The closing of the Tax Court clerk’s office has sparked concerns that taxpayers who try to file petitions could run into trouble if they aren’t aware of the rules on timely filing when the office is inaccessible.
In a March 18 release announcing its building is closed until further notice, the court said that mail will be held for delivery until the court reopens and that petitions and other documents may not be hand delivered.
While the building is closed and some services are scaled back because of the coronavirus pandemic, a spokesperson told Tax Notes that the court will still issue opinions.
The March 18 release said taxpayers may comply with statutory deadlines for filing petitions or notices of appeal by timely mailing a petition or notice of appeal to the court. “Timeliness of mailing of the petition or notice of appeal is determined by the United States Postal Service’s postmark or the delivery certificate of a designated private delivery service,” it added.
As it did when the court closed in late December 2018 because of a government shutdown, the court added a note to the top of its home page that read: “If a document mailed or sent (i.e., through the United States Postal Service or a designated delivery service) to the Court is returned to you, the party that mailed or sent the document should remail or resend it to the Court with a copy of the envelope or container in which it was first mailed or sent. Please retain a copy of the document and the envelope for your records.”
The language is referring to the section 7502 “timely mailed, timely filed” rule, which provides that a document will be deemed to have been filed on the date of the postmark stamped on the envelope.
For taxpayers whose attempts to mail their petition fail because the court is closed and the envelope is returned to them, the “timely mailed, timely filed” rule could help defeat an IRS argument that a petition wasn’t timely filed. However, the rule will only help taxpayers who know that they must save the envelope and send a copy of it as proof of timely filing when they remail the petition, said Carlton Smith, former director of the tax clinic at the Benjamin N. Cardozo School of law.
Smith said taxpayers could argue that deadlines for filing petitions are now extended to the date the clerk’s office reopens. They could cite to Guralnik v. Commissioner, 146 T.C. 230 (2016), which held that when the clerk’s office was closed because of a snowstorm, the last date to file a petition was moved to the first accessible day that wasn’t a Saturday, Sunday, or legal holiday.
Guralnik Not So Clear?
However, Smith said he was puzzled by a recent Tax Court order interpreting the application of Guralnik to the 2018-2019 government shutdown.
In McClain v. Commissioner (Dkt. No. 2699-19S), a taxpayer’s statutory deadline for filing a petition was January 7, 2019, which was when the court was closed because of the shutdown. The taxpayer tried to mail his petition on January 8 and again on January 15, but the package was returned to him both times. Four days after the court reopened on January 28, 2019, the taxpayer mailed the petition and included copies of the envelopes evidencing his earlier attempts.
In a March 17 order, Special Trial Judge Diana L. Leyden held that the petition wasn’t timely filed. Leyden said that under Guralnik, the first accessible day for filing purposes was January 28, 2019, the day the court reopened. Noting that the envelope received by the clerk’s office bore a postmark of February 1, 2019, Leyden said the petition was filed too late.
Smith said he interprets Guralnik as saying the last date to mail or file in person gets extended when the clerk's office is closed, so he would have concluded that McClain’s first attempt to mail his petition (on January 8, 2019) was actually timely.
Smith noted that Leyden didn’t mention the notice posted on the court’s website during the shutdown that advised taxpayers whose mail was returned to save the envelope and send a copy of it when remailing the petition.
A day after the McClain order was issued, Tax Court Judge Albert G. Lauber issued a memorandum opinion in a separate case that dealt with a petition mailed when the court was closed because of the shutdown. In McNamee v. Commissioner, T.C. Memo. 2020-37 (2020), the taxpayer tried to mail his petition on December 28, 2018, a few days before the statutory deadline expired.
The envelope was returned to the taxpayer. He then mailed it again several days after the court reopened and included a copy of the envelope. In his March 18 memorandum opinion, Lauber noted that the message on the court’s website had instructed taxpayers to save envelopes and containers if they were returned to them. Because the envelope McNamee saved from his first attempt showed a postmark of December 28, 2018 — which was three days before the deadline expired — Lauber held that the petition wasn’t late under the “timely mailed, timely filed” rule.
According to Smith, the only difference between McClain and McNamee was that McClain’s first attempt occurred one day after the statutory deadline had expired, while McNamee’s attempt was before the deadline.
“But still, McClain first sent the petition while the clerk's office was closed, so arguably, that should be enough under Guralnik and the website’s instructions,” Smith said.