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Using one of several major private delivery
services to deliver your return, tax payment, etc. to IRS qualifies for the
“timely mailing equals timely filing” rule that otherwise applies only to
delivery by the U.S. Postal Service. Under the timely mailing rule, if the U.S.
Postal Service is used, you are considered to have filed a return, made a
payment, etc. on the day that the relevant envelope is postmarked by the Post
Office. If a qualifying private delivery service is used, the day the envelope
is recorded or marked by the qualifying delivery service is treated as a U.S.
mail postmark date for purposes of the timely mailing rule. On the other hand,
if, on the due date of the return, you give the envelope to a delivery service
that doesn't qualify for the timely mailing rule and they make delivery to IRS
on the day after the due date, the Service could penalize you for late filing.
Since many lateness penalties apply on a percentage basis for every month or
part of a month the return is late, even a single day of lateness could result
in a full month's penalty.
Example. Tom submits his income tax return
for filing on April 15th by giving it to a delivery service for overnight
delivery. The return includes a payment of $2,000 in taxes owed. If the delivery
service doesn't qualify for the “timely mailing equals timely filing” rule, Tom
could be treated as filing late. The late filing penalty of 5% per month (or
part of a month) could cost him $100 (5% of the $2,000 in taxes owed). But if,
for example, Tom uses a qualifying Federal Express delivery service, labeling of
the return by a Federal Express employee by midnight of April 15th constitutes
filing the return, so the return is timely filed and Tom isn't liable for a
penalty.
The “timely mailing equals timely filing”
rule applies to designated private delivery services. So far, IRS has designated
DHL Express (DHL), Federal Express (FedEx), and United Parcel Service (UPS), but
only with respect to specific delivery services. The approved delivery services
are: DHL Same Day Service, DHL Next Day 10:30 am, DHL Next Day 12:00 pm, DHL
Next Day 3:00 pm, and DHL 2nd Day Service; FedEx Priority Overnight, FedEx
Standard Overnight, FedEx 2 Day, FedEx International Priority, and FedEx
International First; and UPS Next Day Air, UPS Next Day Air Saver, UPS 2nd Day
Air, UPS 2nd Day Air A.M., UPS Worldwide Express Plus, and UPS Worldwide
Express.
In general, the date treated as the postmark
date for an item given to DHL, or UPS is the date the delivery service's data
base shows it received the item. You should get a written confirmation of this
date from the delivery service in case you have to prove the date to IRS. The
date treated as the postmark date for an item given to FedEx is the date shown
on the label which was generated and affixed by a FedEx employee. Different
rules apply if you generate the FedEx label yourself.
The “timely filing equals timely mailing”
rule will usually apply only if an item is actually delivered to IRS. At the
moment, the best way to protect yourself against an IRS claim that it didn't
receive a document is to send it by registered or certified mail. If you use
certified mail be sure to get a postmarked sender's receipt. If you use
registered mail, the registration date is the postmark date. The same law which
authorized the application of the “timely mailing equals timely filing” rule to
private delivery services also authorized IRS to designate some private delivery
services as equivalent to registered or certified mail, but IRS has so far
declined to make any such designations.
If you have any questions about the “timely
mailing equals timely filing” rule or the use of designated delivery services,
please call us.
© 2009 Thomson Reuters/RIA. All rights
reserved.
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Timely Mailing Equals Timely Filing
