Mailbox Rule Does Not Apply Where Taxpayer Cannot Prove Mailing

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Court Decisions

The First Circuit dismissed a suit for refund of Federal Insurance Contributions Act (FICA) taxes Maine Medical Center mistakenly paid for its medical residents in the 2001 tax year, upholding a lower court determination that Maine Medical’s discovery requests were not warranted and that the information it sought from the IRS would not have proved that Maine Medical’s refund claim, which the IRS said it never received, was timely (Maine Medical Center, No. 11-1426 (1st Cir. 3/30/12), aff’g 766 F. Supp. 2d 253 (D. Me. 2011)).

Maine Medical said it mailed its refund claim on April 15, 2005, and presented testimony about preparing the claim, but did not present evidence to prove that the claim was actually mailed on that date. Timely filing of a refund claim is a prerequisite to a tax refund suit. In pursuing its refund claim, Maine Medical issued discovery requests to the IRS, asking a number of questions, including requesting information about whether and how the IRS searched for its refund claim and the routine steps the IRS took to process FICA refund claims from similar institutions. The court held that the answers to these discovery requests would not establish that the claim had been timely filed.

In rejecting the request for discovery, the court noted that Maine Medical had not been diligent in preserving its rights because it had not attempted to obtain a duplicate receipt for certified mail (which could have been obtained from the post office within two years of mailing) or investigated why the IRS had not responded to its refund claim until just before it filed suit.

The common law mailbox rule would not prove Maine Medical’s request was timely because the rule does not apply unless a document has been mailed in sufficient time to be received by the due date in the ordinary course of post office business. Since Maine Medical asserted an April 15 mailing date, the refund claim could not have arrived in the IRS’s hands on April 15.

The statutory mailbox rule (Sec. 7502), under which timely mailing is treated as timely filing, did not apply because there was no evidence to prove timely mailing and no evidence of delivery (which is required under the rule). And the court noted that the “extrinsic evidence” doctrine that other circuits have adopted allowing other evidence besides a postmark to be offered to prove mailing would not help Maine Medical because its employees could not remember anything about filing the return, and it had not attempted to get a duplicate certified mail receipt.

The court recognized that the IRS could use the circumstances presented in this case to dispose of refund suits merely by claiming it had no record of receiving a tax document. Despite that possibility, taxpayers seeking jurisdictional discovery must prove due diligence. Where a taxpayer has not been diligent in preserving its claim and has presented no evidence of mailing or a postmark, the court found no error in denying this type of discovery.