## Facts

- Richard L. Mulvania timely filed his 1977 federal income tax return listing his address as 57 Linda Isle Drive, Newport Beach, California.
- The IRS proposed adjustments and corresponded with Mulvania; copies were also sent to his accountant, Gerald F. Simonis Accountants, Inc., under a limited power of attorney to receive copies of IRS correspondence.
- The IRS determined a 1977 deficiency and, on April 15, 1981 (the last day of the three-year assessment period), mailed a notice of deficiency by certified mail to an incorrect address (“St. Linda Isle Drive”).
- The postal service returned the certified-mail notice as not deliverable; after the limitations period expired, the IRS did not remail the notice to the correct address.
- On April 15, 1981, the IRS also sent a copy of the notice by ordinary mail to Simonis, who received it shortly thereafter.
- Mulvania did not receive the certified-mail notice; there was no showing that Simonis timely communicated the notice’s contents to Mulvania.
- Mulvania petitioned the Tax Court; both parties moved to dismiss for lack of jurisdiction on competing theories (no valid notice versus untimely petition).
- The Tax Court dismissed for lack of jurisdiction, concluding there was no valid notice of deficiency; the Commissioner appealed.

## Issues

1. Whether a notice of deficiency mailed by certified mail to an address that was not the taxpayer’s last known address, and returned undelivered, is a valid notice when mailed on the last day of the assessment limitations period.
2. Whether a copy of the notice sent by ordinary mail to the taxpayer’s accountant under a limited power of attorney can satisfy the statutory notice requirement or cure the defective mailing to the taxpayer.
3. Whether the absence of a valid notice of deficiency deprives the Tax Court of jurisdiction to redetermine the asserted deficiency.

## Decision

- The Ninth Circuit affirmed the Tax Court’s dismissal for lack of jurisdiction.
- The misaddressed certified-mail notice, returned undelivered and not remailed within the limitations period, was not a valid notice of deficiency.
- The copy mailed to the accountant did not constitute the statutory notice to the taxpayer and did not cure the defective certified-mail notice.
- Because no valid notice issued within the limitations period, the Commissioner could not assess the 1977 deficiency, and the Tax Court lacked jurisdiction.

## Legal Principles

- Tax Court jurisdiction in a deficiency case requires (1) issuance of a valid notice of deficiency and (2) a timely petition.
- A notice of deficiency must be sent by certified or registered mail to the taxpayer’s last known address within the applicable assessment limitations period.
- A misaddressed notice that is returned as undeliverable does not satisfy the statutory notice requirement absent timely actual receipt by the taxpayer.
- A copy mailed to an accountant with limited authority to receive copies of correspondence is not a substitute for mailing the statutory notice to the taxpayer and does not confer Tax Court jurisdiction.
- Statutory notice requirements are jurisdictional and are not satisfied by informal notice or substantial-compliance theories when the required mailing to the taxpayer is defective.

## Conclusion

The court held that the IRS’s misaddressed, undelivered certified-mail notice was invalid and that sending a copy to the taxpayer’s accountant did not satisfy the statutory notice requirement; without a valid notice issued within the limitations period, the Tax Court lacked jurisdiction and the deficiency could not be assessed.


Mulvania v. Commissioner, 769 F.2d 1376 (9th Cir. 1985)