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Spain v. Commissioner (T.C. Memo. 2021-58)

On May 11, 2021, the Tax Court issued a Memorandum Opinion in the case of Spain v. Commissioner (T.C. Memo. 2021-58). The primary issue presented in Spain was whether the petitioners proved that their petition had been timely mailed such that the Tax Court had jurisdiction to entertain their case.

The Timing Issue

The IRS issued petitioners separate notices of determination dated September 10, 2019, sustaining the underlying collection action. Tracking data from the U.S. Postal Service (USPS) show that these notices were mailed the following day and delivered to petitioners on September 16, 2019. The notices advised petitioners: “If you want to dispute this determination in court, you must file a petition with the United States Tax Court within 30 days from the date of this letter.” See IRC § 6330(d)(1). Because the notices were mailed on September 11, 2019, the 30-day period expired on Friday, October 11, 2019. Cf. Bongam v. Commissioner, 146 T.C. 52, 58 (2016). The Court received a petition from petitioners on October 21, 2019. That date was 40 days after the IRS issued the notices of determination.

No Valid Postmark

The petition (which lacked original signatures) was dated October 10, 2019. The envelope in which the petition was mailed was properly addressed to the Tax Court. The envelope bears U.S. postage of $1.75, evidently affixed by a Pitney Bowes postage meter, and it appears to have been delivered to the Court by USPS. However, the envelope bears no postmark and has no other marking affixed by USPS.

Weak (Read: None, Whatsoever) Substantiation of Mailing

The IRS asked the petitioners to prove timely mailing.  In response, the petitioners’ accountant, Richard Shapiro, replied with a letter in which he stated that the petition had been signed by the petitioners on October 10, 2019, and mailed that same day from his office in Scottsdale, Arizona. However, Dick supplied no “receipts or other documents” as the IRS had ever so politely requested (read: demanded).  Not to be outdone by himself, Dick then sent a letter to the Tax Court.  Importantly, the letter included no additional evidence showing that the petition was timely mailed. Rather, Dick attached a copy of his letter to the IRS’s counsel and requested that the petitioners “be provided their opportunity to review their case through [the] appeals process.”

Limited Jurisdiction

Th Tax Court is a court of limited jurisdiction, and it may exercise jurisdiction only to the extent expressly authorized by Congress. Naftel v. Commissioner, 85 T.C. 527, 529 (1985); Breman v. Commissioner, 66 T.C. 61, 66 (1976). To this end, jurisdiction must be shown affirmatively, and the petitioners, as the parties invoking the Tax Court’s jurisdiction, bear the burden of proving that the court has jurisdiction. David Dung Le, M.D., Inc. v. Commissioner, 114 T.C. 268, 270 (2000), aff’d, 22 Fed. Appx. 837 (9th Cir. 2001). To meet this burden, “petitioner[s] must establish affirmatively all facts giving rise to our jurisdiction.” Id.

IRC § 6330(d)(1) provides that a taxpayer may, within 30 days of a determination, petition the Tax Court for review of such determination (and the Tax Court shall have jurisdiction with respect to such matter). The 30-day period commences on the day after the date on which the notice of determination was issued. Treas. Reg. § 301.6330-1(f)(2), Q&A-F1. If the taxpayer does not file his petition within this 30-day period, the Court lacks jurisdiction to review the IRS collection action. See Guralnik v. Commissioner, 146 T.C. 230, 235-238 (2016); Orum v. Commissioner, 123 T.C. 1 (2004), aff’d, 412 F.3d 819 (7th Cir. 2005); Sarrell v. Commissioner, 117 T.C. 122, 125 (2001).

Timely Mailed is Timely Filed

IRC § 7502(a) provides a “timely mailed, timely filed” rule. A document delivered by U.S. mail is timely mailed if the postmark date falls on or before the prescribed date, and the document is mailed, on or before that date, in an envelope with “postage prepaid, properly addressed” to the recipient. IRC § 7502(a)(2). If those conditions are met, the date of the United States postmark stamped on the cover of the envelope in which such document is mailed is deemed to be the date of delivery.” IRC § 7502(a)(1).

The Postmark Rules

The regulations prescribe distinct rules for USPS and non-USPS postmarks. Treas. Reg. § 301.7502-1(c)(1)(iii). However, they supply no rules to govern the situation where the envelope has no postmark whatsoever. When a postmark is missing, the Tax Court will deem the postmark illegible and will permit the introduction of extrinsic evidence to ascertain the mailing date. See Sylvan v. Commissioner, 65 T.C. 548, 553-555 (1975); see also Mason v. Commissioner, 68 T.C. 354, 356 (1977). The burden is on the party who invokes IRC § 7502 to present “convincing evidence” of timely mailing. Mason, 68 T.C. at 356-357; see Treas. Reg. § 301.7502-1(c)(1)(iii)(A).

When confronted with illegible or missing postmarks, the Tax Court has considered various types of extrinsic evidence. It has examined the envelope to see whether any markings indicate that the letter had been “misplaced, missent, or inadvertently lost or damaged.” See Robinson v. Commissioner, T.C. Memo. 2000-146. It has also considered testimony from the person claiming to have mailed the envelope. See Mason, 68 T.C. at 357. However, and this is key, such testimony must be credible and convincing. Id. We are not required to accept uncorroborated, self-serving statements “as gospel.” Tokarski v. Commissioner, 87 T.C. 74, 77 (1986); see Kauffman v. Commissioner, T.C. Memo. 1993-494 (holding that self-serving statements do not support a finding that a petition was properly and timely mailed to the Tax Court”); Lumber Prods., Inc. v. Commissioner, T.C. Memo. 1992-728.

The envelope that contained the petition in this case bears no postmark or other marking affixed by USPS. The envelope is not damaged, and there is no indication that it was misdelivered, misdirected, or misplaced. The Tax Court’s jurisdiction accordingly turns on whether the petitioners have presented credible evidence that their accountant timely mailed the petition. They have not.

Uncorroborated, Self-Serving Testimony

In response to the motion to dismiss, Dick supplied no evidence of timely mailing but simply attached the letter he had previously sent respondent. That letter likewise supplied no evidence of timely mailing but instead simply asserted that the petition was mailed timely.

The Tax Court is not convinced by these unsworn, uncorroborated statements. Self-serving statements of this sort are not sufficient to carry petitioners’ burden. See Tokarski, 87 T.C. at 77. Because petitioners have not provided “convincing evidence” that the petition was timely mailed, see Mason, 68 T.C. at 357, they have failed to satisfy the requirements of IRC § 7502.

The regulations warn taxpayers and their advisers that “the sender who relies upon the applicability of IRC § 7502 assumes the risk that the postmark will bear a date on or before the last date prescribed for filing.” Treas. Reg. § 301.7502-1(c)(1)(iii)(A). To avoid this risk, the regulations advise the use of certified mail. Id. Had Dick used certified mail, he would have a receipt postmarked by the employee to whom he presented the envelope, and that postmark would be treated as the postmark date of the document. Treas. Reg. § 301.7502-1(c)(2).

In this case, the petitioners have no persuasive evidence of timely mailing, and they have therefore failed to meet their burden to “establish affirmatively all facts giving rise to our jurisdiction.” See David Dung Le, M.D., Inc., 114 T.C. at 270.

(T.C. Memo. 2021-58) Spain v. Commissioner

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