Sylvan v. Commissioner

65 T.C. 548, 1975 U.S. Tax Ct. LEXIS 11

• Court: United States Tax Court
• Decided: December 16, 1975
• Docket: Docket No. 3542-74
• Status: Published

Opinions

OPINION

Wilbur, Judge:

This matter is before us upon respondent’s motion to dismiss for lack of jurisdiction. Respondent determined a deficiency in income tax due from the petitioner for the taxable year 1971 in the amount of $22,755.10 and, under section 6653(a),¹ an addition to the tax in the amount of $1,137.75. Respondent mailed a statutory notice of deficiency to petitioner by certified mail on February 20,1974.

The period provided by section 6213(a)² for filing a petition with this Court expired on Tuesday, May 21, 1974, which was not a legal holiday in the District of Columbia.

The petition was mailed in Oklahoma City on May 20, 1974, by petitioner’s attorney in an envelope properly addressed with the proper postage affixed. Petitioner’s attorney received a certificate of mailing bearing an Oklahoma City, May 20, 1974, postmark affixed by postal meter, and another postmark affixed by the postal service also dated May 20, 1974. The certificate of mailing states that the postal service received one piece of ordinary mail from petitioner’s attorney addressed to the United States Tax Court, Washington, D.C.

The envelope containing the petition was received in the Tax Court mailroom May 22, 1974. The stamps were not canceled and the envelope was not postmarked. The envelope was then opened and the petition was stamped as follows:

Tax Court

Mail Room

1974 May 22 AM 8:55

In accordance with procedures that have been employed by this Court prior and subsequent to 1974, only documents delivered through the mail are received in the Court’s mailroom and stamped with this imprint.

Shortly thereafter, employees in the mailroom delivered the petition to the petition section and the following notation was imprinted by stamp on the petition:

Filed

1974 May 22 9:47

United States Tax Court

Respondent moved to dismiss the petition for lack of jurisdiction on the ground that the petition was not received or postmarked .on or before the 90th day and therefore was not timely filed.

A petition for redetermination of a deficiency must be filed with this Court within 90 days after the notice of deficiency is mailed to the taxpayer. Sec. 6213. Failure to file within the prescribed period requires that the petition be dismissed for lack of jurisdiction. Angelo Vitale, 59 T.C. 246 (1972); Estate of Frank Everest Moffat, 46 T.C. 499 (1966).

Filing is completed when the petition is received by the Court, unless the exception provided by section 7502 applies.³ Section 7502 provides that a petition received after the 90th day but mailed on or before the 90th day is deemed filed on the date of the postmark, if the postmark is timely.⁴

Respondent contends that since the envelope in which the petition was mailed bears no postmark, the timely mailing provisions of section 7502 are inapplicable, citing Jacob L. Rappaport, 55 T.C. 709 (1971), affd. per curiam in open court without opinion 456 F. 2d 1335 (2d Cir. 1972). In Rappaport, we found that the petition there considered was timely mailed, but nevertheless concluded that evidence of when a postmark would have been made was irrelevant, since the requirement of a postmark (whether legible or not) “is essential to obtaining the benefits of section 7502(a).”

We have no doubt whatsoever that the petition herein was timely mailed,and would have been timely postmarked but for an error on the part of the post office. We know for a fact the petition was mailed, because it arrived in our mail room via the mails. Since it was received early in the morning on the 91st day, we also know that the petition was mailed in time to have received a timely postmark in the normal course of business. It is impossible for an item to arrive via mail early in the morning on the same day it is mailed, as we noted under very similar circumstances in Alexander Molosh, 45 T.C. 320 (1965), sustaining this Court’s jurisdiction in the case of an illegible postmark. The only real distinction between Molosh and the instant case is that in Molosh the postmark was partially omitted, while in the instant case the postmark was entirely omitted.

In both cases we know that the item was mailed; in neither case is there a postmark indicating when it was mailed;⁵ and in both cases the time a postmark would have been made must be determined from evidence other than a postmark. Nevertheless, as Rappaport states: “If the requirement of a postmark is the sine qua non of timely filing, such evidence [as to when the envelope would have been postmarked] would be irrelevant.” (55 T.C. at 710). We believe this is an appropriate occasion to reexamine this basic premise of Rappaport.

Prior to the enactment of section 7502, timely filing depended on the vicissitudes of the mail, with the time of delivery varying as to the geographical area of mailing, the seasonal demands imposed on the post office, and the postal performance in the individual case presented. In order to. alleviate hardships resulting from delays in particular cases, a presumption of timely delivery was often employed.⁶

Congress enacted section 7502 to eliminate the inequities resulting from variations in postal performance when a document is timely mailed. Since the time of mailing was being substituted for the time of delivery. Congress logically made the date of the postmark determinative of the time of mailing. This precludes a taxpayer from introducing evidence of timely mailing conflicting with an untimely postmark, save in the sole case of registered mail where the date of registration is “deemed the postmark date.”⁷ Sec. 7502(c)(1)(B). See Boccuto v. Commissioner, 277 F. 2d 549 (3d Cir. 1960); Nathaniel A. Denman, 35 T.C. 1140 (1961).

Congress, in making the postmark irrebuttable evidence of timely mailing, focused on the normal situation involving a readable postmark, indicating the date when the document was mailed,⁸ There is nothing at all in the statute or legislative history indicating what Congress intended where the postmark is illegible; where there is no postmark because the petition was inserted in a new postal cover when the original cover was damaged; or where no postmark is affixed due to oversight or malfunction of a machine. Congress apparently did not consider these cases, and our task in these circumstances is to ask what Congress “would have intended on a point not presented to its mind, if the point had been present.”⁹

In answering this question, we have held that evidence is admissible to ascertain the date of mailing when the postmark is illegible (Alexander Molosh, 45 T.C. 320 (1965); see also Skolski v. Commissioner, 351 F.2d 485 (3d Cir. 1965)), and when the original cover is destroyed and the petition is rewrapped in an envelope with no postmark (Perry Segura & Associates, Inc., T.C. Memo. 1975-80). In both of these instances the time of mailing was not “indicated by the postmark” as contemplated by Congress.¹⁰ For the purpose Congress had in mind in referring to a postmark, a postmark was simply not available.

For purposes of interpreting the specific statute before us, these cases cannot fairly be distinguished from cases where the postal service inadvertently neglects to postmark a properly mailed item. It certainly makes no sense to continue to distinguish between part of a postmark consisting of an empty or obliterated circle (or part of a circle), and no postmark at all. In all of these cases, there simply is not a postmark that serves the purpose of the statute as contemplated by Congress.

In the case of illegible postmarks and damaged envelopes, we have properly concluded evidence as to timely mailing is admissible. We think the answer is the same where a postmark is entirely (rather than partially) omitted through oversight. To hold otherwise would make the important right to a prepayment hearing depend entirely on the form by which a postal omission is manifested.¹¹ And to hold that we hear a case when a wholly omitted postmark is attributable to mishandling — an error of commission — but dismiss the same case when the error is one of omission occurring at the time the postmark should have been affixed, is to make important rights depend on both the form and the time of the error. See Perry Segura & Associates, Inc., supra (involving a petition rewrapped by the postal office and also discussing the handling of instances involving dislodged stamps to which a postmark may have been affixed). As the Third Circuit said in permitting evidence as to timely mailing in the case of an illegible postmark: “To hold otherwise would be to narrow the scope of section 7502(a) to a fortuitous application wholly dependent upon the care with which postal employees affixed postmarks and thus unwarrantedly to defeat in part its remedial purposes.” (Skolski v. Commissioner, 351 F. 2d at 488.)

In enacting section 7502, Congress intended to eliminate the random distribution of hardships occasioned by variations in postal performance. Distinctions based on the formal manifestation of postal omissions reintroduced the random distribution of hardships occasioned by variations in postal performance, and are inconsistent with the congressional purpose underlying the statute.

Additionally, the same evidence will be relevant in cases involving postmarks entirely omitted as is relevant in cases where the postmark is partially omitted, where damaged mail is rewrapped, or where stamps are dislodged. As stated in Skolski:

Evidence as to the actual time of mailing, such as the taxpayers here offered, was clearly relevant to this inquiry and should have been considered by the Tax Court. For it may certainly be reasonably inferred from the practice required of postal employees by the Postal Manual that mail is postmarked on the day it is received by the postal authorities and that the postmark bears that date. [351 F.2d at 488; fn. ref. omitted.] [¹²]

In the instant case we need not hear additional evidence. The petition was received via the mails before 9 a.m. on the 91st day. It is clear that to arrive early on the 91st day, it must have been mailed, at the latest, early enough on the 90th day so that a timely postmark would normally have been affixed. We therefore conclude that the omitted postmark, if affixed, would have been timely. (See Alexander Molosh, 45 T.C. 320 (1965), holding in the case of a partially omitted postmark that a petition received on the 91st day must have been postmarked prior to the day received.)

In overruling Rappaport, we do not do so lightly. However, we noted in Rappaportth&t:

there may be some logical inconsistency between the rule applicable where there is no postmark at all and the rationale of the cases which permit a taxpayer, in the situation where there is an illegible postmark, to sustain his burden by submitting evidence of time of mailing to prove when the postmark was made. * * * [Jacob L. Rappaport, 55 T.C. at 711.]

Subsequent rulings undermine the Rappaport holding that a postmark is the sine qua non to invoking section 7502, while magnifying the logical inconsistency created by this narrow reading of the remedial provisions of section 7502.¹³ Rappaport must yield to the logic and experience of analogous cases (prior and subsequent) that provide an interpretation more in accord with the remedial purposes of section 7502 and the importance of a prepayment adjudication of an individual citizen’s tax controversy. As Justice Frankfurter stated:

We recognize that stare decisis embodies an important social policy. It represents an element of continuity in law, and is rooted in the psychologic need to satisfy reasonable expectations. But stare decisis is a principle of policy and not a mechanical formula of adherence to the latest decision, however recent and questionable, when such adherence involves collision with a prior doctrine more embracing in its scope, intrinsically sounder, and verified by experience. [Helvering v. Hallock, 309 U.S. 106, 119 (1940).]

An appropriate order will be entered.

Reviewed by the Court.

1 All references are to the Internal Revenue Code of 1954 unless otherwise indicated.

2 SEC. 6213. RESTRICTIONS APPLICABLE TO DEFICIENCIES; PETITION TO TAX COURT.

(a) Time for Filing Petition and Restriction on Assessment. — Within 90 days, or 150 days if the notice is addressed to a person outside the States of the Union and the District of Columbia, after the notice of deficiency authorized in section 6212 is mailed (not counting Saturday, Sunday, or a legal holiday in the District of Columbia as the last day), the taxpayer may file a petition with the Tax Court for a redetermination of the deficiency. * * *

3 This may be a case where, at least in practice, the “exception” is the general rule, since petitions are filed in Washington, D.C., and in the vast majority of cases delivery via the mails is the only practical means available. This may have been one reason why Congress applied sec. 7502 to the Tax Court. See Wells Marine, Inc. v. Renegotiation Board, 54 T.C. 1189, 1193 (1970).

4 SEC. 7502. TIMELY MAILING TREATED AS TIMELY PILING AND PAYING.

(a) General Rule.—

(1) Date OF delivery — If any return, claim, statement, or other document required to be filed, or any payment required to be made, within a prescribed period or on or before a prescribed date under authority of any provision of the internal revenue laws is, after such period or such date, delivered by United States mail to the agency, officer, or office with which such return, claim, statement, or other document is required to be filed, or to which such payment is required to be made, the date of the United States postmark stamped on the cover in which such return, claim, statement, or other document, or payment, is mailed shall be deemed to be the date of delivery or the date of payment, as the case may be.

(2) Mailing requirements. — This subsection shall apply only if—

(A) the postmark date falls within the prescribed period or on or before the prescribed date—

(i) for the filing (including any extension granted for such filing) of the return, claim, statement, or other document, or

(ii) for making the payment (including any extension granted for making such ' payment), and

(B) the return, claim, statement, or other document, or payment was, within the time prescribed in subparagraph (A), deposited in the mail in the United States in an envelope or other appropriate wrapper, postage prepaid, properly addressed to the agency, officer, or office with which the return, claim, statement, or other document is required to be filed, or to which such payment is required to be made.

5 The critical piece of information Congress intended the postmark to provide. See n. 8 infra.

6 See discussion in Wells Marine, Inc. v. Renegotiation Board, supra at 1192 n. 3. See also Rich v. Commissioner, 250 F. 2d 170 (5th Cir. 1957).

7 The statute authorizes the Secretary to provide by regulations the extent to which the rules applicable to registered mail also apply to certified mail. See sec. 301.7502-l(c)(2), exercising this authority. However, the certificate of mailing employed by petitioner in this case is not the same as certified mail. Certified mail provides a numbered receipt to the sender. The receipt bears the same number as the certified mail sticker attached to the article. Similarly, a numbered receipt is issued for registered mail. Certificates of mailing, on the other hand, are generally not numbered. Thus, a certificate of mailing while providing evidence of mailing, does not indicate that a particular item was mailed but only that an item was mailed to an addressee. See discussion of certified mail in Nathaniel A. Denman, 35 T.C. 1140, 1143 (1961). The regulations imply that these provisions were designed, at least in part, to overcome “the risk that the document will not be postmarked on Ü>e day that it is deposited in the mail” (sec. 301.7502-l(c)(2), Proced. & Admin. Regs., emphasis supplied), but not that no postmark at all would be affixed, or that the postmark would be partially omitted or unreadable. See Skolski v. Commissioner, 351 F.2d 485 (3d Cir. 1965).

8 The legislative history is sparse, but this point is made clear: “This new section applies in the case where documents (other than returns) are mailed to the proper office within the time prescribed by the internal-revenue laws, as indicated by the postmark on the envelope, and are received by that office after such time has expired. In such case, the document is deemed timely filed.” See H. Rept. No. 1337, 83d Cong., 2d Sess. A434 (1954); S. Rept. No. 1622,83d Cong., 2d Sess. 615 (1954). (Emphasis added.)

9 “The fact is that the difficulties of so-called interpretation arise when the Legislature has had no meaning at all; when the question which is raised on the statute never occurred to it; when what the judges have to do is, not to determine what the Legislature did mean on a point which was present to its mind, but to guess what it would have intended on a point not present to its mind, if the point had been present. If there are any lawyers among those who honor me with their attention, let them consider any dozen cases of the interpretation of statutes, as they have occurred consecutively in their reading or practice, and they will, I venture to say, find that in almost all of them it is probable, and that in most of them it is perfectly evident, that the makers of the statutes had no real intention, one way or another, on the point in question; that if they had, they would have made their meaning clear; and that when the judges are professing to declare what the Legislature meant, they are in truth, themselves legislating to fill up casus omissi. ’’Gray, The Nature and Sources of the Law 173 (Macmillan 1921). (Emphasis added.) See Cardozo, The Nature of the Judicial Process 14, 15 (Yale University Press 1921). See also Seaford Court Estates Ltd. v. Asher, [1949] 2 K.B. 481, 499, discussed in Henry McK. Haserot, 46 T.C. 864, 874 (1966) (Tannenwald, J., speaking separately).

10 H. Rept. No. 1337, supra. If there had been a postmark indicating the date of mailing the postmark itself would be conclusive and not subject to contradiction by evidence aliunde. Evidence aliunde is admissible only when there is nothing to contradict — no postmark within the statute.

11 This is an important right provided by Congress over one-half a century ago, and continually reaffirmed by Congress, most recently by providing in 1969 informal procedures for handling small claims. Those taxpayers are often unrepresented by counsel, will be unfamiliar with the jurisdictional significance of alternative procedures made available under sec. 7502, and will generally timely-deposit their informal petitions in the mail the way they do their income tax returns.

We have often said that we “should not adopt an interpretation which curtails [the right to a prepayment hearing] in the absence of a clear congressional intent io do so.” Samuel J. King, 51 T.C. 851, 855 (1969). (Emphasis added.) See also Irving Fishman, 51 T.C. 869, 874 (1969), affd. per curiam 420 F. 2d 491 (2d Cir. 1970); P. P. Leventis, Jr., 49 T.C. 353, 355 (1968). Certainly there is no “clear congressional intent” underlying this remedial statute that the inadvertent omission of a postmark due to circumstances wholly beyond the taxpayer’s control, will necessarily deprive the taxpayer of his day in this Court.

12 The Postal Service Manual, part 332 (Endorsing, Canceling, and Postmarking) currently states the following:

.33 SETTING DATE AND TIME INDICATOR

Use a.m. to designate hours of postmark from 12 a.m. until 12 noon and p.m. to designate hours of postmark from 12:01 p.m. to 12 midnight.

.34 POSTMARKING LATE MAIL

Mail deposited after the last dispatch but before the office closes must be postmarked the same day. For postmarking, office closing time means the time the last employee assigned to mail processing is scheduled to leave the office. Lobby notices showing mail closing and dispatch time must state that mail deposited in the lobby or in the collection box in front of the post office after the office closes will not be postmarked until the following morning. Include in the statement weekend and holiday exceptions.

The language of the Postal Manual relied on by Skolski was essentially the same. See 351 F. 2d 485,488 n. 4 (1965).

13 See Perry Segura & Associates, Inc., T.C. Memo. 1975-80, declining to follow Rappaport where the mailing cover was destroyed and a new cover provided by the post office in which the petition arrived late with no postmark. These rulings are not only in accord with the purpose underlying sec. 7502 and the cases involving illegible postmarks, but with the cases prior to Rappaport involving no postmark. Both Alexander Molosh, 45 T.C. 320 (1965), and C. Louis Wood, 41 T.C. 593 (1964), affd. 338 F.2d 602 (9th Cir. 1964), contemplated that under appropriate circumstances evidence that the envelope would have been timely postmarked would be admissible. And in Bloch v. Commissioner, 254 F.2d 277 (9th Cir. 1958), the court assumed and stated that this was the procedure to be followed:

“In Case No. 15,728 there is no postmark, so other evidence was resorted to in order to determine the date of mailing. The date of the covering letter and the statement of the case worker * * * were the evidence * * * that said petition was not filed in time. [Id. at 279; emphasis added.]”

Rich v. Commissioner, 250 F.2d 170 (5th Cir. 1957), involved a clearly legible, untimely postmark on the envelope that may not, of course, be contradicted save in the case of registered or certified mail.