Returned to Sender: Should the IRS Be Required to Search for A Taxpayer’s New Address Beyond its Own Databases When a Notice is Returned as Undeliverable?

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We welcome guest blogger Lisa Perkins who is an Assistant Clinical Professor of Law and Director of the Tax Clinic at University of Connecticut School of Law. Professor Perkins worked for five years in the Criminal Division of Department of Justice Tax Section and over a decade as an AUSA in the Unites States Attorney’s office in Hartford. She joins Sonya Miller of UNLV and Christina Thompson of Michigan State as a writer of posts on tax articles featuring procedure issues. She writes to us today about an article that looks at ways to improve getting notice to taxpayers and a realistic opportunity to contest their tax issue in court. The 7th Edition of “Effectively Representing Your Client before the IRS” is coming out this month. It has an entire chapter on this topic if you are interested in more information on last known address issues. Keith

The IRS is required to send via certified mail to the “last known address” of a taxpayer several notices that contain substantive legal rights, including statutory notices of deficiency, final notices of intent to levy, and notices of filing of federal tax liens. The Code requires a taxpayer to exercise the right to appeal the actions proposed in these notices within very strict time limits. The time limit for claiming the substantive right provided in the notice (e.g., filing a Tax Court petition within 90 days), begins to run on the date of mailing, regardless of whether or when the taxpayer actually receives the notice. The IRS need only exercise reasonable diligence in ascertaining the “last known address” of the taxpayer for purposes of mailing the notice. The Code does not require “actual” receipt.

An expansion of the reasonable diligence standard applicable to determining the “last known address” was proposed by the National Taxpayer Advocate in her 2012 annual report and is the subject of The Last Known Address: A Joint Effort Between the IRS and the U.S. Postal Service, Larry Jones and Rachel Multer Michalewicz. Though the article was published in the April-May 2014 issue of the Journal of Tax Practice & Procedure, the question remains relevant today. Courts beyond the Fifth Circuit Court of Appeals have remained reluctant to require the government, upon return of a notice, to search for a new address for a taxpayer in databases outside of the IRS, such as motor vehicle and real property records, despite the government’s access to and routine use of these databases for other purposes (e.g., to locate assets upon which to levy).


In The Last Known Address: A Joint Effort Between the IRS and the U.S. Postal Service, Jones and Michalewicz discuss what constitutes “clear and concise notification of a change of address” for purposes of the IRS’s burden to send certain notices, including statutory notices of deficiency (SNOD), to a taxpayer’s last known address. In particular, the authors look more closely at the change of address process to IRS records effected by a database maintained by the U.S. Postal Service and claim that errors in the process may prejudice a taxpayer.

As the authors explain, Treas. Reg. 301.6212-2(a) “defines ‘last known address’ as ‘the address that appears on the taxpayer’s most recently filed and properly processed Federal tax return, unless the Internal Revenue Service (IRS) is given clear and concise notification of a different address.’” The IRM applicable to Notices of Deficiency warns “[i]n no event should databases or information outside of the IRS be consulted for addresses. Alternative addresses, to the extent that they are used, must have been provided to the IRS by the taxpayer or his representative (or other agent).” IRM (07-09-2013).

While the IRS generally will not accept change of address information from a third party, an exception is provided in the regulation for regular address updates obtained from the U.S Postal Service (USPS). See Treas. Reg. Sec. 301.6212-2(b)(1) & (2). The USPS maintains a National Change of Address (NCOA) database which is forwarded to the IRS weekly. See IRM (08-11-2016) (SNOD Last Known Address guidance). The article explains how the IRS goes about updating an address from the NCOA database and notes the IRS allows the update to carry through despite the fact that the names may not match exactly.

For instance, as the authors explain, “if the NCOA database shows a Bob Smith who changed from one specific address to another, and the IRS records show a Robert Smith with that same prior address, the IRS can consider that a match and update the records.” The new address from NCOA will be considered the last known address until the taxpayer files a tax return with a different address or gives the IRS “clear and concise notification of a different address.” Contrast this with IRS rules that narrowly restrict attempted changes of address by a taxpayer himself.

For instance, per the Internal Revenue Manual relating to Notices of Deficiency, only the following notices from taxpayers are considered “clear and concise notification” of an address change:

  1. A statement signed by the taxpayer requesting the address change and containing full name, old address and SSN and/or EIN,

IRM (07-09-2013)

On the other hand, standing alone, the following are not considered “clear and concise” notification of a new address:

  1. Letterhead of taxpayer correspondence;

Id. A phone call from the taxpayer requesting an address change is insufficient unless it is made in connection with a conversation about an open account or adjustment and authentication of the caller’s identity is verified using the criteria in IRM and IRM (07-09-2013). See also Rev. Proc. 2010-16, 2010-19 IRB 664.

I can certainly see why many of these restrictions seem appropriate safeguards to preventing theft of taxpayer information. Yet, as the authors point out, allowing the USPS NCOA to effect an automatic update to a taxpayer address without an exact name match is prejudicial to taxpayers and seems inconsistent with these safeguards. Couldn’t a third party file a change of address form for a taxpayer with the local post office resulting in the same identity theft issue (though obviously the IRS would not be responsible)? In my former career as a federal prosecutor, I once handled an identity theft case involving a taxi driver who was doing just that: redirecting other people’s mail to post office boxes he set up for the purpose of collecting their financial information, including credit card cash advance offers that he then used to the detriment of these individuals.

As the authors explain, a taxpayer residing in the Fifth Circuit (Louisiana, Mississippi and Texas), may have the added benefit of the Fifth Circuit Court of Appeal’s more expansive requirement of reasonable diligence in determining the “last known address.” In Mulder v. Commissioner, 855 F.2d 208, 210 (5th Cir. 1988), the Fifth Circuit invalidated a notice of deficiency and held the IRS had a duty to further investigate when the postal service had returned letters to it prior to the mailing of the notice of deficiency. Likewise, in Terrell v. Commissioner, 625 F.3d 254, 257 (5th Cir. 2010), the court held the IRS has a duty to further investigate by, e.g., searching DMV or other records, where the “IRS knows or should know at the time of mailing that taxpayer’s address on file may no longer be valid [due to] previously returned letters, . . . .” Nonetheless, as Jones and Michalewicz explain, even in the Fifth Circuit, taxpayers benefit from this more generous standard only at the time of the original mailing of a notice, not if that notice is then returned to the IRS.

Ultimately, the authors conclude that it would not be unreasonable to require the IRS to investigate further to determine a correct address for a taxpayer upon receipt of an undelivered notice (or other credible information questioning the accuracy of the address information on the IRS’s original notice). As the article points out, the National Taxpayer Advocate has urged Congress to amend the Code to require that the IRS look beyond its own databases to locate potential new addresses for sending taxpayers important notices, such as notices of deficiency.


If the IRS were required to search beyond its own databases to locate a new address for a taxpayer, presumably to send a new notice, how far should it be required to go?  Which databases should the IRS consult?  To be clear, the examples the authors suggested (and the National Taxpayer Advocate has suggested) include motor vehicle records and real property records; they do not suggest the IRS could or should rely on a “Google” search for this information.  Motor vehicle records and real property records typically contain information from the individual to which they pertain.  In the context of low-income taxpayers, who tend to move frequently, and may not file or may not be required to file a tax return each and every year, this would seemingly improve the chances of actual receipt of a notice of deficiency.  But, as the authors note, broader search requirements will also raise more questions, such as whether a second notice to a newly located address re-starts the 90 day window for filing a Tax Court petition, and whether the courts should validate the IRS’s extra search effort, even when the IRS picks the wrong Bob Smith.



  1. When IRS eventually moves into the 21st Century, it will allow taxpayers to provide their email address along with a consent to receive duplicate notices by that means. Ask people under 30 how often they have changed physical address in the last ten years, compared with how many times they have changed email address.

    A commissioner in his late 70s has left IRS, to be replaced by one in his 60s. I am fairly sure that Nina Olson is as old as I am, and I am old. Can we maybe have a Deputy Commissioner for Millennials?

  2. Sonya Watson says

    You make a very excellent point, Bob. I’m a Millennial and since graduating college, I’ve changed physical addresses about eight times and have had the same email address throughout all of those moves.

  3. Norman Diamond says

    The IRS ignored my Form 8822 change of address notice. The next five or so times that the IRS sent letters, the post office forwarded them, I replied reminding the IRS of the Form 8822 and giving my current address, and the IRS ignored all of them. When the time period reached nearly a year, I reminded the IRS that forwarding would stop soon. The IRS still did not care.

    An occasion arose for a telephone call. I reminded the IRS employee of the Form 8822, around six or so letters that had been ignored, the fact that the post office would soon stop forwarding, and the expectation that the post office would return undeliverable mail to Panama because the last alphabetic characters in the return address are PA.

    The IRS employee on the phone asserted that the post office would return undeliverable mail to Pennsylvania. I reminded the IRS employee that Japan Post does not see anything like “US” or “United States” in the return address, the last alphabetic characters are the international standard abbreviation for Panama, and that would be the most appropriate thing for Japan Post to rely on. I think she understood! Out of how many employees the IRS has, one was almost teachable! It took her about 10 minutes to almost update my address. She left out the state though. Do IRS employees understand yet that several countries around the world have states (prefectures in Japan but the meaning is the same) which belong in addresses?

    Meanwhile the IRS continues to send letters which WILL NOT BE RETURNED TO SENDER because the return address doesn’t say US.

    So should the IRS look outside their database, like looking at Form 8822 and letters from the taxpayer?

    Meanwhile, some years ago when I didn’t move, why did the IRS make address changes like changing my state from Tokyo to Tokoy? As I’ve read more about identity thieves in the IRS, it seems likely that someone changed the IRS database of my address to Albania to send some notice that they didn’t want me to know about (maybe the same address in Albania that got tens of thousands of IRS tax refunds) and then made a mistake changing the address back?

    • Lisa Perkins says

      How frustrating for you, Norman! Bob and Sonya make excellent points about the consistency of email addresses, despite frequent moves by a taxpayer. Electronic notice may have solved Norman’s problem and would reach overseas and transient taxpayers more easily! The use of electronic notice would certainly be efficient and may raise the probability of actual notice. Of course, it also raises additional security concerns. For security reasons (email can generally be hacked quite easily), the IRS generally is not able to use email to transmit confidential taxpayer information. However, if there were a procedure to allow a taxpayer to consent to and assume the risk of such disclosure via email or other electronic format, why should they not take this added step and send duplicate notices electronically? What about a platform on the IRS website allowing taxpayers to log in and retrieve copies of notices? Banks and other entities that deal with sensitive information routinely use this platform to send electronic messages to customers. The IRS though must still be required to snail mail a notice to the “last known (physical) address,” because as the National Taxpayer Advocate has repeatedly explained, low-income taxpayers tend not to have equal access to electronic platforms. An added electronic notice requirement also would require funding to create a platform, ensure security, and pilot the program. The IRS has woefully lacked funding for over a decade, but we may see this change if Congress acts favorably on the new Commissioner’s budget request.

      • Bob Kamman says

        “For security reasons (email can generally be hacked quite easily), the IRS generally is not able to use email to transmit confidential taxpayer information.”

        So why do they use the Postal Service? On average, Postal Inspectors make about 10 arrests every day for mail-theft offenses – and we know that not everyone is caught. And if someone hacks your email, they are likely to obtain much more valuable information than your name, address and last four digits of SSN.

        “An added electronic notice requirement also would require funding to create a platform, ensure security, and pilot the program.”

        Weigh that against the savings in printing and postage if a few hundred thousand taxpayers prefer to print out their own copies. Not many financial enterprises in the private sector are encouraging customers these days to sign up for paper delivery, because it saves so much money compared to online access.

      • Norman Diamond says

        TIGTA reports theft of mail from IRS mailrooms too.

        Courts get into the act too. A Pro Se Clinic advised that after serving a witness’s notarized declaration on defendants by US domestic certified mail with return receipt, the original and two conformed copies should be sent to the court by US domestic certified mail with return receipt. I wondered why that last part, and the Pro Se Clinic’s lawyer said that sometimes the court mishandles documents. The server received that last return receipt signed by a court employee, but the court denied having received the witness’s notarized declaration. The story continues with the court not filing my brief that attached a copy of that declaration when the court filed everything else contained in the same envelope. The story continues with a court order denying with prejudice my effort to allow testimony by the server, myself, and possibly the witness.

        Warning to other pro se’s: Register to file electronically. Don’t mail any originals to the court.

  4. They mailed notices to an old adress but my school in a different city filed 1098t for both years of missing tax returns in question. Do i have a defense? I defaulted on an oic for failure to file se taxes for 201t 16 and 17.

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