Penny Wise And Pound Foolish: How Scrimping On Certified Mail Now Could Cost You Or Your Client Later

by McGrath North Tax Group

(402) 341-3070

Tax practitioners, and most taxpayers, are familiar with the rule that a tax return will be considered to be timely filed if postmarked by the due date. However, the postmark rule has a wrinkle: it only applies if the return is “delivered by United States mail” to the IRS.

Normally, this “delivery” requirement is not an issue, as the Post Office gets the return where it should be. Yet, we all know times when documents or letters have been “lost” in the mail. If a return is “lost” in the mail, how can the taxpayer prove that the return was timely filed in the first place to avoid a late filing penalty (or worse)?

New regulations, issued by the IRS on August 23, 2011, establish that evidence of a postmark is not sufficient to prove “delivery” of a return. Rather, there are only three ways to meet this “delivery” requirement: 1) proof of actual delivery, e.g. a date stamped receipt of delivery by an IRS agent; 2) proper use of registered or certified mail; or 3) proper use of an IRS approved private service, such as Federal Express, UPS, or DHL. As the IRS states: “No other evidence of a postmark or of mailing will be prima facie evidence of delivery or raise a presumption that the document was delivered.” In other words, without using one of these three methods, a taxpayer cannot prove that he or she timely mailed his or her return to the IRS.

Therefore, we strongly recommend that taxpayers send all returns, payments, or refund claims to the IRS using registered or certified mail. Do not use a private postage meter to do so. An alternative is to file a return electronically. In addition, return preparers may choose to warn their clients that the failure to use registered or certified mail might invalidate their returns.

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