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POSTAGE METER DOESN'T CUT IT

March 03, 2006

Postage meters are handy for everyday mail, but for mailing tax returns, they are a menace. Why? A South Carolina taxpayer can give you $55,895 reasons why.

Irwin Kalman died on March 5, 1999. The estate tax return was filed on the extended due date of June 5, 2000. In administering the estate, it turned out that not so much was owed, so the estate prepared a refund claim for $55,895. The administrator ran the envelope with the refund claim through his postage meter and dropped it in the mailbox on June 5, 2003 -- the last day to claim the refund. The Cincinnati IRS service center got the package June 9, 2003, but since it was mailed on time, he met the deadline, right?

Not in South Carolina, anyway. A U.S. District Court ruled that without a timely Postal Service postmark, the taxpayer is out of luck:

The United States Postal Service does not postmark privately metered mail, and the fault for the lack of a postmark date lies with the plaintiff. The policy reasons present in the cases allowing proof of timely mailing to demonstrate compliance with section 7502 are not present in this action. The Court holds that the plaintiff's proof of mailing is not sufficient to demonstrate compliance with section 7502. The claim for a refund, consequently, was filed on June 9, 2003, when the IRS received the claim.

The opinion noted that in other parts of the country, including the 8th Circuit, which covers Iowa, the claim might have been considered timely-filed. But anywhere in the country you can avoid the whole problem by going down to the post office and sending your returns "certified mail, return receipt requested." It costs an extra $4.25, which probably buys about 90 seconds of the time of the attorney who litigated the case for the estate.

Cite: Estate of Irwin S. Kalman vs. United States, DC-SC (Charleston), February 17, 2006.

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