Joshua Welch and Alejandra De Losada v. United States

United States Court of Appeals
for the Federal Circuit
__________________________
JOSHUA WELCH AND ALEJANDRA DE LOSADA,
Plaintiffs-Appellants,
v.
UNITED STATES
Defendant-Appellee.
__________________________
2011-5090
__________________________
Appeal from the United States Court of Federal
Claims, in case no. 09-CV-890, Senior Judge Robert H.
Hodges, Jr.
_________________________
Decided: May 18, 2012
_________________________
JOSEPH LIPARI, Roberts & Holland LLP, of New York,
New York, argued for plaintiffs-appellants. With him on
the brief was ELLEN SEILER B RODY.
CAROL B ARTHEL, Attorney, Tax Division, United
States Department of Justice, of Washington, DC, argued
for defendant-appellee. With her on the brief were
TAMARA W. ASHFORD , Deputy Assistant Attorney General,
and THOMAS J. CLARK , Attorney.
__________________________

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WELCH v. US 2
Before BRYSON , CLEVENGER , and O’MALLEY, Circuit
Judges.
O’M ALLEY, Circuit Judge.
Appellants Joshua Welch and Alejandra de Losada
appeal from a judgment of the Court of Federal Claims,
finding that they are not entitled to refunds of
$142,277.55 and $725,205.28 paid to the IRS for tax
deficiencies in tax year 1992 and tax year 1995, respec-
tively. The Internal Revenue Service (“IRS”) must assess
any tax deficiency within the applicable limitations pe-
riod, or the taxpayer is relieved of the obligation to pay
the deficiency. The parties dispute whether the IRS
properly mailed the two notices of deficiency at issue here
prior to December 31, 2000, thereby tolling the pertinent
statute of limitations and making the 1992 and 1995
assessments timely. Use of the form prescribed in the
Internal Revenue Manual for establishing compliance
with the notice of deficiency mailing requirement—PS
Form 3877—is not a prerequisite to the government
demonstrating mailing of a notice of deficiency, but some
corroborating evidence of both the existence and timely
mailing of the notice of deficiency is required. Because
the IRS presented such corroborating evidence for the
1992 notice of deficiency but not as to the 1995 notice, we
affirm in part and reverse in part. We affirm the judg-
ment of the Court of Federal Claims with respect to the
1992 assessment, and reverse with respect to the 1995
assessment.
BACKGROUND
In 1993, appellant Joshua Welch, who was then em-
ployed as a financial analyst, filed an individual tax
return for tax year 1992 and paid income taxes in the
amount of $97,964. Welch and appellant Alejandra de
Losada were married in the same year. Appellants filed a

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WELCH v. US 3
joint tax return in 1996 for tax year 1995 and reported
ordinary losses in excess of $1.3 million. Appellants also
requested a carryback of a portion of these losses to
Welch’s 1992 tax year. The IRS granted the carryback,
issuing a refund in the amount of $76,570 for his 1992 tax
year. The IRS subsequently audited the appellants’ 1995
tax return. During the audit, appellants agreed to extend
the statute of limitations with respect to any necessary
assessment for the 1992 and 1995 tax years to December
31, 2000.
In connection with the audit, the IRS mailed a letter
dated November 10, 1998, (“Letter 950”) jointly to Welch
and de Losada informing them that it was denying the
$1,329,070 ordinary loss claimed in their 1995 return.
The IRS concluded that Welch could not support his claim
that he was either a trader/dealer or professional gambler
and therefore entitled to treat his trading losses as ordi-
nary losses. This denial resulted in a tax deficiency of
$223,500 for 1995. The IRS also proposed a twenty per-
cent negligence penalty in the amount of $44,700 for that
tax year. On the same day, the IRS mailed a letter to
Welch individually (“Letter 569”) proposing a full disal-
lowance of Welch’s refund of $76,570 for tax year 1992,
which was based on a carryback of the ordinary loss
claimed in tax year 1995.
Both Letters 569 and 950 were mailed to appellants’
Central Park West address. Although appellants have no
recollection of receiving either letter, they do not dispute
the mailing or receipt of these letters. At his deposition
Welch testified that, upon receiving any correspondence
from the IRS, it was his standard practice to forward such
correspondence to their then-accountant, Eric Roseman.
Mr. Roseman, in fact, represented Welch in an appeal—
that was ultimately denied—to the IRS regarding the
adjustment proposed in Letter 569 and represented both

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WELCH v. US 4
Welch and de Losada in connection with a similarly
unsuccessful appeal relating to Letter 950. In an Appeals
Case Memorandum (“ACM”) dated June 7, 2000, IRS
personnel made a request to IRS counsel for approval to
issue a notice of deficiency to Welch for tax year 1992 and
to both appellants for tax year 1995. The ACM sets forth
a tax deficiency for 1992 of $43,032, reduced from
$76,570, and a deficiency of $223,500 and a penalty of
$44,700 for 1995. A supplemental ACM indicating that
“statutory notice has been approved by district counsel” is
dated August 31, 2000. Both the initial and supplemental
ACM identify a statute of limitations date of December
31, 2000. Tax assessments for the 1992 and 1995 tax
years were subsequently recorded on February 15, 2001.
A tax lien for the 1992 tax year was filed against
Welch on December 14, 2001. In September 2007, the
IRS issued a “Final Notice of Intent to Levy” for the 1992
and 1995 tax years.1 Appellant, represented by the
accounting firm Press Schonig, requested a Collection Due
Process Hearing with the IRS to protest the filing of the
Final Notice of Intent to Levy. The IRS denied the peti-
tion for relief. A tax lien for the 1995 tax year was filed
against both appellants in June 2008.
On July 11, 2008, appellants filed a petition in the
Tax Court seeking removal of the assessments and cessa-
tion of all collection activities. In order to complete an
apartment sale while their petition was pending, appel-
lants paid $142,277.55 with respect to the 1992 lien and
$725,205.28 with respect to the 1995 lien, for a total of
$867,482.83, in October 2008. On March 31, 2009, the
Tax Court summarily dismissed the appellants’ petition
as moot since payment on the assessment had been made.
1 No explanation is given for the delay between the
2001 tax lien and the 2007 levy notice.

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WELCH v. US 5
On May 7, 2009, appellants filed two Form 1040X’s
with the IRS, seeking a refund of the $867,482.83 in tax
deficiencies paid for tax years 1992 and 1995. After more
than six months elapsed from filing the Forms 1040X, on
December 28, 2009, appellants filed suit in the Court of
Federal Claims seeking a refund of the full $867,482.83,
alleging overpayment under I.R.C. § 6401(a) on grounds
that the deficiencies were both assessed after the expira-
tion of the governing statute of limitations. The Court of
Federal Claims had jurisdiction under 28 U.S.C. §
1346(a)(1) and § 1491(a)(1).
After the close of discovery, the parties filed cross-
motions for summary judgment on whether the IRS
properly mailed statutory notices of deficiency for the tax
years 1992 and 1995 before December 31, 2000. The
parties argued that this issue would be determinative of
appellants’ claims because, if notices of deficiency were
mailed before the running of the statute of limitations,
those mailings would thereby extend the statute of limita-
tions for assessing appellants’ income tax. The parties
agreed that the assessments were timely even if the
statutory notices were never received, as long as they
were timely sent.
On May 3, 2011, the Court of Federal Claims granted
summary judgment to the government and denied sum-
mary judgment to appellants, finding that “[the IRS] has
demonstrated as a matter of law that it mailed the notices
of deficiency for the 1992 and 1995 tax years.” Specifi-
cally, the Court of Federal Claims determined the IRS
procedure in Manhattan to consist of the following: (1) an
appeals officer decides to issue a statutory notice of defi-
ciency and personally delivers the case to the Appeals
Processing Section; (2) the appeals officer enters the
preparation of the notice into his or her case activity
record; (3) the tax examiner then issues the statutory

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WELCH v. US 6
notice of deficiency, date stamping the notice and noting
the ninety-day default date by which the taxpayer must
petition the Tax Court; (4) the notice is then sent to the
address listed in taxpayer’s file. The Court of Federal
Claims concluded that the existence of the ACM indicated
compliance with procedural steps (1) and (2). With regard
to steps (3) and (4), the court noted that appellants’ file at
the IRS contains a date-stamped notice of deficiency for
1992 with the correct address and date of default. Addi-
tional documentation, in the form of mail return-receipt
cards and a computer-generated control card with tax
amounts matching that listed on the Certificates of As-
sessments and Payment, were also cited by the Court of
Federal Claims as additional supporting documentation.2
The Court of Federal Claims found that this evidence
collectively raised a presumption that the IRS had acted
with official regularity and that the appellants did not
contradict that presumption.
On these grounds, the Court of Federal Claims found
the statute of limitations tolled and collection of deficien-
cies for both tax years valid. Citing United States v.
Zolla, 724 F.2d 808, 810 (9th Cir. 1984), the court noted
that “[t]he IRS is entitled to a presumption of official
regularity if it can produce a Form 3877 and a date-
stamped copy of the notice of deficiency.” Welch v. United
States, 98 Fed. Cl. 655, 659 (2011). The court went on to
find that, even “[w]here the IRS is unable to produce
these two documents it can raise the same presumption
by establishing that it followed a set procedure with
2 The Court of Federal Claims found sufficient proof
of mailing for the 1992 notice without this additional
documentation. The return-receipt cards and computer-
generated control card were relied upon by the Court of
Federal Claims for the 1995 notice, but are also applicable
to the 1992 notice.

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WELCH v. US 7
respect to the taxpayers and providing corroborating
documentation.” Id. (citing United States v. Ahrens, 530
F.2d 781, 785 (8th Cir. 1976)). Finding that the Manhat-
tan IRS office both established its own procedure and
provided corroborating documentation showing this
procedure was followed, the Court of Federal Claims
determined that the IRS had established, as a matter of
law, that it mailed the statutory notices of deficiency for
1992 and 1995 on September 11, 2000.
Appellants timely appealed. We have jurisdiction
pursuant to 28 U.S.C. § 1295(a)(3).
D ISCUSSION
We review the Court of Federal Claims’s grant of
summary judgment de novo, with justifiable inferences
drawn in favor of the party opposing the judgment.
Adams v. United States, 471 F.3d 1321, 1324 (Fed. Cir.
2006). We address the relevant legal framework, and
then turn to the evidence presented by the government in
support of its contention that notices of deficiency were
timely mailed.
I.
Section 6203 of the I.R.C. provides that a tax assess-
ment “shall be made by recording the liability of the
taxpayer in the office of the Secretary in accordance with
rules or regulations prescribed by the Secretary.” Under §
6501(a), the IRS is generally required to assess a tax
within three years after a tax return is filed. This limita-
tions period may be extended by mutual agreement of the
taxpayer and IRS, as was done by the parties here to
December 31, 2000. I.R.C. § 6501(c)(4)(A). The assess-
ment limitations period is also tolled when the IRS mails
a statutory notice of deficiency to the taxpayer under §
6212(a). Id. § 6503(a). The assessment limitations period

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WELCH v. US 8
is tolled for ninety days once the notice has been sent to
allow the taxpayer to petition the Tax Court, and then for
an additional sixty days if the taxpayer has failed to make
such a petition. See id. §§ 6213(a), 6503(a). Once an
assessment has been made within the limitations period,
the assessed tax may be collected by levy or by court
proceeding. Id. § 6502(a). If the IRS fails to properly
assess the tax, the taxpayer is relieved of the obligation to
pay the tax. See id. §§ 6213(a), 6401(a).
Section 6212(a) provides that the IRS may “send no-
tice of such deficiency to the taxpayer by certified mail or
registered mail.” To be effective, actual receipt of the
notice of deficiency by the taxpayer is not required. See,
e.g., Keado v. United States, 853 F.2d 1209, 1211-12 (5th
Cir. 1988); Cohen v. United States, 297 F.2d 760, 772 (9th
Cir. 1962) (“We think it clear that the Congress, when it
‘authorized’ service by registered mail, did not intend to
require actual receipt by the addressee of the letter.
Rather, it permitted the use of a method of giving notice
that would ordinarily result in such receipt.”). See also
Tadros v. Comm’r, 763 F.2d 89, 91 (2d Cir. 1985); Zolla,
724 F.2d at 810. But the government must present com-
petent and persuasive evidence that the statutory notice
of deficiency was actually mailed to the taxpayer on a
particular date before it can rely on a mailing to toll the
statute of limitations. Epstein v. Comm’r, 58 T.C.M.
(CCH) 128 (T.C. 1989); see also Keado, 853 F.2d at 1214
(“failure to comply precisely with each aspect of each
procedure is irrelevant if the evidence adduced is suffi-
cient to prove mailing”).
Furthermore, while § 6212(a) mentions use of certified
or registered mail for sending notice, courts have held
that other methods, such as regular mail or hand deliv-
ery, may be used. Munz v. Comm’r, 61 T.C.M. (CCH)
2412 (T.C. 1991) ,aff'd, Munz v. Comm’r, 972 F.2d 1341

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WELCH v. US 9
(9th Cir. 1992). “Such methods, however, must provide
the taxpayer with actual notice of the Commissioner's
determination to be sufficient under section 6212.” Id.
The government has the burden of proving that notice
was sent to the taxpayer. See, e.g., O'Rourke v. United
States, 587 F.3d 537, 540 (2d Cir. 2009); Pietanza v.
Comm’r, 92 T.C. 729, 736-37 (T.C. 1989) aff'd, 935 F.2d
1282 (3d Cir. 1991) acq. in part and nonacq. in part
recommended by 1991 WL 771260 (May 23, 1991). To
facilitate compliance with this burden, the Internal Reve-
nue Service Manual section 4.8.9.9.3, “Records of Mail-
ing,” provides that the record of certified and registered
mailing should be kept on PS Form 3877 together with
the certified/registered mail numbers, which are supplied
by the United States Postal Service. Specifically, the
Manual states that each PS Form 3877 is to be labeled
with, “Notices of Deficiency, for the years indicated, have
been sent to the following taxpayers.” Certified/registered
mail numbers of each individually mailed notice are
recorded on the form, along with the name and address of
each addressee. Multiple addresses are separately en-
tered. In the “Remarks” column of PS Form 3877, the tax
years to which the notice is applicable is entered. At the
Post Office, the postal employee will compare the certi-
fied/registered mail number of each notice against the
number recorded in PS Form 3877, and subsequently sign
and date PS Form 3877.
II.
On appeal, appellants contend that the IRS failed to
present evidence that it timely mailed notices of defi-
ciency for tax years 1992 and 1995, and that therefore,
the IRS failed to establish that assessment of those defi-
ciencies fell within the statute of limitations. In particu-
lar, appellants argue that the failure of the IRS to

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WELCH v. US 10
produce a PS Form 3877, or the information contained on
PS Form 3877 in a different format, for either notice of
deficiency is dispositive. The government does not con-
tend that PS Form 3877 was properly completed here;
indeed, it concedes that there is no evidence that, despite
recommendation by the Internal Revenue Manual, that
the Manhattan Appeals Office even used PS Form 3877
during the relevant timeframe. Instead, the IRS argues
that a PS Form 3877 is not necessary in all circumstances
and that its production of a date-stamped notice of defi-
ciency, certified mail return-receipt cards, and a computer
generated control card matching the amounts listed on
the Certificates of Assessment and Payment is otherwise
sufficient to support its contention that notices of defi-
ciency had been mailed to the appellants. We focus our
analysis, accordingly, on whether the evidence presented
by the government—which did not include use of a PS
Form 3877 or its equivalent—is sufficient to demonstrate
timely mailing of a notice of deficiency.
III.
While adherence to Manual procedures in mailing
statutory notices is presumptive proof of mailing, strict
compliance has not been legally required by other circuits.
See, e.g., Keado, 853 F.2d at 1214. Other courts address-
ing the issue have used a two-prong inquiry when exam-
ining the IRS’s claims that a notice of deficiency has been
sent. See O'Rourke, 587 F.3d at 540-41; Coleman v.
Comm’r, 94 T.C. 82, 91-92 (1990); see also Keado, 853 F.2d
at 1214; Zolla, 724 F.2d at 810; Ahrens, 530 F.2d at 784-
86. First, where the IRS has (1) established the existence
of a notice of deficiency and (2) produced a properly com-
pleted PS Form 3877 certified mail log, it is entitled to a
presumption of mailing, and the burden shifts to the
taxpayer to rebut that presumption by clear and convinc-
ing evidence. See, e.g., O'Rourke, 587 F.3d at 540-41;

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WELCH v. US 11
Coleman v. Comm’r, 94 T.C. 82, 91-92 (1990). Second, in
the absence of proof of a notice of deficiency and a prop-
erly completed Postal Form 3877 certified mail log, the
IRS may meet its burden with evidence that is “otherwise
sufficient.” See, e.g., O'Rourke, 587 F.3d at 540-41; Cole-
man v. Comm’r, 94 T.C. 82, 91-92 (1990). While we
believe this framework is sound generally, it still begs the
question of what evidence is “otherwise sufficient” for
these purposes.
A review of other courts’ analyses of the sufficiency of
the evidence presented to establish timely mailing of a
notice of deficiency provides a helpful background to the
standard we apply here. In O’Rourke, the government
possessed an incomplete copy of the notice of deficiency,
as well as an improperly filled-out PS Form 3877. 587
F.3d at 540-41. Although the defects in each piece of
evidence did not entitle the government to a presumption
of mailing under the first part of the inquiry, the Second
Circuit held that the incomplete notice and PS Form 3877
were “otherwise sufficient” under the second part of the
inquiry to establish proof of mailing. Id. at 541-42.
The Eighth Circuit in Ahrens conducted a similar
analysis, also finding in favor of the government. In
contrast to O’Rourke, all copies of the notice of deficiency
in Ahrens had been lost. Ahrens, 530 F.2d at 784-85. The
government did, however, produce a properly filled-out
Form 3877, which the court considered highly probative
evidence that a notice of deficiency was mailed to the
taxpayer. Id. at 784. Additionally, the government
showed the existence of a deficiency notice through depo-
sition testimony of the taxpayer’s attorney, who recalled
receiving a copy of the notice, as well as through corre-
spondence between the taxpayer and his attorney. Id. at
783, 785. Only the validity of the notice’s contents was
therefore in question. In the absence of evidence to the

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WELCH v. US 12
contrary, the court concluded that the contents of the
notice could be presumed via the presumption of official
regularity that attached upon mailing of the notice. Id. at
785-86.
In Keado, the Fifth Circuit found proof of mailing of
the notice based upon: (1) an undated copy of the actual
notice; (2) an affidavit regarding IRS mailing procedures
in Dallas; (3) a receipt for certified mail (PS Form 3800)
indicating that a certified letter with the number
P727358276 was sent to the taxpayers’ home address; (4)
a deficient PS Form 3877-A also indicating that certified
letter P727358276 was sent to the taxpayers’ home ad-
dress; and (5) an affidavit explaining that PS Forms 3800
and 3877-A were used exclusively for mailing notices of
deficiency. 835 F.2d at 1214.
In Zolla, the IRS destroyed all copies of the deficiency
notices per established routine. The government did,
however, offer a completed Form 3877 certifying that the
notices of deficiency were mailed, as well as an IRS form
certifying that taxes and penalties had been assessed. In
light of the taxpayer’s failure to offer any contrary evi-
dence, the Ninth Circuit held that Form 3877 and the
certification of tax assessment were highly probative, and
found proof of mailing. Zolla, 724 F.2d at 810-11.
The Tax Court has looked for similarly corroborating
evidence to evince proof of mailing when a Form 3877 was
either incomplete or missing. Thus, in Coleman, 94 T.C.
at 91-93, the tax court found the following sufficient to
establish mailing of notice of deficiency: (1) existence of
the actual notice, (2) habit evidence as to mailing proce-
dure, (3) a partially deficient Form 3877, and (4) properly
completed Forms 3877 immediately preceding and follow-
ing the deficient form. See also Stein v. Comm’r, 60
T.C.M. (CCH) 211 (1990) (where the evidence for the

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WELCH v. US 13
government included: (1) a copy of the deficiency notice;
(2) procedural testimony of mailing procedures at the
Laguana, CA IRS office; and (3) a copy of a certified mail
list similar to, and performing the same function as, Form
3877).
In Pietanza, the government produced only a PS Form
3877 and a sample draft of the deficiency notice. 92 T.C.
733. There, the Tax Court found that this evidence did
not support a conclusion that notice had been properly
mailed, because the government had the burden of estab-
lishing the existence of a deficiency notice in addition to
its date of mailing. Id. at 736. Similarly, in Butti, the
government offered no procedure evidence to prove notice
creation, nor provided any corroborative documentation
since the administrative file was lost. Butti v. Comm’r, 95
T.C.M. (CCH) 1321 (2008). Aside from a completed PS
Form 3877, an IRS Appeals officer’s testimony that he
saw a copy of the deficiency notice was the only support-
ing evidence offered by the government. Id. The court
found itself bound by its precedent in Pietanza and ruled
in favor of the taxpayer. Id.
Using these decisions for general guidance, we struc-
ture the following standard for determining whether the
evidence submitted by the IRS is sufficient to demon-
strate timely mailing of a notice of deficiency. First, we
find that the government bears the burden of proving
proper mailing of a notice of deficiency by competent and
persuasive evidence. Butti, 95 T.C.M. (CCH) 1321, at *3;
Coleman, 94 T.C. at 90. Next, where the IRS has (1)
established the existence of a notice of deficiency and (2)
produced a properly completed PS Form 3877 certified
mail log it is entitled to a presumption of mailing, and the
burden shifts to the taxpayer to rebut that presumption
by clear and convincing evidence. See, e.g., Ahrens, 530
F.2d at 784-86. In the absence of a properly completed PS

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WELCH v. US 14
Form 3877, where the existence of a notice of deficiency is
not in dispute, the government must come forward with
evidence corroborating an actual timely mailing of the
notice of deficiency. The evidence presented to prove
timely mailing may include documentary evidence as well
as evidence of mailing practices corroborated by direct
testimony. See e.g., Byk v. Comm’r, 46 T.C.M. (CCH) 1189
(1983) (explaining that, when a Form 3877 is not avail-
able, mailing of a deficiency notice in compliance with
I.R.C. § 6212(b) may be established "as any other perti-
nent fact by other competent evidence such as the testi-
mony of [the IRS's] agents"). See also Butti, 95 T.C.M.
(CCH) 1321, at *2; Coleman, 94 T.C. at 90. But that
evidence must directly corroborate the mailing of the
specific notice of deficiency at issue on a date certain.
Where the parties dispute the existence of the notice
of deficiency itself, the government bears the burden of
establishing both the existence of the notice itself, as well
as timely mailing of that specific notice. See, e.g., Zolla,
724 F.2d at 810; Ahrens, 530 F.2d at 784-86. Evidence of
a mere mailing absent corroboration that the notice of
deficiency was actually created is insufficient to meet the
government’s burden. Pietanza, 92 T.C. 729; Butti, 95
T.C.M. (CCH) 1321. Thus, where the existence of a notice
is not in dispute, the presumption of official regularity can
be invoked to establish the validity of the notice’s con-
tents. See Coleman, 94 T.C. at 91. See also Zolla, 724
F.2d at 810. And, when a PS Form 3877 or substitute is
used, the presumption of official regularity can be invoked
to establish mailing. See, e.g., Coleman, 94 T.C. at 91
But, the presumption does not extend to the existence of
the notice itself, or to mailing in the absence of a PS Form
3877 or its substitute. See, e.g., Ahrens, 530 F.2d at 785.

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WELCH v. US 15
IV.
We now apply these principles to the 1992 assess-
ment. Appellants contend that, “when the Service does
not have both a copy of the statutory notice and Form
3877, the courts have almost always held that the Service
has not met its burden of proof.” Appellants’ Brief at 16.
Although a copy of the 1992 notice exists, because the
government can only provide mail return-receipt cards
and not a PS Form 3877, appellants argue the govern-
ment’s proof is insufficient. According to the government,
return-receipt cards signed for by Nath Gosh on Septem-
ber 14, 2000,3 in conjunction with the testimony of Ne-
shell Fowler-Moore, the Lead Tax Examiner for Appeals
in the IRS’s Manhattan office, stating that notices of
deficiency are sent by certified mail and that those cards
would correspond to “the only certified mail sent to these
taxpayers in 2000,” are sufficient to uphold the Court of
Federal Claims’ ruling. The government also points to
other corroborating evidence, including: the ACM; the
declaration of Fowler-Moore regarding Manhattan IRS
office mailing procedures; the computer-generated control
card for appellants; a copy of the actual notice of defi-
ciency for the 1992 tax year; and an associated transmit-
tal letter to Roseman, explaining to him that the 1992
notice had been sent to his client.
Here, because the government possesses a copy of the
1992 notice of deficiency, to demonstrate timely mailing
the government need only produce a completed Form
3877 or otherwise sufficient documentation of certified
mailing. While the government concedes that the Man-
hattan IRS office did not follow the procedure regarding
proof of mailing described in the IRS Manual, and cannot
3 At oral argument, counsel for appellants repre-
sented that Mr. Gosh is a resident of appellants’ building.

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WELCH v. US 16
produce a PS Form 3877 for the 1992 tax year notices, we
find the evidence submitted is sufficient to corroborate
mailing of the 1992 notice of deficiency prior to the expi-
ration of the statute of limitations.
As discussed above, the failure of the IRS to adhere to
the procedure outlined in the IRS Manual does not auto-
matically render a notice of deficiency ineffective. See
Keado, 853 F.2d at 1214 (“Procedures or rules adopted by
the IRS are not law . . . failure to comply precisely with
each aspect of each procedure is irrelevant if the evidence
adduced is sufficient to prove mailing.”). Although appel-
lants correctly claim that the return-receipts do not
indicate the content of the mailed correspondence, Fowler-
Moore’s declaration, the date on the return-receipt
cards—September 14, 2000—and the corresponding letter
to Roseman, all tie the return-receipt cards to the 1992
statutory notice of deficiency, and establish mailing on
September 11, 2000.4 The evidence leads to the justifi-
able inference that the 1992 notice of deficiency was
timely mailed.
The appellants’ reliance on United States v. Wright,
658 F. Supp. 1 (D. Alaska 1986) to defeat this conclusion
is misplaced. In Wright, much of the taxpayers’ file was
lost or discarded. Id. at 2. The IRS attempted to estab-
lish proof of mailing with only: (1) a date-stamped copy of
the deficiency notice and (2) a memorandum written by
the IRS appeals officer who met with the taxpayers. The
memorandum was written five years later, and only noted
4 The appellants correctly point out that other evi-
dence presented here, such as the Appeals Case Memo-
randums or Certificates of Assessments and Payments,
offer limited probative value in this case as to whether a
certified mail letter was actually prepared and sent to
taxpayers.

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WELCH v. US 17
that the now-lost administrative file indicated the defi-
ciency notice was returned as undeliverable. Id. The
court found that the two pieces of evidence were not
sufficient to prove mailing. Similarly, in Magazine v.
Commissioner, 89 T.C. 321 (1987), the Tax Court found
for the taxpayer where no direct evidence of mailing was
entered and the government could only offer habit evi-
dence as to mailing procedure. Both cases are inapposite
to the situation here, where the government offered far
more evidence of mailing. For these reasons, we affirm
the Court of Federal Claims’ judgment in favor of the
government to the extent that judgment relates to the tax
year 1992.
V.
The parties’ arguments with respect to the 1995 no-
tice mirror those asserted for the 1992 notice. Unlike the
evidence presented for the 1992 tax year, however, no
copy of a 1995 notice of deficiency was presented, nor is
there any transmittal letter to the appellants’ representa-
tive informing him that one was sent to Welch and de
Losada. As noted above, for the government to meet its
burden of proof in the absence of a copy of the notice, it
must offer sufficiently corroborative evidence in the form
of testimony, correspondence, habit evidence, or other-
wise, both of the existence of the notice of deficiency and
of timely mailing. See, e.g., Zolla, 724 F.2d 808; Ahrens,
530 F.2d at 784–86.
No such corroborative evidence for the 1995 notice of
deficiency was presented here. Instead, the government
offers evidence in the form of: (1) testimonial evidence
from Fowler-Moore regarding internal IRS procedure for
notice preparation at the Manhattan office, (2) Appeals
Case Memorandums indicating that a statutory notice
was approved, (3) computer control cards suggesting a

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WELCH v. US 18
1995 notice existed, and (4) the two postal return-receipts.
The government’s reliance on Fowler-Moore’s declaration
in connection with the computer control cards is mis-
placed. The declaration establishes—at best—that a
statutory notice was created and mailed on September 11,
2000. And as discussed above, the evidence points to that
being the 1992 notice of deficiency. Nothing in Fowler-
Moore’s declaration is sufficient to tie any reference to the
1995 tax deficiency on the computer cards to a notice of
deficiency for 1995, or timely mailing of that notice.
There is no evidence that the computer control cards
relied on by Fowler-Moore were generated contemporane-
ously with the purported mailing of the 1995 notice of
deficiency, and the cards themselves arguably relate only
to the 1992 tax year. Appellants assert that notation of
“KEYPER: 199212” at the top of the control card indi-
cates that the computer entry itself references a “key
period” of the 1992 tax year. JA171. This is arguably
corroborated by the notation on the transmittal letter for
the 1992 notice of deficiency that the relevant tax period
for that notice ended “9212.” JA188. The government
offered no competent testimony to rebut appellants’
contention.
Thus, even assuming the evidence is sufficient to
prove that a 1995 notice of deficiency was approved and
that the IRS intended to create it, only the return-receipt
cards are potential proof that such a notice actually
existed and was mailed. As appellants correctly argue,
the government offers no way to cross-reference the
return-receipts with whatever letter or correspondence it
accompanied. Fowler-Moore’s testimony can only estab-
lish that some form of certified mail was sent to appel-
lants on September 11, 2000. In the absence of evidence
establishing a connection between the return-receipt
cards and a particular document, the parties can do no

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WELCH v. US 19
more than speculate as to the letters’ contents. One
receipt is addressed only to Welch, the other only to de
Losada. According to the government, because Welch
filed singly for the 1992 tax year, a notice of deficiency
would have been mailed only to him, and not his wife.
Assuming, therefore, that the return-receipt addressed to
Welch pertains to the 1992 notice, it follows, according to
the government, that the postal receipt addressed to de
Losada pertains to the 1995 notice.
But the government provides no explanation as to
why the 1995 deficiency notice would be addressed only to
de Losada, especially when Welch is the primary taxpayer
listed on their 1995 tax return (de Losada was listed as
“Spouse”). The government’s response at oral argument
as to why the cards would be addressed to the secondary
taxpayer only was, “Why not? If they are at the same
address, it was a joint return, there is no reason why not
just to list one of them rather than the two of them.” Oral
Argument at 18:45. At the same time, however, the
government concedes that multiple copies of the 1995
notice, addressed to both Welch and de Losada, would not
have been included in a single mailing, thereby asking
this court to believe the IRS notified only the second listed
taxpayer of a deficiency. Id. at 19:00. The government’s
explanations simply are insufficient to support the justifi-
able inference that the return receipt card addressed to de
Losada contained a 1995 notice of deficiency which the
government cannot locate and which the government
cannot establish was sent to the taxpayers’ representa-
tive, as it should have been. An equally justifiable—
indeed more justifiable—inference is that a copy of the
1992 notice of deficiency was mailed to both Welch and de
Losada, separately, because the deficiency related to the

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WELCH v. US 20
rejection of a proposed adjustment to a tax year, 1995, in
which appellants jointly filed.5
Based on the evidence presented, the government has
failed to demonstrate the existence of the 1995 notice of
deficiency and the date of its mailing by competent and
persuasive evidence. Both are required before we can find
that assessment of the 1995 deficiency occurred within
the governing statute of limitations period. See, e.g.,
Butti, 95 T.C.M. (CCH) 1321; Pietanza, 92 T.C. 729. The
government attempts to rely on the presumption of offi-
cial regularity to overcome the deficiencies in its proofs,
but that reliance is misplaced. Noting that the govern-
ment had neither a copy of the deficiency notice nor a PS
Form 3877 for 1995, the Court of Federal Claims still held
that, “[w]here the IRS is unable to produce these two
documents, it can raise the same presumption by estab-
lishing that it followed a set procedure with respect to the
taxpayers and providing corroborating documentation.”
Welch, 98 Fed. Cl. at 659 (citing Ahrens, 530 F.2d at 785).
This application of the presumption of official regularity
is incorrect. In Ahrens, the presumption of official regu-
larity was invoked with respect to the validity of the
notice’s contents, not to the issue of whether a notice was
mailed, or whether the notice existed. 530 F.2d at 785.
Abstract references to office procedures not tied to either
an identifiable notice of deficiency or clear evidence of the
mailing of the same are insufficient to give rise to a
presumption of official regularity.
Other cases explicitly preclude the use of the pre-
sumption of official regularity with respect to a mailing
5 In contrast, as described above, the only justifi-
able inference from the existence of the 1992 notice of
deficiency and the testimony of Fowler-Moore is that at
least one of the return-receipt cards corresponds to the
mailing of the 1992 notice of deficiency.

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WELCH v. US 21
when neither the deficiency notice nor a PS 3877 is pro-
duced. See O’Rourke, 587 F.3d at 540-41 (holding that a
defective PS 3877 does not entitle the IRS to a presump-
tion of mailing); Butti, 95 T.C.M. 1321, at *3 (“[W]here, as
here, the existence of the notice of deficiency is in dispute,
we have previously rejected the Commissioner's reliance
on the presumption of regularity based solely on the Form
3877 under circumstances similar to those present here.”);
Coleman, 94 T.C. at 91 (“[W]here respondent relies on
imprecise mailing procedures and other corroborative
evidence of mailing, the presumption of official regularity
does not apply.”). Here, the government cannot produce a
copy of the 1995 notice, nor can it produce a PS Form
3877, even a defective one. It is not, therefore, entitled to
a presumption of official regularity with respect to the
existence and mailing of the 1995 notice. The Court of
Federal Claims below incorrectly presumed both validity
and timely mailing of the 1995 notice of deficiency from
its finding that the IRS complied with established proce-
dures. For these reasons, we must reverse the trial
court’s judgment in favor of the government to the extent
that judgment relates to the 1995 tax year.
CONCLUSION
Although the combination of a copy of the 1992 notice
and postal return-receipts dated three days after that
notice, in combination with a corresponding letter to
Welch’s representative meet the government’s burden of
proof of mailing for that tax year, the lack of a 1995 notice
and the inability to cross-reference the return-receipts to
any specific IRS correspondence simply do not. We there-
fore affirm the Court of Federal Claims’s decision with
respect to the 1992 assessment, and reverse with respect
to the 1995 assessment. We remand this matter for entry
of judgment in favor of Welch and de Losada with respect
to the refund they seek for the deficiency paid relating to

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WELCH v. US 22
the 1995 tax year and any further necessary proceeding
consistent with this judgment.

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