                       T.C. Memo. 2000-88



                     UNITED STATES TAX COURT



            EDWARD K. & SUSIE Y. WONG, Petitioners v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 6918-99.                 Filed March 14, 2000.



     Edward K. Wong, pro se.

     Sylvia L. Shaughnessy and Jenny A. Moon, for respondent.



                       MEMORANDUM OPINION


     PAJAK, Special Trial Judge:   This case comes before the

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

on the grounds that the petition was not filed within the time

prescribed by section 6213(a) or section 7502.   Unless otherwise

indicated, section references are to the Internal Revenue Code in

effect for the year in issue, and all Rule references are to the
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Tax Court Rules of Practice and Procedure.

     Petitioners contend that respondent's motion to dismiss

should be denied on the theory that the original notice of

deficiency was "withdrawn and superceded by the Statement of Tax

Owing" which is the subject of their petition.

     At the time the petition was filed with the Court,

petitioners resided in Newport Beach, California.

     On June 15, 1998, respondent mailed petitioners a joint

notice of deficiency which stated that respondent had determined

a $10,283 deficiency for the 1995 taxable year.   The notice of

deficiency states in pertinent part that:    (1) petitioners have

90 days from the date of the letter within which to file a

petition with the United States Tax Court, (2) the Court cannot

consider a late petition, (3) the time to file cannot be extended

or suspended, and (4) the receipt of other information or

correspondence from the IRS will not change the period for filing

a petition.

     Petitioners, through their accountant, contacted respondent

and requested audit reconsideration some time around October 20,

1998.   Respondent replied to petitioners on October 20, 1998, in

a letter which stated that petitioners' case would be returned to

the examination group for evaluation.   At the bottom of this

letter is the handwritten statement "Time to file a petition has

expired".   The letter also clearly states that: "Correspondence
                                - 3 -

or interview during the 90-day period does not suspend the period

for filing a petition with Tax Court in Washington, D.C.   The

last day for filing a petition is 9/13/98".   Respondent concedes,

and we hold, that the 90-day period for timely filing a petition

with respect to this notice of deficiency expired on Monday,

September 14, 1998, because September 13, 1998, the 90th day,

fell on a Sunday.

     On January 12, 1999, respondent mailed petitioner a letter

that stated:

     Enclosed are two copies of a report supplementing the
     statutory notice of deficiency we sent you earlier. This
     report explains changes we made to our proposed adjustments.
     * * *

          If you do not accept, you may, within the period stated
     in the statutory notice, petition the United States Tax
     Court for a redetermination of your tax liability.

          This correspondence and consideration of your case has
     not extended the period in which you may file a petition
     with the United States Tax Court. If no petition is filed
     within the allotted time, we will assess the tax and bill
     you.

     Attached to the letter was an examination report which

showed that certain deductions were allowed, resulting in a

reduced deficiency of $8,606.

     On behalf of petitioners, their accountant wrote respondent

a letter dated January 19, 1999, which stated that the newly

determined amount of the deficiency had the legal effect of

withdrawing the notice of deficiency.   Respondent did not reply

to this letter.   Petitioners filed their petition based on the
                                - 4 -

January 12, 1999, statement of tax owing.    The petition was filed

with this Court on April 13, 1999, and the U.S. postmark on the

petition's envelope was April 9, 1999.

     Respondent filed a motion to dismiss for lack of

jurisdiction on the ground that the petition was not timely

filed.   Petitioners filed an opposition to respondent's motion to

dismiss alleging that the notice of deficiency was withdrawn and

superseded by the statement of tax owing on which their petition

was based.    Respondent then filed a response to petitioners'

opposition and denied that the revised examination report

(statement of tax owing) "constituted a second notice of

deficiency that superceded or withdrew the notice of deficiency,

dated June 15, 1998".    Respondent's response, citing section

6212(d), stated that once a notice of deficiency has been issued,

it may be rescinded only with the taxpayer's consent.    Respondent

further stated that the June 15, 1998, notice of deficiency had

never been rescinded.    Petitioners then filed a reply to

respondent's response.    Petitioners restated their position and

stated that their January 19, 1999, letter to respondent

communicated their consent to withdrawal of the notice of

deficiency.    Respondent filed a supplement to respondent's

response, and petitioners filed a reply and opposition to the

supplement.    A hearing was held in San Diego, California, on

respondent's motion.
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     The 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).    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.       A

notice of deficiency is sufficient if it is mailed to the

taxpayer at the taxpayer's last known address.     Sec. 6212(b)(1).

Pursuant to section 6213(a), the taxpayer has 90 days (or 150

days if the notice is addressed to a person outside of the United

States) from the date that the notice of deficiency is mailed to

file a petition with the Court for a redetermination of the

deficiency.

     Section 6212(d) authorizes the Commissioner, with the

consent of the taxpayer, to rescind any notice of deficiency

mailed to the taxpayer.    If a notice of deficiency is rescinded,

the taxpayer has no right to file a petition with the Court based

on such a notice.    Sec. 6212(d).   Moreover, a notice that is

rescinded is not treated as a notice of deficiency for purposes

of section 6212(c)(1), which restricts the issuance of further

notices of deficiency.    Sec. 6212(d).

     The parties do not dispute that the notice of deficiency was

mailed to petitioners at petitioners' last known address, nor do

the parties dispute that the petition was mailed and filed more
                                - 6 -

than 90 days after the issuance of the June 15, 1998, notice of

deficiency.   In fact, the 90-day period for filing a timely

petition with respect to the notice of deficiency dated June 15,

1998, expired on September 14, 1998.    The petition was mailed to

this Court on April 9, 1999, 298 days after the mailing of the

notice of deficiency.

     A taxpayer’s contention that the notice of deficiency was

rescinded has been argued before and has been rejected.     Powell

v. Commissioner, T.C. Memo. 1998-108; Slattery v. Commissioner,

T.C. Memo. 1995-274.    In Slattery we stated that:

     Section 6212(d) provides that the Secretary may, with the
     consent of the taxpayer, rescind any notice of deficiency
     mailed to the taxpayer. Clearly, the statute requires
     mutual consent by the Secretary and the taxpayer to effect a
     rescission of a notice of deficiency.4 We know of no
     authority deeming a notice of deficiency rescinded in
     absence of a formal rescission.
          4
           The Internal Revenue Service has provided guidance to
     taxpayers wishing to consent to the rescission of a notice
     of deficiency. See Rev. Proc. 88-17, 1988-1 C.B. 692. This
     revenue procedure requires the taxpayer to request Form
     8626, Agreement to Rescind Notice of Deficiency, which
     becomes effective when executed on behalf of the
     Commissioner.

     Rev. Proc. 98-54, 1998-43 I.R.B. 7, modifies Rev. Proc. 88-

17 by allowing the use of (in lieu of Form 8626) a document which

reflects the agreement by the taxpayer and the Internal Revenue

Service to rescind the notice of deficiency.   The document will

not be effective unless it meets five criteria, one of which is

that it contain the signatures of both the Commissioner's
                               - 7 -

delegate and the taxpayer (or the taxpayer's representative).

Rev. Proc. 98-54, 1998-43 I.R.B. 7.    This revenue procedure also

states that the Service will not rescind a notice of deficiency

when the 90-day period has expired without the taxpayer’s filing

a petition with the Court.

     Petitioners in the present case never filed a Form 8626.

They argue that the January 19, 1999, letter written by their

accountant to respondent provides their consent to the

rescission.   The letter lacks the signature of the Commissioner's

delegate.   In their opposition to respondent's motion to dismiss,

petitioners argue that because respondent did not reply to this

letter, the statements are deemed admitted, thereby causing a

rescission of the notice of deficiency.   Petitioners have no

valid legal basis for this contention.

     It is difficult for us to understand how petitioners could

honestly believe there was a rescission, because respondent

repeatedly notified petitioners on all correspondence that

subsequent discussions or findings would not have any effect on

the 90-day period in which petitioners could petition for a

redetermination.   Even if petitioners actually believed there was

a rescission, "the rescission of a notice of deficiency is not a

function of the taxpayer's subjective belief.   Rather, the

rescission of a notice of deficiency requires mutual consent by

the Commissioner and the taxpayer, and such mutual consent must
                                - 8 -

be objectively apparent."    Powell v. Commissioner, supra.     In

this case, there is no objective manifestation of mutual consent

by the parties to rescind the June 15, 1998, notice of

deficiency.

     Contrary to petitioners’ argument, this Court has stated

that "Further consideration of a taxpayer's case after the

mailing of the notice of deficiency, coupled with respondent's

concession of a portion of the previously determined deficiency,

does not result in the rescission of the notice of deficiency."

Id. (citing Hesse v. Commissioner, T.C. Memo. 1997-333; Mullings

v. Commissioner, T.C. Memo. 1997-114; Slattery v. Commissioner,

supra).   Based on all the facts, we find that the June 15, 1998,

notice of deficiency was not rescinded.

     Petitioners' petition was filed based on their position that

the January 12, 1999, statement of tax owing constituted a new

notice of deficiency.    Because the June 15, 1999, notice of

deficiency was not rescinded, the statement of tax owing could

not operate as a new notice of deficiency.    This Court lacks

jurisdiction over a petition that is filed with respect to a

letter from the Commissioner to the taxpayer, if the letter did

not constitute a notice of deficiency.    Powell v. Commissioner,

supra.    It is clear from respondent's correspondence that the

statement of tax owing was not to be construed as a new notice of

deficiency, nor did it alter the running of the 90-day period.
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Additionally, petitioners did not even begin to discuss audit

reconsideration with respondent until after the 90-day period had

expired.

     We find that petitioners did not file their petition for

redetermination with this Court within the time prescribed by

sections 6213(a) and 7502.   Therefore, we lack jurisdiction to

redetermine the 1995 tax liability of petitioners.       We grant

respondent's motion to dismiss for lack of jurisdiction.

     To the extent we did not discuss any of the parties'

arguments, we have considered them and find them to be without

merit.

     To reflect the foregoing,



                                         An order granting respondent's

                                 motion to dismiss for lack of

                                 jurisdiction will be entered.
