A taxpayer who receives a notice of deficiency (also known as a 90 day letter) has 90 days to file a petition to challenge the deficiency in Tax Court. This deadline is important, since this is the only method of challenging an IRS assertion of additional tax due without first paying the tax. Cases about when a petition is timely mailed for purposes of this 90 day rule are always popping up. For this purpose, the date of mailing is considered the date of filing under what is known as the “mailbox rule.”
In a recent case, a taxpayer received a 90 day letter and had to file his petition by March 3, 2014. On March 3, a stamp was printed using the online service Stamps.com. The stamp was affixed to an envelope containing the petition, and the envelope was dropped off at the post office. When the Tax Court received the petition, it had a U.S. Postal Service postmark of March 4, 2014. However, the stamp that was printed through Stamps.com includes the date of purchase, which was March 3, 2014, and it also provides a log of when stamps are purchased. The government claimed the petition was mailed too late, based on the March 4 postmark. The taxpayer countered that the Stamps.com date could be used to prove mailing on March 3.
The court held for the government. The regulations provide that if the U.S. Postal Service postmark is legible, it controls the deemed date of mailing. Treas.Regs. Section 301.7502-1(c)(1)(iii)(A). The regulations further provide that if an envelope bears a USPS postmark, plus a postmark with a different date made by other means (e.g., an office stamp metering machine), the USPS postmark still applies. Treas.Regs. Section 301.7502-1(b)(3). This is pretty much what was going on here, treating the Stamps.com date as a third party postmark. So even if the taxpayer could produce other unequivocal and indisputable evidence that the envelope was dropped in the mail on a day before the postmark date, the court cannot consider it and the USPS postmark date still controls. The bottom line is that anyone making a filing by mail under the mailbox rule bears the risk that the Postal Service will not affix its postmark until a day after it is dropped off in a mailbox or at the post office.
This timely mailed, timely filed rule has application not just to Tax Court petition to filings, but to many tax filings and payments made directly with the IRS – so the above case and principles should apply equally in those circumstances.
So how to prove timely mailing when items are mailed on or close to the last day allowed for filing? Easy – the use of registered or certified mail. For example, certified mailing with a stamped receipt from the post office with the date of mailing, is all that is needed. This of course will require a trip to the post office. And be careful with certified mail – it is not enough to affix certified mail documentation to the envelope and drop it in the mail or at the post office. You are going to need to stand in line and have the clerk hand stamp and return to you the dated mailing receipt.
The person who did the mailing in this case actually did go to the post office and did mail the petition via certified mail. However, she said the lines were too long and she just dropped the envelope off in a box, instead of getting the required hand-stamped receipt. As the song goes, “so close, and yet so far...”