What do these two forms have in common?
In the US, federal law says the information you supply on your tax return is confidential. Taxpayers use Form 2848, Power of Attorney and Declaration of Representative, to authorize an individual or organization to act as the taxpayer’s representative in matters pertaining to taxes. The representative can request and inspect confidential tax information and sign agreements, consents, waivers or other documents) that the taxpayer could perform for the tax forms or matters listed on Form 2848. The IRS will not honor Form 2848 for any purpose other than representation before the IRS.
Taxpayers file Form 4868, Application for Automatic Extension of Time to File US Individual Income Tax Return, with the IRS to request a six month extension of time to file a federal income tax return. The extension also includes gift tax returns (Form 709).
In 152 T.C. No. 7 (Gregory), the taxpayer filed both of these forms with the IRS. The taxpayer moved on June 30, 2015, and used their old address on their 2014 federal income tax return. They first used the new address in correspondence with the IRS when they submitted two Forms 2848, Power of Attorney and Declaration of Representative, in November of 2015.
In April of 2016 the taxpayer used the new address again when they submitted a Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return.
When the IRS sent a notice of deficiency on October 13, 2016, the notice went to the address on their last filed tax return (for tax year 2014, at the old address), instead of the taxpayer’s new address as show on Forms 2848 and 4868. On November 11, 2016, the US Postal Service marked the notice “Return To Sender/Unclaimed/Unable to Forward” and returned it to the Commissioner.
The taxpayer became aware of the notice of deficiency on January 17, 2017, and filed a petition that day.
Neither the IRS nor the taxpayer dispute that the taxpayer did not actually receive the notice of deficiency.
The taxpayer said Forms 2848 and 4868 were sufficient notification of the new address. The IRS says those forms are not sufficient notification.
The court decided for the IRS.
Do you know why?
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Neither of them constitute a "return" for purposes of updating a taxpayer's last known address, and both of these forms specifically state in the instructions that the forms will not serve to update a taxpayer's address.
In addition, Revenue Procedure 2010-16 explicitly states that Form 2848 and Form 4868 are not clear and concise notice of an address change (see page 8).