Why you should keep your address updated with the IRS

On March 13, 2019, the Tax Court found that not all tax forms are equal, in that the IRS doesn’t have to recognize and update your address when you use a new address on all IRS tax forms.

Individuals should use Form 8822to update their address with the IRS
Individuals should use Form 8822 to update their address with the IRS | Photo by Christopher Harris on Unsplash

Earlier this year I wrote a post about how to change your address with the IRS. The post was the result of some questions from a client who had recently moved and was concerned about receiving an IRS notice. Based on the conversation, I thought other people might find the information useful.

Now, I think it’s even more important. You can read “How to report your new address to the IRS and others” here.

So, why is in important to keep the IRS appraised of your new address? Well, in Damian K. Gregory, et ux. v. Commissioner, 152 T.C. No. 7, Code Sec(s) 6212, the Tax Court found that both a Form 2848, Power of Attorney and Declaration of Representative, and a Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return, showing the new address was not enough for the IRS to update the taxpayer’s address in the IRS system.

So, let’s review some facts: the taxpayer filed a Form 1040, Individual Income Tax Return that showed their old address. They moved and subsequently filed both a Form 2848 and a Form 4868 showing their new address. After these were filed, the IRS issued a Notice of Deficiency and mailed it to the last address the taxpayer used on a tax return.

From the IRS point of view, the Form 1040 was the most recent tax return so they used that address on the Notice of Deficiency. Well, the taxpayer never received this notice. As you can imagine, they didn’t respond to the notice because they never received it.

The rest of the story is that the IRS didn’t receive a response in time so the proposed assessment in the notice of deficiency was assessed on the taxpayer. The taxpayer then took the IRS to Tax Court to get a redetermination but the Tax Court said the IRS followed the rules, so the taxpayer lost.

The moral of the story is that all the taxpayer had to do was file a Form 8822 to update their address with the IRS and they would have received the notice and could have responded in time. Like I said back in January, it’s important to make sure the IRS knows how to find you if they need you.