Greve v. Commissioner

WILLIAM M. GREVE, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT. Greve v. Commissioner Docket No. 75686. United States Board of Tax Appeals 37 B.T.A. 450; 1938 BTA LEXIS 1033; March 9, 1938, Promulgated *1033 DEFICIENCY NOTICE - JURISDICTION. - A notice of deficiency mailed by registered mail to an address other than petitioner's and not received by petitioner, but returned by postal authorities to the Commissioner, who remailed it by ordinary mail to petitioner's counsel, held, not a statutory notice of deficiency. Proceeding based on such notice dismissed for want of jurisdiction. Henry Wilson,16 B.T.A. 1280, followed. Lawrence A. Baker, Esq., and Henry Ravenel, Esq., for the petitioner. F. D. Strader, Esq., for the respondent. ARUNDELL *450 In this proceeding the respondent determined a deficiency in income tax for the calendar year 1931 in the amount of $23,779.05. Two hearings have been had. The first hearing was on the questions of whether the respondent on or before March 15, 1934, mailed a statutory notice of deficiency, and whether the Board has jurisdiction in the case. That hearing was held pursuant to the petitioner's motion for a severance of the issues. Upon conclusion of the first hearing a memorandum opinion was entered holding that we had jurisdiction, and denying the petitioner's motion to dismiss*1034 for want of jurisdiction. At the second hearing the case was called for trial on the merits. At the opening of the second hearing, counsel for the petitioner renewed his motion for dismissal for want of jurisdiction. The motion was denied by the presiding member and the proceeding was heard on the merits. Upon further consideration we are now of the opinion that we erred in our memorandum opinion heretofore entered. Our findings are confined to the jurisdictional issue. FINDINGS OF FACT. The petitioner filed his income tax return for 1931 with the collector for the first district of New York on March 15, 1932. That return showed the petitioner's address as 331 Madison Avenue, New York, New York. That address had not been changed on February 23, 1934, on which date the respondent mailed a notice of deficiency for the year 1931 by registered mail addressed to the petitioner at 331 Madison Avenue, Brooklyn, New York. The deficiency notice was returned to the respondent by the postal authorities. The respondent did not remail it to the petitioner at his proper New York address, *451 and the notice was not in the petitioner's personal possession at any time prior*1035 to March 15, 1934. On March 8, 1934, the respondent mailed it by ordinary mail in petitioner's name, care of his Washington counsel, Lawrence A. Baker, accompanied by a letter to the petitioner informing him of the previous mailing of the notice and of its return by the postal authorities to the respondent. Thereupon said counsel remailed the notice to the respondent on March 10, 1934, informing him that, while he had a power of attorney from the petitioner, such power of attorney did not authorize him to accept the notice. Thereafter on April 5, 1934, the respondent remailed the notice to petitioner's Washington counsel, Lawrence A. Baker. On April 20, 1934, the petitioner filed a petition with the Board, reciting therein briefly the facts concerning the mailing of the deficiency notice substantially as set out above, and stating further that he was submitting to the Board for the purpose of having the Board rule on the question of jurisdiction. OPINION. ARUNDELL: The facts in this case are quite similar to those in the case of *1036 . In that case the respondent sent a notice of deficiency by registered mail addressed to Mrs. Henry Wilson at 110 Market St., Oakland, California. She had never lived at that address, and the notice was return undelivered to the respondent and was remailed by ordinary mail addressed to the petitioner at 110 Market St., San Francisco, California. The latter address was the business address of a partnership of which the petitioner's husband was a member. The second letter, with its enclosures, was received by the petitioner. We held, on the facts in the Wilson case, that no statutory deficiency notice had been sent to the petitioner and that we had no jurisdiction. The opinion on the jurisdictional question reads as follows: It is clear from the evidence that the address used by the Commissioner in the issuance of the original deficiency notice was not, and never had been, the residence or other address of the petitioner. Under several of our prior decisions such mailing could not be considered a compliance with the provisions of section 274(a) of the Revenue Act of 1926, and consequently could not be considered a compliance with*1037 the provisions of section 283(a) of the same Act. See ; ; ; . The petitioner also calls attention in her brief to our decision in the case of . This last decision is somewhat different from those previously cited, in that a deficiency notice was attempted to be delivered by hand, and we held that the method of notice provided by statute was exclusive, with the result that no other method, though it might be effectual in giving actual notice, could be deemed to be a compliance with the statute. *452 Since the original mailing did not under our decisions constitute such a notice as the statute contemplates, in that it was not mailed to the correct address, and since the the second notice enclosing the first did not constitute a compliance with the statute in that it was not registered, it is apparent that no notice, either for the year 1922 or 1923, such as that provided for by statute, was ever sent to the petitioner. As a consequence, *1038 we must hold that there is no basis for a proceeding before this Board in the case of this petitioner for either of the years 1922 or 1923, and, being without jurisdiction, we dismiss the proceeding. The reasoning quoted above is applicable here. The original mailing, having been directed to a wrong address, did not constitute a statutory notice of deficiency, and the second notice did not constitute a compliance with the statute in that it was not registered. There having been no statutory notice of deficiency, there was no basis for a proceeding before this Board, and, being without jurisdiction, we must dismiss the proceeding. Our memorandum opinion previously entered was based largely on the case of , in which the notice of deficiency, although not addressed to the proper person, was sent by registered mail as required by the statute and came into the hands of the petitioner. The facts in that case are readily distinguishable from those in this case and in the Wilson case supra, and the conclusion reached in the Scruggs case, based on the facts therein, is not decisive of the question raised on*1039 the facts present in this proceeding. Cases cited by the respondent are also distinguishable. In , the notice of deficiency was actually received by the taxpayer and no question of error in the notice was raised until the case came on for trial before the Board. In that case the trustee was "the taxpayer." Some of the communications prior to the formal determination of a deficiency had been addressed by the Commissioner to the beneficiary in care of the trustee and some to the trustee. All, including the deficiency notice, were directed to the correct address of the trustee and were received by it. The court pointed out that "the notice of deficiency was not only received by the taxpayer, but it apparently was fully understood as referring to the liability of the trust company as trustee for this beneficiary." In its petition in that case the trustee raised no question as to the adequacy of the deficiency notice or as to jurisdiction. The court took the view that the filing of the petitioner was in effect a general appearance by which the petitioner, by invoking jurisdiction, waived any defect in the notice. *1040 It was held that under the facts there the taxpayer would not be permitted to change its position in an effort to prevent the collection of the tax. We need not here pass on the matter of whether a taxpayer can waive defects in a notice and thereby confer jurisdiction. It is plain that in this case there has been no waiver. The Commissioner was put on notice of error in his deficiency letter *453 when the postal authorities were unable to deliver it. He was given further notice of his error and also notice that there was no waiver of the error when Baker returned the letter to the Commissioner. These matters occurred within the statutory period and the Commissioner then had ample time to send a proper notice. No change of position can be charged against this taxpayer. He has maintained at all times that there was no proper notice of deficiency. Nor can it be said that he entered a general appearance. His petition stated the facts on which he claimed a lack of proper notice and specifically raised the question of jurisdiction. This method of procedure is in effect approved in the case of *1041 , affirming . There the Commissioner sent a notice of transferee liability to the estate of a decedent without having first made a determination against the decedent, who was the transferee. The propriety of the determination against the estate, rather than the decedent, was questioned in the petition filed with the Board. The petition so filed was pointed to by the Supreme Court, which said that when such a protect was made "the remedy available to the Commissioner was obvious and ample." The opinion reads in part: * * * In such circumstances, the cases cited by the government, where a formal defect has been ignored in circumstances tending toward an inference of waiver or estoppel [; * * *], have no relation to the case at hand. We are not required at this time to approve or disapprove them. In this case there was neither waiver nor estoppel, but a steady insistence that the deficiency had been assessed against the estate and no one else, and that the liability of the estate had ended. * * * *1042 In this case, as in the Hulburd case, there has been neither a waiver nor estoppel, but an unwavering insistence by the taxpayer that there was no proper notice of deficiency, and that insistence antedated the running of the statute of limitations. The case of , is likewise distinguishable. In that case the registered notice of deficiency was actually received by the taxpayer, as the court said, "in due course", although it had been directed to a wrong address. Upon further consideration of the jurisdictional question in this case, we are of the opinion that we erred in the conclusion reached in the memorandum opinion heretofore entered. That opinion is accordingly hereby vacated and the petitioner's motion to dismiss for want of jurisdiction is granted. An order of dismissed will be entered.