Originally published on Forbes.com Oct 10th, 2014
Here is a decision that provides a timely reminder. Alene Witcher was appealing an amended proof of claim by the IRS in the United States Bankruptcy Court for the District of Columbia. If you really want to skip reading the details, I’ll give you the critical executive summary. It is almost October 15th. October 15 is the extended due date of your federal individual tax return. If, like me, you still have not filed it and you are planning, unlike me, to paper file, use certified mail and save the return card when it comes back – especially if you owe money. Here is the story.
Ms. Witcher did not have the money to pay the balance due on her 2012 return. According to her testimony, she dropped the return in the mail on October 15, 2013. Filing timely even if you can’t pay timely is, I think, generally, the wiser course. As a matter of fact, you can attach an Installment Agreement Request (Form 9465) to your return and if you owe less than ten grand and meet some other requirements, you are guaranteed to be allowed an installment agreement. After a couple of months of not hearing from the IRS, Ms. Witcher contacted them including an unsigned copy of her return. The IRS sent the return back to her with a request that she sign it. They received the signed copy back from her on February 20, 2013. Which, having no record of the return mailed in October, they recorded as when she filed. Which, is late. Ergo the late file penalty of $710.75 included in the proof of claim which Ms. Witcher was objecting to.
The discussion the bankruptcy court went into on this matter was fairly involved, which is why I gave you the punch-line up front. First of all under the most general rule, the court could not find that the return was timely filed because it was not received by the IRS before the due date. Then there is a “common law” “mailbox rule” which indicates that if the return was mailed well before the due date, it should be treated as timely filed. Of course, there is no evidence that Ms. Witcher met the “mailbox rule”.
Then there is a statutory rule, which I always call the “timely mailed, timely filed” rule – Code Section 7502. If the IRS receives your returned it is deemed to be filed on the postmark date. Of course, the IRS has no record of receiving Ms. Witcher’s return and:
When Witcher mailed her return on or before October 15, 2013, she neglected to do so by registered or certified mail in order to guard against the risk of nondelivery or any failure of the Postal Service to place a postmark (or to place an accurate postmark) on the envelope.
The regulations provide that the exclusive exceptions to the rule that actual delivery is required are “proof of proper use of registered or certified mail, and proof of proper use of a duly designated ,” and that “o other evidence of a postmark or of mailing will be prima facie evidence of delivery or raise a presumption that the document was delivered.”
It seems like the bankruptcy court went to quite a bit of trouble over a $710.75. Also a late pay penalty of $85.29 was upheld. The clock only stopped on late pay, when the bankruptcy petition was filed.
Timely Mailed Timely Filed Some Fine Points
There are some fine points on the timely mailed, timely filed rules. If you have a refund claim on which the statute is due to run out “timely mailed” does not help you, since it is not a return required to be filed.
The other issue is whether you can use services other than the United States Post Office. You can, although not just any old service. The service has to be approved by IRS. At least one taxpayer got tripped up by the fine points of that rule, so my advice is to use the actual United States Postal Service. I’m no foe of private enterprise by any means, but I think the United States Postal Service is one of the pillars of our civilization. I love the movie the Postman, where Kevin Costner uses a salvaged mailman’s uniform to give post-apocalyptic Americans hope of a new beginning,
There used to be a postman on every street in America. They wore uniforms and hats just like this one. Getting a letter made you feel that you were part of something bigger than yourself. I don’t think we ever really understood what they meant to us until they were gone
So it’s fine to get your printer ink cartridges at Staples, but buy your stamps at the Post Office and go there for certified mail for a paper filed return. In case you don’t know where to go, this site will help. The Staples locations are included, sad to say. Use them, if you must.
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