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Timely Mailed = Timely Filed

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By Roy Lewis

Ever wonder how the IRS determines when a tax return is "filed"?

We all know about the "day that will live in infamy." No, not December 7, 1941, but April 15 each and every year. Each year many people ask, "Why is the date to mail your tax return April 15, when the IRS won't receive the return until sometime after April 15? If April 15 is the filing deadline, don't we really have to mail our tax return earlier to make sure that the IRS will receive it by April 15th? Especially if we owe money to Uncle Sammy?"

The answer is no at least not exactly. Let's take a look.

The Internal Revenue Code (Section 7502) says that a return is deemed "timely filed" on the date of the postmark on the envelope -or- on the date a receipt is issued by the post office for either certified or registered mail. If the postmark shows that a return was mailed on or before the due date, the return is considered timely filed regardless of when it is received by the IRS. But if the return is filed late (based on the postmark), the return is considered filed when it is actually received by the IRS.

Example:
Tom filed (mailed) his 1998 individual income tax return on April 15, 1999 (the envelope was postmarked April 15 by the post office). Tom's return was received by the IRS on April 20. Should Tom care? Nope. Because of the postmark, Tom's return is considered timely filed by Uncle Sammy.

Example:
Harry filed (mailed) his 1998 individual income tax return on April 16, 1999. Harry's return was received by the IRS on May 10 because of a mix-up at the post office. Should Harry care? He sure should, because his late-filing and late-payment penalties will be based on the date the return was actually received by the IRS -- May 10th in this example -- and the good old U.S. Post Office has now caused Harry to incur additional penalties. Remember that the "timely mailed = timely filed" doctrine is valid only for a timely filed return. For a late-filed return, the return is considered filed only when actually received by Uncle Sammy (Regulations Section 301.7502-1).

Make sense so far? Great. But, what happens if you use regular mail and the Post Office drops the ball and loses your return completely? Should you be concerned? You sure should. If you mail your return using ordinary mail service (most likely standard First Class mail) and the return is lost by the Postal Service before delivery to the IRS, the return is not considered filed. It's as if the return was never placed in the mailbox. So if you are using regular mail, you assume the risk of non-delivery.

You must prove that you delivered the return to the Postal Service... which is difficult to do if you use regular mail. To avoid this result, you should always consider mailing the return by certified or registered mail. When you use certified or registered mail, the certification or registration receipt that you keep is also postmarked and is prima facie evidence that the return was given to the Postal Service for delivery to the IRS on a timely basis.

In some cases, the courts have ruled that a return was timely filed when the taxpayer has provided strong circumstantial evidence that the return was timely mailed. But, do you want to go through the hassle of trying to provide the evidence to prove timely mailing when you really have no proof to offer? Most likely not, which is why certified or registered mail is preferred to just normal delivery.

But, what if you don't live close to a post office or close to a commercial service (such as Mail Boxes, Etc.) that will provide easy access to certified or registered mail service? You still have another option -- a private delivery service.

Since 1997, you can use a commercial or private delivery service and take advantage of the "timely mailing = timely filing" rule. Private delivery services are defined in the Code as any delivery service provided by a trade or business and "designated" as such by the Treasury Secretary. A designated service is one which:

  1. Is available to the general public;
  2. Is at least as timely and reliable on a regular basis as the US mail;
  3. Records electronically to a database kept in the regular course of its business, or marks on the cover of the item to be delivered the date on which the taxpayer gives the document/item to the trade or business for delivery; and
  4. Meets other criteria as prescribed by the Secretary.
The IRS has designated certain delivery services of four private companies as "designated private delivery services." The services designated for these purposes are:
  • Airborne Express -- Overnight Air Express, Next Afternoon, and Second Day service.
  • DHL Worldwide Express -- Same Day and USA Overnight service.
  • Federal Express -- Priority Overnight, Standard Overnight, and 2nd Day Air.
  • United Parcel Service -- Next Day Air, Next Day Air Saver, 2nd Day Air, and 2nd Day Air A.M.
No other service types offered by these companies qualify for the "timely mailed = timely filed" rule. For example, if Federal Express has a "3rd Day Super Saver" delivery service, it will not qualify for the "timely mailed = timely filed" rule. So, be careful that you select not only the correct provider, but also the correct type of service. In addition, if you use another private delivery company not on the list above, you will not qualify for the "timely mailed = timely filed" rule.

The designations are effective until the IRS issues a revised list. You can view the list and other information on using approved private delivery services on the IRS website.

To qualify for the "timely mailed = timely filed" rule, you must make sure that the designated private delivery service actually is given or picks up the document or tax return on or before the due date.

As you can see, you have a number of options to ensure that your return is filed in a timely manner. So make sure that you use one of them, and sleep well at night knowing that regardless of what may happen to your return, you'll be covered.

If you have any additional questions regarding this or any other tax issues, be sure to post them in the Tax Strategies discussion board.
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