The attorney for the taxpayer in the case of Tilden v. Commissioner, TC Memo 2015-188 prepared the petition for the taxpayer’s Tax Court case on the last day for the petition to be filed. The petition was sent to the IRS via certified mail.
So far all appears well, except the attorney used an online postage service (Stamps.com) to print the certified mail postage and supporting documents. That’s not itself a problem except that the rules regarding “timely filing” provide protection not simply for filing by certified mail.
Rather, certified mail will serve as proof of timely filing only if the following conditions are met:
If the document or payment is sent by U.S. certified mail and the sender's receipt is postmarked by the postal employee to whom the document or payment is presented, the date of the U.S. postmark on the receipt is treated as the postmark date of the document or payment. Accordingly, the risk that the document or payment will not be postmarked on the day that it is deposited in the mail may be eliminated by the use of registered or certified mail.
It is certainly possible to mail a document via certified mail in a manner other than by handing it to a USPS employee at a post office. If the document contains sufficient postage and the correct paperwork for certified mail, it can simply be deposited into a mailbox or handed to a USPS Postal carrier.
In this case, although we do not know exactly how the document made its way to the postal system, we do know the document was not presented to a U.S. Postal Service employee. Nor was the document actually postmarked by the U.S. Postal Service. Rather, only the Stamps.com date (which reflected the date the postage was purchased) was found on the envelope--the normal treatment for mailing using such third party postage options.
The IRS argued that, based on the fact that there was no U.S. Postal Service postmark, the date of filing should be determined via Reg. 301.7502-1(c)(2) which generally provides that in such a case the document will be deemed mailed by looking at the date it was delivered and then determining, based on when such mail would normally be delivered as compared to its mailing date, backing into the date of mailing.
The Tax Court, interestingly enough, did not take the IRS up on that view--but what the Court did failed to help the taxpayer either (though it might help other taxpayers facing an IRS challenge to their timely mailing of a document).
The Tax Court looked to the U.S Postal Service’s Tracking system to determine when the document was mailed. That system did not show an entry for the document until two days after the final date for filing, so the Court determined, based on the evidence, that the item had not been timely filed.
The Court justified the use of the USPS Tracking data as follows:
However, USPS Tracking (formerly USPS Track & Confirm) reflects that the envelope entered the U.S. mail system on April 23, 2015. In Boultbee v. Commissioner, T.C. Memo. 2011-11, 2011 WL 94744, at the Court expressly decided that USPS Track & Confirm data, which represents "official records of the U.S. Postal Service", can serve as the functional equivalent of, or be tantamount to, a USPS postmark. See also sec. 7502(f) (regarding the treatment of private delivery services and the use of corporate records electronically written to a database as a postmark). After all, both USPS Tracking data and the more traditional postmark are products of the USPS, and nothing would suggest that the former is not as reliable and accurate as the latter when it comes to determining the time of mailing. See id. As we stated in Boultbee v. Commissioner, 2011 WL 94744, at *5, "The U.S. Postal Service Track and Confirm service provides reliable data from a neutral third-party source that is not susceptible to manipulation by the parties." See also Abeles v. Commissioner, 91 T.C. 1019, 1034-1035 (1988) (regarding adapting the law to reflect technological advancements).
When the taxpayer complained that the USPS database must be in error, the Court noted that when the document was not given to a Postal Service employee and a white stamped certified mail receipt showing the date of mailing obtained, the taxpayer bore the risk that the postmark might not be timely applied.
Thus, the Court effectively found the USPS Tracking data serves as a postmark date if the document in question does not itself bear a USPS Postmark date.
Prudence suggests that time sensitive items should be mailed directly at a USPS Post Office and a certified mailing receipt obtained. But if a client fails to do that but mailed the document in a manner where the USPS Tracking system is available, tax advisers should suggest clients obtain that data in order to have it available should the IRS suggest the document was not timely filed.