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Facts: Crispino vs. US<\/strong><\/p>\n\n\n\n The Crispino v US<\/a> federal district court case in New Jersey addresses some very important administrative law principles regarding the mailing of tax returns to the IRS. The IRS assessed the taxpayers taxpayers $134,000 finding that they did not properly report an IRA rollover as a taxable event. The taxpayers claim they filed a claim for refund before the statute of limitations expired. <\/p>\n\n\n\n Problem #1: The IRS collected the tax via two levies against the taxpayer. Money was now in the hands of the IRS.<\/p>\n\n\n\n Problem #2: The IRS says it never received the refund claim and thus denied issuing the refund. The taxpayers then refile their refund claim. <\/p>\n\n\n\n Problem #3: The IRS notifies the Crispinos that the second filing of their refund claim was made after the statutory period to claim the refund had expired and again denied their claim for refund.<\/p>\n\n\n\n <\/p>\n\n\n\n How Did the Taxpayer Prove Their Refund Claim Was Timely Filed?<\/strong><\/p>\n\n\n\n Their tax representative asserted in a deposition that that he mailed a refund claim using a postage label printed from a Stamps.com postage meter on April 15, 2015. Having heard nothing about the claim, the tax rep also testified that at some point in 2015 he checked on the claim\u2019s status and learned that the IRS did not have a record of receiving it. In November of 2015, the tax rep mailed a copy of the (supposedly) earlier filed claim. On December 31, 2015, IRS mailed a notice of disallowance on the basis that the claim was untimely because it was filed beyond two years of the tax\u2019s payment. <\/p>\n\n\n\n IRS Regulations Stipulate How to Prove Date of Mailing<\/strong><\/p>\n\n\n\n IRS regulations (regs) provide that Section 7502 is the only way to prove that documents that IRS never receives were actually mailed.<\/p>\n\n\n\n As Leslie Book, a professor of law at Villanova University of Law discusses in his Procedurally Taxing Blog<\/em> post, this is important because a statutory tax-filing requirement generally can be satisfied only by actual, physical delivery. Section 7502 provides an exception to the physical delivery rule if a document is postmarked before the deadline and received after the deadline. In addition, sending the document via registered or certified mail, or with an authorized<\/strong> private delivery service, establishes that the document was in fact received even if the document never was received or the IRS has no record of receiving it.<\/p>\n\n\n\n The issue as to whether a taxpayer can introduce extrinsic evidence to prove mailing in the absence of using a 7502-proscribed method or whether Section 7502 was the exclusive way to prove mailing has been contested over the years. Some circuits said yes; others said no. The Third Circuit, where an appeal in this NJ case would lie, had come down in favor of allowing a taxpayer to prove mailing beyond what Congress established in Sec. 7502.<\/p>\n\n\n\n Other than direct proof of actual delivery, proof of proper use of registered or certified mail, and proof of proper use of a duly designated private delivery service as provided for by paragraph (e)(2)(ii) of this section, are the exclusive means to establish prima facie evidence of delivery of a document to the agency, officer, or office with which the document is required to be filed. 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.<\/p>\n\n\n\n The Crispinos challenged the reg\u2019s validity citing other court cases and Rule 406 of the Federal Rules of Evidence. Professor Book thoroughly analyzed each of these arguments and their merits, which is beyond the scope of this post. As Professor Book states in his blog, “the Crispinos are out of luck, at least insofar as getting a court to consider the claim\u2019s merits. Whether they have a cause of action against their practitioner is another matter. \u00a0The case is yet another reminder that if one is snail mailing something important to the IRS, it is worth the extra time and money to mail it in a way that eliminates any risk of non-delivery.” <\/p>\n\n\n\n <\/p>\n\n\n\n Tax Tip <\/strong>#1<\/p>\n\n\n\n Carefully choose your tax professional. If your tax pro instructs you to mail returns or documents to the IRS, use certified or registered mail, AND keep those proof of mailing receipts. If your pro will do the mailings, then request copies of the proofs of mailing for your files. Remember that you, the taxpayer, are ultimately responsible for the filing of your taxes and paying your taxes due. <\/p>\n\n\n\n Tax Tip <\/strong>#2<\/p>\n\n\n\n When mailing tax returns or important documents to the IRS, be sure to read IRS Reg. 301.7502-1 regarding proofs of mailings that the IRS will accept. The IRS says that certified and registered mail are acceptable, but Priority Mail is not mentioned. If the IRS local service centers were open, you could request a hand-stamp proof of delivery. If you choose to use a private carrier such as FedEx, UPS ,or DHL, be careful as not every mailing from these carriers will satisfy the IRS rules to prove date of mailing. https:\/\/www.irs.gov\/filing\/private-delivery-services-pds lists which of these services the IRS will accept as proof of mailing. <\/p>\n\n\n\n <\/p>\n\n\n\n <\/p>\n\n\n\n If you would like to discuss your business or personal tax planning<\/a>, tax preparation<\/a> and other financial concerns with an experienced tax professional, we invite you to call 610-594-2601<\/a> today to make an appointment at our Exton PA CPA office<\/a> to discuss your situation. You can also schedule a consultation at Click Here<\/a>. <\/p>\n\n\n\n Copyright \u00a9 2022 Keystone Financial Solutions, Inc. All rights reserved. <\/strong><\/p>\n\n\n\n BE SURE TO READ THE DISCLAIMER PAGE: Tax laws, IRS rules and regulations change frequently<\/strong>. Although we hope you’ll find this information helpful, this blog is for educational purposes only and should not be considered as the rendering of tax, legal or investment advice. The publisher shall not assume liability for any losses, injuries, or damages from the display or use of this information.<\/strong><\/p>\n\n\n\n About F. Bryan Haarlander, EA, CTRS:<\/strong><\/p>\n\n\n\n Bryan\nHaarlander is an IRS licensed Enrolled Agent and who owns and operates a\nspecialized tax services firm serving clients in the western suburbs of\nPhiladelphia, PA, which includes the cities of Chester Springs, Coatesville,\nCollegeville, Devon, Downingtown, Exton, Frazer, King of Prussia, Paoli, Philadelphia,\nPhoenixville, Pottstown, Radnor, Reading, Wayne, West Chester in Berks,\nChester, Delaware, Montgomery and\nPhiladelphia Counties, as well as clients in Delaware, New Jersey, New York and\nthroughout the continental USA. <\/p>\n\n\n\n
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