Tax Court And Delivery Services

 We sent a petition to the Tax Court on Friday. It needs to arrive by Monday.

Technically, the petition does not have to arrive Monday, as long as it is in the care of an “approved” delivery service. I do not like to count on that extra day(s), however, so I treat the final day of the 90-day letter as an absolute deadline. In truth, I do not like waiting this late into the 90 days, but there was, you know, tax season and all.

COMMENT: Yes, the individual filing deadline was moved to May 17, but we made a concerted effort to prepare as many individual returns as possible by April 15. The majority of us here at Galactic Command do not like or appreciate a Dunning-Kruger Congress requiring us to again reschedule our personal lives.  

You may remember the old days when people used to go to the post office on April 15^th and mail their returns, especially if there was money due. Clearly there is no way that the return could make it to the IRS on the 15^th if one mailed it on the 15^th. The reason this worked (and still works, although it is much less of an issue with electronic filing) is Code Section 7502.

            § 7502 Timely mailing treated as timely filing and paying.

(a)  General rule.

(1)  Date of delivery.

If any return, claim, statement, or other document required to be filed, or any payment required to be made, within a prescribed period or on or before a prescribed date under authority of any provision of the internal revenue laws is, after such period or such date, delivered by United States mail to the agency, officer, or office with which such return, claim, statement, or other document is required to be filed, or to which such payment is required to be made, the date of the United States postmark stamped on the cover in which such return, claim, statement, or other document, or payment, is mailed shall be deemed to be the date of delivery or the date of payment, as the case may be.

This Section means that putting the return in the mail timely equals the IRS receiving it timely.

Mail service in our corner of the fruited plain has been … substandard recently. We have an accountant who no longer uses mail delivery for repetitive time-sensitive filings, such as sales and payroll taxes. She has too many experiences of mail taking a week to go crosstown that she has given up on regular mail for certain returns.

It is easier nowadays to avoid the post office, of course, with Fed Ex and UPS and other delivery services available.

We sent our petition via Fed Ex.

I am looking at a case that deals with “approved” delivery services.

What makes this an issue is that a delivery service is not approved until the IRS says it is. Granted, a lot of services have been approved, but every now and then one blows up. Use CTG Galactic Delivery, for example, have a hiccup – or just cut it too close – and you may not like the result.

A law firm sent a Tax Court petition the day before it was due. The admin person shipped it with Fed Ex using “First Overnight” delivery.

OK.

Something weird happened, and the package got relabeled. Why? Who knows. The result however is the petition got to the Tax Court late.

In general, one would consider Fed Ex to be a safe bet and Fed Ex to be squarely within the list of approved delivery services. The problem is that the IRS does not look at Fed Ex overall as “approved.” It instead looks at the delivery options of Fed Ex as individually approved or not. When the law firm sent their petition, the following services were approved:

·      Fed Ex Priority Overnight

·      Fed Ex Standard Overnight

·      Fed Ex 2 Day

·      Fed Ex International Priority

·      Fed Ex International First

You know what service is not on the list?

Fed Ex First Overnight, the one the law firm used.

Now, Fed Ex Overnight eventually got added to the list, but not in time to save the law firm and this specific filing.

Are their options left if one blows the Tax Court filing?

Yes, but the options are less appealing. One could litigate in District Court, for example, but that would require one to pay the assessed tax in full and then sue for refund.

There is also audit reconsideration, but I shudder to take that option with IRS COVID 2020/2021. The IRS has the option of accepting or rejecting a reconsideration request. I can barely get the IRS to do what it HAS to do, so the idea of giving it the option to blow me off is unappealing.

For the home gamers, our case this time was Organic Cannabis Foundation LLC et al v Commissioner.