Minnesota: Regular Mail Correspondence Satisfies Due Process

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Detailed Minnesota Development

The Minnesota Supreme Court recently held that a Department of Revenue tax order sent by regular, non-certified mail satisfied due process. The taxpayer, a sole proprietorship, ran a business from the same address as his home. The Commissioner sent the taxpayer multiple letters and notices notifying him that the business had been selected for audit.  None of the letters were returned to the Commissioner as undeliverable. After the taxpayer failed to respond to letters and emails, a tax assessment was issued. The taxpayer failed to respond to the assessment, leading to the eventual levy of the taxpayer’s bank account.  At that point, the taxpayer responded. The taxpayer claimed to have overlooked the notices and explained that he received a ton of junk mail at his house, which tended to “pile up” in the kitchen. After unsuccessful internal and tax court appeals, the taxpayer eventually appealed to the Minnesota Supreme Court, generally arguing that the tax order/assessment sent via regular U.S. mail was insufficient notice to satisfy due process.

The United States Supreme Court has held the requirement for notice to be constitutionally sufficient is if it is “reasonably calculated, under all circumstances,” to apprise interested parties of the pending action and give them a chance to respond. The taxpayer argued that notice by regular mail was insufficient to satisfy due process in this case because there was a “better alternative” (i.e., certified mail), and that the large dollar amount at issue should require more sophisticated notice procedures. In addition to complaining about the “glut of junk mail in modern times,” the taxpayer cited to decisions holding that certified mail was sufficient for due process.  The court determined that although there were decisions holding that certified mail was sufficient, that did not in turn mean that notice via certified mail was a necessary requirement.  If the state had actual knowledge that the initial notice did not reach the taxpayer, then due process would require the state to take additional reasonable steps to provide notice. However, no letters to the taxpayer had been returned to the Commissioner as undeliverable, and the taxpayer lived at the address to which the letters were sent. In sum, the taxpayer provided no evidence that regular mail was not “reasonably calculated” to reach the address and person to which it was sent.  While the court did not go so far as to preclude every possible due process challenge to the use of regular (non-certified) mail, it made clear that substantiating lack of notice will take more than copious amounts of junk mail. Please contact Sarah McGahan at 713-449-9748 with questions on Olson v. Commissioner.




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Sarah McGahan

Sarah McGahan

Managing Director, State & Local Tax, KPMG US