A taxpayer whose lawyer used print-at-home postage when mailing a Tax Court petition timely filed that petition, the Seventh Circuit Court of Appeals held, reversing and remanding the case to the Tax Court for consideration on the merits (Tilden, No. 15-3838 (7th Cir. 1/13/17), rev’g and remanding T.C. Memo. 2015-188).
Robert H. Tilden received deficiency notices from the IRS for his 2005, 2010, 2011, and 2012 tax years. The last day to file petitions challenging the deficiencies was April 21, 2015. Tilden’s legal counsel waited until the last day, April 21, and filed the petitions using a “print-at-home” postage service purchased from Stamps.com. The postage included a certified delivery supplement. The label bore a mark of April 21, and an employee at the legal counsel’s law firm stated that she delivered the petitions to the Salt Lake City post office on that date.
Nonetheless, the post office tracking system did not enter them into its certified mail tracking system until April 23; the Tax Court received the petitions on April 29. The Tax Court treated the date the petitions were entered in the post office’s tracking system as the filing date and, because they were two days late, dismissed Tilden’s petitions.
When Tilden sought reconsideration by the Tax Court, the IRS now agreed that he had met the timely filing requirements, but the Tax Court refused to allow the IRS to change its position, arguing that the filing deadline was jurisdictional and could not be waived by the parties’ agreement. In Tilden’s appeal, the Seventh Circuit considered whether the parties could agree about the filing deadlines. It decided that although the parties cannot stipulate to jurisdiction, they can agree on facts that determine jurisdiction, which is what the IRS was doing here. It cited as an example a case in which the federal court’s jurisdiction is based on the diversity statute and the parties stipulate that one party is from Illinois and the other from Delaware.
Because the parties agreed that the envelope had been delivered to the post office on April 21 and the IRS conceded that certified mail can take eight days to reach the Tax Court when mailed from Utah, the court held that the petition had been timely filed.
In the conclusion to its opinion, the appeals court criticized Tilden’s legal counsel for waiting until the last possible day to mail the petitions and for failing to get a hand-stamp from the post office as proof of mailing or to use a certified private delivery service.
—Sally P. Schreiber (Sally.Schreiber@aicpa-cima.com) is a Tax Adviser senior editor.