A Twist on the Last Known Address Issue and an Update on DAWSON

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We just had a call in the clinic that highlights another unexpected result of the dysfunction at the IRS resulting from the pandemic. As you probably know one result of the pandemic is that the IRS is taking months, perhaps more than a year, to process 2019 returns filed by paper. The filing of a return is an act that triggers the IRS to change a person’s address. So, by not processing a return, the IRS is slow to record in its system the taxpayer’s new address. That is an unfortunate by product of the pandemic. The delay in processing the return can have a stranger impact in some cases.

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In our case the client had filed a change of address form with the IRS when she moved pre-pandemic. The IRS accepted her change of address form and recorded her new address. Shortly before she filed her change of address form she had submitted her 2019 return using her then correct address but now prior address (and prior address from more than one year ago so no more postal forwarding.)

The IRS took many months to process her paper return. When it did get to her return, the processing of her 2019 return caused the IRS computer to notice that the address on her return was different than her address in its system. So, the computer “updated” her address to her old address. So, even though she properly followed the rules and the IRS followed its rules, the sequencing of the processing of her documents caused the IRS system to have a bad address.

Fortunately, in this case her file was in the hands of an alert Appeals Officer who figured out the problem and is working to get the IRS computer to accept the client’s true last known address. As you can imagine not many taxpayers in this situation will be so lucky as to have a live, alert human looking out for their interest. I bring this up in case other experience a similar difficulty.

A related problem is the time it will take for the IRS to process a return and pick up a new address. With the IRS using the tax return to change addresses, many taxpayers could rely on that system together with postal forwarding to receive IRS correspondence. The Gregory case demonstrates one of the exceptions and argues for use by the IRS of the other address information it receives. What should a taxpayer argue who has submitted a return to the IRS with a new address or submitted any document to the IRS that would change their address but that the IRS does not get to for months because of the pandemic backlog? I don’t have good advice. I am sure the IRS will take the position that it does not have a responsibility to change an address until it actually processes the return. Undoubtedly, there will be situations where the lengthy delays currently occurring will cause problems.

DAWSON and sealed documents

Recently, Judge Holmes issued a lengthy, informative and, as usual, entertaining opinion regarding the valuation of Michael Jackson’s image in a Tax Court case involving his estate. The opinion is public and was published on Tax Notes and other sites almost immediately after its release. If you go to the docket for the case on the Tax Court website, however, you cannot obtain the opinion and you will be told the record in the case is sealed. Some parts of the case were sealed by court order early in the litigation. For a general discussion of sealing the record in a Tax Court case, you can read this post from several years ago by guest blogger Sean Akins. As the Tax Court merged its prior system to DAWSON, it has yet to make the upgrades that will allow the system to recognize the difference between sealed and unsealed documents in a case. So, it is not possible to pull the Estate of Jackson opinion from the Court’s website at this time. It is a public document, however, and you can request a copy of the opinion from the clerk’s office as you can request any document from the court as discussed here. My understanding is that this issue and others are ones which the Court is continuing to fix as it continues to work on DAWSON. In the meantime, it will be impossible to obtain a document through DAWSON in a case in which the Court has sealed a part of the record.

Comments

  1. Hi Keith interesting points.
    You’re right about not being able to find the Michael Jackson decision on Dawson.
    But if you like, I found it here
    https://www.courthousenews.com/wp-content/uploads/2021/05/MichaelJackson.pdf

  2. Jack Townsend says

    Thanks for the update on DAWSON.

    I have noted this “glitch” in trying to retrieve the opinion in the Jackson case. The case was available on the Tax Court web site for one day on its daily opinion page but then disappeared from access. As presently configured, after the day an opinion or order is issued, the opinion or order must be accessed through the docket entries. But, presently, as I understand it, if any document in a case is sealed (whether or not it is a type of document that appears on the docket entries) the docket entries in the case (including links to opinions and orders) is not available. And the opinion cannot be accessed through the opinion and order search. In other words, if anything gets sealed, everything gets sealed from public access. That means that, after the date of publication, orders and opinions cannot be accessed.

    That is weird.

    I have done a lot of database work over many years and can’t imagine why there could not be an easy fix to that issue so that the docket entries get shown and any document that is sealed simply not linked in the docket entries so that they cannot be accessed by the public. (Of course, documents such as trial exhibits do not get shown on the docket entries, so sealing trial exhibits (as I understand was the issue in Jackson) should not affect access to the docket entries.)

    And, DAWSON has not carried forward the prior ability to search for opinions by date, name, judge, etc., which I found to be really useful. That too is just a database issue that should be easily solved if the Tax Court wanted to do that.

    Jack Townsend

  3. Bob Kamman says

    Nearly six months after the Tax Court took away from us an online resource that did not need to be fixed, we are left with this

    Dreadful, Awful Website Serving Opacity Needs.

    What’s the difference between DAWSON and the Covid-19 virus? One of them now has a vaccine that prevents ill effects.

  4. Jack Townsend says

    Let me add, although this is off-topic, I wrote the Tax Court months ago with a request that the Tax Court make its style manual available to the public. I have had no response. I would have thought that the Tax Court has the resources available to at least respond to this type of request.

    For these types of issues, including the DAWSON issue, I am concerned that the Tax Court is not serving the role that it could serve. I mean no disrespect to the judges and the great service they give. I just raise the issue of whether the Court is as transparent as to its processes as, I think, it should be.

    Jack Townsend

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