Originally published on Forbes.com.
Another postmark case! This time it is Endicia.com , which according to its website has sold $14 billion in postage. Teri Jordan was counting on an Endicia label to save her Tax Court petition from being considered untimely. It might have worked, but she really should have gone for the sure thing.
Firm Deadline
The Tax Court has a very firm deadline for filing a petition.
We are a court of limited jurisdiction, and we may exercise our jurisdiction only to the extent authorized by Congress. Our jurisdiction in a deficiency case depends on there being a timely filed petition. In a deficiency case, a taxpayer generally has 90 days from the date of the notice of deficiency to file a petition with this Court. Sec. 6213(a). (Citations omitted)
In other words, if you are late, they can’t cut you a break even if they want to. No Tax Court hearing for you. Pay the deficiency and sue for refund in district court.
The Wiggle Room
Of course, even a firm rule can have some wiggle room. Here it would be the “timely mailed, timely filed rule”
We must determine whether Ms. Jordan’s petition is deemed timely under the “timely mailed, timely filed” rule of section 7502. The section provides that when a taxpayer sends a petition by U.S. mail within the prescribed period and it is received after the expiration of the prescribed period, the date of the U.S. postmark stamped on the envelope is treated as the date it was received. In the case of postmarks not made by the USPS, the “timely mailed, timely filed” rule applies only to the extent provided by regulation.
We’ll get into the regulation, but really, here is the key lesson. Why bother with the regulation? Go to the Post Office. Watch the clerk put a stamp on it and walk away with a date stamped receipt. Do you really file that many Tax Court petitions that a trip to the Post Office is too much to add to the process?
Other Date Stamps And A Slow Boat
Now the Endicia.com date stamp might have been good except for two things. If there is a USPS date stamp on the envelope, that trumps anything else. This envelope had the Endicia.com date of March 6, which was the absolute drop dead for mailing the petition. There were two USPS date stamps. One was March 7 and the other was March 20. So Teri loses there.
The other requirement is that the petition actually arrive at the Tax Court in a normal amount of time, three days in this case. This one arrived on March 26, twenty days, which probably would not have been good time even in pre-railroad days.
The twenty days is really strange, but given the March 7 stamp, I guess it really happened. So the scenario I’m seeing is that Teri being real confident about the Endica.com stamp, dropped the envelope in the mailbox, without noting that pickup would not be till the next day. That would account for the March 7 stamp.
Go For The Sure Thing
Now that I have explained all that to you, forget about it. Here is what your takeaway should be Reilly’s Seventeenth Law of Tax Planning – 17. Don’t cut your deadlines close and use the US Mail with proof of mailing.
Some deadlines – Tax Court petitions for example – are very strict and others have mild but still annoying consequences for missing. Make believe that the deadline is ten days before the actual deadline. And always use US Mail if a physical document has to be sent. Other services are acceptable, but US Mail is a sure thing. And go to the counter and get everything stamped by an actual person.
God Save The Constitutional Post Offices
I hope privatization fanatics who claim to love the Constitution, never forget that in Section 8 of Article 1, post offices come before the Army and the Navy. As usual with these posts, I have to tip my hat to one of my favorite movies. The Postman where Kevin Costner’s character says
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.
Other Coverage
Bryan Camp has Lesson From The Tax Court: Murphy’s Law Of Mailing on TaxProf.
When something goes right most of the time, we generally are not prepared for when it goes wrong. Last week’s opinion in Teri Jordan v. Commissioner, T.C. Memo. 2019-15 (Mar. 4, 2019) (Judge Buch) teaches that lesson as applied to the §7502 statutory mailbox rule.
Elise Hansen had Mich. Woman’s Petition Filed Too Late, Tax Court Says behind the Law360 paywall.