Search Knowledge Base by Keyword
Taxpayers Guide to LLCs and S Corps
Expat and Expatriate KB
Rental Property KB
Other Tax Information KB
Small Business KB
- Articles coming soon
Can I ignore an IRS notice or claim I never received it?
Good luck. The Tax Court recently ruled that a taxpayer had actually received a tax deficiency notice even though the IRS made a clerical mistake in addressing the notice. In this particular case and several prior cases, the taxpayer never physically touched the envelope. Yet the tax Court ruled he still had constructively received it according to previous case law.
Section 6212(a) of the tax code allows the IRS to send notices by certified or registered mail. Typically the taxpayer has 90 days from the date the notice was mailed to file a petition with the Tax Court for redetermination of the deficiency. A taxpayer has 150 days if he or she is living outside the United States.
Sending a notice of deficiency to the last known address is not the only way the IRS can deliver a notice to a taxpayer. The Court has held in the past that sending the notice to the last known address is merely a safe harbor whereby the notice will be considered received by the taxpayer even it if never was. Bummer.
Further, the last known address caveat is not a factor if the taxpayer actually receives the notice through other constructive means. Actual receipt can take several forms such as receiving the envelope and throwing it away, or deliberately refusing delivery from the Postal Service. Also, delivery notifications from the Postal Service (you know, those annoying yellow or salmon colored notes) might be considered constructive receipt even if the taxpayer never physically has the envelope containing the notice. In other words, attempted delivery is delivery.
In this particular Tax Court case (Tax Court Memo 2012-278), the court found that the taxpayer did not have problems receiving other mail and since the taxpayer’s wife clearly understood the importance of an IRS notice after her own tax audit, the Tax Court ruled that the taxpayer had actually received the notice. Subsequently he did not petition the Tax Court within the statutory 90 day window, and therefore was denied his petition for determination of tax deficiency.
If the 90 day window expires, and in this court case it had, relief is to still available. You can pay the tax, and then you have two years from the payment date to challenge the tax with a refund suit in the US Court of Federal Claims or the US District Court. Sounds like fun- we suggest keeping the IRS updated on your current address, don’t ignore notices, and make sure your spouse doesn’t toss out the mail.