From the Desk of Lauran L. Stevenson
The Power of the Postmark
The “postmark rule” appears in section 301.7502-1(c)(1)(iii)(A), Proced. & Admin. Regs., and provides that the USPS postmark is conclusive in determining whether the document was timely mailed and therefore timely filed.
In September 2015, a taxpayer’s attorney purchased the postage for mailing the petition (first class mail and postage for certified delivery) from Stamps.com. The postage was printed on the last day for filing the petition and a member of the law firm’s staff testified that she delivered the petition in its stamped envelope to the local post office on that date. The Tax Court held that the “postmark” was the date the USPS entered the mail into their system and the USPS 20-digit tracking number was the official postmark for the purposes of this rule.
This month, the Appeals Court found that the Tax Court was mistaken. The relevant part of the regulation specifies what happens if an envelope has both a private postmark and a postmark from the U.S. Postal Service. Taxpayer’s envelope had only one postmark. The regulation does not ask whether a date that is not a “postmark” is as good as a postmark. It asks whether there are competing postmarks.
The court stated: “To say “A is as good as B” is not remotely to show that A is B. “Vanilla ice cream is as good as chocolate” does not mean that a customer who orders chocolate must accept vanilla, just because the customer likes both. They are still different. Subsection (B)(3) does not make anything turn on a date as reliable as an official postmark. It makes the outcome turn on the date of an official postmark. If the Postal Service were to treat tracking data as a form of postmark, that might inform our reading of the regulation, but we could not find any evidence that the Postal Service equates the two.”
In conclusion, the Court questions why would one use a private postmark when an official one would have avoided these issues. The Court’s shaming of the law firm’s practice serves as a powerful warning to tax practitioners to heed the rules carefully and thoughtfully.