United States: U.S. Tax Court: 90 Days Is 90 Days, Shutdown Or Not

On October 1, 2013, the majority of the U.S. government shut down, including the U.S. Tax Court.  Despite the shutdown, the statutory deadline for filing a petition in the Tax Court cannot be extended.  Under these circumstances, the mailbox rule is the taxpayer's only hope.

On October 1, 2013, the U.S. government shutdown caused the U.S. Tax Court to close its doors.  Under Section 6213(a), however, the 90-day statutory deadline for filing a petition in the Tax Court cannot be extended.  During the shutdown, the Tax Court is not accepting hand delivery and likely is not opening its mail.  Under these circumstances, the mailbox rule is the taxpayer's only means to ensure that the Tax Court has jurisdiction over the taxpayer's case.


Generally a taxpayer has 90 days from the date of the Statutory Notice of Deficiency or Statutory Notice of Determination to file a petition in the Tax Court.  Sections 6213(a); 6330(d)(1).  Without a timely filed petition, the Tax Court lacks subject-matter jurisdiction over the taxpayer's case and the taxpayer loses the Tax Court as a forum in which to litigate.  The remaining litigation forums require the taxpayer to pay the disputed tax, penalties and interest and sue for refund. 

Barring the government shutdown, a taxpayer can file the petition either by mail or by hand delivery.  Tax Court Rules of Practice and Procedure (Rule) 26 (establishing rules for electronic filing and specifically exempting "petitions and other papers not eligible for electronic filing"); Rule 34 ("the signed original of each petition is required to be filed").  A statutory filing requirement generally can be satisfied only by actual physical delivery to the government—a principle commonly called the "physical delivery rule."  United States v. Lombardo, 241 U.S. 73, 76 (1916).  When the Tax Court receives a petition prior to the 90th day, the physical delivery rule is satisfied.  However, if the petition is received after the deadline, the taxpayer must look to the common-law "mailbox rule" and the statutory "postmark rule" of Section 7502 to determine if it has satisfied the physical delivery requirement.  The Tax Court Rules of Practice and Procedure expressly reference Section 7502, stating that "In all cases, the jurisdiction of the Court also depends on the timely filing of a petition.  See Code sections 6213 and 7502."  Rule 13(c).

Under the common-law mailbox rule, when a taxpayer offers evidence that it sent documents to the government (e.g., the Internal Revenue Service or Tax Court) in a properly addressed and stamped envelope through the U.S. Postal Service, courts will presume that the documents were received within the customary time for mail delivery.  Philadelphia Marine Trade Assoc. v. Commissioner, 523 F.3d 140, 147 (3rd Cir. 2008).  The mailbox rule is a method of satisfying the physical delivery requirement.  Once proof is sufficiently established, the presumption is that the government received the document, but the government then has the opportunity to rebut this presumption with evidence of untimely receipt.  Hagner v. United States, 285 U.S. 427, 430 (1932). 

In 1954, Congress enacted Section 7502 of the Internal Revenue Code and created a postmark rule to satisfy the physical delivery requirement.  The relevant part of section 7502(a) provides:

If any return, claim, statement, or other document required to be filed, or any payment required to be made, within a prescribed period or on or before a prescribed date under authority of any provision of the internal revenue laws is, after such period or such date, delivered by United States mail to the agency, officer, or office with which such return, claim, statement, or other document is required to be filed, or to which such payment is required to be made, the date of the United States postmark stamped on the cover in which such return, claim, statement, or other document, or payment, is mailed shall be deemed to be the date of delivery or the date of payment, as the case may be.

If the mailed document is lost or the post-marked envelope is not retained, then Section 7502(c) provides that proof of registered mail or certified mail constitutes prima facie evidence that the document was received.  Moreover, the date of registration or the postmark on the certified receipt constitutes the postmark date and also the delivery date.

Because the Tax Court currently is not accepting hand deliveries, the common-law mailbox rule and statutory postmark rule may provide the sole means for a taxpayer to satisfy the physical delivery requirement for timely filing petitions during the shutdown.  Taxpayers and practitioners must pay careful attention to the requirements to prove timely filing via the mailbox rule, because even a small foot fault will deprive the Tax Court of subject-matter jurisdiction. 

Proving the Mailbox Rule and the Circuit Split

Currently the U.S. courts of appeals are split as to whether extrinsic evidence may be presented to establish proof of a timely mailing (i.e., whether the taxpayer may present any evidence other than a receipt from the post office or approved private delivery service, or the actual postmark).  The U.S Courts of Appeals 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.  See Estate of Wood v. Commissioner, 909 F.2d 1155 (8th Cir. 1990), aff'g 92 T.C. 793 (1989); Anderson v. United States, 966 F.2d 487 (9th Cir. 1992); Sorrentino v. Internal Revenue Service, 383 F.3d 1187 (10th Cir. 2004).  The Second and Sixth Circuits have held that if the taxpayer cannot show an actual postmark, section 7502 is not "literally applicable" and the court cannot accept "testimony or other evidence as proof of actual date of mailing."  Deutsch v. Commissioner, 599 F.2d 44, 46 (2d Cir. 1979); Miller v. United States, 784 F.2d 728, 730-31 (6th Cir. 1986).

The most recent opinion to discuss the mailbox rule and the major hurdles a taxpayer must jump over in order to satisfy the evidentiary requirements of the mailbox rule is Stocker v. United States, No. 11-1890 (6th Cir. 2013).  Under the current jurisprudence of the Sixth Circuit, the taxpayer may only prove the mailbox rule by showing either a receipt from the post office (or other acceptable delivery service) or the actual postmark-stamped envelope.

Stocker v. United States

In Stocker v. United States, the taxpayers' accountant determined that the Stockers had overpaid their taxes for the 2003 tax year and prepared amended federal and state tax returns for Mr. Stocker to mail.  The accountant also prepared the Stockers' 2006 federal and state returns.  Each of those returns was due on October 15, 2007, the original 2003 return having been filed on October 15, 2004, under an extension, and the 2006 returns having been twice extended.  The accountant's assistant prepared postage-paid, certified mail, return-receipt-requested envelopes for the 2003 amended returns and regular postage prepaid envelopes for the 2006 returns; however, she accidentally retained the customer copies of the certified mail receipts for the 2003 amended returns.   

Mr. Stocker testified that he took his returns directly to the post office on October 15, 2007, and mailed all of the returns.  Mr. Stocker explained that he was unable to obtain the date-stamped receipts for the 2003 amended returns because he did not have the customer copies of the certified mail receipts.

The Stockers' 2003 and 2006 state tax returns were timely received by the Michigan Department of Treasury, and the 2006 federal return was timely received by the Internal Revenue Service (IRS).  However, the IRS claimed that it did not receive the 2003 amended return until October 25, 2007.  The IRS did not retain the envelope, and the IRS's records stated that the envelope had a postmark dated October 19, 2007.

The government disallowed the Stockers' claim for refund contending that the 2003 amended return was untimely.  The Sixth Circuit agreed, explaining that there are only two exceptions to the common law rule requiring actual physical delivery.  The exceptions, found in section 7502, indicate that delivery to the U.S. mail shall be deemed as delivery to the IRS, and that if the return is sent by U.S. mail, the postmark shall be the date of "registration."  Because the Stockers could not produce a receipt verifying delivery to the post office or a postmark dated prior to the due date, they could not avail themselves of the exceptions of section 7502.  The Sixth Circuit found that the taxpayers could not produce extrinsic evidence outside of the exact requirements of section 7502 and elected "to follow the decisions of other courts holding that the 'exceptions embodied in [§7502] [a]re exclusive and complete.'"

Current Ramifications

Shortly after the U.S. Court of Appeals for the Tenth Circuit decided Sorrentino, the IRS issued proposed regulations to eliminate the use of extrinsic evidence to prove the mailbox rule.  These regulations were revised and finalized in Treasury Regulation 301.7502-1(e)(2)(i), which states:

In the case of a document (but not a payment) sent by registered or certified mail, proof that the document was properly registered or that a postmarked certified mail sender's receipt was properly issued and that the envelope was properly addressed to the agency, officer, or office constitutes prima facie evidence that the document was delivered to the agency, officer, or office.  Other than direct proof of actual delivery, proof of proper use of registered or certified mail, and proof of proper use of a duly designated [private delivery service] as provided for by paragraph (e)(2)(ii) of this section, are the exclusive means to establish prima facie evidence of delivery of a document to the agency, officer, or office with which the document is required to be filed.  No other evidence of a postmark or of mailing will be prima facie evidence of delivery or raise a presumption that the document was delivered.

Whether the Tax Court will apply the statutory postmark rule as the exclusive means to establish prima facie delivery of the petition to the Tax Court is unclear.  In two recent cases, the Tax Court cited to the new Treasury Regulations; however, each case involved the date on which a return or form was filed with the IRS, not the date on which a petition was filed with the Tax Court.  For example, in Tesoriero v. Commissioner, T.C. Memo. 2012-261 at *7, the court applied the law of the Second Circuit—the circuit to which the case was appealable—which already does not allow extrinsic evidence.  In Herrera v. Commissioner, T.C. Memo. 2012-308 at *21 n. 12, the court mentions the Treasury Regulations, but declines to discuss the issue, finding that "even if extrinsic evidence were allowed, petitioners did not meet their burden of proof."  

The Tax Court has previously allowed taxpayers to introduce extrinsic evidence, such as testimony, to establish that they mailed a return to the IRS.  Estate of Wood v. Commissioner, 92 T.C. 793, 799 (1989), aff'd 909 F.2d 1155 (8th Cir. 1990).  While Treasury Regulation 301.7502-1(e)(2)(i) has established Section 7502 as the exclusive means to satisfy the physical delivery rule, Section 7502 and the regulations are by their terms limited to documents "addressed to the agency, officer or office" and do not expressly refer to documents addressed to the Tax Court.  It is also important to note that the Tax Court will apply the rule of the court of appeals to which the case it is trying is appealable.  Golsen v. Commissioner, 54 T.C. 742 (1970) aff'd on other issues 445 F.2d 985 (10th Cir. 1971).  Therefore, it is particularly important for taxpayers and practitioners to understand the rule in their circuit, and it may be prudent to stipulate appellate jurisdiction to a jurisdiction most favorable to the kind of evidence the taxpayer possesses.  Taxpayers and practitioners can avoid the circuit split evidentiary issues by retaining the receipt for certified or registered mail, or from an approved private delivery service.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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