                        T.C. Memo. 2011-243



                      UNITED STATES TAX COURT



         SHELBY L. AND DONZELLA H. JORDAN, Petitioners v.
           COMMISSIONER OF INTERNAL REVENUE, Respondent*



     Docket No. 14572-07L.             Filed October 5, 2011.



     Pierce J. Guard, Jr., for petitioners.

     Miriam C. Dillard, for respondent.



                 SUPPLEMENTAL MEMORANDUM OPINION


     WELLS, Judge:   This case is before the Court on the parties’

cross-motions for summary judgment pursuant to Rule 121.1   We


     *
      This opinion supplements Jordan v. Commissioner, 134 T.C. 1
(2010).
     1
      Unless otherwise indicated, section references are to the
Internal Revenue Code of 1986, as amended, and Rule references
                                                   (continued...)
                               - 2 -

must decide whether, on remand, respondent’s Appeals Office

properly verified that a notice of deficiency was mailed to

petitioners for their 1986, 1988, and 1989 tax years.

                            Background

     Many of the relevant facts are set forth in our prior

Opinion in Jordan v. Commissioner, 134 T.C. 1 (2010) (prior

Opinion), and are incorporated by reference.   Additionally, some

of the facts discussed in this Opinion are taken from the

parties’ moving papers and attachments.2

     At the time they filed their petition, petitioners resided

in California.

     Respondent sent a Notice of Determination Concerning

Collection Action(s) Under Section 6320 and/or 6330 (notice of

determination) to petitioners with respect to a lien filed to

collect petitioners’ unpaid tax liabilities for their 1986, 1987,

1988, 1989, 1994, and 1995 tax years.    Petitioners timely filed a

petition with this Court seeking review of respondent’s

determination.   Petitioners’ taxes for their 1987, 1994, and 1995

tax years were assessed on the basis of their joint tax returns



     1
      (...continued)
are to the Tax Court Rules of Practice and Procedure.
     2
      Those attachments include certified copies of the Forms
4340, Certificate of Assessments, Payments, and Other Specified
Matters, and copies of the notices of deficiency on which
respondent’s Appeals Office relied during the hearing on remand.
The parties do not dispute the authenticity of the attachments.
                                 - 3 -

after petitioners failed to pay the taxes shown on those returns.

There are no remaining factual or legal issues concerning

petitioners’ 1987, 1994, and 1995 tax years, and the parties

agree that the Court should enter a decision sustaining

respondent’s determination with respect to those years.

     Petitioners filed their 1986 tax return on December 9, 1987;

their 1988 tax return on June 22, 1990; and their 1989 return on

September 21, 1990.   Petitioners’ taxes for the 1986, 1988, and

1989 tax years were assessed following audits.    In the reply

brief they filed before we entered our prior Opinion, petitioners

contended for the first time that the administrative record

showed that a notice of deficiency had not been issued for those

years.   Petitioners did not testify at trial that they did not

receive notices of deficiency.    Nonetheless, because the

administrative record did not state that the Appeals Office had

verified that notices of deficiency were sent, we remanded the

case for the Appeals Office to clarify the record.    In our prior

Opinion, we stated:

          The record before us is unclear as to whether a notice
     of deficiency was sent to petitioners for their 1986, 1988,
     and 1989 tax years. We have held that a verification
     generally is proper if the Appeals officer relied on a Form
     4340, Certificate of Assessments, Payments, and Other
     Specified Matters, or a transcript containing similar
     information. Nestor v. Commissioner, 118 T.C. 162 (2002).
     There is no mention of a Form 4340 in the record. Moreover,
     the original assessment dates in the early 1990s covered
     petitioners’ 1986, 1988, and 1989 tax years; however, the
     transcript provided covers only petitioners’ tax years 2000
     and forward. We therefore remand the instant case to
                                  - 4 -

     respondent’s Appeals Office to clarify the record as to
     whether a notice of deficiency was sent to petitioners for
     each of the 1986, 1988, and 1989 tax years.

Jordan v. Commissioner, supra at 12-13.

     On remand, respondent’s Appeals Office placed in the

administrative file certified copies of Forms 4340, Certificate

of Assessments, Payments, and Other Specified Matters, for each

of petitioners’ 1986, 1988, and 1989 tax years, each dated

February 4, 2010.   Although the Forms 4340 do not state that a

notice of deficiency was mailed to petitioners, the Forms 4340

each contain an entry stating:    “additional tax assessed by

examination audit deficiency per default of 90 day letter.”

Petitioners signed a consent to extend the time to assess tax for

their 1986 tax year on December 5, 1990.    The assessment for

petitioners’ 1986 tax year was made on June 1, 1992, and the

assessments for petitioners’ 1988 and 1989 tax years were made on

April 26, 1993.

     In addition to the Forms 4340, the Appeals Office placed in

the administrative file copies of the notices of deficiency.      The

notice of deficiency for petitioners’ 1986 tax year is stamped

with the date December 6, 1991.    The notice of deficiency for

petitioners’ 1988 and 1989 tax years is stamped with the date

October 28, 1992.   Both notices of deficiency are addressed to

petitioners’ last known address, which is the same address

petitioners used when they filed their petition in this Court.
                               - 5 -

     After reviewing the Forms 4340 and copies of the notices of

deficiency for petitioners’ 1986, 1988, and 1989 tax years,

respondent’s Appeals Office issued supplemental notices of

determination.

                            Discussion

     Rule 121(a) allows a party to move “for a summary

adjudication in the moving party’s favor upon all or any part of

the legal issues in controversy.”   Rule 121(b) directs that a

decision on such a motion shall be rendered “if the pleadings,

answers to interrogatories, depositions, admissions, and any

other acceptable materials, together with the affidavits, if any,

show that there is no genuine issue as to any material fact and

that a decision may be rendered as a matter of law.”    In the

instant case, the parties have made cross-motions for summary

judgment, and each party contends that there are no genuine

issues of material fact and that the party is entitled to summary

judgment as a matter of law.

     Generally, the Commissioner is not entitled to collect a tax

by administrative means until it has been formally and timely

assessed.   When the taxpayer files a return, the Commissioner may

summarily assess the amount shown on the return without issuing a

notice of deficiency.   Sec. 6201(a).    However, when a deficiency

exists, the Commissioner must issue a notice of deficiency and

wait 90 days before assessing the tax.    Secs. 6212(a), 6213(a).
                                - 6 -

To be timely, the assessment generally must be made within the

3-year period of limitations.   Sec. 6501(a).

     When we review an Appeals Office determination under section

6330(d), we review the Appeals Office’s consideration of all

issues that were raised by the taxpayer, and we also consider

whether the Appeals Office conducted the verification required by

section 6330(c)(1).    Jordan v. Commissioner, 134 T.C. at 12;

Hoyle v. Commissioner, 131 T.C. 197, 202 (2008).   Section

6330(c)(1) requires that, as part of its review, the Appeals

Office verify that a valid notice of deficiency was issued to the

taxpayer.   Jordan v. Commissioner, supra at 12; Hoyle v.

Commissioner, supra at 202.

     The act of mailing the notice of deficiency generally is

proven by evidence of the Commissioner’s mailing practices

corroborated by direct testimony or documentary evidence of

mailing.    Coleman v. Commissioner, 94 T.C. 82, 90 (1990);

Magazine v. Commissioner, 89 T.C. 321 (1987).   A Postal Service

Form 3877 reflecting Postal Service receipt represents direct

documentary evidence of the date and the fact of mailing and also

shows compliance with established   Internal Revenue Service (IRS)

procedures for mailing notices of deficiency.    Coleman v.

Commissioner, supra at 90; Magazine v. Commissioner, supra at

324, 327.   Exact compliance with Postal Service Form 3877 mailing

procedures raises a presumption of official regularity in favor
                               - 7 -

of the Commissioner and is sufficient, absent evidence to the

contrary, to establish that a notice of deficiency was properly

mailed.   Hoyle v. Commissioner, 136 T.C. ___, ___ (2011) (slip

op. at 10); Coleman v. Commissioner, supra at 91.   A certified

mailing list containing the same information as Postal Service

Form 3877 may also be relied upon to establish mailing.    Hoyle v.

Commissioner, 136 T.C. at ___ (slip op. at 10).

     Respondent contends that the certified mailing lists related

to petitioners’ tax years 1986, 1988, and 1989 were destroyed

after 10 years pursuant to IRS procedures for document retention.

Because respondent does not have the certified mailing lists in

his possession, he contends that the Appeals Office should be

allowed to rely on Forms 4340 to verify that the notices of

deficiency were mailed to petitioners.

     We have held that a verification that a notice of deficiency

was issued generally is proper if the Appeals Office relied on a

Form 4340, unless the taxpayer demonstrates an irregularity in

the assessment procedure that would raise a question about the

validity of the assessments.   Jordan v. Commissioner, supra at

12-13; Nestor v. Commissioner, 118 T.C. 162, 166 (2002); Davis v.

Commissioner, 115 T.C. 35, 41 (2000).    In Hoyle v. Commissioner,

131 T.C. at 205 n.7, we stated that “where a taxpayer alleges no

notice of deficiency was mailed he has * * * ‘[identified] an

irregularity’, thereby requiring the Appeals officer to do more
                                - 8 -

than consult the computerized records”, including the Form 4340.

In that footnote in Hoyle, we referred to Chief Counsel Notice

CC-2006-19 (Aug. 18, 2006), which cited Nestor v. Commissioner,

supra, for the proposition that the Appeals Office may rely on

the Form 4340 in the absence of an irregularity identified by the

taxpayer.   In Nestor v. Commissioner, supra at 167, we stated:

“The Forms 4340 that respondent gave petitioner before trial

showed that the amounts at issue were properly assessed, and

petitioner did not show at trial any irregularity in the

assessment procedure that would raise a question about the

validity of the assessments.”   (Emphasis added.)   According to

our holding in Nestor, therefore, the burden is on the taxpayer

to show at trial that an irregularity existed.   If the taxpayer

does not offer any evidence to show an irregularity, the IRS may

rely on computerized records, including the Form 4340, to verify

that the notice of deficiency was sent and the tax properly

assessed.   See id.

     When we remand a case to the Appeals Office to clarify the

record as to whether a notice of deficiency was mailed to a

taxpayer, the Appeals Office is not limited to what the Appeals

Office considered during the first administrative hearing.     Hoyle

v. Commissioner, 136 T.C. at ___ (slip op. at 10).    Rather, on

remand the Appeals Office is to independently verify that a

notice of deficiency was properly mailed to the taxpayer.     Id.
                                - 9 -

     Petitioners did not proffer any evidence suggesting an

irregularity in the assessment procedure.    At trial petitioners

did not testify that they never received the notice of

deficiency.   Nor did they raise the issue at any other time

during the proceedings before this Court or before respondent’s

Appeals Office.    Indeed, it was not until their reply brief that

they contended that the administrative record showed that no

notice of deficiency had been sent.     A contention in a brief that

the administrative record showed that no notice of deficiency was

mailed is not a showing of irregularity.    In contrast, the

taxpayer in Hoyle v. Commissioner, 131 T.C. at 200 n.3, testified

at trial that he did not receive a notice of deficiency.       In the

instant case, there is no such factual dispute.    Instead, the

parties’ disagreement is about what documents respondent is

required to produce to show that the notice of deficiency was

properly mailed.

     Accordingly, because petitioners did not show that there was

an irregularity, we hold that Forms 4340, combined with copies of

the notices of deficiency, may be used to verify that the notices

of deficiency were mailed to petitioners’ last known address and

that the tax was properly assessed.

     The Forms 4340 do not contain entries stating that notices

of deficiency were mailed to petitioners, but the Forms 4340 do

state:   “additional tax assessed by examination audit deficiency
                              - 10 -

per default of 90 day letter.”   Chief Counsel Notice CC-2006-19

(Aug. 18, 2006) notes that the Form 4340 “currently provide[s]

verification of assessment of the liability and the sending of

collection notices”, but it is silent on whether the Form 4340

provides verification that the notice of deficiency was mailed.3

In two recent District Court cases, the Forms 4340 the IRS

provided did not state that a notice of deficiency had been

mailed to the taxpayers, but those courts nonetheless held that

the IRS could rely on the designation “additional tax assessed by

examination audit deficiency per default of 90 day letter” as

evidence suggesting that a notice of deficiency had been mailed.

See United States v. Stevenson, 105 AFTR 2d 2010-2933 (E.D. Pa.

2010); Laeger v. United States, 105 AFTR 2d 2010-1707 (W.D. La.

2010).   In neither case did the taxpayers provide credible

evidence that they did not receive the notices of deficiency.

     In the instant case, the dates stamped on the copies of the

notices of deficiency are more than 90 days before the assessment

dates on the Forms 4340.   The copies of the notices of deficiency

show petitioners’ last known address.   We conclude that the Forms

4340, combined with the copies of notices of deficiency, are

sufficient to show that the respective notices of deficiency were

timely mailed to petitioners at their last known address.


     3
      It is unclear whether it is IRS practice to make an entry
on the Form 4340 stating that the notice of deficiency has been
mailed.
                             - 11 -

Consequently, we hold that respondent’s Appeals Office properly

verified on remand, pursuant to section 6330(c)(1), that “the

requirements of any applicable law or administrative procedure

have been met.”

     In reaching these holdings, we have considered all the

parties’ arguments, and, to the extent not addressed herein, we

conclude that they are moot, irrelevant, or without merit.

     To reflect the foregoing,


                                        An appropriate order and

                                   decision will be entered.
