When contemplating filing a petition for redetermination, the taxpayer must be sure to comply with certain procedural and jurisdictional requirements. If the taxpayer fails to do so, there is a risk that the deficiency litigation will be invalid.
90-Day Filing Period
The first step in a tax deficiency litigation is always the statutory notice of deficiency, which is mailed to the taxpayer by the IRS. When the taxpayer receives a statutory notice of deficiency, he or she has 90 days to file a petition for redetermination with the Tax Court. This requirement is proscribed by statute and without a proper filing within the correct length of time, the Tax Court cannot have jurisdiction over the taxpayer’s deficiency action. This is true even if the taxpayer proffers a legitimate and reasonable explanation for the delay in responding to the statutory notice of deficiency. Thus, if you receive a statutory notice of deficiency and intend to file a petition for redetermination in Tax Court, you must make sure to do so within 90 days of receipt of the statutory notice of deficiency. If you miss the deadline and the Tax Court is deprived of jurisdiction, the IRS can none the less assess and collect on the tax. At that point, your only option is to pay the tax and sue the IRS for a refund.
How is the 90-Day Filing Period Computed?
The 90-Day filing period following a statutory notice of deficiency does not seem confusing, but there are some subtleties that can impact how the filing period is calculated. Typically, the statutory period for filing a petition for redetermination begins as of the date of the mailing of the statutory notice of deficiency. However, sometimes the deficiency notice is actually dated after the date of mailing, and when that occurs, the Tax Court has held that the filing period begins as of the date of the notice itself.
The IRS bears the burden of proving the date of the mailing of the statutory notice of deficiency. The “mailing date” for these purposes is the actual date that the notice was mailed, not necessarily the date of the postmark. To establish evidence of the date and fact of mailing, the IRS can rely upon a properly completed United States Postal Service Form 3877. This form provides the IRS with a presumption of mailing on the date indicated by the form. Without the form, the presumption does not exist and the IRS must rely upon other evidence to establish the date and fact of mailing of the statutory notice of deficiency.
In computing the 90-day period, the first day to be counted is the day after the date of the mailing of the notice. After that, succeeding calendar days are to be counted, even if they include weekends and holidays, until the 90th day is reached. If the 90th day falls on a Saturday, Sunday, or legal holiday, the filing deadline is extended to the next day which is not a weekend or holiday.
What are the Timely-Mailed/Timely-Filed Rules that Apply to Deficiency Litigation?
As noted, the filing of a petition for redetermination must take place within 90 days of the mailing of the statutory notice of deficiency. In order to determine whether a filing took place within the required time period, the Tax Court looks to the timely-mailed/timely-filed provisions of IRC § 7502. Under these rules, a petition for redetermination received by the Tax Court after the 90-day deadline will be considered as timely if the official postmark notes that it was mailed on or before the filing deadline (1).
If the postmark is legible, extrinsic evidence will not be allowed to contradict the postmarked date on the mailing. Thus, if the postmark on the envelope or other wrapper containing the petition for redetermination does not fall within the statutory filing deadline, the filing is not timely even if it was mailed from a United States mailbox or U.S. Post Office. Where the postmark is illegible or missing, extrinsic evidence is admissible to prove the actual date of the mailing.
Benefits of Using Certified Mail to File Your Petition for Redetermination
In order to reduce the risks associated with filing a petition for redetermination within the statutory filing period, the taxpayer can use registered mail or certified mail. The use of registered mail establishes prima facie evidence of the document’s delivery, and the registration date is considered as the postmark date for these purposes. Moreover, registered mail is monitored as it passes through the U.S. postal service until its eventual delivery to the addressee. When certified mail is used, the postmark date of the sender’s receipt is treated as the postmark date of the document. Unlike registered mail, certified mail is not monitored as it passes through the U.S. postal system, but there is a record of sending and delivery.
How a Tax Attorney Can Help with Your Tax Litigation
If you are contemplating a deficiency litigation, then you must consult with an experienced tax attorney. San Diego Tax Attorney William D. Hartsock has been successfully helping clients with tax issues since the early 1980s. Mr. Hartsock offers free consultations with the full benefit and protections of attorney client privilege to help people clearly understand their situation and options based on the circumstances of their case. To schedule your free consultation simply fill out the contact form found on this page, or call (858) 481-4844.
Tax Law References:
- IRC § 7502.