Anderson v. US, C-89-786 RJM.

• Decision Date: 04 October 1990
• Docket Number: No. C-89-786 RJM.,C-89-786 RJM.
• Citation: 746 F. Supp. 15
• Parties: Lois ANDERSON, Plaintiff, v. UNITED STATES of America, Defendant.
• Court: U.S. District Court — District of Washington

746 F. Supp. 15

Lois ANDERSON, Plaintiff, v. UNITED STATES of America, Defendant.

No. C-89-786 RJM.

United States District Court, E.D. Washington.

October 4, 1990.

Richard P. Algeo, Turner, Stoeve, Gagliardi & Goss, Spokane, Wash., for plaintiff.

Emily Kingston, Trial Atty., Dept. of Justice, Tax Div., Washington, D.C., for defendant.

ORDER

ROBERT J. McNICHOLS, District Judge.

Trial to the bench was held on October 3, 1990 at 8:00 a.m. The following will constitute the findings and conclusions. As was probably expected by all concerned, the trial brought no surprises. Ms. Anderson's testimony was consistent with her affidavit previously submitted, as was Ms. Brown's deposition testimony. In fact, there is no need to alter the Order entered July 13, 1990 and the same is attached hereto as an Appendix.

The only intervening change in the law of any significance is that the Wood decision relied upon so heavily by plaintiff and adopted by this Court has since been affirmed. Estate of Wood v. C.I.R., 909 F.2d 1155 (8th Cir.1990). The strength of the evidence in the instant case is not on a par with the facts of Wood, but the principles are the same. The Court is convinced that Ms. Anderson witnessed her 1984 return being postmarked by a postal employee. That raises a rebuttable presumption that it was received by IRS. Id. at 1159-61. The presumption has not been overcome.¹ See id. at 1161-62.

There may be thousands of such cases floating around, and the Court appreciates the burdens which would be visited on the Tax Division if each must be tried. The solution, however, is not so difficult. All that need be done is for IRS to call the taxpayer's attention to the benefits of using certified mail; something which is not being done at present.

THEREFORE IT IS ORDERED that:

(1) Plaintiff is entitled to a refund in the principal sum of $3,655.

(2) The Clerk shall enter judgment accordingly.

APPENDIX

ORDER

July 13, 1990.

This is a suit for refund. Currently pending are the government's motion to dismiss and plaintiff's motion for summary judgment. Argument was heard telephonically on July 11, 1990. Counsel probably received an indication during the hearing that the Court was leaning strongly toward proceeding to trial. That was in fact the Court's inclination at the time. As is always done prior to finalizing a decision, however, the authorities relied upon were funneled through Westlaw one last time to assure that there has been no significant movement in the case law. The result of that effort has been to further confuse an already confusing morass of conflicting authority. Taking all of plaintiff's allegations as true, the following appears.

Ms. Anderson's 1984 return was prepared on August 12, 1985 by the accounting firm of LeMaster & Daniels and transmitted to her. The return reflected an overpayment of $3,655 and requested that $3,000 be carried over to the 1985 tax year and that the remaining $655 be refunded. After a hiatus of over a year, Ms. Anderson mailed the return to the regional service center on September 15, 1986 using an oversize envelope which had been provided by her accountant. She took the return to a post office and watched the clerk as he weighed the package, placed stamps on it, cancelled the stamps, and placed the envelope in a pouch.

The $655 refund was never received. At some point which is murky on the present state of the record, plaintiff filed her 1985 return claiming the $3,000 carried over from the previous year. Correspondence followed, not all of which was received by Ms. Anderson. So did a notice of deficiency and subsequent collection efforts when IRS failed to honor the $3,000 carryover. Ultimately, by letter dated December 16, 1988 IRS notified plaintiff of the reason why the carryover was not honored; viz., the 1984 return had never been received. On December 30, 1988 plaintiff provided IRS with a copy of her 1984 return and IRS now takes the position that this is the effective date of filing.

As framed by plaintiff, the question is whether the 1984 return should be deemed filed within three years after the due date of April 15, 1985. If so, then the $3,000 carryover should be applied to the 1985 return. If not, then the money disappears by operation of the statute of limitations. 26 U.S.C. § 6511.

Courts are all over the board on the issue of the extent to which, if at all, extrinsic evidence of mailing gives rise to a presumption of delivery. Some hold summarily that only a certified or registered mailing will suffice, and refuse to allow evidence of any other nature. See, e.g., In re Brookman, 114 B.R. 769 (Bkrtcy.M.D. Fla.1990). Others have taken a more ameliorative approach by holding that credible evidence of a mailing being postmarked and placed into the postal system carries with it a fair corollary that the mailing was received. Crosby v. Commissioner, 58 A.F.T.R.2d 86-5497 1986 WL 34348 (D.C. Cal.1986). Perhaps the best overview of both the problem and the array of conflicting authority is contained in Estate of Wood, 92 T.C. 793 (1989) (en banc), appeal pending. When as many eminent jurists as participated in the Wood opinion can disagree so vehemently, it would probably be presumptuous for this Court to attempt to add any insight. The Ninth Circuit does not seem to have addressed the precise issue.¹

One might think that if the IRS were going to take the position that sending by certified or registered mail constitutes the exclusive means of establishing delivery, it would freely advise the taxpaying public of that fact. But it does not:

Your return is filed on time if it is properly addressed and postmarked no later than the due date. The return must have sufficient postage. If you send a return by registered mail, the date of the registration is the postmark date. The registration is evidence that the return was delivered. If you send a return by certified mail and have your receipt postmarked by a postal employee, the date on the receipt is the postmark date. The postmarked certified mail receipt is evidence that the return was delivered.

Department of the Treasury, Your Federal Income Tax, Publication 17 at page 11 (1989).

The cautious taxpayer might pick up on the hint that using certified or registered mail is the prudent thing to do, but in no wise can this language be read as laying out an immutable requirement that such be done. On the contrary, we are told that a "return is filed on time if it is properly addressed and postmarked no later than the due date." That is what Ms. Anderson claims was done here.²

Probably no one would take issue with the proposition that the postal system on occasion misplaces mail, or that the IRS on occasion loses mail which was in fact delivered. Crosby, supra. Accordingly, and in the absence of mandatory precedent compelling a contrary result, the Court is inclined to adopt the majority view expressed in Wood, supra, and allow plaintiff to put on her proof.

Having said that much, however, there is yet another issue in the case which has recently been the subject of several decisions. It has now been held by at least three courts that § 7502(a) comes into play if, and only if, the filing would be timely if deemed received on the mailing date. Emmons v. C.I.R., 898 F.2d 50, 51 (8th Cir. 1990); Chasar v. I.R.S., 733 F.Supp. 48, 49 (N.D.Tex.1990); see also, King v. United States, 495 F.Supp. 334, 337 (D.Neb.1980). A plain reading of the statutory scheme supports that interpretation.

This subsection shall apply only if ... the postmark date falls within the prescribed period or on or before the prescribed date ... for the filing (including any extension granted for such filing) of the return, claim, statement, or other document.

26 U.S.C. § 7502(a)(2)(A)(i).

Plaintiff's 1984 return was presumptively due on April 15, 1985. She may or may not have obtained an extension; the record does not so disclose. But such silence is not helpful when, under Ms. Anderson's own version of the facts, the return was not mailed until September of 1986 — some seventeen months after the presumptive due date. A past due return falls outside the ambit of § 7502(a)(2)(A)(i) and is thus deemed filed on the date of delivery. Emmons, supra, 898 F.2d at 51. A late filer who wishes to guard against the risk of nondelivery can only avail himself of registered or certified mailing. Chasar, supra, 733 F.Supp. at 50; § 7502(c).

Now for the mind boggling part. Assuming that the above-cited decisions were rightfully decided, and that plaintiff's 1984 return does not enjoy the protection of the statutory mailbox rule, does that same result obtain with respect to her 1984 claim for refund? Perhaps Ms. Anderson is not aware even now that she filed a claim for refund, but by virtue of IRS regulations, she did so:

A properly executed individual ... original income tax return ... shall constitute a claim for refund or credit within the meaning of section 6402 and section 6511 for the amount of the overpayment disclosed by such return (or amended return). For purposes of section 6511, such claim shall be considered as filed on the date on which such return (or amended return) is considered as filed, except that if the requirements of § 301.7502-1, relating to timely mailing treated as timely filing are met, the claim shall be considered to be filed on the date of the postmark stamped on the cover in which the return or amended return was mailed.

26 C.F.R. § 301.6402-3(a)(5).

An ambiguity, or at least an exercise in begging the question, should immediately leap out. To what is the citation to § 301.7502-1 referring: the return, or the claim for refund? Turning to the cited section:

A return may contain, or have attached to it, a statement which sets forth an election under the internal revenue laws. In such a case, section 7502 is applicable to the statement if the conditions of such section are met, although it does not apply to the return.

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