IRA Deadline

[Kram BergGold]

In the most recent NATP "You Make the Call", the point is made that an IRA contribution post marked by the due date but received after the due date can be credited to the prior year. This is per IRS Letter Ruling 8536085. I was always told the deposit had to be on the books by the due date. I have always read that IRS when dealing with a postmark says "prove what was inside the envelope" and since you can't then you lose. So before I would go with this concept I would check that the institution receiving the deposit will in fact treat the timely mailed deposit as for the previous year rather than the current year.

[Roland Slugg]

Interesting post. I do believe the rules say that the IRA funds must be in the hands of the IRA trustee by the due date, and I have always advised my clients accordingly. The IRS's acceptance of a postmark date, however, is consistent with the rule that a return, payment, etc. is deemed to be timely filed if postmarked on time. The latter, however, is the LAW (Code §7502(c)(1), whereas the former is, apparently, just IRS policy. It would probably be prudent, though, for someone mailing an IRA deposit on (or just before) the deadline, to use certified mail, and record the certified receipt's serial number on the transmittal letter of form accompanying the check.

[S T]

I have had situations - that the "institution" receiving the IRA deposit for the Tax Year, states that they will only record if they receive funds by 4/15 (and record)
So while IRS might have one criteria, the institution receiving the funds might have another.
I usually check with the institution and not rely on what IRS states.

Sandy

[ChEAr$]

Still

an IRA contribution is not effected until the receiving custodian accepts it.

[MarketMaker]

Postmark

It may depend on the policy of the company receiving the check, but if the envelope is received and postmarked properly, it gets coded as of the prior tax year. Usually, a copy of the check and post mark is made to.

[Roberts]

How on earth would the IRS request that you prove what's in an envelope or prove the post mark of an envelope when you've mailed it to someone else? When you mail something, do you normally get the original envelope mailed back to you for your records?

The financial institution is responsible for matching the date of the check and postmark to IRS rules. They code the deposit and the IRS is eventually notified of the tax year it was credited with.