicle Bureau and searched

microfilm records for tax returns filed by Alaskans in 1978 and

1979.   When these steps did not produce a new address for the

taxpayer, the Commissioner mailed the notice of deficiency to the

taxpayer's old address.    Under these circumstances, the Court of

Appeals held that the Commissioner failed to exercise reasonable

diligence in ascertaining the taxpayer's last known address.      In

reaching this conclusion, the Court of Appeals found it

significant that the Commissioner failed to make an adequate

search of Internal Revenue Service computer records for the

taxpayer's correct address.

     We conclude that respondent did not exercise due diligence

in ascertaining petitioner's correct address.    In short, the

record shows that respondent was aware prior to issuing the
                                - 9 -


notice of deficiency to petitioner for 1990 that the address

appearing on the petitioner's most recently filed return was no

longer petitioner's correct address.    However, respondent was

unable to demonstrate what, if any, steps were taken to ascertain

petitioner's correct address.   In the absence of any evidence on

the point, we decline to assume, as suggested by counsel for

respondent at the hearing on this matter, that respondent's

agents complied with Internal Revenue Manual directives and

conducted a search of respondent's computer records in an effort

to ascertain a more current address for petitioner prior to

issuing the disputed notice of deficiency.3   See Taylor v.

Commissioner, supra.   By sending the notice of deficiency to the

Crystal Drive address, knowing that prior correspondence to that

address was returned undeliverable (without any evidence in this

record of a follow-up check for a current address by agents of

respondent), respondent failed to exercise due diligence.




     3
        We note that a number of respondent's administrative
procedures direct Internal Revenue Service personnel to take
various steps, including conducting a computer search, checking
the telephone and/or city directory, and contacting the
taxpayer's employer or a third party, in an effort to obtain a
taxpayer's correct address where current address information is
known to be incorrect. See 2 Audit, Internal Revenue Manual
(CCH), secs. 4243.2 (handling of undeliverable mail in the
examination function), 4462.1(3), at 7900 (manner of sending
notices of deficiency); 3 Audit, Internal Revenue Manual (CCH),
sec. 4(14)53, at 9142 (30-day notice returned as undeliverable).
                             - 10 -


     In sum, we conclude that respondent failed to mail the

notice of deficiency concerning petitioner's tax liability for

1990 to petitioner's last known address.    Accordingly, we will

deny respondent's motion to dismiss and to strike as to the

taxable year 1990, and we will grant petitioner's motion to

dismiss as to the taxable year 1990, as supplemented, on the

ground that the notice of deficiency for that year is invalid

under section 6212.

     To reflect the foregoing,

                                 An order will be issued

                         denying respondent's Motion to

                         Dismiss for Lack of Jurisdiction

                         and to Strike as to the Taxable

                         Year 1990 and granting petitioner's

                         Cross-Motion to Dismiss for Lack of

                         Jurisdiction as to the Taxable Year

                         1990, as Supplemented.
