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I. Whether Petitioners Can Challenge the Underlying Tax
Liability
Petitioners contend that the assessment of tax was untimely.
In the alternative, petitioners contend that the adjustments in
the notice of deficiency are erroneous. Each contention
constitutes a challenge to the underlying tax liability. See
Hoffman v. Commissioner, 119 T.C. 140, 145 (2002); Butti v.
Commissioner, T.C. Memo. 2006-66.
Respondent argues that petitioners cannot dispute the
underlying tax liability because they received a notice of
deficiency. See sec. 6330(c)(2)(B). Petitioners concede that
respondent mailed a notice of deficiency but assert that it was
never delivered to them.
If the Commissioner properly mails a notice of deficiency to
a taxpayer’s last known address, a presumption arises that the
notice was delivered to the taxpayer in the normal course of the
mail. Zenco Engg. Corp. v. Commissioner, 75 T.C. 318, 323
(1980), affd. without published opinion 673 F.2d 1332 (7th Cir.
1981); Hovind v. Commissioner, T.C. Memo. 2006-143. The
Commissioner bears the burden of proving proper mailing of a
notice of deficiency. Coleman v. Commissioner, 94 T.C. 82, 90
(1990). Proper mailing may be shown by evidence of the
Commissioner’s mailing practices corroborated by direct testimony
or documentary evidence of mailing. Magazine v. Commissioner, 89
T.C. 321, 326 (1987); Hovind v. Commissioner, supra. A U.S.
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