James A. and Muriel M. Andrews - Page 10

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               an obligation to exercise reasonable diligence to                       
               ascertain the taxpayer’s correct address if prior to                    
               mailing the deficiency notice [he] has become aware                     
               that the address last known to the agency may be                        
               incorrect. * * *  [Follum v. Commissioner, supra at                     
          The Court of Appeals recently applied this standard in Sicari v.             
          Commissioner, 136 F.3d 925 (2d Cir. 1998), revg. and remanding               
          T.C. Memo. 1997-104, in which it found that the Commissioner had             
          failed to exercise reasonable diligence where, before mailing the            
          deficiency notice to the old address, he had received several                
          indications that the taxpayers had a new address and had himself             
          entered it into a database and used it in two letters to the                 
          taxpayers as well as in a filing in the taxpayer husband’s                   
          bankruptcy case.  Moreover, strictly speaking the “old” and “new”            
          addresses at issue in Sicari were not for different locations;               
          the “new” address was merely a more precise refinement of the                
          “old” one (involving the addition of a box number), and the Court            
          of Appeals concluded that the identity of the two addresses would            
          have been “apparent” upon their comparison if the Service had                
          conducted a diligent search of all its databases.                            
               In the instant case, we believe that respondent exercised               
          reasonable diligence to ascertain petitioners’ correct address in            
          the circumstances.  We note first that the instant case is                   
          distinguishable from Sicari in critical respects.  In Sicari,                
          over 3 months prior to mailing the deficiency notice to the “old”            
          address, the Commissioner had received a formal notification of              

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