With release of Notice 2015-38, 2015-21 I.R.B. 21, effective May 6, 2015, the Internal Revenue Service has provided an updated list of private mail carriers taxpayers may use to qualify under the timely-mailed-timely filed provisions of section 7502 (i.e., the mailbox rule). As discussed more fully below, taxpayers mailing documents or payments by private mail carrier are well-advised to understand fully the implications and requirements of this notice.
Section 7502(a) provides the general rule that, for purposes of determining whether a document or payment is timely filed or made, the United States postmark date accompanying the document or payment is deemed the date of delivery. In other words, taxpayers who send documents or payments within a prescribed deadline are deemed to have met that deadline even if the documents or payments arrive to the recipient thereafter. By its terms, however, section 7502(a) applies only to mail delivered by United States mail. In 1996, Congress enacted section 7502(f), see Taxpayer Bill of Rights 2, Pub. L. 104-168, sec. 1210, 110 Stat. 1452, authorizing the Secretary to designate certain private mail carriers (referred to by statute as a “designated delivery service”) as equivalents to United States Postal Service mailings, at least for purposes of section 7502(a). It is pursuant to this authority that the Internal Revenue Service released Notice 2015-38, superseding Notice 2004-83, 2004-2 C.B. 1030.
Notice 2015-38 adds four new delivery services—three from Federal Express and one from United Parcel Service—and drops all delivery services provided by DHL Express, which discontinued most domestic mail delivery in the United States in 2009. Effective May 6, 2015, the following are designated delivery services: (1) FedEx First Overnight; (2) FedEx Priority Overnight; (3) FedEx Standard Overnight; (4) FedEx 2 Day; (5) FedEx International Next Flight Out; (6) FedEx International Priority; (7) FedEx International First; (8) FedEx International Economy; (9) UPS NextDay Air Early A.M.; (10) UPS Next Day Air; (11) UPS Next Day Air Saver; (12) UPS 2nd Day Air; (13) UPS 2nd Day Air A.M.; (14) UPS Worldwide Express Plus; and (15) UPS Worldwide Express. Taxpayers who do not use the United States Postal Service or an approved private mail carrier service, provided above, should be advised that their mailings will not qualify for the mailbox rule.
Recent Tax Court cases illustrate this rule and the potential pitfalls of relying on a non-designated private mail carrier service. In Sanders v. Commissioner, T.C. Summ. Op. 2014-47, the taxpayer received a notice of deficiency, dated February 2, 2013, providing him with 90 days, or until May 3, 2013, to file a petition with the Tax Court. On May 6, 2013, or three days after the petition was due, the Tax Court received and filed the taxpayer’s petition. The petition was delivered to the Tax Court by UPS Ground with an envelope showing a date of May 2, 2013. The IRS moved to dismiss the case for lack of jurisdiction, arguing that the petition was filed three days too late and that section 7502 was inapplicable because the petition was mailed by UPS Ground, which was not a designated delivery service under then applicable Notice 2004-83. The Tax Court granted the IRS’ motion to dismiss, acknowledging that although its holding may be viewed as harsh, the Court could “not rely on general equitable principles to expand the statutorily prescribed time for filing a petition.” Several other Tax Court cases have reached similar results. See Eichelburg v. Commissioner, T.C. Memo. 2013-269 (no jurisdiction where petition received late and taxpayer mailed petition by “FedEx Express Saver”); Scraggs v. Commissioner, T.C. Memo. 2012-58 (no jurisdiction where petition received late and taxpayer mailed petition by “FedEx Express Saver Third”); Raczkowski v. Commissioner, T.C. Memo. 2007-72 (no jurisdiction where petition received late and taxpayer mailed petition by “UPS Ground”). Notably, because the Tax Court lacked jurisdiction over each of these individual cases, the taxpayers’ only remedy to contest the tax would be to pay the tax assessed, file a claim for refund with the IRS, and, if denied, sue for a refund in either the appropriate federal district court or U.S. Court of Federal Claims.