In the ordinary course of our lives, we mail many items. Most of the time, the mailing date is not critical. However, when dealing with the IRS, the mailing date is frequently very critical.
We are all familiar with the personal tax filing deadline of April 15. A majority of personal returns are now filed electronically. But, not so many years ago major U.S. Post Offices would remain open until midnight on April 15 to accept last minute mailings. And there would be long lines of people waiting to hand their return to a postal employee before midnight. The taxpayer knew the envelope would be postmarked April 15 by the U.S. Postal Service (USPS), thus meeting the filing deadline.
There are many other tax-related filing deadlines, including ones for quarterly payroll tax forms, appeals from the IRS actions, and petitions to the U.S. Tax Court.
What Are the Consequences of Missing a Tax Filing Deadline, and What Can You Do About It?
Missing a deadline can have significant consequences. If you do not file your personal income tax return on time, you incur a penalty of 5% of the unpaid tax amount for each month or part of a month that the return is late. If you miss the filing deadline by even one day, you incur the penalty for an entire month.
If you are filing an appeal of proposed collection actions, such as an intent to levy your wages or your bank account, you can lose your right to stop the collections action as well as losing your right to take your case to the U.S. Tax Court before paying the tax.
If you disagree with an assessment action proposed by the IRS, you may be able to get the U.S. Tax Court to decide the issue BEFORE you pay the tax. But, this is possible only if you follow all the steps correctly and timely. This includes filing all appeals and petitions on time.
If you miss the deadline for filing a petition to the U.S. Tax Court, then you are required to pay the tax first. Then you can file a claim for refund of the money.
Don’t Make the Same Mistake as Mr. Sanchez
Mr. Sanchez’s situation is an example of how easy it is to inadvertently miss a critical tax filing deadline. Mr.Sanchez disagreed with an adjustment to his taxes proposed by the IRS. He had worked his way through the appeal process to the point where his only chance of a decision in his favor before having to pay the tax bill was to file a petition in the U.S. Tax Court.
Mr. Sanchez completed the petition on the very last day for timely filing. He then enlisted a friend to help with the mailing. The friend printed postage from her computer using Stamps.com. She included enough postage for certified mail. When the friend arrived at the Post Office, there was a long line. So rather than wait in line to have a postal clerk stamp the envelope and her receipt, she dropped the petition in the mail box.
Unfortunately for Mr. Sanchez, the U.S. Postal Service (USPS) did not postmark the letter until the next day.
The IRS subsequently requested the court dismiss the petition as not timely filed based on the USPS postmark. According to the law, if a piece of mail has both a non-US Postal Service date mark and a USPS mark, the non USPS mark is disregarded.
So, in Mr. Sanchez’s case, with no other evidence of mailing, such as a certified mailing receipt stamped by a USPS employee, the Tax Court had no alternative but to agree with the IRS and dismiss Mr. Sanchez’s case.
Use Certified Mail and Get Your Receipt Stamped
The moral of the story – If you are sending something to the IRS that must be filed by a certain date, use certified or registered mail AND get your mailing receipt stamped by the USPS clerk. Don’t be another Mr. Sanchez.