The Mailbox Rule

It is often said that timing is everything. When it comes to the submission of tax returns, Tax Court petitions, and other time-sensitive tax actions, this statement is true because they must be completed and filed by the deadline. Thus a return for 2015 must be delivered and received by the IRS no later than April 18, 2016 (April 19 for those in Maine and Massachusetts). However, under a special rule, timely mailing is treated as timely filing. This is referred to as the mailbox rule.

Overview of the mailbox rule

The Tax Code allows a taxpayer to send submissions by the U.S. Postal Service to be treated as timely received if they are timely mailed. This means that submissions are properly addressed and mailed with sufficient postage prior to the deadline. Thus, even though the submission is received after the deadline, it is treated as timely.

Using certified or registered mail from the U.S. Postal Service is prima facie evidence of the date of mailing. This means that if you have the receipt for certified or registered mail showing that your item was sent by the deadline, it is automatically treated as timely.

Merely putting a return or other submission in a mailbox may be timely, but it is up to a taxpayer in this instance to prove when the item was mailed. This may be difficult to do.

Approved private delivery services

The mailbox rule has been extended to IRS-designated private delivery services. These are:

• Federal Express (FedEx): FedEx Priority Overnight, FedEx Standard Overnight, FedEx 2Day, FedEx International Priority, FedEx International First, FedEx First Overnight, FedEx International Next Flight Out, and FedEx International Economy.
• United Parcel Service (UPS): UPS Next Day Air, UPS Next Day Air Saver, UPS 2nd Day Air, UPS 2nd Day Air A.M., UPS Worldwide Express Plus, UPS Worldwide Express, and UPS Next Day Air Early A.M.

Private postage meters

Can you use the mailbox rule when you affix postage with a private postage meter? The Tax Court has said no. In its view, a private postage meter is merely proof of paying for postage and not proof of the date of mailing.

Snow days

If the filing deadline falls on a Saturday, Sunday, or holiday in the location in which the action must be performed, the filing deadline becomes the next business day. That is the reason why the deadline for 2015 income tax returns has been postponed from April 15. This year April 15 (a Friday) happens to be a legal holiday in the District of Columbia, so the deadline becomes April 18 (Monday). However, in Maine and Massachusetts, April 18 is Patriots Day, so the deadline for filing 2015 income tax returns in these two states is April 19. Does a snow day amount to a holiday for purposes of the mailbox rule? That’s the question before the Tax Court in a recent case.

The taxpayer mailed a Tax Court petition on Friday using FedEx First Overnight which required the petition to be delivered on the following Tuesday (the filing deadline). However, on Tuesday there was a snow storm in the District of Columbia and federal government offices were closed. The U.S. Tax Court is located in the District of Columbia. The petition was delivered on Wednesday, the day after the filing deadline. The IRS said it was late; the taxpayer said it was timely.

The Tax Court agreed with the taxpayer in this case. In its view, the snow day that closed federal government offices amounted to a holiday for purposes of the mailbox rule.

Note: Currently, Tax Court petitions cannot be filed electronically.

Conclusion

Failing to file on time can cost you dearly. You may lose out on a refund. You may owe penalties and interest. You may lose your right to contest an IRS assessment in Tax Court. Don’t miss out; file on time!