The majority of the U.S. government, including the U.S. Tax Court, shut down on October 1. Late this past Wednesday, Congress voted to reopen the government through January 15 of next year.
Despite the shutdown, the statutory deadline of 90 days for filing a petition in the Tax Court cannot be extended. Yet during the shutdown, the Tax Court was not accepting hand delivery and very likely was not opening its mail.
Under these circumstances, the mailbox rule may provide the only means for a taxpayer to satisfy the physical delivery requirement for timely filing petitions, according to Robin Greenhouse, a partner at McDermott Will & Emery.
“Without a timely filed petition, the Tax Court lacks jurisdiction over the taxpayer’s case and the taxpayer loses the Tax Court as a forum in which to litigate,” she said. “The remaining litigation forums require the taxpayer to pay the disputed tax, penalties and interest and sue for a refund.”
Since some taxpayers have already been faced with the issue, and the fact that history may repeat itself after January 15, it is time for a look at the rules.
The statutory postmark rule, enacted as Section 7502 of the Tax Code, allows the physical delivery requirement to be satisfied by the date of the United States postmark stamped on the cover in which the document is mailed. But if the mailed document is lost or the postmarked envelope is not retained, then Section 7502 provides that proof of registered mail or certified mail constitutes evidence that the document was received, according to Greenhouse.
“The date of registration or the postmark on the certified receipt constitutes the postmark date and also the delivery date,” she said.
The common law rule allows extrinsic evidence, such as testimony, but relying on this can be risky, Greenhouse indicated.
The federal appeals courts are currently split as to whether extrinsic evidence, such as testimony, may be presented to establish proof of a timely mailing. “The U.S. Courts of Appeal for the Eighth, Ninth and Tenth Circuits have adopted rules that allow the taxpayer to introduce extrinsic evidence that it in fact timely mailed the petition,” she said. “The Second and Sixth Circuits have held that if the taxpayer cannot show an actual postmark, the court cannot accept testimony or other evidence as proof of actual date of mailing,” Greenhouse said.
“In 2011 the IRS issued final regulations that provide that only the receipt from certified or registered mail or a private delivery service will satisfy proof of delivery,” she said. “The regs were meant to dispense with the common law rule, but they haven’t been specifically addressed by the Tax Court.”
“The Tax Court will apply the rule of the court of appeals to which the case is appealable, so it is particularly important for taxpayers and practitioners to understand the rule in their circuit,” Greenhouse added. “But the best way to avoid the circuit split evidentiary issues is to retain the receipt for certified or registered mail, or from an approved private delivery service,”