Tax Court - Taxpayer outside United States has 150 days to file petition

February 28: The U.S. Tax Court today—in a “reviewed opinion”—held that the taxpayer was entitled to the 150-day period for filing a timely Tax Court petition because she was a resident of Canada when the deficiency notice was mailed to her (even though she was in the United States when the notice was mailed and delivered to her). Smith v. Commissioner, 140 T.C. No. 3 (February 28, 2013)

The Tax Court majority concluded that the taxpayer’s status as a person “outside of the United States” is largely a function of her residency and is not vitiated by her brief presence in the United States on the date when the notice was mailed. Thus, the 150-day rule under section 6231(a) applies, the majority concluded.

Separate concurring and dissenting opinions were filed. Read the opinion: Smith v. Commissioner [PDF 68 KB]

Summary

In 2007, the taxpayer and her daughters moved from San Francisco to Canada and became permanent residents of Canada. The taxpayer continued to own a home and maintained a post office box in San Francisco.

In December 2007, the taxpayer returned to San Francisco to move her remaining furniture to Canada. On December 27, 2007, while the taxpayer was in San Francisco, the IRS mailed a deficiency notice to her San Francisco post office box. The taxpayer did not pick up the notice, and on January 8, 2008, she returned to Canada.

On May 2, 2008, the taxpayer received a copy of the notice, and on May 23, 2008, she filed a Tax Court petition (i.e., 148 days after the notice of deficiency).

The IRS moved to dismiss for lack of jurisdiction and contended that the petition was not timely filed. The taxpayer countered that under section 6213(a), she was entitled to 150—rather than 90—days to file the petition.

Today, the Tax Court agreed with the taxpayer that her petition was timely filed within the 150-day period. The majority found that the 150-day rule applies when the notice is addressed to a “person outside of the United States” and that this status is not changed by the taxpayer’s brief presence in the United States on the date of the mailing of the deficiency notice.

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