In Jordan John O’Neill v. Commissioner of Internal Revenue, T.C. Memo. 2025-49, the United States Tax Court addressed crucial jurisdictional questions stemming from a taxpayer’s challenge to Notices of Deficiency and the timeliness of his petition. The case highlights the technical requirements for both the Internal Revenue Service (IRS) and taxpayers in deficiency proceedings before the Tax Court.

Background and Facts

The petitioner, Jordan John O’Neill, resided in California and initiated this case on January 30, 2022. His Petition sought judicial review of two items: a Notice of Determination concerning collection actions issued on January 4, 2022, and two Notices of Deficiency issued for taxable years 2016 and 2017. The 2016 Notice of Deficiency was issued on March 4, 2019, and the 2017 Notice of Deficiency was issued on August 5, 2019.

On May 30, 2023, the Court severed the proceeding into two distinct cases: Docket No. 894-22L for the Notice of Determination, and Docket No. 28075-22, which is the subject of this memorandum opinion, concerning the Notices of Deficiency.

The case came before the Court on Cross-Motions to Dismiss for Lack of Jurisdiction. The Commissioner of Internal Revenue (Respondent) first moved to dismiss on February 26, 2023, arguing the Petition was time-barred, having been filed more than 90 days after the Notices of Deficiency were issued. Petitioner objected, challenging the timely mailing of the Notices and arguing they were invalid because they were not issued by an official with delegated authority. In support of this initial motion, Respondent submitted the Notices and two U.S. Postal Service (USPS) Forms 3877, Firm Mailing Book for Accountable Mail. The Court, finding defects in the USPS Forms 3877 (lacking USPS employee signatures and total piece count), denied Respondent’s motion in part on June 14, 2023, holding that the presumption of official regularity did not apply. The Court noted that its ultimate decision on mailing would depend on evidence presented at trial. Given the defects provided a sufficient basis to deny the motion in part, the Court declined to address the petitioner’s argument about delegated authority at that time.

Petitioner subsequently filed his own Motion to Dismiss on May 27, 2024, also for lack of jurisdiction, contending the Notices were invalid due to improper mailing and issuance by improper authority. This led to an evidentiary hearing held on September 24, 2024, specifically calendared to address the mailing issue.

At the evidentiary hearing, Respondent submitted additional evidence beyond the defective USPS Forms 3877, including official USPS tracking histories showing mailing dates, attempted deliveries, and return as unclaimed, as well as internal Automated Underreporter (AUR) system records and Integrated Data Retrieval System transcripts confirming mailing details and petitioner’s last known address. Petitioner did not submit evidence but reiterated his arguments regarding the defective USPS forms and lack of delegated authority. Following the hearing, Respondent renewed his Motion to Dismiss based on the additional evidence, and petitioner objected, primarily focusing on the delegation argument.

Jurisdictional Framework of the Tax Court

The Tax Court is a court of limited jurisdiction, authorized only to the extent Congress provides. To exercise jurisdiction in a deficiency case, there are two prerequisites:

The issuance of a valid Notice of Deficiency by the Commissioner.
The timely filing of a petition with the Court by the taxpayer.

The petitioner, as the party invoking the Court’s jurisdiction, bears the burden of proving that the Court has jurisdiction. In this case, petitioner challenged the validity of the Notices, while Respondent challenged the timeliness of the Petition. The Court clarified that regardless of who prevails on these points, it lacks jurisdiction to consider the case on its merits, but it does possess jurisdiction to determine the reason for lacking jurisdiction. It is undisputed that the Petition was filed more than 90 days after each Notice was issued. Therefore, the Court must dismiss the case as untimely unless it finds the Notices were invalid due to improper mailing or issuance by an official lacking delegated authority. If the Notices were invalid, the case would also be dismissed on that basis.

Analysis of Petitioner’s Arguments for Invalid Notices

The Court addressed petitioner’s two arguments challenging the validity of the Notices.

1. Proper Mailing of the Notices of Deficiency

In deficiency cases, the Commissioner bears the burden of proving by competent and persuasive evidence that a Notice of Deficiency was mailed to the taxpayer. This can be shown through documentary evidence of mailing or evidence of mailing practices corroborated by testimony.

Exact compliance with USPS Form 3877 procedures gives rise to a presumption of official regularity in favor of the Commissioner. Conversely, defects in the USPS Form 3877 prevent this presumption from applying. The Court agreed with the petitioner that the incomplete USPS Forms 3877 submitted by Respondent, which lacked signatures and total item counts and did not identify the items as Notices of Deficiency for specific years, were indeed defective. Thus, Respondent was not entitled to the presumption of official regularity.

However, the Court noted that Respondent could still prevail if the evidence of mailing was otherwise sufficient. Even defective USPS Forms 3877 are probative and can be combined with additional evidence. The Forms in this case bore USPS date stamps matching the issuance dates of the Notices and listed petitioner’s name, address, and the certified mail numbers correctly.

Crucially, Respondent presented additional evidence at the evidentiary hearing. This included certified USPS tracking records confirming mailing dates, unsuccessful delivery attempts, and the return of both Notices as unclaimed. Respondent also provided internal AUR system records corroborating issuance dates, mailing addresses, tracking numbers, and delivery status, as well as internal transcripts confirming petitioner’s last known address was unchanged.

The Court found that a record showing a Notice was returned as unclaimed or refused is strong evidence that the Notice was mailed. Logic dictates an item must be mailed to be returned as unclaimed. The Court stated that petitioner could not use the fact that the Notices went unclaimed to argue they were never mailed.

Petitioner did not offer any evidence at the hearing to challenge Respondent’s proof of mailing beyond reiterating the defects in the USPS Forms 3877. The Court found Respondent’s additional evidence to be credible and persuasive and sufficient to establish proper mailing.

2. Procedural Validity of Notices Issued by the AUR System

Petitioner also argued the Notices were invalid because they were issued by Respondent’s AUR system, which he contended was not a delegated authority. A valid petition requires a valid statutory notice. Section 6212(a) authorizes the "Secretary" (or his delegate) to send a Notice of Deficiency if a deficiency is determined. The Ninth Circuit (to which this case is presumably appealable) has indicated that a valid Notice of Deficiency should reflect a "thoughtful and considered determination". The word "determination" implies consideration, resolution, conclusion, and judgment.

This Court has previously held that Notices of Deficiency issued by the AUR system can reflect a thoughtful and considered determination. Citing Kelley v. Commissioner, T.C. Memo. 2023-126, the Court noted that, based on the presumption of regularity and evidence of prior notices, an AUR-system-issued Notice could reflect a "thoughtful and considered determination made by a duly authorized delegate of the Secretary".

In this case, similar to Kelley, petitioner received and responded to Notice CP 2000s for both tax years before the Notices of Deficiency were issued. The AUR Case History Transcript confirmed petitioner’s multiple responses to the CP 2000s. The settled general rule is that all necessary prerequisites to the validity of official action are presumed to have been complied with, and the party asserting the contrary must affirmatively show it. Given this presumption and petitioner’s failure to present any evidence to support his claim that the AUR system lacked delegated authority, the Court was persuaded that the Notices reflected a thoughtful and considered determination made by a duly authorized delegate and were therefore valid.

Analysis of Respondent’s Argument for Untimely Petition Filing

The jurisdiction of the Tax Court in a deficiency case depends, in part, on the timely filing of a petition. Section 6213(a) mandates that a petition must be filed within 90 days (or 150 days if the notice is addressed outside the U.S.) after the Notice of Deficiency is mailed. For cases appealable to the Ninth Circuit, this 90-day (or 150-day) deadline is jurisdictional.

Respondent contended that the Petition, filed on January 30, 2022, was untimely because it was filed 1,064 days after the 2016 Notice was mailed (March 4, 2019) and 910 days after the 2017 Notice was mailed (August 5, 2019). Petitioner did not dispute these dates but focused his objection solely on the validity of the Notices, reiterating his argument about the AUR system.

The Court firmly stated that it is not acting unilaterally but is bound by the jurisdictional limits imposed by Congress. The Court has no authority to extend the deadline in section 6213(a), regardless of the equities or the reason for the late filing. Since petitioner failed to establish that the Petition was filed within the required 90-day period, he failed to meet a prerequisite for the Court’s jurisdiction.

Conclusion

Based on its analysis, the Tax Court reached the following conclusions:

Petitioner’s argument that the Notices were improperly mailed due to defective USPS Forms 3877 failed because Respondent presented sufficient additional evidence (USPS tracking, AUR records) to prove proper mailing.
Petitioner’s argument that the Notices were invalid because they were issued by the AUR system without proper delegated authority failed because the Notices reflected a thoughtful and considered determination, supported by the presumption of official regularity and evidence of petitioner’s responses to prior notices, and petitioner provided no evidence to the contrary.
Since the Notices were valid and properly mailed, the Petition was filed well beyond the 90-day statutory deadline.
The 90-day deadline under section 6213(a) is jurisdictional, and the Court lacks the authority to extend it.

For these reasons, the Court denied petitioner’s Motion to Dismiss and granted Respondent’s Motion to Dismiss for Lack of Jurisdiction, resulting in an order of dismissal for lack of jurisdiction.

This case serves as a stark reminder to tax practitioners regarding the critical importance of adhering to statutory deadlines for filing petitions with the Tax Court and the need for thorough evidence when challenging standard IRS procedures like mailing and notice issuance, particularly when the presumption of regularity is overcome by initial defects.

Prepared with assistance from NotebookLM.