Americans Overseas: Timely Filing of Tax Returns and Other Documents With the IRS

Quite often, US taxpayers living in a foreign country are faced with tight deadlines for filing their paper tax returns.  They are often confused as to how to send these physical documents to the Internal Revenue Service (IRS) and be considered to have sent them in a timely fashion when the foreign (i.e., non-US) post office may be unreliable at best.

I recently read the case of Baldwin v. United States  (9th Cir. 2019) and decided now is a good time to  review the rules for timely filing of returns, statements and the like with the IRS.  In Baldwin the taxpayers claimed to have timely filed their amended tax return via US mail, but the Ninth Circuit ruled that since  they could not show they complied with the relevant Treasury regulation promulgated Internal Revenue Code Section 7502 (to be discussed), their amended return was filed “late”.  As a result, the Ninth Circuit reversed the lower court decision and the Baldwins lost a $167,000 tax refund as well as a $25,000 award of legal fees.  OUCH!

“Mailbox Rule” Not Applicable

According to the Ninth Circuit, the Treasury Regulation is conclusive on whether a tax filing is “timely”.  A failure to meet the Regulation means the tax return is not mailed (therefore, filed) on time.

The Baldwin decision resolved a circuit split concerning use of the so-called common-law “mailbox rule.”  The common-law mailbox rule provides that proof of proper mailing—including by testimonial or circumstantial evidence—gives rise to a rebuttable presumption that the document was physically delivered to the addressee in the time such a mailing would ordinarily take to arrive.  The Baldwin’s had such testimonial evidence, but the Ninth Circuit says taxpayers cannot rely on the “mailbox rule” to prove a timely filing. The exclusive means of proof is through the Regulation and the Baldwin’s missed the mark.

Filing Timely: What Does it Mean?  Paper tax returns, statements, or other documents required or permitted to be filed with the IRS are generally treated as filed timely if the same is mailed in an envelope that is properly addressed to the IRS office where the document must be filed, contains sufficient postage, and is postmarked no later than the due date (e.g., due date for the filing of the tax return).

The general rule is that a tax document is considered filed only when it is actually delivered to the IRS. Internal Revenue Code Section 7502 eliminates the problems that arise when mail delivery may fail or be slowed down.  Code Section 7502 permits the postmark date to serve as sufficient evidence of timely filing. 

Registered Mail and Certified Mail

Under the relevant tax rules, there are only three (3) methods of transmitting specified tax documents including tax returns, that provide taxpayers with certainty in an uncertain world.

These are registered and certified mail and the use of specially IRS-designated Private Delivery Services (PDS).

The relevant Treasury Regulations (Treas. Reg. Section 301.7502-1) promulgated under Code Section 7502 state that:

In the case of a document (but not a payment) sent by registered or certified mail, proof that the document was properly registered or that a postmarked certified mail sender’s receipt was properly issued and that the envelope was properly addressed to the agency, officer, or office constitutes prima facie evidence that the document was delivered to the agency, officer, or office. Other than direct proof of actual delivery, proof of proper use of registered or certified mail, and proof of proper use of a duly designated PDS …. are the exclusive means to establish prima facie evidence of delivery of a document to the agency, officer, or office with which the document is required to be filed. No other evidence of a postmark or of mailing will be prima facie evidence of delivery or raise a presumption that the document was delivered.

Thus, for taxpayers sending in a tax return by registered mail, the date of the registration is the postmark date. The registration receipt is prima facie evidence that the return was delivered. If the taxpayer sends in his return by certified mail, the postmarked certified mail receipt serves as the evidence that the return was delivered. In the case of foreign post offices, the document will be treated as timely filed ONLY if it bears an official postmark of the foreign country and it is dated on or before the last date prescribed for filing, including any extension of time for such filing.

Use of Private Delivery Services Taxpayers may also use a private delivery service if it is specifically designated by the IRS.  The postmark date generally is the date the return or document is given to the private delivery service.  

The following are the IRS designated private delivery services.

IRS Designated PDS 

Taxpayers or Tax Professionals can use certain private delivery services designated by the IRS to meet the “timely mailing as timely filing/paying” rule for tax returns and payments. These private delivery services include only the following:

DHL Express:

  1. DHL Express 9:00
  2. DHL Express 10:30
  3. DHL Express 12:00
  4. DHL Express Worldwide
  5. DHL Express Envelope
  6. DHL Import Express 10:30
  7. DHL Import Express 12:00
  8. DHL Import Express Worldwide

FedEx:

  1. FedEx First Overnight
  2. FedEx Priority Overnight
  3. FedEx Standard Overnight
  4. FedEx 2 Day
  5. FedEx International Next Flight Out
  6. FedEx International Priority
  7. FedEx International First
  8. FedEx International Economy

UPS:

  1. UPS Next Day Air Early AM
  2. UPS Next Day Air
  3. UPS Next Day Air Saver
  4. UPS 2nd Day Air
  5. UPS 2nd Day Air A.M.
  6. UPS Worldwide Express Plus
  7. UPS Worldwide Express.

The private delivery service can tell you how to get written proof of the mailing date.  The official IRS Notice 2016-30 regarding the designated PDS’ is here.

Delivery to PO Box Addresses Will  not Work! Please remember that a PDS cannot deliver items to Post Office boxes. Often the IRS includes in the relevant tax form instructions a permissible street address for the courier / private delivery of the tax return or other form. If none is specified, you may consider to use the postal service, per the above rules, to mail the document to an IRS P.O. Box address, or the specially designated street addresses for IRS submission processing centers for PDS delivery. Here are the street addresses of the submission processing centers for delivery by a PDS.

Remember, in summary, other than direct proof of an actual delivery to the IRS, the exclusive means of proving that you filed a tax return in a timely manner is through proof that, on or before the last date prescribed for filing, you properly sent the return by registered or certified mail, or that you used a private delivery service specifically designated by the IRS. These are the exclusive means to establish prima facie evidence of delivery; no other kind of evidence of a postmark or of mailing will constitute such evidence.  Make sure you keep the registered mail / certified mail or courier receipts in a safe place.

Posted June 6, 2019

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