T.C. Memo. 2005-164
UNITED STATES TAX COURT
LEONARD AND L. MELNIK GROSSMAN, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 8662-04. Filed July 5, 2005.
On Jan. 5, 2004, R issued a notice of deficiency to
petitioners. The envelope containing Ps’ petition was
postmarked by a private postage meter with a date of March
30, 2004. The envelope was properly addressed, but it was
received by the Court after the 90-day period for filing
prescribed by sec. 6213(a), I.R.C. R moved to dismiss this
case for lack of jurisdiction on the ground that Ps’
petition for redetermination was not timely filed. Secs.
6213(a), 7502(a) and (b), I.R.C. Ps contend that their
petition was timely filed because it was mailed in
accordance with the timely-mailing/timely-filing rule in
sec. 7502, I.R.C., and the regulations prescribed
thereunder.
Ps further contend that because they satisfied the
requirements of sec. 7491(a), I.R.C., the burden of proof
shifts to R on the issue of whether Ps’ petition was timely
filed. R argues that the plain language of sec. 7491(a)(1),
I.R.C., indicates it is not applicable to the issue of
whether Ps’ petition was timely filed. R argues, in the
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alternative, that sec. 7491(a)(3), I.R.C., precludes the
application of sec. 7491(a)(1), I.R.C., to the issue of
whether Ps’ petition was timely filed because the
regulations are legislative regulations that were prescribed
by the Secretary pursuant to Congress’s grant of authority
in sec. 7502(b), I.R.C., and because the regulations
specifically place the burden of proof on Ps.
Held: R’s motion to dismiss for lack of jurisdiction
will be denied because the preponderance of the evidence
establishes that Ps’ petition was timely filed in accordance
with sec. 301.7502-1(c)(1)(iii)(B)(2), Proced. & Admin.
Regs. In addition, we need not decide whether sec. 7491(a),
I.R.C., is applicable to the jurisdictional issue because we
decide that on the preponderance of the evidence.
Melvyn Ward, for petitioners.
Patricia A. Riegger, for respondent.
MEMORANDUM FINDINGS OF FACT AND OPINION
GOEKE, Judge: This matter is before the Court on
respondent’s motion to dismiss for lack of jurisdiction.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
The stipulation of facts is incorporated herein by this
reference. Petitioners resided in Brooklyn, New York, when their
petition was filed.
On January 5, 2004, respondent determined by notice of
deficiency a deficiency in petitioners’ Federal income tax of
$34,125 and an accuracy-related penalty under section 6662(a)1 of
1
Unless otherwise indicated, all section references are to
the Internal Revenue Code as amended, and all Rule references are
(continued...)
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$6,825 for their 2001 tax year. Petitioners’ petition needed to
be filed with the Court by April 5, 2004, which was not a
Saturday, a Sunday, or a legal holiday in the District of
Columbia, for it to be timely filed pursuant to section 6213(a).
It was not received and filed by the Court until May 25, 2004;
thus, respondent moved to dismiss this case for lack of
jurisdiction pursuant to Rule 36(a).
Petitioners’ petition was sent in an envelope properly
addressed to this Court by certified mail, article No. 7194 9102
2970 0000 1909. Petitioners’ counsel received a return receipt
confirming that the petition was received by the Court on May 25,
2004. The envelope containing the petition received by the Court
(collectively termed, piece of mail at issue) did not bear a U.S.
Postal Service postmark or any other U.S. Postal Service mark.
Instead, the envelope bears a privately metered postmark dated
March 30, 2004.
Canceled Checks
The Court received eight canceled checks into evidence at
trial. Melvyn Ward, P.A., petitioners’ counsel, was the payor of
these checks. These checks were issued as follows:
1
(...continued)
to the Tax Court Rules of Practice and Procedure.
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Check No. Issuance Date Payee Amount
4367 3/26/2004 Brenda Bucco $488.67
4368 3/26/2004 Lisa M. Arcate 495.98
4369 3/26/2004 Lisa Perlman 643.96
4370 3/30/2004 United States Tax 60.00
Court
4371 4/1/2004 The Bureau of Fire 90.00
Prevention
4372 4/1/2004 Hazlet Township 50.00
4373 4/1/2004 Hazlet Township 25.00
4374 4/1/2004 Hazlet Township 100.00
U.S. Postal Written Correspondences
On June 9, 2004, the Consumer Affairs & Claims, Central New
Jersey Performance Cluster of the U.S. Postal Service, sent a
letter to petitioners’ counsel regarding the piece of mail at
issue, certified mail article No. 7194 9102 2970 0000 1909. The
relevant portion of this letter states:
Our records indicate that item number 7194 9102 2970
0000 1909 was delivered on May 25, 2004 to the Tax
Court and signed for by “K. Mitchell”. The item went
to Clarksburg, New Jersey and was scanned incorrectly
as delivered there, but was then sent on to Washington,
DC for delivery. All mail for any government office in
Washington, DC is still being irradiated due to the
anthrax ordeal from a few years ago.
On August 26, 2004, the manager of the Consumer Affairs &
Claims, Central New Jersey Performance Cluster of the U.S. Postal
Service, sent a letter to chief counsel of the Internal Revenue
Service. The relevant portions of this letter state:
On June 9, 2004, my office responded to a letter from
Mr. Melvin Ward regarding the disposition of a
certified mailpiece addressed to the Tax Court in
Washington, DC 20217. I am sorry to learn that the Tax
Court is not accepting Mr. Ward’s mailpiece because of
a missed closing date. Our records indicated that the
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certified mailpiece was delivered May 25, 2004 to the
Tax Court and signed for by “K. Mitchell.” Our records
also indicated an intermittent scan in Clarksburg New
Jersey on May 13, 2004.
The Clarksburg scan appears to have been in error and
should have been scanned missent. * * * Since our
record show no acceptance scan for the mailpiece, we
can only presume the letter did not enter the mails
prior to May 12, 200[4] if it had been mailed from Zip
Code 07730. * * *
If the item had been mailed on March 30, 2004 according
to information supplied by Mr. Ward, a Postal employee
would have date stamped the receipt. The verification
and date stamp by the Postal employee would also have
been done [on] a customer’s “Firm Sheet” that lists
multiple items. Mr. Ward was unable or did not supply
a dated receipt (or Firm Sheet) that indicated the date
the mailpiece was accepted by a Postal employee to be
deposited into the mails. * * *
Irradiation of Mail
In the June 9, 2004, letter to petitioners’ counsel, the
U.S. Postal Service indicated, among other things, that all mail
addressed to any Government office in Washington, D.C., continues
to be subjected to irradiation to eliminate any anthrax spores.
OPINION
This Court has limited jurisdiction. This Court’s
jurisdiction to redetermine a deficiency depends on the issuance
of a valid notice of deficiency and a timely filed petition.
Rule 13(a), (c); Levitt v. Commissioner, 97 T.C. 437, 441 (1991).
Section 6213(a) provides that a petition for redetermination of a
deficiency determined by respondent is timely filed if it is
filed within 90 days, or 150 days if the notice is mailed to a
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taxpayer outside the United States, after a notice of deficiency
is mailed. Here, petitioners’ petition was received by the Court
on May 25, 2004. Because the notice of deficiency was not
addressed to persons outside of the United States, petitioners’
petition was filed well after the 90-day period provided in
section 6213(a), which had expired on April 5, 2004.
Nevertheless, a petition received and filed by the Court after
the expiration of the 90-day period may be deemed timely filed if
it was mailed in conformity with the precepts set forth in
section 7502 and the regulations promulgated thereunder.
Section 7502 and the regulations prescribed thereunder
contain the requirements for treating any document as timely
filed when it was timely mailed (the timely-mailing/timely-filing
rule). The general rule provides that the date of a U.S. Postal
Service postmark is deemed to be the delivery date. Sec.
7502(a). For this general rule to apply, however, a taxpayer
must have mailed the document at issue in a properly addressed
envelope, postage prepaid, and postmarked by the U.S. Postal
Service within the prescribed period or on or before the
prescribed date for the filing, including any extensions granted
for filing. See id.; sec. 301.7502-1(c)(1)(i), (ii), and (iii),
Proced. & Admin. Regs. In this case, the piece of mail at issue
bears a private postage meter stamp; thus, section 7502(a) is not
applicable.
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However, in a case such as this, the timely-mailing/timely-
filing rule may apply to a postmark not made by the U.S. Postal
Service to the extent provided by regulation. Sec. 7502(b).
Under section 301.7502-1(c)(1)(iii)(B)(1), Proced. & Admin.
Regs., the timely-mailing/timely-filing rule applies to non-U.S.
Postal Service postmarks if the following requirements are
satisfied:
(i) The postmark so made must bear a legible date
on or before the last date, or the last day of the
period, prescribed for filing the document or making
the payment; and
(ii) The document or payment 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 or payment contained in an envelope that is
properly addressed, mailed, and sent by the same class
of mail would ordinarily be received if it were
postmarked at the same point of origin by the U.S.
Postal Service on the last date, or the last day of the
period, prescribed for filing the document or making
the payment.
In this case, the postmark on the envelope containing
petitioners’ petition was within the prescribed filing period,
and also was mailed in a properly addressed envelope. At
respondent’s behest, Stanley Wong (Mr. Wong), a delivery and
retail analyst for the New York District of the U.S. Postal
Service, credibly testified that the service standard mailing
period from Hazlet, New Jersey, to Washington, D.C., is 2 days
(the 2-day standard) for a piece of first-class mail properly
addressed and postmarked by the U.S. Postal Service. The piece
of mail at issue here was not received by the Court until May 25,
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2004, well after the expiration of the 90-day period for filing
plus the 2-day standard for it to be considered timely mailed.
Even if we account for the estimated 4 days it takes to irradiate
an item of mail addressed to a Government office in Washington,
D.C., petitioners’ petition was still not received in a timely
fashion under this rule.2 Because petitioners’ petition was
received and filed outside the prescribed period, including the
standard delivery time, it will be deemed timely filed only if
the following requirements are established by petitioner:
(i) That it was actually deposited in the U.S.
mail before the last collection of mail from the place
of deposit that was postmarked (except for the metered
mail) by the U.S. Postal Service on or before the last
date, or the last day of the period, prescribed for
filing the document or making the payment;
(ii) That the delay in receiving the document or
payment was due to a delay in the transmission of the
U.S. mail; and
(iii) The cause of the delay.
Sec. 301.7502-1(c)(1)(iii)(B)(2), Proced. & Admin. Regs.
The validity of this regulation has been upheld. Lindemood
v. Commissioner, 566 F.2d 646, 649 (9th Cir. 1977), affg. T.C.
2
For the petition at issue to be timely filed under sec.
6213(a) it needed to be filed with the Court by Monday, Apr. 5,
2004. Accounting for the 2-day standard, had the piece of mail
at issue been mailed on Apr. 5, 2004, it would not have reached
this Court until Wednesday, Apr. 7, 2004. Accounting for the 4-
day period to irradiate the piece of mail at issue, it would not
have reached this Tax Court until Sunday, Apr. 11, 2004. Since
there is no mail delivered to the Court on weekends, the piece of
mail at issue would not have been received or filed by the Court
until Monday, Apr. 12, 2004.
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Memo. 1975-195; Fishman v. Commissioner, 51 T.C. 869, 872 (1969),
affd. per curiam 420 F.2d 491 (2d Cir. 1970).
Before we address whether the piece of mail at issue
satisfied the requirements of section 301.7502-
1(c)(1)(iii)(B)(2), Proced. & Admin. Regs., we are asked to
decide which party bears the burden of proof.
A. Burden of Proof
Generally, a taxpayer bears the burden of proving that this
Court has jurisdiction. See Patz Trust v. Commissioner, 69 T.C.
497, 503 (1977); Fehrs v. Commissioner, 65 T.C. 346, 348 (1975);
Wheeler's Peachtree Pharmacy, Inc. v. Commissioner, 35 T.C. 177,
180 (1960); Natl. Comm. To Secure Justice v. Commissioner, 27
T.C. 837 (1957).
Section 7491(a) shifts the burden of proof to the
Commissioner under certain circumstances. The parties dispute
whether section 7491(a)(1) applies to questions of jurisdiction.
Section 7491(a)(1) shifts the burden of proof to the Commissioner
if the taxpayer “introduces credible evidence with respect to any
factual issue relevant to ascertaining the liability of the
taxpayer for any tax imposed by subtitle A and B” in any court
proceeding. Subtitle A contains the Federal income tax, and
subtitle B contains the Federal gift and estate tax. The burden
shifts to the Commissioner under section 7491(a)(1) with respect
to an issue only if the taxpayer has complied with the
requirements imposed by the Internal Revenue Code (the Code) to
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substantiate any item, has maintained all records as required by
the Code and cooperated with reasonable requests made by
respondent for witnesses, information, documents, meetings, and
interviews, and meets the net worth limitation set forth in
section 7430(c)(4)(A)(ii) if the taxpayer is a partnership,
corporation, or trust. Sec. 7491(a)(2). Additionally, section
7491(a)(3) provides that section 7491(a)(1) does not apply to any
issue with respect to which the Code provides for a specific
burden of proof.
Petitioners’ position is that section 7491(a) is applicable
in deciding whether their petition was timely filed. Respondent
argues that section 7491(a) is not applicable to this issue
because whether petitioners’ petition was timely filed is not a
factual issue relevant to the ascertainment of petitioners’ tax
liability imposed by subtitle A or B. In the alternative,
respondent argues that because the regulations prescribed by the
Secretary pursuant to section 7502(b) are legislative
regulations, section 7491(a)(3) precludes the application of
section 7491(a). Because we decide the jurisdictional issue by
the preponderance of the evidence, we need not address the
application of section 7491(a) to the instant matter. Blodgett
v. Commissioner, 394 F.3d 1030, 1039 (8th Cir. 2005), affg. T.C.
Memo. 2003-212.
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B. Section 301.7502-1(c)(1)(iii)(B)(2), Proced. & Admin. Regs.
Analysis
Petitioners must establish that their petition was mailed in
compliance with three requirements for it to be deemed timely
filed under section 301.7502-1(c)(1)(iii)(B)(2), Proced. & Admin.
Regs. These requirements include: (1) The piece of mail at
issue was actually deposited in the U.S. mail in a timely
fashion; (2) the delay in receipt of the piece of mail at issue
was due to a delay in transmission; and (3) what caused the
delay. Id.
(1) Was Petitioners’ Petition Actually Deposited in the
U.S. Mail Before the Expiration of the 90-Day Period
Prescribed for Filing?
At trial, Brenda Bucco (Ms. Bucco) testified on petitioners’
behalf. Ms. Bucco is employed by petitioners’ counsel as an
office manager, a position she has held for 11 years. Ms. Bucco
testified that on March 29, 2004, she prepared petitioners’
petition to be mailed by placing it in a properly addressed
envelope, affixing the proper postage, and completing the
certified mail receipt. Ms. Bucco maintained a private postal
meter mailing log in the ordinary course of business that shows
March 29, 2004, as the date she prepared petitioners’ petition.
She further testified that on March 30, 2004, she personally
handed the piece of mail at issue to a U.S. Postal Service
employee who collected her employer’s mail from his office in
Hazlet, New Jersey.
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Respondent argues that Ms. Bucco’s testimony is not
credible. In support of his argument, respondent offered a copy
of Ms. Bucco’s affidavit, dated August 3, 2004, that was received
by the Court into evidence for impeachment purposes. This
affidavit indicates that Ms. Bucco mailed the piece of mail at
issue on March 29, 2004. However, Ms. Bucco’s August 3, 2004,
affidavit submitted to this Court, which was signed and
notarized, and her testimony both indicate that she mailed the
piece of mail at issue on March 30, 2004. Ms. Bucco testified
that in originally preparing her affidavit she failed to consider
that she would have given the piece of mail at issue to the
mailman the day after she prepared the petition for petitioners’
counsel’s signature. This failure apparently caused there to be
two versions of Ms. Bucco’s affidavit dated August 3, 2004.
However, given Ms. Bucco’s reasonable explanation, we do not find
this discrepancy significant enough to question Ms. Bucco’s
veracity. In all other respects, we find Ms. Bucco’s testimony
to be consistent and credible.
Petitioners’ position that their petition was timely mailed
is further supported by canceled check No. 4370, dated March 30,
2004, that named this Court as the payee. After considering Ms.
Bucco’s testimony and canceled check No. 4370, we hold that the
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piece of mail at issue was deposited in the U.S. mail on or
before the last day of the period prescribed for filing
petitioners’ petition.
(2) Was the Delay in Receiving Petitioners’ Petition
Due to a Delay in the Transmission of Mail?
The Court, at trial, received into evidence a letter from
the U.S. Postal Service dated August 26, 2004. The letter
indicates that from May 13 through May 25, 2004, the piece of
mail at issue was delayed due to the fault of the U.S. Postal
Service. Mr. Wong, an employee of the U.S. Postal Service,
interpreted the terms in this letter to mean that on May 13,
2004, the piece of mail at issue was incorrectly scanned as
delivered. He also testified that a piece of mail sent from
Hazlet, New Jersey, to Washington, D.C., usually does not go
through Clarksburg, New Jersey, where it was received and
incorrectly scanned as delivered. According to Mr. Wong, the
piece of mail at issue should have been scanned as missent. A
missent piece of mail is one that arrives at the wrong
destination. When a missent piece of mail is properly scanned as
missent, the post office that incorrectly received the piece of
mail is identified.
Respondent contends that the delay in the Court’s receipt of
the piece of mail containing petitioners’ petition was not the
result of a delay in the transmission of the mail. Specifically,
respondent points to the U.S. Postal Service letters dated June 9
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and August 26, 2004, in which the U.S. Postal Service accepted
responsibility for delaying the transmittal of the piece of mail
at issue from May 13, 2004, until it was delivered on May 25,
2004. Since May 13, 2004, was after the 90-day filing period had
expired, respondent reasons that petitioners have failed to show,
as required by section 301.7502-1(c)(1)(iii)(B)(2)(ii) and (iii),
Proced. & Admin. Regs., that the delay from April 5 until May 13,
2004, was caused by the U.S. Postal Service’s mistake. We
disagree with respondent’s analysis. In the August 26, 2004,
letter, the author stated: “we can only presume” (emphasis added)
that the envelope containing petitioners’ petition could not have
entered the U.S. mail system earlier than May 12, 2004. Mr. Wong
testified that this presumption was likely made on the basis of
the standard delivery time for a piece of mail sent from Hazlet,
New Jersey, to Clarksburg, New Jersey. A presumption is indeed
not a fact. Mr. Wong testified to the effect that on the basis
of the information available to the U.S. Postal Service it is
impossible to identify the actual mailing date of the piece of
mail in question. The author of the August 26, 2004, letter,
moreover, did not testify at trial, and we shall not speculate on
the basis of his presumption. Mr. Wong’s testimony, Ms. Bucco’s
testimony and affidavit submitted to the Court, and the letter
issued by the U.S. Postal Service taking partial responsibility
for missending and incorrect scanning, all lead us to conclude
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that petitioners’ petition was delayed because of errors made by
the U.S. Postal Service in the transmission of the mail.
(3) What Caused the Delay?
Mistakes occur and the delay at issue was the result of
such. The facts indicate that the U.S. Postal Service missent
the piece of mail at issue to Clarksburg, New Jersey, a location
this piece of mail should have never reached had it been handled
properly. There the U.S. Postal Service incorrectly scanned it
delivered, instead of scanning it missent. This may have
perpetuated the delay. A careful review of the envelope in which
petitioners’ petition was mailed supports a finding that it was
properly addressed to this Court in Washington, D.C. Given these
unique circumstances, together with all of the other evidence
presented, we find that petitioners have provided specific
evidence that the delay resulted from errors made by the U.S.
Postal Service.
(4) Conclusion
We hold that the preponderance of the evidence establishes
that petitioners have satisfied the timely-mailing/timely-filing
requirements set forth in section 301.7502-1(c)(1)(iii)(B)(2),
Proced. & Admin. Regs. Therefore, respondent’s motion to dismiss
for lack of jurisdiction will be denied.
An appropriate order
will be isued.