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GOING UP THE RIVER? BE SURE TO TELL IRS

June 22, 2005

We've all moved, and we all know the ritual of sending forwarding information to our friends. Next time, don't forget your friends at the Internal Revenue Service. David Broomfield forgot, and yesterday it led to his defeat in Tax Court.

Mr. Broomfield was disputing a deficiency on his 1991 tax return. He had a telephone conference with an IRS Appeals officer on November 6, 2002, and was given a December 11 deadline to file back tax returns.

Mr. Broomfield was involuntarily given a new address on November 14, 2002: the Oakhill Correctional Institution in Oregon, Wisconsin; it seems that he had pleaded guilty to a "5th+" charge of operating while intoxicated. He had mentioned this move to the appeals officer, but hadn't given him a forwarding address.

TIMING IS EVERYTHING, IN TAX COURT

After Mr. Broomfield failed to file the back tax returns, the IRS on January 30, 2003 mailed him a "Notice of Determination," which gives a taxpayer 30 days to file a Tax Court petition to fight the tax. If you miss the deadline, your only recourse is to pay the tax and sue for a refund in U.S. District Court.

Unfortunately for Mr. Broomfield, the notice was mailed to his home address, rather than to the prison. Mr. Broomfield's petition wasn't postmarked until March 15, 2003 - after the 30 days had expired. The Tax Court ruled that the IRS had mailed the notice to his last known address, and that he had missed his chance in Tax Court.

Somewhat ironically, some cases have ruled that if the IRS puts you in jail, they are assumed to know your new address. That loophole was unavailable to Mr. Broomfield.

THE MORAL: Even when your new address is the Graybar Motel, be sure to file Form 8822 so your "friends" at IRS can reach you.

Cite: Broomfield v. Commissioner, T.C. Memo. 2005-148.

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