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notice of deficiency to petitioner for 1990 that the address
appearing on the petitioner's most recently filed return was no
longer petitioner's correct address. However, respondent was
unable to demonstrate what, if any, steps were taken to ascertain
petitioner's correct address. In the absence of any evidence on
the point, we decline to assume, as suggested by counsel for
respondent at the hearing on this matter, that respondent's
agents complied with Internal Revenue Manual directives and
conducted a search of respondent's computer records in an effort
to ascertain a more current address for petitioner prior to
issuing the disputed notice of deficiency.3 See Taylor v.
Commissioner, supra. By sending the notice of deficiency to the
Crystal Drive address, knowing that prior correspondence to that
address was returned undeliverable (without any evidence in this
record of a follow-up check for a current address by agents of
respondent), respondent failed to exercise due diligence.
3 We note that a number of respondent's administrative
procedures direct Internal Revenue Service personnel to take
various steps, including conducting a computer search, checking
the telephone and/or city directory, and contacting the
taxpayer's employer or a third party, in an effort to obtain a
taxpayer's correct address where current address information is
known to be incorrect. See 2 Audit, Internal Revenue Manual
(CCH), secs. 4243.2 (handling of undeliverable mail in the
examination function), 4462.1(3), at 7900 (manner of sending
notices of deficiency); 3 Audit, Internal Revenue Manual (CCH),
sec. 4(14)53, at 9142 (30-day notice returned as undeliverable).
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