Sometimes a little bit of luck goes a long way tax-wise. Two examples: A lost case file lets a couple walk away from a tax bill. The Service claims that it sent a bill for taxes to a couple’s last known address, but the couple said that they never received the deficiency notice. IRS presented a certificate of mailing from the Postal Service, showing that a letter was mailed to their correct address. However, the agency was unable to prove exactly what was mailed to the couple because it had lost the case file and all of the copies of the notice of the deficiency. So the Tax Court concluded the couple owed noting (Galluzzo, TC Memo. 2013-136).
And a son’s receipt of a tax notice isn’t related to his father. The Service claimed a man was liable for payroll taxes and mailed a notice of proposed assessment to his home. His adult son, who didn’t live there, signed for the letter and left it in the basement without telling his dad. IRS said the father had constructive receipt of the notice through his son, but the Tax Court said no (Lepore, TC Memo. 2013-135). As a result, the father ended being off the hook for the unpaid employment taxes.