An attorney’s testimony that he recalled the date of mailing of a taxpayer’s Tax Court petition was not found to be sufficient to prove the document had been mailed in a timely fashion in the case of Williams v. Commissioner, TC Memo 2019-66.[1]

IRC §7502(a) provides what is often referred to as the “timely mailing is timely filing” rule:

(1) Date of delivery

If any return, claim, statement, or other document required to be filed, or any payment required to be made, within a prescribed period or on or before a prescribed date under authority of any provision of the internal revenue laws is, after such period or such date, delivered by United States mail to the agency, officer, or office with which such return, claim, statement, or other document is required to be filed, or to which such payment is required to be made, the date of the United States postmark stamped on the cover in which such return, claim, statement, or other document, or payment, is mailed shall be deemed to be the date of delivery or the date of payment, as the case may be.

Example

On April 15, 2019 Elaine dropped her Form 1040 into a mailbox near her home at 3:00 pm. The mail that had been deposited in that box was picked up at it’s scheduled 4:00 pm pick up time by the US Postal Service and taken to the local post office. The envelope containing the tax return was postmarked by the local post office with a date of April 15, 2019. The postmark is clear and legible.

The envelope containing the tax return is delivered to the IRS on April 20, 2019, which is after the due date for Elaine’s return. However, under §7502(a) the return is treated as delivered to the IRS on April 15, 2019 based on the postmark applied by the USPS.

The same result would occur if, for whatever reason, the delivery by the USPS was delayed for a period well beyond the normal date an item mailed from Elaine’s city would be expected to arrive at the particular IRS location to which it was mailed.

*****

In this case the Tax Court petition was required to be filed by December 3, 2014. The envelope containing the petition arrived nearly a month after that date at the Tax Court on January 8, 2015. While the envelope had USPS stamps on it and was delivered by the USPS, no postmark or other markings applied by the USPS had been applied to the envelope.[2]

The taxpayer’s attorney had prepared and mailed the petition on behalf of the taxpayer. The attorney provided a declaration under penalty of perjury where he states that:

… he recalls preparing this petition because his daughter was scheduled to have surgery on December 3, 2014, the petition’s due date. He recalls that he “had a full day of appointments and was not able to prepare the petition until the evening before the surgery.” (This recollection seems inconsistent with the date next to his signature on the petition, which is November 29, not December 2.) He states that he drafted the petition at home, affixed “postage stamps from his home,” and deposited the petition in a mailbox “outside of the United States Post Office at 3350 S. 2940 E., Salt Lake City, UT 84109 late in the evening of December 2, 2014.”[3]

The Court notes that USPS standards provide that a document mailed from Salt Lake City should be delivered to Washington, DC within 8 days of being mailed. The attorney speculated that the document’s delivery must have been delayed due to some issue in the US Postal System.[4]

Neither IRC §7502 nor the regulations the IRS has promulgated under that section provide for rules that would apply when a document is delivered by the USPS, but the envelope appears not to have been postmarked by the USPS. The Tax Court notes that case law has developed to deal with this situation which it explains as follows:

… When a postmark is missing, our case law instructs us to deem the postmark illegible and permit the introduction of extrinsic evidence to ascertain the mailing date. See Sylvan v. Commissioner, 65 T.C. 548, 553-555 (1975); see also Mason v. Commissioner, 68 T.C. 354, 356 (1977). The burden is on the party who invokes section 7502 to present “convincing evidence” of timely mailing. Mason, 68 T.C. at 356-357; see sec. 301.7502-1(c)(1)(iii)(A), Proced. & Admin. Regs. (providing that, if a USPS postmark “is not legible, the person * * * [invoking section 7502] has the burden of proving the date that the postmark was made”).

When confronted with illegible or missing postmarks, we have considered various types of extrinsic evidence, including testimony from the person claiming to have mailed the envelope. See Mason, 68 T.C. at 357. We also look to evidence regarding the normal delivery time from the place of origin to our Court in Washington, D.C. See ibid.; Selter v. Commissioner, T.C. Memo. 2000-316, 80 T.C.M. (CCH) 491, 493-494; Robinson v. Commissioner, T.C. Memo. 2000-146, 79 T.C.M. (CCH) 1956, 1957. We may examine the envelope to see whether any markings indicate that the letter had been “misplaced, missent, or inadvertently lost or damaged.” Robinson, 79 T.C.M. (CCH) at 1957 (noting the testimony of a post office employee that, in the event of misdelivery or damage, “there should be some marking on * * * [the envelope] ‘to let you know exactly what has happened to that letter’”).

In some cases we have considered evidence regarding holiday conditions at the post office as a possible explanation for a delayed delivery. Such conditions might include holiday closures, unusually large volumes of mail, or inefficiencies attributable to temporary staff. Generally speaking, we have found such evidence persuasive in explaining relatively short delays only. Compare Rotenberry v. Commissioner, 847 F.2d 229 (5th Cir. 1988) (finding that holiday conditions could explain a three-day delay in ordinary delivery time for a letter mailed on December 23), with Robinson, 79 T.C.M. (CCH) at 1958 (declining to find an 11-day delay explained by holiday conditions around Memorial Day), and Chang v. Commissioner, T.C. Memo. 1998-298, 76 T.C.M. (CCH) 290, 292 (declining to find a delay of 6 to 10 days explained by holiday conditions for a petition that arrived in mid-November.)[5]

Example

Assume Elaine’s document arrived on May 10, 2019, long after the expected delivery date for an item mailed on April 15, 2019, and the envelope in question contained no postmark. However, the document had markings applied by the USPS indicating that the document had originally been delivered to the wrong address. The Tax Court would consider this information, along with Elaine’s testimony regarding mailing of the return, to determine if it was reasonable to accept that the document had been timely mailed.

However, since this is a factual determination made by the Court based on the evidence available, Elaine cannot assume that the Court will find the explanation adequate to allow the Court to infer that she had timely mailed the return. But, because she has introduced evidence that may explain the late delivery, she has a chance the Court will find the filing timely.

*****

In this case the attorney argued that since the envelope has been mailed between Thanksgiving and New Years’ Day, a period when the volume of mail being handled by the USPS is at its peak, the delay in delivery could be explained.[6]

The Tax Court did not accept that as a reasonable explanation of the delay in delivery:

We find this explanation unpersuasive. As of December 2 the Thanksgiving holiday was over and the Christmas holiday was three weeks away. Given this timeframe, holiday conditions at the post office cannot explain a 28-day delay in delivery. Cf. Rotenberry v. Commissioner, 847 F.2d 229 (finding that holiday conditions could explain a three-day delay for a letter mailed on December 23).[7]

Thus, in the end the Court found that the taxpayer had not carried his burden to show that his petition with the Court had been timely filed.

Since a taxpayer (or, in this case, the taxpayer’s representative) cannot assure that a postmark will be applied by the USPS, nor assure that the item will actually be delivered so that the envelope can be examined for the postmark, are both fully at the mercy of the USPS? Actually, no.

IRC §7502(c) provides that taxpayers can obtain evidence of the filing by using registered mail or, based on regulations issued by the IRS, make use of evidence obtained through the use of certified mail or via electronic filing.

Reg. §301.7502-1(c)(2) provides the following rules for using registered or certified mail to tied down the postmark (and thus filing) date:

(2) Registered or certified mail. If the document or payment is sent by U.S. registered mail, the date of registration of the document or payment is treated as the postmark date. If the document or payment is sent by U.S. certified mail and the sender’s receipt is postmarked by the postal employee to whom the document or payment is presented, the date of the U.S. postmark on the receipt is treated as the postmark date of the document or payment. Accordingly, the risk that the document or payment will not be postmarked on the day that it is deposited in the mail may be eliminated by the use of registered or certified mail. (emphasis added)

Example

Elaine takes her return to the Post Office on April 15 before it closes, takes her return to the counter and mails the return using certified mail. She obtains the white stamped receipt from the USPS employee at the counter showing the postmark date of April 15, 2019. She does not pay for the green proof of delivery card.

When the IRS claims her return was not timely filed, Elaine can present a copy of the white stamped receipt to shift the burden to the IRS to show that her return was not timely mailed, which effectively means the burden will be on the agency to prove that her return was not in the envelope covered by the receipt or that the document truly was never delivered to the IRS and somehow lost by the IRS. Suffice it to say that will be an extremely difficult burden for the IRS to carry.

Example

Elaine pays for the “green card” that is to be stamped by an IRS employee upon receipt of the document. When she receives that card back, she throws away the white receipt.

Again the IRS claims that the return was not timely filed. Elaine is at risk now of facing late filing penalties, since the regulation only provides protection if she produces the receipt she received when she presented the document for mailing. As is often true in taxes, details matter.

*****

For electronically filed documents, the date of the electronic postmark obtained from the electronic return transmitter is deemed to be the date of filing per Reg. §301.7501-1(d)(3). The time of the electronic postmark, while based on when the return is received by electronic return transmitter’s host system, is based on the time zone of the taxpayer (not that of the electronic return transmitter or the electronic return originator).[8]

Under IRC §7502(f), a similar result can be obtained via the use of certain specified services provided by private delivery services. The services that qualify for this treatment can be found currently in Notice 2016-30, with the IRS maintaining an unofficial list of such services on its website.[9]

In both cases, only the use of the specific services listed[10] and compliance with the other requirements will serve to provide prima facia proof of the postmark date. Thus, for instance, obtaining a proof of mailing document from the USPS, or sending the package via FedEx 3 Day will not suffice to come under these rules.

[1] https://www.ustaxcourt.gov/UstcInOp/OpinionViewer.aspx?ID=11971 (references to page numbers refer to this PDF of the document posted by the US Tax Court)

[2] Ibid, pp. 3-4

[3] Ibid, p. 3

[4] Ibid

[5] Ibid, pp. 5-7

[6] Ibid, p. 8

[7] Ibid

[8] Reg. §301.7502-1(d)(3)(ii)

[9] https://www.irs.gov/filing/private-delivery-services-pds

[10] Note that even if one of the vendors adds a “faster” delivery option at some point, it won’t count for purposes of these rules until the IRS issues a new Notice or similar guidance adding that service to the list. So checking the official IRS list is crucial if you wish to use the private delivery service option.