Timely filed 1040X

[taxmansteele]

Client filed 2002 original return on time; filed 1040X for 2002; postmark was prior to 4/15/06 by several days; IRS did not "stamp" 1040X in until 4/18/06; IRS has denied 1040X refund, saying that 1040X was not timely filed; can this be correct, that IRS is going by date received instead of date postmarked? Client has not filed any previous amended returns for year 2002

[Black Bart]

Postmark

Postmark date is what counts. Can't see how they're figuring it's late. Was it maybe done with an office postage meter? I understand that they don't accept those as proof because the dates on them can be manipulated

[New York Enrolled Agent]

[QUOTE=Black Bart;26628]Postmark date is what counts.

BB - I have to disagree with you. A tax return is considered filed on the day it is RECEIVED by the IRS - there are many court cases which uphold this concept. An example Pace Oil v Commissioner 73 TC 249.

To my knowledge there are 2 exceptions to the "received" date. §6513 which says an early return is considered filed on the due date and §7502 which says the return is considered filed on the postmark date ONLY if the return is received after the due date but postmarked on or before the due date. I agree with your assessment about postage meters. The regulations for §7502 put a number of conditions on a postage meter "postmark" in order to be effective.

[Brad Imsdahl]

and §7502 which says the return is considered filed on the postmark date ONLY if the return is received after the due date but postmarked on or before the due date.

In fairness to what BB said, that is basically the same thing. Of course IRS is not going to squawk if they receive the return prior to the due date. The only time it is an issue is when they receive the return after the due date. Then and only then do they look at the postmark to determine if it was mailed prior to the due date. And if it is a U.S. postal service postmark, it should never be an issue, other than proving that such postmark actually exists, which brings up the issue of whether or not it is a good idea to send it certified mail.

[TMI Moderator]

TheTaxBook, page 15-4:

"...Other than direct proof of actual delivery, proof of proper use of registered or certified mail is the exclusive means to establish prima facie evidence of delivery of a document to the IRS..."

Reg. 301.7502-1(c)(iii) states in part:

"...if the envelope that contains a document or payment has a timely postmark made by the U.S. Postal Service, but it is received after the time when a document or payment postmarked and mailed at that time would ordinarily be received, the sender may be required to prove that is was timely mailed."

If the return was sent "prior to 4/15/06 by several days," and was not received by the IRS until 4/18/06, that's after the time the mail would ordinarily be received. I would assume that the IRS has a cutoff date a few days after the deadline to accept documents considered filed under the mailbox rule.

I know there will be conspiracy theorists out there who insist that some entry-level IRS mailroom employee is part of a grand conspiracy to check such returns for refunds and put them in a holding pile for a few days before stamping, but of course that's ridiculous.

The moral is that any paper document filed that's anywhere near the deadline should be sent registered or certified.

[New York Enrolled Agent]

Brad

You wrote: In fairness to what BB said, that is basically the same thing.

You are much too knowledegable to use "basically the same thing" in tax matters.
There is a common misconception that date of filing is always the date of the postmark. That is not true. This is not nitpicking but a crucial difference especially in deficiency cases. As examples, I'll give two taxpayers who learned the hard way that the date received as opposed to the postmark date was controlling and used successfully by the IRS.
Estate of Mitchell 103 TC 520 and Emmons 92 TC 342.

To: taxman Al - check the NAEA board in regards to your query.

[Gene V]

Looking back over my records, I remember one of my clients was disallowed a refund because his return was received more than 3 years after the date it was due.

My client mail his 1995 return on April 13, 1999, IRS didn’t received it until April 17, 1999.

I wrote a letter back to the IRS disagreeing with there decision to disallow the refund.
I base the refund on the US Court of Appeals for the Second Circuit Weisbart v. United States, KTC 2000-362 (2d Cir.2000).

We received a letter from the IRS allowing the refund. The letter reads as follows:

Dear Taxpayer:

A recent regulation change now allows US to accept a postmark date as the return received date when considering timely filed claims for refund on late-file returns. We are applying a credit of $790.00 to your account that we previously disallowed. Etc. etc. etc.

I also found this piece of information in my files, Not sure where it came from.

FINAL REGS ON POSTMARK ON LATE FILED RETURNS, EFFECTIVE JANUARY 11, 2001……..timely mailing treated as timely filing under section 7502 of the IRC…The new rules state that in certain situations, a claim for a credit or refund made on a late filed original return should be treated as timely based on the date of the postmark rather than the date the claim is received, reversing IRS’ previous position, is consistent with opinion handed down by the US Court of Appeals, 2nd Circuit. IRS has begun to identify approximately 28,000 previously disallowed claims of individual income tax returns for 1995 and subsequent tax years. The IRS will automatically reconsider these claims and issue a refund or credit where appropriate without the need of taxpayer contact with the IRS>

[tilt53]

Manipulating postage meter?

I'm curious - on all the meters I've ever worked with you can adjust the day forward but not backward. Why would anyone want to advance a date past what would be acceptable?

[New York Enrolled Agent]

Gene
You mention Weisbart - that decision has a great opening written by Judge McLaughlin in the decision:

"Judge Learned Hand once described the Tax Code as a “fantastic labyrinth[ ]” whose words “merely dance before my eyes in a meaningless procession: cross- reference to cross-reference, exception upon exception...” .... Like Theseus of old we are compelled to enter this labyrinth — but without his ball of thread. "

Almost qualifies as poetry in taxes.

[Brad Imsdahl]

You are much too knowledegable to use "basically the same thing" in tax matters.
There is a common misconception that date of filing is always the date of the postmark. That is not true. This is not nitpicking but a crucial difference especially in deficiency cases. As examples, I'll give two taxpayers who learned the hard way that the date received as opposed to the postmark date was controlling and used successfully by the IRS.
Estate of Mitchell 103 TC 520 and Emmons 92 TC 342.

I understand the concept in 103 T.C. 520. But that case has nothing to do with filing a tax return on time. It dealt with the time period IRS has to challenge an already filed return. For purposes of the IRS filing a notice of deficiency, the date received by the IRS can be the date filed that starts the 3 year statute of limitation, under certain circumstances. That has nothing to do with the context of this thread on what counts as a timely filed return, nor of BB's response when he said postmark date is what counts.

[New York Enrolled Agent]

The case has NOTHING to do "... when he said the POSTMARK date is what counts"??????????????????

Here's the official court holding:
HELD: Pursuant to sec. 7503, I.R.C., the return is considered timely filed on Mon., July 23, 1990. Sec. 7502, I.R.C., does not apply unless the return is untimely filed. Accordingly, the date of filing decedent's estate tax return for purposes of the statute of limitations on assessment is the date of its DELIVERY to the IRS, July 23, not the date of POSTMARK, July 20. The notice of deficiency was timely mailed.

I hate these debates - I simply asserted in my first post that the postmark is not always controlling and then I said in the second post it could be crucial in deficiency cases. I'll let everyone draw their own conclusion about whether or not the postmark date always counts?????

[ChEAr$]

Talk about speed

YOu posted just today, Al, and look how many replies you got.

[Black Bart]

In fairness to BB

I hate these debates - I simply asserted in my first post that the postmark is not always controlling and then I said in the second post it could be crucial in deficiency cases. I'll let everyone draw their own conclusion about whether or not the postmark date always counts?????

Oh, don't let it bother you that much. It's not like the zillion John and Jane Does who drop their stuff in the box on April 15th are gonna start worryin' about what Emmons, Theseus, Mitchell, and Weisbart (any kin to Black Bart?) think about it. They usually aren't that interested in gettin' Learned Heads.

I just love it when the boarders here wax poetic (I wanted English Lit, but the old man insisted on Business Administration). Your "fantastic labyrinth...dance before my eyes" and so on was good; and Brad's spirited defense of my simple pronouncement was nice too. I swear, you two are just so well-mannered that I cain't hardly believe you're Yanks. I'm thinkin' about invitin' y'all to my next family reunion (be prepared to co-sign notes).

Well; back to business: I think Steely is just unlucky in having drawn an IRS zealot. I suggest writing to a different location and trying to deal with another less-rigid zealot (or sometimes the Taxpayer Advocate can get you out of these scrapes).

P.S. to tilt53 -- You may be right about postage meters -- I've never seen one before and I'm still tryin' to get a piece of one of those pre-licked stamps loose from my tongue.