Moving is always a stressful event and it is easy for certain things to be overlooked. One item on your moving checklist that is critical to remember: properly notifying the Internal Revenue Service (IRS) of your change of address. Today’s post tells you how to do it right and the terrible things that can happen if you don’t. Americans abroad who rely on foreign mail carriers that are sometimes unreliable will have special concerns.
Typically the IRS will correspond with a taxpayer by mailing the relevant item (e.g., a notice of deficiency) to the “taxpayer’s last known address”. If a taxpayer is unaware of IRS correspondence because he or she is simply not receiving it due to an address change, this can cause serious problems, including assessment of taxes based on incomplete information (this is called a “substitute for return” or “SFR”), imposition of penalties, perhaps the filing of a federal tax lien. In addition, a taxpayer with “seriously delinquent tax debt” can now be denied issuance or renewal of his US passport, or worse, it can be revoked by the Department of State. What a mess if the taxpayer is denied a passport because the required IRS notice sent to the taxpayer beforehand was simply never received due to a change in address. Full detail about passport revocation is at my blog post here.
What is the “Taxpayer’s Last Known Address”?
The “taxpayer’s last known address” is a term of art. Under the relevant tax law regulations (Treas. Regs. Section 301.6212-2(a)), this is the address that appears on the taxpayer’s most recently filed and properly processed Federal tax return unless the IRS is given clear and concise notification of a different address.
The burden of informing the IRS of an address change falls on the taxpayer; the IRS has no obligation to find him! Courts have been very strict on this matter and a recent case serves to illustrate the point. The Tax Court ruled in Duane Lee Chapman v. the Commissioner, TC Memo 2019-110 (August 29, 2019) that IRS properly mailed a notice of deficiency to taxpayers’ last known address. The taxpayers no longer lived at that address at the time the deficiency notice was mailed. They argued that the IRS Appeals Officer with whom they were dealing during an ongoing audit “should have known” that they no longer resided at that address and should not have had the deficiency notice mailed there. The court refused to accept this argument and pointed out that the Treasury Regulations and their reference to Rev. Proc. 90-18 (1990-1 C.B. 491) or later IRS-prescribed procedures (see below, Rev. Proc. 2010-16 2010-19 I.R.B. 664) provide the acceptable means of notifying the IRS of an address change. Without strict adherence to those rules, the court noted that the IRS would suffer an unreasonable administrative burden. It is untenable to think the IRS should have to “‘systematically record in a central file all address information acquired in any fashion’ so that it could be sure it was sending the taxpayer a notice of deficiency to every conceivable ‘known’ address!”
Notifying the IRS of Address Change — Do It Right or Regret!
There are several ways to notify the IRS of an address change and have it count for tax purposes. Bear in mind that it can take four to six weeks for a change of address request to be fully processed. Americans overseas should be extra cautious in the method they choose.
- When Filing Your Tax Return
If you change your address before filing your income tax return, enter your new address on your tax return when you file. When your return is processed, the IRS will update your records. Be careful here! Not everything will constitute a “return” for the purpose of notifying the IRS of an address change. See Damian K. Gregory and Shayla A. Gregory v. Commissioner 152 TC 7 (March 13, 2019). The Tax Court held that neither Form 2848 (Power of Attorney) nor Form 4868 (Extension of time to file) constitute a “return” for this purpose. Rev. Proc. 2010-16 provides a list of IRS forms that qualify and do not qualify as “returns”, specifically for the purpose of establishing whether the form is a return sufficient for updating the “taxpayer’s last known address”.
- Notifying the Relevant US Post Office
If you are in the US, and change your address after filing your tax return, you should notify the US post office that services your old address. I do not like this method standing alone because it is very nuanced when one reads the details in the Treasury Regulations. Not all post offices will forward government checks, thus, notifying the post office that services your old address ensures that your mail will be forwarded, but not necessarily your refund check. Notifying a foreign (non-US) post office is not a reliable method and will not work for purposes of meeting the stringent requirements of providing notification to the IRS of an address change.
- By Form 8822
I believe that properly using Form 8822 can keep taxpayers safe and sound. A copy of the form should be retained. It should be sent to the IRS by registered or certified mail, return receipt requested, so the taxpayer can have proof of having sent in the Form, in the event needed later on. Taxpayers using foreign post offices should take special care that postal receipts bear an official postmark of the foreign country and that it is dated.
To change your address with the IRS, you may complete a Form 8822, Change of Address, (For Individual, Gift, Estate, or Generation-Skipping Transfer Tax Returns) (PDF) and/or a Form 8822-B, Change of Address or Responsible Party — Business (PDF) and send them to the address shown on the forms. For information on changing the “responsible party,” see Form 8822-B. You may download and print the fillable Forms 8822 and 8822-B or order them by calling in the USA 800-TAX-FORM (800-829-3676).
- In Writing
This is another method that I like. You may write to inform the IRS of your address change. Tell the IRS you are changing your address, and provide your full name, old and new addresses, social security number, individual taxpayer identification number, or employer identification number, and signature. If you filed a joint return, you should provide the information and signatures for both spouses. Send your written address change information to the campus addresses listed in the instructions to the tax forms you filed. If you have separated from your spouse and if you filed a joint return but now have separate residences, each of you should notify IRS of the new, separate addresses. Again, any writing should be sent to the IRS by registered or certified mail, return receipt requested.
Posted October 10, 2019
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