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CERTIFIED MAIL GOOD. POSTAGE METER BAD.

July 06, 2005

A properly-postmarked certified mail receipt is to late-filing penalties what a crucifix is to a vampire. But without the right kind of postmark, it's not so easy to ward off old Vlad. Leonard Grossman learned this the hard way in Tax Court. Or at least his attorney did.

The tax law has a "timely-mailed, timely-filed" rule. If an item is postmarked by a filing deadline, the postmarked date is the filing date, even if it is received later than the filing date.

Not all postmarks are created equal. A hand-stamped postmark received at the post-office -- like the one in the above picture -- is golden. An office postage meter isn't nearly as convincing, for obvious reasons. And there lies Mr. Grossman's problem.

POSTAGE METERS DON'T HELP MUCH

Mr. Grossman wanted to fight a $34,000 IRS assessment in Tax Court. His attorney was responsible for filing the Tax Court petition, which had a filing deadline of April 5, 2004. The Tax Court didn't receive the petition until May 25, 2004.

The good news for Mr. Grossman: his attorney had a certified mail receipt.

The bad news? The receipt had a postage meter postmark.

ESTABLISHING TIMELY FILING

The IRS argued that the late delivery overcame what slim evidence a postage meter postmark provides for timely filing. The Tax Court seemed to agree, but it gave the taxpayer's attorney the opportunity to establish timely filing by other evidence. After a full hearing, including testimony from the law firm the office manager and evidence of a misrouting of the envelope, the Tax Court ruled that the petition was mailed on time.

LESSONS LEARNED

Mr. Grossman needed an attorney and a Tax Court hearing and decision just to earn a chance to continue to contest his assessment. Had the attorney walked the petition to the post office and walked back with a hand-stamped postmarked receipt, he would have avoided the entire hearing.

The attorney arguing for timely filing was the same attorney who filed the petition. The Tax Court case doesn't say whether the attorney sent Mr. Grossman a bill for fighting the postmark issue -- or whether the attorney's only benefit from yesterday's decision was avoiding a malpractice claim, or at least an irate client.

Cite: Grossman v. Commissioner, T.C. Memo. 2005-164

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