Photo credit: By EraserGirl - Own work, CC BY 2.0, Link
Attorney Scott Boyce must be breathing a sigh of relief. The Tax Court ruled on Monday (January 13, 2020) that his client’s petition will be allowed to go forward rather than be stopped by the strict 90-day rule for Tax Court petitions.
There is a lesson to be learned from this close call though and it applies to more than Tax Court petitions. Here is the story. If you must know who his clients are you can read the decision, but for my purposes, they are just “the clients”.
Background
The clients received a notice of deficiency for the years 2013, 2014 and 2015. IRS had mailed the notice on March 28, 2017. That made June 26, 2017 the due date of the petition (3+30+31+26=90). June 26 was Monday and World Refrigeration Day is not recognized as a holiday by the Tax Court nor is Ratcatcher’s Day , so no help from the weekends and holiday rule. June 26, 2017 it was.
The Tax Court received the petition on July 17, 2017. That made its acceptance a matter of the timely mailed timely filed rule and the credibility of Mr. Boyce who had dropped the envelope containing the petition (with adequate postage affixed) in “the collection receptacle located at 690 Gage Blvd, Richland, Washington 99352” on June 22, 2017. Spoiler alert – this is what the lesson is going to be about.
An Unusual Envelope
The envelope that arrived at the Tax Court was kind of extraordinary. It had been in the USPS system for several weeks, without having any marks at all placed on it. This created a real puzzler for Judge Vasquez.
“The regulations prescribe distinct rules for USPS and non-USPS postmarks, sec. 301.7502-1(c)(1)(iii), Proced. & Admin. Regs., but they supply no rules to govern the situation where the envelope has no postmark whatsoever.”
“The envelope that contained the petition in this case is not damaged and has no marking of any kind suggesting that it was misdirected or misplaced. The envelope, however, does not bear any postmark. Therefore, the issue turns on whether petitioners have presented convincing evidence establishing that they timely mailed their petition. We allowed both parties to present extrinsic evidence to establish the petition’s mailing date”
Irradiation
From there we get into how long it takes for mail to get to the Tax Court. The IRS argued and there was no disagreement that mail from anywhere in the US should make it to the Tax Court (or any government office in Washington DC) in eight to fifteen business days.
That surprised me, but it is explained in a footnote. It takes three to five days for the mail to get to Washington where it is sorted. Then it is sent up to New Jersey to be irradiated which can add five to ten days. Who knew?
There were 16 business days from the day that Mr. Boyce said he dropped the petition in the mail and its receipt by the Tax Court. That was the IRS gotcha, but Judge Vasquez did not buy it.
“First, we note that the petition arrived at the Court only one business day late. We also note that the Fourth of July 4 holiday fell between the date of the alleged mailing and the delivery date. In prior cases holiday conditions at the post office (e.g., holiday closures, unusually large volumes of mail, or inefficiencies attributable to temporary staff) have been found to be a possible explanation for short delays in delivery.”
These Things Take Time
The IRS moved that the petition be dismissed for lack of jurisdiction (i.e. If you miss the 90 days, no Tax Court for you.) on September 8, 2017. Judge Vasquez held a hearing on September 17, 2018 (a little over a year later). The decision on the motion came on January 13, 2020.
I spoke with Mr. Boyce and he wryly noted that now the real work can begin.
The Lessons
The irradiation thing has been going on for a long time, but it was news to me. So you need to remember that mail to a government office in Washington, D.C. can take much longer than you thought. (Note, since this irradiation thing started many agencies have started receiving mail at different zip codes).
More importantly, if timeliness of mailing has any chance of being an issue, use certified mail and go to the Post Office and have it stamped in your presence. Mr. Boyce told me that that will certainly be his practice in the future.
Other Coverage
Theresa Schliep has Tax Court Won’t Toss Mailed Petition Likely Delayed By Holiday behind the Law360 paywall.
Ed Zollars of Current Federal Tax Developments has Petition to Tax Court Found to Be Timely Mailed Despite Lack of Postmark.
Lew Taishoff in another of his dated pop culture references has Days of Our Lives.
“No, this is not an episode of the fifty-five year old soap opera. This is yet another in the endless series of counting days from date of mailing of petition to the date whereon the hard-laboring intake clerks and flailing datestampers at The Glasshouse on Second Street, NW, receive same in hot hands.”
Mr. Taishoff decided to dub Mr. Boyce “Scotty” and speculates on what I confirmed by interview.
“Scotty was timely. Just. I expect, however, that he won’t use that mailbox again.”