T.C. Memo. 1997-376
UNITED STATES TAX COURT
HANNA AND ASSOCIATES, P.C.,
F.K.A. MARK J. HANNA, P.C., Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 9716-96. Filed August 18, 1997.
Charles F. Daily, Jr., for petitioner.
Steven B. Bass, for respondent.
MEMORANDUM OPINION
WHALEN, Judge: This case is before the Court to
decide respondent's Motion To Dismiss For Lack Of
Jurisdiction. The issue for decision is whether petitioner
filed its petition within the time prescribed by section
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6213(a). Unless stated otherwise, all section references
are to the Internal Revenue Code.
Background
Petitioner is a corporation. At the time the instant
petition was filed, petitioner's principal place of
business was in Austin, Texas.
Respondent issued a notice of deficiency determining a
deficiency of $19,131 in petitioner's 1992 income tax, and
an accuracy-related penalty pursuant to section 6662(a) of
$3,826.
Respondent sent the notice of deficiency by certified
mail to petitioner's last known address on February 8,
1996. The 90-day period under section 6213(a) for timely
filing a petition for redetermination in this Court expired
on May 8, 1996.
After the notice of deficiency was mailed to
petitioner, its president, Mr. Mark J. Hanna, conferred
with its attorney, Charles F. Daily, Jr., about filing a
petition for redetermination with this Court and about the
substance of the petition. Mr. Hanna was aware that the
deadline for filing such a petition was May 8, 1996, and
he met with Mr. Daily on May 7, 1996, to finalize the
preparation of a petition for redetermination.
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At that time, petitioner employed Ms. Denese D.
Lindsay-Mosley as a legal assistant and office manager.
Ms. Mosley had worked for petitioner in that capacity
for approximately 6½ years. She was responsible for
petitioner's outgoing mail and was the only person in
petitioner's office who regularly used petitioner's private
postage meter.
On May 7, 1996, Mr. Hanna instructed Ms. Mosley to
type and mail the instant petition. Ms. Mosley was aware
that the petition needed to be filed on or before May 8,
1996. Mr. Daily relied upon Ms. Mosley to type and mail
the instant petition because he did not employ his own
secretary. After the close of business on May 7, 1996,
Ms. Mosley planned to be away from the office for
approximately 3 weeks to marry and go on a honeymoon.
During Ms. Mosley's absence from the office, from May 9,
1996, through May 24, 1996, petitioner employed a temporary
secretary, Ms. Laura Sanders.
The instant petition was received by the Court, and
was filed, on May 20, 1996, 102 days after the mailing of
the notice of deficiency. It was received in an envelope
postmarked "May 7, 1996" from Austin, Texas. The postmark
was made by a private postage meter bearing the number
5048754, and not by the U.S. Postal Service. The petition
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is dated May 7, 1996, and is signed by petitioner's
attorney. The envelope in which the petition was received
by the Court is not torn or damaged, and there are no
markings indicating that additional postage was due or that
the normal delivery of the envelope was delayed. The
parties agree that the normal delivery time for a properly
addressed envelope sent from Austin, Texas, to Washington,
D.C., is 3 days.
On May 7, 1996, the mailboxes in petitioner's building
were located in the basement. Sometime thereafter, the
mailboxes were moved to a location down the hall from
petitioner's office. While it is unclear from the record
exactly when that move occurred, it is clear that the move
had taken place by July 11, 1996, the date on which
petitioner filed Petitioner's Response To Respondent's
Motion To Dismiss, and the date of Ms. Mosley's affidavit
attached thereto (Ms. Mosley's affidavit).
Over the years, petitioner has had several different
postal meters, and each meter has had a different serial
number. On May 7, 1996, petitioner was using a postal
meter with the number 5048754. Sometime after May 28,
1996, the date Ms. Mosley returned from her vacation, a
Pitney Bowes representative replaced petitioner's postal
meter with one bearing the number 5037718.
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On or about July 6, 1996, Mr. Hanna wrote the
following letter to Mr. Steve Hanson, the mailing requests
clerk at the main U.S. Post Office in Austin, Texas,
inquiring whether petitioner's office had ever been
notified about sending "'stale date' mailings":
Dear Mr. Hanson:
If you will check your Austin Post Office
computer record of notices sent relating to
"stale date" mailings and certify that neither
Mark J. Hanna, P.C. nor Hanna & Associates, P.C.
have ever been mailed such a notice, I would
appreciate it. Our Pitney-Bowes meter number
is 5037718.
Sincerely,
Mark J. Hanna
In response, Mr. Hanson provided the following information:
Post office personnel scan all metered mail which
is collected in this fashion. Most such mail
does not separately receive a postmark in our
cancelling facility. However, when scanners
detect metered mail which does not bear the
current date on its meter, it is pulled and run
through a cancelling machine to receive a cancel
bearing the current date over its 'stale' meter
date. If either a significant amount of stale
date metered mail or any mail bearing a meter
date several days old is detected, the sender may
be contacted and asked to redate all such mail
before it is remailed.
* * * * * * *
Upon the written request of Mr. Mark J. Hanna,
who has held a Pitney Bowes postage meter number
5037718 and has sent mail labeled either Mark J.
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Hanna, P.C. or Hanna and Associates, P.C. since
1990, I checked our computer and learned that no
stale date notices have been recorded on that
account.
Discussion
The issue for decision is whether the instant petition
was filed with the Court within 90 days after the notice of
deficiency was mailed to petitioner, as required by section
6213(a). The petition was received by the Court on May 20,
1996, 102 days after the mailing of the notice of
deficiency. The envelope in which the petition was
received bears the postmark May 7, 1996, 89 days after the
notice of deficiency was mailed to petitioner. The Court
must decide whether the petition shall be deemed to be
filed on the date of the postmark on the envelope, as
permitted in certain circumstances by section 7502. The
postmark on the envelope was not made by the U.S. Postal
Service. It was made by petitioner's private postage
meter.
If section 7502 applies, a document that is timely
mailed is treated as timely filed. In order for section
7502 to apply, the document must be mailed in accordance
with certain requirements set forth in the statute and
regulations. See sec. 7502(a)(2), (b); sec. 301.7502-1(c),
Proced. & Admin. Regs. For example, the document must be
contained in a properly addressed envelope, with sufficient
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postage prepaid. See sec. 301.7502-1(c)(1), Proced. &
Admin. Regs. There are additional rules regarding the
postmark on the envelope. Sec. 301.7502-1(c)(1)(iii). In
the case of a postmark made other than by the U.S. Postal
Service, section 301.7502-1(c)(1)(iii)(b), Proced. & Admin.
Regs., sets forth the following rules:
(b) If the postmark on the envelope or wrapper
is made other than by the United States Post
Office, (1) the postmark so made must bear a
date on or before the last date, or the last
day of the period, prescribed for filing the
document, and (2) the document must be received
by the agency, officer, or office with which it
is required to be filed not later than the time
when a document contained in an envelope or other
appropriate wrapper which is properly addressed
and mailed and sent by the same class of mail
would ordinarily be received if it were post-
marked at the same point of origin by the United
States Post Office on the last date, or the last
day of the period prescribed for filing the
document. However, in case the document is
received after the time when a document so
mailed and so postmarked by the United States
Post Office would ordinarily be received, such
document will be treated as having been received
at the time when a document so mailed and so
postmarked would ordinarily be received, if the
person who is required to file the document
establishes (i) that it was actually deposited in
the mail before the last collection of the mail
from the place of deposit which was postmarked
(except for the metered mail) by the United
States Post Office on or before the last date,
or the last day of the period, prescribed for
filing the document, (ii) that the delay in
receiving the document was due to a delay in the
transmission of the mail, and (iii) the cause of
such delay.
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As mentioned above, the instant petition was received
by the Court on May 20, 1996, 13 days after petitioner
alleges that it was mailed. The parties agree that the
ordinary delivery time for a properly addressed envelope
sent from Austin, Texas, to Washington, D.C., is 3 days.
Accordingly, the petition was not received by the Court
within the ordinary delivery time for mail sent from
Austin, Texas, to Washington, D.C. Therefore, under
section 301.7502-1(c)(1)(iii)(b), Proced. & Admin. Regs.,
quoted above, the petition will not be deemed filed on the
postmark date, May 7, 1996, unless petitioner establishes:
(1) That the petition was actually deposited in the mail
before the last collection of the mail on May 8, 1996,
the last day for filing the petition; (2) that the delay
in receiving the petition was due to a delay in the trans-
mission of the mail; and (3) the cause of the delay. Sec.
301.7502-1(c)(1)(iii)(b), Proced. & Admin. Regs.; see
Gomez v. Commissioner, T.C. Memo. 1996-561; Little v.
Commissioner, T.C. Memo. 1995-491.
We find that petitioner has failed to satisfy each
of the three conditions of section 301.7502-1(c)(1)(iii)
(b), Proced. & Admin. Regs. Petitioner has introduced no
evidence to show that the delay in receiving the petition
was due to a delay in the transmission of the mail, the
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second condition, or to show the cause of the delay, the
third condition. See Beacham v. Commissioner, T.C. Memo.
1996-226; Gomez v. Commissioner, supra. We note that the
complete failure of proof on petitioner's part in regard
to the delay in the transmission of the mail makes this
case readily distinguishable on its facts from Rotenberry
v. Commissioner, 847 F.2d 229 (5th Cir. 1988), revg. and
remanding an unreported order of this Court, where the
Commissioner conceded that the delay in delivering the
taxpayer's petition to the Tax Court was occasioned by a
delay in the transmission of the mail, and the Court of
Appeals accepted the taxpayer's explanation of the cause
of that delay. At the hearing on respondent's motion,
petitioner's attorney conceded that petitioner did not have
proof regarding these conditions of the regulations. The
following discussion took place at the hearing:
THE COURT: Let me just ask you a question,
Mr. Daily. In your opening are you
conceding that Petitioner cannot make
the proof called for in regulation
Section 301.7502-1(c)(iii)(b), in-
asmuch as you do not claim to have
proof to show that the delay in
receiving the document was due to
a delay in the transmission of the
mail?
And that the cause of -- and that
you have no proof to show the cause
of delay?
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MR. DAILY: That's correct, Your Honor. And
therefore, I would argue that that
Section does not apply to us because
of the interpretation of what
postmark of the United States Post
Office is.
Inasmuch as petitioner had no proof regarding
the second and third conditions of section 301.7502-
1(c)(iii)(b), Proced. & Admin. Regs., petitioner's attorney
argued "that the marking on our envelope should, in fact,
be considered a U.S. postmark because the U.S. Postal
Service so considers it and their operations manual and
the domestic mail manual are both consistent in that
application." We disagree. We find that the postmark on
the envelope in which the instant petition was mailed is a
postmark "not made by the United States Postal Service".
Thus, it is subject to section 7502(b) and the regulations
promulgated thereunder, quoted above. The burden placed on
taxpayers by those regulations may be a difficult one but
that, by itself, does not permit us to find that the
regulations are invalid, as suggested by petitioner. The
regulations were promulgated under the broad rule-making
authority given to the Commissioner by section 7502(b).
They have been held valid by this and other courts, and
nothing in petitioner's argument convinces us that the
regulations are unreasonable or plainly inconsistent with
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the statute. See Lindemood v. Commissioner, 566 F.2d 646,
649 (9th Cir. 1977), affg. per curiam T.C. Memo. 1975-195;
Fishman v. Commissioner, 51 T.C. 869, 872 (1969), affd. per
curiam 420 F.2d 491 (2d Cir. 1970).
Moreover, we find that petitioner has failed to prove
the first condition imposed by the regulations, that the
petition was deposited in the mail before the last
collection of the mail on May 8, 1996, the last day of
the period prescribed for filing. See sec. 301.7502-
1(c)(1)(iii)(b), Proced. & Admin. Regs. To prove this
condition of the regulations, petitioner relies entirely
upon the testimony of Ms. Mosley. At the hearing,
Ms. Mosley testified that she mailed the petition on
May 7, 1996, by depositing it in the mailboxes located
"in the basement of our building." However, Ms. Mosley's
affidavit states that she mailed the petition by depositing
it in a mailbox in our building "just down the hall from
our office." Ms. Mosley's affidavit states as follows:
There is a U.S. Post Office mail box in our
building just down the hall from our office.
After weighing the envelope containing the
required copies of the Tax Court petition, I
affixed the necessary metered postage and hand
carried this envelope and our other outgoing mail
to that box well before 5:00 p.m. (it has a 5:00
p.m. pickup daily) on May 7, 1996, just as I do
every day before I leave the office at 5:00 p.m.
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During the hearing, Ms. Mosley acknowledged this
discrepancy and attempted to explain it in the following
passage:
Q And your affidavit indicates that it was
prepared on the 7th and mailed on the 7th.
Your affidavit goes further on and says that
the mailing room, the mailing facilities in
this building is down the hall from your
office.
And you mailed this petition down the
hall. Is that what your petition says?
A No.
Q Or your affidavit?
A No. It did not say that I mailed it down
the hall. It said that there were mail
boxes in our building just down the hall.
Q Yes. And then you go on to say you mailed
this petition in those mail boxes.
A Correct.
Q Referring to the one down the hall?
A At the time I executed the affidavit they
were located down the hall.
Q Okay. And at the time that --
A At the time that they -- that I mailed it
they were downstairs in the basement.
Q So today your testimony would be where did
you mail this petition -- which Mr. Daily
didn't ask. But if I asked you, Where did
you mail this petition, it would be --
A In the basement of our building.
Q And that is different than the affidavit?
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A Well, not in my opinion, no.
Q But the affidavit indicates that you mailed
it in those mail boxes.
A Can you read that and show me that -- where
it says that?
* * * * * * *
Q What else does it say? As to where the
mailboxes are located?
A Okay. That's on page two. "There is a U.S.
Post Office mailbox in our building down the
hall from our office."
Q Uh-huh. Could you go on?
A "After weighing the envelope containing the
required copies of the Tax Court petition, I
fixed the necessary metered postage and hand
carried this envelope and our other outgoing
mail to that box well before 5:00 p.m."
Q "That box." Were you referring to the box
down the hall?
A I was referring to the box in our building
-- because the boxes were not down the hall
on May 7th.
In view of the above discrepancy in Ms. Mosley's statements
regarding where the mailboxes were located at the time she
allegedly deposited the envelope containing the petition in
the mail, we are not convinced that the petition was
deposited in the mail on or before May 8, 1996, as required
by section 301.7502-1(c)(1)(iii)(b), Proced. & Admin. Regs.
See Little v. Commissioner, T.C. Memo. 1995-491.
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Because petitioner has not established that section
7502 applies, we cannot find that the petition was filed
within the time required by section 6213(a) and, therefore,
we shall grant respondent's motion to dismiss for lack of
jurisdiction.
To reflect the foregoing,
An appropriate order will
be entered granting respondent's
motion to dismiss.