Los Angeles California Tax Attorney Blog
Here is a quick summary of a recent US TAX COURT case against the Internal Revenue Service . The ruling on this case may apply to other documents filed with the tax court or the IRS including late filed FBAR Voluntary Disclosure Program.
Tax Court Petitioners MADDOX v.
COMMISSIONER OF Internal Revenue Service
TAX PROBLEM:
This case seems to reflect the current trend by IRS Attorneys when dealing with tax court petitions that they receive 90 days after issuance of Notice of Determination arising from IRS Tax Audit or Collection Due Process hearing.
IRS TAX CODE
Internal Revenue Code §6213(a) provides that a petition for redetermination of a deficiency determined by the Commissioner is timely filed if it is filed within 90 days after a notice of deficiency is mailed. Internal Revenue Code §7502 – If a petition is received by the Court after the 90-day period, then the postmark date can be deemed the date of delivery.
IRS MAY CHALLENGE TAX COURT PETITION IF RECEIVED 90 DAYS AFTER MAILING NOTICE OF DEFICIENCY
The IRS moved to dismiss this case on the ground that the petition was not filed within 90 days of the mailing of the notice of deficiency. Taxpayers state the petition was timely mailed even though not received by the Court within the 90-day period. IRS mailed on October 7, 2008, a notice of deficiency to taxpayers. A petition signed by taxpayers’ attorney, dated December 17, 2008, was received and filed by the Court on January 23, 2009, which was 108 days after the mailing of the notice of deficiency. The U.S. Postal Service (USPS) cancellation stamps appeared on the envelope, but the exact date of cancellation was illegible. January 5, 2009, was the 90th day after the mailing of the notice of deficiency. On March 11, 2009, the IRS filed a motion to dismiss for lack of IRS tax court jurisdiction.
TAXPAYER’S TESTIMONY MAY BE SUFFICIENT TO SHOW THAT TAX COURT PETITION WAS MAILED
Taxpayers’ attorney mailed the petition by placing it in the mailroom in his office building before 4 p.m. on Friday, January 2, 2009. The mailroom was locked, and only building tenants and the USPS had access. The outgoing mail was placed in a USPS basket.
Usually, the postmark placed on the envelope in which the petition has been mailed is accepted as evidence of timely mailing and timely filing. In this case, however, the postmark is illegible. Because taxpayer’s petition was received and filed outside the prescribed period, bearing an illegible USPS postmark, it will be considered timely filed only if petitioners can show the date that the postmark was made and that the date was within the 90-day period.
Taxpayers have shown that the envelope was postage prepaid and had a USPS cancellation. Taxpayers also testified that the petition was timely placed in the USPS mail before the expiration of the 90-day period and timely postmarked (illegibly). The envelope was received by the Court and the petition was filed.
The decision was entered against the Internal Revenue Service . The tax court denied the IRS’ motion to dismiss tax court case and concluded that the tax court petition was timely postmarked, timely mailed and timely filed.
Note that some documents filed with the IRS may be deemed filed upon receipt while others are deemed filed upon mailing of the document. Check with your tax attorney on the filing variations.