Opinion
1657-21
01-30-2024
NICHOLAS R. COATS, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER OF DISMISSAL FOR LACK OF JURISDICTION
Kathleen Kerrigan Chief Judge
On May 4, 2021, respondent filed in the above-docketed case a Motion To Dismiss for Lack of Jurisdiction on the ground that the Petition was not filed within the time prescribed by section 6213(a) or 7502 of the Internal Revenue Code (I.R.C.). Respondent attached to the Motion a copy of a certified mail list (U.S. Postal Service (USPS) Form 3877), as evidence of the fact that a notice of deficiency for the taxable years 2016 and 2017, dated September 24, 2020, had been sent to petitioner by certified mail on September 24, 2020.
Unless otherwise indicated, statutory references are to the Internal Revenue Code, Title 26 U.S.C., in effect at all relevant times, regulation references are to the Code of Federal Regulations, Title 26 (Treas. Reg.), in effect at all relevant times, and Rule references are to the Tax Court Rules of Practice and Procedure.
The Petition herein was filed with the Court on January 4, 2021, which date is 102 days after the date of the notice of deficiency for tax years 2016 and 2017 mailed to petitioner. The Petition had been received by the Court in an envelope that bears postage purchased and printed from "Stamps Endicia" dated December 25, 2020, which date is 92 days after the date of the notice of deficiency. The label further indicated that the postage supplied was for USPS Priority Mail 2-Day service and a USPS tracking number was provided.
This Court is a court of limited jurisdiction. It may therefore exercise jurisdiction only to the extent expressly provided by statute. Breman v. Commissioner, 66 T.C. 61, 66 (1976). In a case seeking the redetermination of a deficiency, the jurisdiction of the Court depends, in part, on the timely filing of a petition by the taxpayer. Rule 13(c); Organic Cannabis Found., LLC v. Commissioner, 962 F.3d 1082, 1092 (9th Cir. 2020); Hallmark Rsch. Collective v. Commissioner, 159 T.C. 126, 130 n.4 (2022) (collecting cases); Brown v. Commissioner, 78 T.C. 215, 220 (1982). In this regard, section 6213(a) provides that the petition must be filed with the Court within 90 days, or 150 days if the notice is addressed to a person outside the United States, after the notice of deficiency is mailed (not counting Saturday, Sunday, or a legal holiday in the District of Columbia as the last day). The Court has no authority to extend this 90-day (or 150-day) period. Hallmark Rsch. Collective, 159 T.C. at 166-67; Joannou v. Commissioner, 33 T.C. 868, 869 (1960). However, a petition shall be treated as timely filed if it is filed on or before the last date specified in such notice for the filing of a Tax Court petition, a provision which becomes relevant where that date is later than the date computed with reference to the mailing date. § 6213(a). Likewise, if the conditions of section 7502, I.R.C., are satisfied, a petition which is timely mailed may be treated as having been timely filed.
A petition is ordinarily "filed" when it is received by the Tax Court in Washington, D.C. See, e.g., Leventis v. Commissioner, 49 T.C. 353, 354 (1968). Although the Court may sit at any place within the United States, its principal office, its mailing address, and its Clerk's office are in the District of Columbia. § 7445; Rule 10. And a document that is electronically filed with the Court is filed when it is received by the Court as determined in reference to where the Court is located. Nutt v. Commissioner, No. 15959-22, 160 T.C. (May 2, 2023).
In the present case, the time for filing a petition with this Court expired on December 23, 2020. However, the Petition was not filed within that period.
Petitioner was served with a copy of respondent's Motion to Dismiss and, on May 27, 2021, filed an Objection, with attachments. Therein, petitioner took the position that the Petition was timely mailed. Specifically, the submission explained that petitioner's accountant had printed and mailed the Petition on December 22, 2020. The attachments included an affidavit from the accountant stating as follows:
Nicholas Coats signed the petition that was submitted to the tax court on December 21, 2020. The following day, December 22, 2020, I personally printed postage from stamps.com, the postage system we use within the office, and included tracking on the package. After printing postage on December 22, 2020, I personally walked the package on the same day to the Post Office located at 1350 S Five Mile Rd. Boise, ID 83709. This post office is adjacent to my office.
The package with tracking was dropped at the post office by me on December 22, 2020 with postage already affixed.
I am attaching an image from our stamps.com system showing the exact date the postage was created, at 8:35am on December 22, 2020, shortly before it was hand delivered to the post office.
As indicated, also attached was a printout of a receipt from the Stamps Endicia purchase dated December 22, 2020, showing the tracking number, addresses, and price paid.
Further Responses from respondent and petitioner were then filed on January 11, 2023, and April 6, 2023, respectively, reiterating the parties' positions.
Section 7502 governs the procedures under which a petition that is allegedly mailed on or before the expiration of the statutory filing period is treated as having been timely filed. The statute applies to documents sent by U.S. mail and to documents sent by private delivery services that have been explicitly designated by the Government for that purpose. § 7502(a), (f). As such, the relevant law places the burden and risk on the taxpayer to establish timely mailing for purposes of section 7502, not on the Commissioner to show untimeliness. See Treas. Reg. § 301.7502-1(c)(1)(iii)(A). In that connection, and to augment the express requirements given in the statute, regulations set forth a framework for evaluating particular mailing scenarios, as follows. First, assuming that a postage prepaid hurdle has been crossed, regulations provide that if an envelope bears a legible USPS postmark, that mark is considered conclusive absent proof of registered or certified mailing, or shipment by a designated private delivery service (PDS), on a contrary date, "regardless of when the document or payment is deposited in the mail". Treas. Reg. § 301.7502-1(c)(1)(iii), (2), (3).
The exception for registered or certified mail, or shipment by a designated PDS, is likewise further elucidated by regulations. As to certified or registered mail, the regulations specify that the date of registration of a document or the date "postmarked by the postal employee to whom the document . . . is presented" on the sender's certified mail receipt "is treated as the postmark date of the document" and will thus eliminate the risk of an untimely postmark on an envelope. Treas. Reg. § 301.7502-1(c)(2); see also Treas. Reg. § 301.7502-1(e)(2)(i). As to a designated PDS, the regulations and additional administrative guidance treat the date of delivery to the PDS, as recorded in the PDS's electronic database, as the equivalent to proof of registered or certified mailing. Treas. Reg. § 301.7502-1(c)(3), (e)(2)(ii); Notice 2016-30, 2016-18 I.R.B. 676.
Alternatively, in the absence of a legible USPS postmark or showing of delivery by a designated PDS, Treas. Reg. § 301.7502-1(c)(1)(iii)(B)(1) provides that if a document in a mailing envelope bearing a timely, legible postmark made other than by the USPS is received not later than the time when a document so mailed and so postmarked by the USPS would ordinarily be received, the document is considered timely mailed. If the envelope bears a timely non-USPS postmark but is received after the time when a document so mailed and so postmarked by the USPS would ordinarily be received, Treas. Reg. § 301.7502-1(c)(1)(iii)(B)(2) specifies that the document is treated as having been received at the time when a document so mailed and so postmarked would ordinarily be received if the person required to file the document establishes: (1) That the document was actually deposited in the U.S. Mail before the last collection of mail from the place of deposit on or before the last date prescribed for filing; (2) that the delay in receiving the document was due to a delay in transmission of the U.S. Mail; and (3) the cause of the delay. In the case of both a USPS postmark and a non-USPS postmark, the USPS postmark controls, and the other is disregarded. Treas. Reg § 301.7502-1(c)(1)(iii)(B)(3).
Where there is no legible postmark of any kind, no sending by registered or certified mail, and no delivery by a designated PDS, section 7502 affords no explicit protection.
Here, none of the provisions of section 7502 are applicable to help in petitioner's situation. The envelope in which the Petition was received bears only the Stamps Endicia postage dated December 25, 2020. Conversely, there is no U.S. Postal Service postmark, no indication or claim that the Petition was sent by registered or certified mail, and no suggestion that a PDS was used. Precedent has established that postage from Stamps.com and similar services is treated as a non-USPS postmark for purposes of the regulations under section 7502. Tilden v. Commissioner, 846 F.3d 882 (7th Cir. 2017), rev'g and remanding T.C. Memo. 2015-188; Pearson v. Commissioner, 149 T.C. 424 (2017). As such, this Court expressly addressed use of Stamps.com postage in the context of section 7502 in Pearson v. Commissioner, 149 T.C. at 434, ruling as a foundational premise that "a Stamps.com postage label, like the output of a private postage meter, constitutes a 'postmark[] not made by the United States Postal Service.' Sec. 7502(b)." Timeliness must therefore be determined under Treas. Reg. § 301.7502-1(c)(1)(iii)(B)(1) or (2). See Pearson v. Commissioner, 149 T.C. at 434.
In the instant case, the non-USPS postmark displayed on the envelope in question reads December 25, 2020. Hence, petitioner fails even the first prerequisite to fall within the safe harbor provided by Treas. Reg. § 301.7502-1(c)(1)(iii)(B)(1) or (2). The non-USPS postmark is not timely, instead being two days late. Nonetheless, petitioner seems to argue that the timely December 22, 2020, date on the Stamps Endicia receipt should be treated as a postmark made by other than the USPS and that the late December 25, 2020, date on the envelope itself should be somehow ignored. The gaps in logic and applicability of such an approach, however, are a bridge too far.
Hence, while the Court is sympathetic to petitioner's situation and understands the unintentional character of the predicament here, as well as the challenges of the circumstances faced and the good faith efforts made, the fundamental nature of the filing deadline precludes the case from going forward. As a Court of limited jurisdiction, the Court is unable to offer any remedy or assistance when a petition is filed late. Rather, the Court is barred from considering in any way petitioner's case or the correctness of petitioner's claims. Unfortunately, governing law recognizes no reasonable cause or other applicable exception to the statutory deadline, and the fact that the envelope bears a postmark made by other than the USPS that is beyond the deadline for filing a petition takes petitioner out of any potential safe harbor available under section 7502.
The Court has no authority to extend that period provided by law for filing a petition "whatever the equities of a particular case may be and regardless of the cause for its not being filed within the required period." Axe v. Commissioner, 58 T.C. 256, 259 (1972). Accordingly, since petitioner has failed to establish that the Petition was mailed to or filed with this Court within the required 90-day period, this case must be dismissed for lack of jurisdiction. The Court would, however, encourage petitioner to consider or continue working administratively through the Internal Revenue Service (IRS), which, being entirely separate from the Tax Court, may be able to offer alternative avenues for relief, not dependent on the existence of a Tax Court case, such as audit reconsideration or a refund action.
The premises considered, it is
ORDERED that respondent's Motion To Dismiss for Lack of Jurisdiction is granted, and this case is dismissed for lack of jurisdiction.