Summary
In Cowan v. Commissioner, 54 T.C. 647, 652 (1970), we held that the taxpayers, "who merely went across the border into Mexico for part of 1 day" were not persons outside the United States entitled to 150 days to file their petition.
Summary of this case from Smith v. Comm'rOpinion
Docket No. 4038-69.
1970-03-26
JULES COWAN AND YETTA COWAN, PETITIONERS v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT
Mark Pastor, for petitioner Jules Cowan. Loren P. Oakes, for the respondent.
Mark Pastor, for petitioner Jules Cowan. Loren P. Oakes, for the respondent.
Held: 1. The fact that one of petitioners, Jules Cowan, was in Tijuana, Mexico, from 9 a.m. until 7:30 p.m. on the day the notice of deficiency was mailed to him does not cause him to have 150 days from the date of the mailing of the notice of deficiency within which to file a petition with this Court.
2. The fact that two unidentified employees of the Internal Revenue Service told petitioner Jules Cowan that he had until Aug. 6, 1969, to file a petition with this Court seeking a redetermination of taxes determined in a notice of deficiency mailed to him on May 7, 1969, does not in effect constitute a remailing of the notice on May 8, 1969.
3. Since the petition was filed with the Court on the 93d day and mailed to the Court in an envelope postmarked on the 91st day after the date of the mailing by certified mail of the notice of deficiency to each petitioner, it is dismissed for lack of jurisdiction as to both petitioners.
SCOTT, Judge:
On September 19, 1969, respondent filed a motion to dismiss the petition in this case for lack of jurisdiction on the ground that the petition was not filed within 90 days after the mailing on May 7, 1969, of the notice of deficiency which determined deficiencies in petitioners' income tax and additions to tax for the calendar years 1960 through 1964. On September 24, 1969, this Court entered an order to the effect that the case would be dismissed for lack of jurisdiction unless petitioners on or before October 24, 1969, filed written objection to respondent's motion. On October 24, 1969, this Court received a document captioned in the names of ‘Jules Cowan and Yetta Cowan’ entitled ‘Objection to Motion to Dismiss' and signed by ‘Counsel for Petitioner,‘ which document was filed and signed by ‘Counsel for Petitioner,’ which document was filed on October 27, 1969, upon receipt of the entry of appearance of the counsel signing the document.
By order of this Court respondent's motion was calendared for hearing at the trial session of this Court in Los Angeles, Calif., commencing on January 26, 1970. At the hearing held on January 28, 1970, in Los Angeles, Calif., respondent offered the documentary evidence which had been attached to his motion to establish that on May 7, 1969, he mailed by certified mail a statutory notice of deficiency to petitioner Jules Cowan at 10610 Magnolia Boulevard, North Hollywood, Calif. 91601, and mailed a statutory notice of deficiency to petitioner Yetta Cowan at 6444 Fair Avenue, North Hollywood, Calif. 91601. The application for registration or certification, U.S. Post Office Form 3877, offered by respondent bore a handwritten notation ‘3 PM’ underneath the signature on behalf of the postmaster.
Petitioner Jules Cowan contends that under the provisions of section 6213(a), I.R.C. 1954,
he had 150 days within which to file his petition since on May 7, 1969, he was in Tijuana, Republic of Mexico. In the alternative he contends that because of conversations which he had with employees of the Internal Revenue Service there had been in effect a remailing of the notice of deficiency at a later date.
All references are to the Internal Revenue Code of 1954.
At the trial petitioner Jules Cowan, his present wife, and one other witness testified. This testimony disclosed the following facts.
FINDINGS OF FACT
On approximately May 1, 1969, Jules Cowan and his present wife, Marjorie Cowan, went on a vacation trip to Oceanside, Calif., which is about 40 miles north of San Diego. On the morning of May 7, 1969, Jules and Marjorie Cowan drove from Oceanside, Calif, to San Diego where Marjorie Cowan's daughter-in-law, Noralee Knight, joined them in order to accompany them to Tijuana, Mexico. Jules and Marjorie Cowan and Noralee Knight then drove from San Diego to Tijuana, Mexico, entering Mexico somewhere around 9 a.m. on May 7, 1969. They remained in Mexico until approximately 7:30 or 8 p.m. on May 7, 1969. After returning from Mexico on May 7, 1969, Jules and Marjorie Cowan returned to Oceanside, Calif. where they remained until May 11, 1969.
When petitioner Jules Cowan returned to his office in North Hollywood, Calif., on May 12, he found the notice of deficiency determining deficiencies in income taxes and additions to tax for the calendar years 1960 through 1964 which bore the date of May 7, 1969, and which had been mailed to him at the North Hollywood address on May 7, 1969.
The notice of deficiency was addressed, ‘Mr. Jules Cowan and Mrs. Yetta Cowan, 10610 Magnolia Boulevard, North Hollywood, California 91601.’ The notation ‘Certified Mail’ appeared at the top of the notice and the following statement was included therein:
the deficiency or deficiencies will be assessed for collection, as required by law, upon the expiration of 90 days (150 days if you are outside the States of the Union and the District of Columbia) from the date of this letter, unless within that time you contest this determination in the Tax Court of the United States by filing a petition with that Court in accordance with its rules. * * *
A petition seeking a redetermination of the deficiencies for each of the years 1960, 1961, 1962, 1963, and 1964 as determined in the notice dated May 7, 1969, was filed in this Court on August 8, 1969, in the names Of Jules Cowan and Yetta Cowan. The petition was signed and verified by both Jules Cowan and Yetta Cowan and was mailed in an envelope which bore a postmark, ‘Aug. 6, 1969 Burbank, California.’ Yetta Cowan was the wife of Jules Cowan during the years 1960 through 1964.
A little after 8 a.m. on May 12, 1969, Jules Cowan telephoned the Internal Revenue Service and told the person who answered the telephone that he had gone to Mexico on May 7, 1969, leaving in the morning and returning in the evening, that the letter dated May 7, 1969, had been received in his office on May 8 and had been received by him on May 12, upon his return to his office from his vacation. He then asked when he would have to file ‘a responsive document’ to the notice of deficiency. The unidentified individual whom petitioner had reached by telephone answered that he had until August 6.
On May 19, 1969, Jules Cowan went into the offices of the Internal Revenue Service in order to obtain some forms for use of some of his clients in his accounting business. After picking up the forms, petitioner Jules Cowan noticed that there was no one in line where the ‘agents' were. He walked over to the counter and showed a woman there the notice of deficiency dated May 7, 1969, which he had received, told her he had been in Mexico from some time in the morning until the early evening of May 7, 1969, and asked her what was ‘the last final date’ on which he was ‘supposed to answer this.’ The woman employee left the counter and went into another room. In a few moments she came back to the counter and said to petitioner Jules Cowan, ‘August 6 is the date that you could file the answer.’
OPINION
Respondent takes the position that under the provisions of section 6213(a)
petitioners' petition to this Court was required to be filed within 90 days after the notice of deficiency was mailed to each of them. Respondent takes the further position that any statements made to Jules Cowan by unidentified employees of the Internal Revenue Service would not extend the time allowed by statute for filing a petition with this Court.
SEC. 6213. RESTRICTIONS APPLICABLE TO DEFICIENCIES; PETITION TO TAX COURT.(a) TIME FOR FILING PETITION AND RESTRICTION ON ASSESSMENT.— Within 90 days, or 150 days if the notice is addressed to a person outside the States of the Union and the District of Columbia, after the notice of deficiency authorized in section 6212 is mailed (not counting Saturday, Sunday, or a legal holiday in the District of Columbia as the last day), the taxpayer may file a petition with the Tax Court for a redetermination of the deficiency. Except as otherwise provided in section 6861 no assessment of a deficiency in respect of any tax imposed by subtitle A or B and no levy or proceeding in court for its collection shall be made, begun, or prosecuted until such notice has been mailed to the taxpayer, nor until the expiration of such 90-day or 150-day period, as the case may be, nor, if a petition has been filed with the Tax Court, until the decision of the Tax Court has become final. Notwithstanding the provisions of section 7421(a), the making of such assessment or the beginning of such proceeding or levy during the time such prohibition is in force may be enjoined by a proceeding in the proper court.
Petitioner contends that he had 150 days from May 7, 1969, to file a petition with this Court contesting the deficiencies determined in the notice mailed to him on that date, since within the meaning of section 6213(a) the notice was addressed ‘to a person outside the State of the Union and the District of Columbia.’ Petitioner takes the further position that the notice should be considered to have been mailed to him on May 8 and not May 7 because of statements made to him by Internal Revenue Service employees.
The deficiency notice clearly informed petitioner that he had 90 days, or if out of the United States 150 days, within which to file a petition to this Court. The fact that two Internal Revenue Service employees may have computed 90 days from May 7, 1969, to be August 6, 1969, and not August 5, 1969, in no way serves to extend the time petitioner had for filing the petition.
Petitioner, himself, was capable of determining the 90-day or the 150-day period. Petitioner relies on Eppler v. Commissioner, 188 F.2d 94 (C.A. 7, 1951), reversing an order of this Court; Arlington Corp. v. Commission, 183 F.2d 448 (C.A. 5, 1950), reversing an order of this Court; Arkansas Motor Coaches v. Commissioner, 198 F.2d 189 (C.A. 8, 1952), reversing an order of this Court; and Tenzer v. Commissioner, 285 F.2d 956 (C.A. 9, 1960), reversing an order of this Court. Each of these cases, except Arlington Corp., deals with a deficiency notice which was mailed by registered or certified mail, not received by the taxpayer to whom it was addressed but returned to the Internal Revenue Service and again mailed or personally delivered to the addressee. Arlington Corp. v. Commissioner, supra, deals with a notice sent to an incorrect address of the taxpayer. These cases in no way support petitioner's contention that he had additional time to file his petition because of statements made to him by employees of the Internal Revenue Service. We hold that the statements made to petitioner Jules Cowan by the unidentified employees of the Internal Revenue Service did not extend the time allowed by statute for the filing of a petition to this Court.
Petitioner's actual testimony with respect to the telephone conversation with the unidentified person who answered the telephone when he called the Internal Revenue Service was that the person stated to him, after he told her that he had been in Mexico on May 7, 1969, that ‘if you are out of the Republic of— out of the United States and in the Republic of Mexico, you have one extra day to answer.’ We did not in making our findings include a finding that this statement was made to petitioner since we did not believe petitioner's recollection in regard to the words used to be correct. We found, as petitioner stated at another point, that the voice stated to petitioner that he had until August 6. However, if petitioner's recollection of the exact words of the employee was correct, our opinion would not be changed. The letter clearly informed petitioner of the time allowed for filing a petition and even if it had not, petitioner could have ascertained the time from the statute.
The more difficult question here is whether the time within which the petition was required to be filed was 90 or 150 days. Respondent contends that since there is no showing that Yetta Cowan was outside of the United States on May 7, 1969, the petition should be dismissed as to her in any event. Petitioner, Jules Cowan, however, contends that under our holding in Estate of William Krueger, 33 T.C. 667 (1960), and the holding of the United States Court of Appeals for the Second Circuit in Mindell v. Commissioner, 200 F.2d 38 (C.A. 2, 1952), reversing an order of this Court, his petition was timely. In Estate of William Krueger, we stated our agreement with the holding in Mindell v. Commissioner, that there is nothing in the language of the statute (sec. 6213(a)), or in its legislative history, to suggest that Congress intended to differentiate between persons temporarily absent from the United States and persons ‘regularly residing’ abroad in granting the 150-day period in which to file a petition to this Court where the notice is addressed to a person outside of the United States. Petitioner states that since he was outside of the United States for 10 or 11 hours on May 7, 1969, he was temporarily outside the United States when the notice of deficiency was mailed to him and under our holding in the Krueger case was entitled to the 150-day period within which to file his petition.
The underlying reason for granting the 150-day period for persons outside of the United States to file a petition with this Court was stated by the Court of Appeals in Mindell v. Commissioner, supra at 39, as follows:
Whatever the reason for the taxpayer's absence from the country receipt of the deficiency notice was likely to be delayed if he was not physically present at the address to which the notice was sent; hence, he was given additional time to apply for review of the deficiency. We think the fact of ‘residence’ abroad irrelevant.
This reasoning would have no application to a person who merely went across the border into Mexico for part of 1 day. We therefore conclude that the deficiency notice in this case was not addressed ‘to a person outside of the States of the Union and the District of Columbia’ within the meaning of section 6213(a).
Petitioner Jules Cowan contends that grave inequity would be done to him if his petition is dismissed and he is forced to pay the substantial tax and additions to tax under sections 6651(a) and 6653(a) which total approximately $13,500, as determined in the notice of deficiency together with interest thereon, prior to being able to litigate the merits of the determination. Whatever hardship may result to petitioner Jules Cowan from having to pay the determined amount cannot operate to enlarge the jurisdiction of this Court.
Reviewed by the Court.
An order will be entered dismissing the petition for lack of jurisdiction as to both petitioners.