May 25, 2017
It’s important to notify the IRS if you move and change your address. Under tax law regulations, a taxpayer’s last known address is the one that appears on the tax return you filed most recently — unless the IRS is otherwise notified.
In one court case, it was made clear that the burden of informing the IRS of address changes falls on taxpayers. The IRS is not obligated to find them.
The Court of Appeals for the Seventh Circuit ruled that the IRS did not abuse its discretion when it mailed a deficiency notice to the last known address of a taxpayer after it had been informed by the U.S. Postal Service that mail to the taxpayer at that address was undeliverable. IRS had no duty to seek out address information. The taxpayer filed no tax returns from 2001 through 2007, moved seven times during that period and never notified IRS of his new addresses.
Basic rules: Under federal regulations, a taxpayer’s last known address is the one that appears on the taxpayer’s most recently filed and properly processed federal tax return, unless the IRS is given “clear and concise” notification of a different address. Change of address information that a taxpayer provides to a third party, such as a payor or another government agency, isn’t clear and concise notification for these purposes.
However, the IRS will update taxpayer addresses maintained in IRS records by referring to data accumulated and maintained in the U.S. Postal Service’s National Change of Address database. The rules allow notification to be made in several ways (see chart below).
Facts of the Case
From 2001 through 2007, a man filed no income tax returns. During that same period he moved frequently, living at eight different addresses in four cities and two states. The IRS sent a notice of taxpayer’s 2001 deficiency in March 2004 to his apartment in San Francisco. This was the address he had reported on his most recently filed tax return for the 2000 tax year, and it was the most recent address in the IRS’s computer system. The IRS had no record of any address update from the taxpayer.
Forms submitted to the IRS by third parties, however, showed a few possible addresses. In November 2004, the IRS mailed a Form 2797 “R-UThere” letter to a street in Oakland. The IRS received no answer to this letter.
The IRS sent a deficiency notice to the San Francisco street address for tax year 2003 on December 11, 2006. Notwithstanding the fact that the Postal Service returned this deficiency notice to the IRS marked “not deliverable as addressed” and “unable to forward,” the IRS sent another deficiency notice to the same San Francisco address for tax year 2002 on July 30, 2007. This notice was also returned as undeliverable by the Postal Service. The IRS took no further steps to locate the man or to reissue either notice. A deficiency was assessed for tax years 2002 and 2003 in 2007, and the IRS filed a federal lien on the man’s real property in 2009.
Later, the man requested a collection due process hearing. The IRS Appeals Office issued a notice of determination sustaining the tax agency’s lien notice and concluding that the tax agency followed all legal and procedural requirements in the assessment and collection process.
The U.S. Tax Court sustained the Appeals Office determinations. The man appealed to the Court of Appeals claiming that the IRS abused its discretion in using the San Francisco address as his last known address for deficiency notices for tax years 2002 and 2003.
The IRS wins. The Seventh Circuit ruled that the IRS properly mailed deficiency notices to the taxpayer’s last known address before filing the lien and held that the man waived any challenge as to the correctness of the determination of his underlying tax liabilities.
The Court of Appeals rejected the man’s argument that he updated his address because he provided no documentation to support his testimony. The Court found that the IRS has no obligation to send notifications to possible addresses provided by third parties on W-2 or 1099 forms, since third party notification is not clear and concise notification.
Finally, the court rejected the man’s assertion that the IRS didn’t act with reasonable diligence when it sent the tax year 2002 deficiency notice to the original San Francisco address when it knew at the time of mailing that the notice would be undeliverable. The court agreed with the IRS Appeals Office that no amount of diligence would have uncovered a new return or notification from the taxpayer because the man never submitted one. The court noted that this was not a case of the IRS overlooking a more recently filed return, ignoring an address update from the taxpayer or misaddressing an envelope. (Gyorgy, (CA 7 2/27/2015) 115 AFTR 2d)
You can only notify the IRS electronically if your refund check was returned to the IRS. Use the Where’s My Refund? tool at the IRS website (www.irs.gov) to complete your change of address online. You will need your Social Security number, filing status and the amount of your refund.
Additional information: If you filed a joint return, you should provide the same information and signatures for both spouses. If you filed a joint return and you and/or your spouse have since separated, you both should notify us of your new addresses.
Representatives filing a change of address for a taxpayer (by form or written statement) must attach a copy of their power of attorney or IRS Form 2848, Power of Attorney and Declaration of Representative. Unauthorized third parties cannot change a taxpayer’s address.
Any new address you provide to the U.S. Postal Service may also update your address of record on file with the IRS based on what the USPS retains in its National Change of Address database. However, even if you notify the USPS, you should still notify the IRS directly as not all post offices forward government checks.