If your business is moving, be sure to file Form 8822-B with the IRS. Failure to notify the IRS of a change of address recently prevented a taxpayer from contesting a lien for unpaid taxes.
The Tax Court ruled that the taxpayer didn’t actually have to receive the notice of the tax lien in order for the lien to be valid. (Duplicki v. Commissioner, No. 16533-10S L, U.S. Tax Court, 2012)
You’ve got mail, but where?
A taxpayer moved and rented a P.O. box, which the IRS used as his last known address. He gave up the P.O. box in July 2005, and requested that the post office forward his mail to his current address until Jan. 1, 2007.
In May 2006, the IRS sent a letter proposing a tax assessment to the P.O. box. While this letter was forwarded to the taxpayer’s residence, as he requested, and the envelope contained a forwarding label, the taxpayer never informed the IRS of his new address. Later, when the IRS sought to file a lien for the unpaid taxes, the taxpayer asserted that he wasn’t properly notified of the lien because the IRS sent everything to the P.O. box. IRS: As long as correspondence is mailed to a taxpayer’s last known address, actual receipt isn’t necessary.
The Tax Court agreed with the IRS. Court: A taxpayer’s last known address is the address that appears on the most recently filed federal tax return, unless the IRS receives clear and concise notification of a different address, such as filing a change of address card with the post office. Here, the court said, none of the documents the taxpayer submitted to the post office required it to officially change his address. The lien was valid, the court concluded, since the taxpayer didn’t prove that he provided the IRS either directly or indirectly (e.g., through a change of address card) with a clear and concise notification of his change of address.
PRACTICE TIP: It’s up to you to notify the IRS of a change of address. Filing a change of address card with the post office is good, but it’s not foolproof. Example: On June 15, you changed your address with the post office, which included the change in its weekly database update. On June 29, the IRS received the post office’s data and updated your address. However, eight days before, on June 21, the IRS mailed a deficiency notice to the address it had in its records (i.e., your old address). Result: The deficiency notice was properly mailed to your last known address. Moral: Take the extra step and file Form 8822-B as insurance.