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THE PRICE OF PEACE OF MIND: $4.05.

April 12, 2004

An enduring mystery of tax practice is the unwillingness of taxpayers who have paid hundreds of dollars to a preparer for a return owing thousands of dollars of taxes to spend $4.05 extra to mail the return "certified mail, return receipt requested."

The tax casebooks are full of instances where taxpayers have tried to prove timely-filing in the absence of a postmark. Absent a certified mail receipt, taxpayer victories are rare - and the ones that do exist certainly cost the taxpayer more in attorney fees than they would have spent on certified mail.

As April 15 looms, here is a recap of making sure your return is treated as timely-filed.

THE TECHNOLOGICAL SOLUTION

Electronic filing is hard to beat as a means of making sure your return or extension has been filed on time. Electronic filers get prompt acknowledgment of filing from the IRS. We are unaware of any case where the timeliness of an e-filed return has been disputed.

CERTIFIED OR REGISTERED MAIL

A timely certified mail or registered mail postmark can be a valuable possession. The penalty for late filing a return is 5% of the tax due, plus 5% for each additional month. It doesn't take much tax owing to exceed the cost of that certified mail postmark.

If you send certified mail, be sure to get the postmarked receipt and put it in a safe place. It also doesn't hurt to write the receipt number on the return or extension, just to be safe.

UPS AND OTHER PRIVATE DELIVERY SERVICES

The IRS now accepts receipts from some private delivery services, such as UPS and Federal Express, as proof of timely mailing. If you want to use such a service, be sure to review Notice 2002-62 to make sure the private delivery method you use qualifies.

DROPPING THE ENVELOPE IN THE BIN HELD BY THE POSTAL WORKER ON 2ND AVENUE AT 11:59 PM ON APRIL 15

For incorrigible optimists only.

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