Thursday, February 7, 2013

Watch the Details in Relying on the Timely Mailing, Timely Filing Rule (2/7/13)

I write today to provide a reminder to students, practitioners and even law professors as to not thinking through and accomplishing simple tasks in a tax controversy practice.  This object lesson is based on Glenn v. Commissioner, T.C. Memo. 2013-33, here.

In Glenn, the lawyer did, as most practitioners do, intended to rely upon the timely mailing, timely filing rule in Section 7502, here, to meet Section 6213(a)'s jurisdictional requirement for timely filing a Tax Court petition.    See Section 6213(a), here.  Section 7502 requires a timely USPS mailing to the Tax Court in a properly addressed envelope with proper postage prepaid.  (A similar rule applies for qualified overnight delivery services.)  When the USPS mailing is by registered or certified mail, it is prima facie proof of timely filing even if  the petition arrives at the Tax Court late or even never arrives.

In this case, the lawyer wanted to receive a return stamped petition copy which requires that the envelope with the petition include the copy for stamping and a self-addressed, postage prepaid envelope to return the  stamped copy to whomever is designated to receive it (in this case the attorney).  The attorney took both envelopes, with appropriate certified mail form, to the USPS to obtain the proper postage.  She handed it to the USPS person, presumably at the window with instructions to determine and apply the proper postage (for which she paid) and then to insert the return envelope with the other documents into the envelope for delivery to the Tax Court.  The USPS person made a mistake.  He put the Tax Court delivery postage on the return delivery envelope and apparently put no postage on the Tax Court delivery envelope; he then placed everything into the envelope that was to be the return envelope.  Hence, that return delivery envelope went through the mail back to the attorney along with the petition and the petition envelope and did not go to the Tax Court as intended.  Ms. Walker then promptly sent the package to the Tax Court with an  explanation of why the petition was late.

The IRS moved to dismiss the petition as untimely filed.

The Tax Court held that the error was the USPS person's error.  The Court relied upon its cases holding that USPS error does not vitiate timely mailing timely filing if the mailing were otherwise proper (proper address, proper postage).

The opinion saves the attorney's bacon.  The message though is that this case could have gone the other way.  Cross your t's and dot your i's.

I recommend that practitioners periodically review Section 7520 and the regulations, 301.7502-1, here.

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