                        T.C. Memo. 2009-309



                      UNITED STATES TAX COURT



      ESTATE OF PAUL RULE, DECEASED, BETTY RULE, SUCCESSOR
                   ADMINISTRATOR, Petitioner v.
           COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 15717-08.                Filed December 30, 2009.



     A. Lavar Taylor and Robert S. Horwitz, for petitioner.

     Michael S. Hensley, for respondent.



                            MEMORANDUM OPINION


     KROUPA, Judge:   This matter is before the Court on the

parties’ motions to dismiss for lack of jurisdiction.   The estate

moves to dismiss on the ground that respondent issued an invalid

deficiency notice to the estate.    Respondent moves to dismiss on

the ground that the petition was not timely filed.   The issue we

are asked to decide turns on whether respondent mailed the
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deficiency notice to the estate’s last known address if

respondent mailed the notice to the address shown on the estate

tax return despite having notice that there was a new address for

the estate executor.1   We find that respondent did not mail the

deficiency notice to the estate’s last known address and,

accordingly, we grant the estate’s motion to dismiss for lack of

jurisdiction.

                          Background

The S. Coast Address

     Paul Rule (decedent) died intestate on December 6, 1993.

The San Diego County Superior Court issued letters of

administration to James Keenan (Mr. Keenan), the administrator of

the Estate of Paul Rule (the estate), on March 14, 1994.    Mr.

Keenan filed an estate tax return (estate’s return) on behalf of

the estate on December 17, 1996.   The return lists Mr. Keenan as

the executor of the estate and lists his office address as 1231

S. Coast Highway, Ste. G, Oceanside, California 92054 (S. Coast

address).   Respondent mailed a letter pertaining to the estate’s

return to Mr. Keenan at the S. Coast address shortly after the

return was filed.

     Respondent began an audit of the estate’s return on or about

March 20, 1997, and sought information from Mr. Keenan.    Mr.



     1
      Petitioner concedes that, if the deficiency notice was
valid, then the petition was not timely filed.
                                 -3-

Keenan informed respondent’s estate tax examiner (examiner) in

May 1997 that he could not access documents relating to the

estate because the S. Coast office was under the temporary

control of a bankruptcy receiver.      Mr. Keenan told the examiner

in November 1997 that he had not had access to the office for the

past six months.    Mr. Keenan provided the examiner with a post

office box to which the examiner then began sending

correspondence related to the estate’s audit.

The Crown Point Address

     A revenue agent assigned to perform a limited audit of Mr.

Keenan regarding his amended individual income tax return for

1995 informed the estate’s examiner on or about May 20, 1999,

that respondent’s computer records indicated a new residential

address for Mr. Keenan.    The revenue agent provided the examiner

with the address 3999 Crown Point Drive, Villa 29, San Diego,

California 92109-6112 (Crown Point address) that was listed in

respondent’s computer records.    The examiner mailed a letter

regarding the estate’s audit to Mr. Keenan at the Crown Point

address on May 20, 1999.

     The examiner also issued a summons to Mr. Keenan at the

Crown Point address on May 20, 1999, to obtain more information

about the estate.    The examiner noted in the case history that

the summons was “served * * * at TP’s new address.”     A copy of

the summons was left at the Crown Point address on May 27, 1999.
                                  -4-

Mr. Keenan called the examiner shortly thereafter to confirm his

receipt of the summons and to ask why it had been sent.    Mr.

Keenan and the examiner had several phone conversations between

late May and September of 1999.

The Deficiency Notice

     Respondent issued a deficiency notice to the estate on

December 8, 1999.   Respondent determined a $433,793 deficiency in

Federal estate tax, as well as a $108,448 addition to tax for

late filing and an $86,759 accuracy-related penalty.   Respondent

issued only one deficiency notice, and it was addressed to

“Estate of Paul Rule/Paul W. Keenan, Executor” at the S. Coast

address.   The deficiency notice was returned to respondent by the

U.S. Postal Service marked “Attempted Not Known.”   Respondent did

not attempt to issue another deficiency notice after the original

deficiency notice was returned because respondent’s deadline for

issuing a deficiency notice to the estate was December 20, 1999.2

Mr. Keenan was removed as the executor of the estate after the

deficiency notice was issued.

     The 90-day period for filing a petition in response to the

deficiency notice expired on March 7, 2000.   Thereafter

respondent assessed the deficiency, addition to tax, and penalty




     2
      Respondent calculated the deadline to be Dec. 20, 1999, but
noted in the case history that he would apply “a more
conservative SOL which is 12-17-99.”
                                -5-

against the estate.   The estate did not file a petition with this

Court until June 26, 2008.

                             Discussion

     Both parties move to dismiss for lack of jurisdiction.      We

must determine whether respondent mailed the deficiency notice to

the estate’s last known address.    If we find that the deficiency

notice was mailed to the estate’s last known address, then we

must grant respondent’s motion because the petition was untimely.

See Stewart v. Commissioner, 55 T.C. 238 (1970).    If we find

instead that the deficiency notice was not mailed to the estate’s

last known address, then we must grant the estate’s motion

because the deficiency notice was invalid.   See Shelton v.

Commissioner, 63 T.C. 193, 195 (1974).    We find that respondent

did not mail the deficiency notice to the estate’s last known

address.   Accordingly, we will grant the estate’s motion to

dismiss for lack of jurisdiction.

     We begin with the Court’s jurisdiction.   This Court’s

jurisdiction to redetermine a deficiency depends on the issuance

of a valid deficiency notice and a timely filed petition.     See

Rule 13(a), (c);3 Monge v. Commissioner, 93 T.C. 22, 27 (1989).

The Commissioner is expressly authorized to issue a deficiency

notice by certified or regular mail to the taxpayer after


     3
      All section references are to the Internal Revenue Code as
amended, and all Rule references are to the Tax Court Rules of
Practice and Procedure, unless otherwise indicated.
                                 -6-

determining a deficiency.   See sec. 6212(a).    Even if not

received by the taxpayer, the deficiency notice is still valid if

the notice is mailed to the taxpayer at the taxpayer’s last known

address.    See King v. Commissioner, 857 F.2d 676, 679 (9th Cir.

1988), affg. 88 T.C. 1042 (1987); Clodfelter v. Commissioner, 527

F.2d 754, 756 (9th Cir. 1975), affg. 57 T.C. 102 (1971).       A

deficiency notice not mailed to the taxpayer’s last known address

is nonetheless valid if the taxpayer receives it without

prejudicial delay so as to permit the timely filing of a

petition.   Lifter v. Commissioner, 59 T.C. 818, 822-823 (1973).

     The Commissioner must send the deficiency notice to the

fiduciary of an estate once the Commissioner has been notified of

the existence of a fiduciary relationship.      Sec. 6212(b)(3).      Mr.

Keenan became a fiduciary of the estate when he was issued

letters of administration by the San Diego County Superior Court.

See sec. 7701(a)(6).   Mr. Keenan’s filing of the estate’s tax

return notified respondent of the fiduciary relationship.          See

Huddleston v. Commissioner, 100 T.C. 17, 31 (1993).      Accordingly,

respondent properly mailed the deficiency notice to the “Estate

of Paul Rule/Paul W. Keenan, Executor.”   We must determine now

whether the deficiency notice was properly mailed to Mr. Keenan’s

last known address.

     An inquiry into a taxpayer’s last known address is based on

the relevant facts and circumstances.   See O’Brien v.
                                  -7-

Commissioner, 62 T.C. 543, 550 (1974); Lifter v. Commissioner,

supra at 821.   The relevant inquiry is what the Commissioner knew

at the time the deficiency notice was issued.    Abeles v.

Commissioner, 91 T.C. 1019, 1035 (1988); Pyo v. Commissioner, 83

T.C. 626, 633 (1984); Buffano v. Commissioner, T.C. Memo. 2007-

32.   The taxpayer’s last known address is the address shown on

the return that was most recently filed at the time that the

deficiency notice was issued absent clear and concise notice of a

change of address.   Abeles v. Commissioner, supra at 1035; King

v. Commissioner, supra at 681.    If the Commissioner knows of one

address for the taxpayer and is then notified of another address

for the same taxpayer, such other address supersedes the previous

address and becomes that taxpayer’s “last known address.”      Abeles

v. Commissioner, supra at 1030.    The Commissioner must use

reasonable care and diligence in ascertaining and mailing the

deficiency notice to the correct address once he has been given

notice of the change.   Frieling v. Commissioner, 81 T.C. 42, 49

(1983).

      The estate argues that respondent knew at the time the

deficiency notice was issued that the estate’s address had

changed, and that respondent therefore failed to use reasonable

care and diligence in mailing the deficiency notice to the

estate’s last known address.   We agree.   Information that the

Commissioner knows or should know through use of his computer
                                 -8-

system is attributable to the Commissioner’s agents.    Abeles v.

Commissioner, supra at 1030; Buffano v. Commissioner, supra.

Respondent’s revenue agent informed the estate’s examiner on May

20, 1999, only six months before the deficiency notice was

issued, that respondent’s computer records listed the Crown Point

address as a new residential address for Mr. Keenan.    We find

that the examiner knew of the estate’s new address at the time he

issued the deficiency notice to the estate.

     Moreover, respondent failed to use reasonable care and

diligence in ascertaining and mailing the deficiency notice to

the new address.   The examiner mailed correspondence pertaining

to the estate’s audit to Mr. Keenan at the Crown Point address

before issuing the deficiency notice.    The examiner spoke with

Mr. Keenan several times before issuing the deficiency notice and

could have confirmed with him that the estate’s address had

changed.   He did not.   The examiner also could have mailed

deficiency notices to both the address on the estate’s return and

the new Crown Point address, but he did not.    We hold that the

examiner failed to use reasonable care and diligence in

ascertaining and mailing the deficiency notice to the estate’s

last known address.

     We find that the S. Coast address provided on the estate’s

return to which respondent mailed the deficiency notice was not

the estate’s last known address.    Accordingly, we shall grant the
                                 -9-

estate’s motion to dismiss for lack of jurisdiction and shall

deny respondent’s motion to dismiss for lack of jurisdiction.

     To reflect the foregoing,


                                       An appropriate order will be

                                 entered denying respondent’s motion

                                 to dismiss for lack of jurisdiction

                                 and granting petitioner’s motion to

                                 dismiss for lack of jurisdiction.
