IRS Prevails Over Taxpayer In Establishing Last Known Address for Contacting Taxpayer
The Facts of the Case
Damian and Shayla Gregory moved in 2015. After moving, they filed their 2014 Form 1040 using their former address. The IRS audited their 2014 tax return and the married couple filed Form 2848, POA, with the IRS using their new address. The couple had also filed an extension of time to file their 2014 tax return and had shown their new address on that filing.
As a result of the IRS audit examination, the IRS mailed the Gregorys a notice of deficiency in October of 2016 to their old address. The Post Office returned the notice of deficiency to the IRS and marked the mailing as undeliverable. At that time, the couple had not yet filed their 2015 Form 1040. The Gregorys were thus unaware that the IRS had sent them a notice of deficiency and did not timely petition the Tax Court for a hearing within the statutory 90 days.
What Is the Last Known Address?
The taxpayers argued before the Tax Court that the IRS had mistakenly sent its audit deficiency to their old address and not their last known (current) address, and therefore the IRS assessment lacked standing before the court. Unfortunately for the taxpayer, the requirements of Rev. Proc. 2010-16 had not been met and the Tax Court concluded that the IRS had sent its notice of deficiency to the taxpayer’s “last known address”. Thus, the taxpayer’s petition was not timely filed.
Rev. Proc. 2010-16
This Revenue Procedure requires a clear and concise written statement , signed by the taxpayer, mailed to the appropriate IRS address for an address change requesting an address change that shows both the former mailing address and the new mailing address. The Forms 2848 and 4868 that the taxpayer had sent to the IRS with their new address did not inform the IRS that these forms should be interpreted as an address change, and neither form included the taxpayer’s former address.
Tax Planning Tip #1:
When filing Form 1040, the taxpayers should always use their current mailing address. For example, the Gregorys likely believed that they should show their 2014 address on their 2014 Form 1040. Instead, they should have used their 2015 mailing address since the move had been completed before the filing of the 2014 tax return.
Tax Planning Tip #2:
Taxpayers can easily notify the IRS of an address change by filing IRS Form 8822, Change of Address, to the service center based on the mailing address of their former residence.
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About F. Bryan Haarlander, EA, CTRS:
Bryan Haarlander is an IRS licensed Enrolled Agent and who owns and operates a specialized tax services firm serving clients in the western suburbs of Philadelphia, PA, which includes the cities of Chester Springs, Coatesville, Collegeville, Devon, Downingtown, Exton, Frazer, King of Prussia, Paoli, Philadelphia, Phoenixville, Pottstown, Radnor, Reading, Wayne, West Chester in Berks, Chester, Delaware, Montgomery and Philadelphia Counties, as well as clients in Delaware, New Jersey, New York and throughout the continental USA.
A Certified Tax Resolution Specialist, Bryan is well-known for his IRS tax resolution expertise and his book How to Resolve Your IRS Tax Debt Problems.