Analysis of and reflections on recent cases and rulings.

• Author: Beavers, James A.
• Position: TAX TRENDS

Procedure & Administration

Validity of notice is based on how and where it was sent, not who received it

A notice of the right to a Collection Due Process (CDP) hearing that was sent to a taxpayer at his actual address started the running of the 30-day period to request a CDP hearing even though it was received by a person who was not the taxpayer's employee or authorized to receive his mail.

Background

As of July 13, 2018, Wiley Ramey owed almost $250,000 in tax, interest, and penalties to the IRS for the tax years 2012 to 2016. The IRS wanted to levy Ramey's assets to collect what he owed, and, as it was required, it sent Ramey a Notice LT11, Notice of Intent to Levy and Notice of Your Right to a Hearing, for those years.

The notice informed Ramey that the IRS intended to levy on his property and property rights, and if he wanted to appeal the proposed levy in a CDP hearing, he was required to file a request for a hearing by Aug. 12, 2018. It further warned Ramey that if he did not timely file his request for a CDP hearing, he would not be able to contest Appeals' decision in his case in Tax Court.

The notice was mailed to Ramey by U.S. Postal Service (USPS) certified mail, return receipt requested, to an address in San Simeon, Calif, that he shared with a number of other businesses. Three days after the IRS mailed the notice, the USPS delivered it to the San Simeon address, leaving it with a person who Ramey claimed was not his employee and was not authorized to sign for or receive certified mail on his behalf. Ramey personally received the notice sometime before the Aug. 12 deadline for filing a request for a CDP hearing.

Ramey wanted a CDP hearing, so he filled out a Form 12153, Request for a Collection Due Process or Equivalent Hearing, and submitted it to the IRS. The Form 12153 was dated Aug. 16, 2018, and the envelope it was sent in was postmarked Aug. 20, 2018. The IRS received it on Aug. 24, 2018.

Because Ramey sent the Form 12153 more than 30 days after the IRS sent its notice to him, Appeals gave Ramey an administrative "equivalent hearing" under Regs. Sec. 301.6330-1(i)(1). After the equivalent hearing, the IRS issued Ramey a decision letter in which it sustained the notice, stating "Your request for a CDP Hearing was not timely since it was not received within the 30-day time period as set in the statute."

Ramey petitioned the Tax Court to review the IRS's decision. The IRS filed a motion to dismiss the case for lack of jurisdiction, claiming it had not issued a Notice of Determination Concerning Collection Action (notice of determination) pursuant to a CDP hearing or any other notice to Ramey that conferred jurisdiction on the Tax Court for the years at issue.

Sec. 6330 and the regulations

Sec. 6330 gives a taxpayer on whose property or property rights the IRS intends to levy the right to a CDP hearing by IRS Appeals, generally before the levy is made. Under Sec. 6330(a)(2), the IRS is required to notify the taxpayer of the right to a CDP hearing by a notice either given to the taxpayer in person, left at the taxpayer's dwelling or usual place of business, or sent by certified or registered mail, return receipt requested, to the person's last known address. The notice must be provided to the taxpayer in one of these ways not less than 30 days before the day of the first levy with respect to the amount of the unpaid tax.

If the taxpayer desires to have a CDP hearing, the taxpayer must request the hearing during the 30-day period described in Sec. 6330(a)(2). Within 30 days of IRS Appeals' determination in a CDP hearing, the...