Bloomberg Tax
Jan. 17, 2023, 9:45 AM

Mastering the Mailbox Rule So IRS Tax Forms Can Arrive on Time

Zachary M. Nolan
Zachary M. Nolan
Greenberg Glusker Fields Claman & Machtinger
Sally James
Sally James
Greenberg Glusker Fields Claman & Machtinger
Alexa Steinberg
Alexa Steinberg
Greenberg Glusker Fields Claman & Machtinger

It is not uncommon for tax practitioners to needlessly disagree on which delivery service should deliver a form to the IRS. This disagreement can arise in a variety of contexts, which include but are not limited to:

  • Timely filing of federal income tax returns, because the return needs to be delivered to the IRS by the required date or penalties and interest will start to accrue (Section 6501(a));
  • M&A situations when performing an F-reorganization pursuant to Rev. Rul. 2008-18, where the timing for filing a Qualified Subchapter S Subsidiary Election can be crucial for preserving the tax-free nature of the transaction (PLR 201724013);
  • Tax controversies in which filing a petition within the required 90-day period, after the day the notice of deficiency was mailed, to avoid having the tax automatically assessed (Section 6213(a)); and
  • Tax elections and accounting method changes, such as filing Form 3115 to change accounting methods, because if the election isn’t filed by the last day of the tax year of change, the election will not be effective (Reg. 1.446-1(e)(3)(i)).

Given the costly nature of a mistake in these contexts, individuals may get skittish when it comes to mailing tax documents. Practitioners and taxpayers generally fall into one of three camps when it comes to which delivery service is preferred: the US Postal Service; a private delivery service such as FedEx, UPS, or DHL; or no preference.

So, is the Postal Service better than a private delivery service in the eyes of Congress and, as a result, given preferential treatment? The answer may be more equitable than some would think.

Prior to the enactment of Section 7502(a) in 1954, forms needed to be physically delivered to the IRS to be considered timely filed. It’s sometimes referred to as the “mailbox rule,” meaning that forms mailed on or before the last day for filing, but physically received by the IRS after the last day for filing, will be deemed timely filed. Congress also enacted Section 7502(f), which treats certain private delivery services as equivalent to the Postal Service if the following requirements are met:

  • The delivery service is available to the general public;
  • It’s at least as timely and reliable on a regular basis as the Postal Service; and
  • It records electronically to its database (kept in the regular course of its business) or marks on the cover the date on which an item was given for delivery.

Rather than forcing taxpayers and tax practitioners to speculate which private delivery services would meet these ambiguous qualifications, the IRS published a list of designated private delivery services in Notice 2016-30, which considers the following as equivalent to the Postal Service:

First Overnight
Priority Overnight
Standard Overnight
2 Day
International Next Flight Out
International Priority
International First
International Economy

Next Day Air Early AM
Next Day Air
Next Day Air Saver
2nd Day Air
2nd Day Air AM
Worldwide Express Plus
Worldwide Express

Express 9:00
Express 10:30
Express 12:00
Express Worldwide
Express Envelope
Import Express 10:30
Import Express 12:00
Import Express Worldwide

Taxpayers should still exercise caution when using a designated private delivery service, since only certain services are able to invoke the mailbox rule. For example, if a taxpayer used FedEx Ground, it would not be eligible.

But what if the filing is lost in transit or never received by the IRS? Unfortunately, the burden of proof for the mailing date falls on the taxpayer if there was no physical delivery. However, Section 7502(c), known well by practitioners who prefer the Postal Service, holds that a form sent via Postal Service registered or certified mail will be prima facie evidence that the form was delivered to the IRS, and the date of filing will be the postmark date. The prima facie evidence rule applies to a designated private delivery service as well, as laid out in Reg. 301.7502-1(e)(2)(ii).

Proof of filing is the exclusive means to establish prima facie evidence of physical delivery, regardless of whether a taxpayer uses the Postal Service or a designated private delivery service. Extrinsic evidence cannot be used as prima facie evidence to prove that the form was timely filed. As discussed in PLR 201442015, even affidavits from an accounting or law firm will not be considered prima facie evidence that such form was delivered to the IRS.

It doesn’t matter if forms are mailed via Postal Service or a designated private delivery service, because both could qualify for benefits of the mailbox rule if the IRS physically received the form, and for prima facie evidence rules if the IRS never physically received the filing. As a policy matter, Congress wanted to assist taxpayers in getting forms filed and ease the administration burden of tax compliance, so Section 7502 was drafted in a way that treats the Postal Service and designated private delivery services equally.

For those practitioners who exclusively use the Postal Service, still make their clients run to the post office for their certified mail slip, or want to take photos of themselves putting the filings into the mail, we have great news—you can just use a designed private delivery service and normal document retention procedures, such as keeping a receipt of delivery and a PDF copy of the mailed forms.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.

Author Information

Zachary M. Nolan is a tax associate at Greenberg Glusker in Los Angeles who advises clients on a wide range of federal, state, and international tax issues pertaining to all stages of a company’s life, including entity selection and formation, financing, restructurings, mergers and acquisitions, cross-border planning, and tax-efficient dissolution.

Sally C. James is a corporate partner at Greenberg Glusker, primarily in the entertainment industry. She handles large film finance and M&A transactions for established Hollywood brands and negotiates deals for entertainment start-ups.

Alexa Steinberg is corporate counsel at the firm for middle-market companies and entrepreneurs. She represents privately held companies in general corporate and transactional matters and prepares and guides companies through mergers and acquisitions as well as financings.

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