Understanding Sec. 7502(a), USPS, and non-USPS postmarks
These days, taxpayers need to understand the reasoning behind Sec.7502(a), which states a petition must be timely mailed to be timely filed. Please understand how the U.S. Postal Service and non-USPS postmarks work and give yourself more time than you usually would need to ensure your petition is received and filed on time.
On November 30, 2017, the IRS sent a deficiency notice to Susan and David Thomas for the tax year 2015, highlighting March 5, 2018, to be the final day for redetermination of the deficiency. The taxpayers stamped same-day non-USPS postage using Susan’s employer’s private postage on March 5, 2018, and mailed the petition with USPS postage on March 5 or 6, 2018, from Nevada. The petition was received by the Tax Court on March 12, 2018, past its due date, resulting in the IRS to entirely dismiss the petition.
Any returning petition should be prepared and sent no later than the date indicated by the IRS.
When the Thomas’ argued that their petition was filed timely on March 5, 2018, and the postage meter date confirmed this date, the IRS responded that the USPS postmark was March 6, 2018.
One immediate logical reasoning is that the taxpayers should have allowed themselves more time, long before the deficiency notice, so their petition was filed in time.
Had the taxpayers recognized Sec. 301.7502-1(c)(1)(iii)(B)(3), they would not face their negative outcome. This regulation states that when mail has USPS and non-USPS postmarks, the non-USPS postmark is not applicable.
Had the taxpayers recognized Sec. 301.7502-1(c)(1)(iii)(A), they would avoid assuming the risk. This regulation states that when a taxpayer relies on USPS postmark, they are at risk that the postmark will show whether the petition was timely mailed.
The Tax Court rejected the taxpayer’s arguments since the USPS postmark of March 6, 2018, was visible, and the non-USPS postmark did not apply. As a result, the taxpayers could have avoided risk by using registered or certified mail under Sec. 301.7502-1(c)(2). This regulation gives taxpayers a postmarked mailing date receipt.
In the unforeseeable future in which taxpayers may receive a tax deficiency notice, please follow Sec. 7502 in its entirety to best plan your mailing dates ahead.