Drake v. C.I.R., 75-3473

• Decision Date: 24 June 1977
• Docket Number: No. 75-3473,75-3473
• Citation: 554 F.2d 736
• Parties: 77-2 USTC P 9483 George K. DRAKE and Charlene C. Drake, Petitioners-Appellants, v. COMMISSIONER OF INTERNAL REVENUE SERVICE, Respondent-Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 736

554 F.2d 736

77-2 USTC P 9483

George K. DRAKE and Charlene C. Drake, Petitioners-Appellants, v. COMMISSIONER OF INTERNAL REVENUE SERVICE, Respondent-Appellee.

No. 75-3473.

United States Court of Appeals, Fifth Circuit.

June 24, 1977.

James G. R. Smith, Galveston, Tex., for petitioners-appellants.

Scott P. Crampton, Asst. Atty. Gen., Gilbert E. Andrews, Acting Chief, Appellate Section, Elmer J. Kelsey, John G. Manning, Attys., Tax Div., Dept. of Justice, Meade Whitaker, Chief Counsel, Internal Revenue Service, Myron C. Baum, Acting Asst. Atty. Gen., John G. Manning, Gary R. Allen, Attys., Tax Div., Dept. of Justice, Washington, D. C., for respondent-appellee.

Appeal from the Decision of the Tax Court of the United States (Texas Case).

Before GODBOLD, TJOFLAT and HILL, Circuit Judges.

JAMES C. HILL, Circuit Judge:

This is a tax case in which the facts are undisputed and the question presented is quite straightforward. The sole issue is whether taxpayers' petition for redetermination filed in the tax court was timely under section 7502 of the Internal Revenue Code of 1954 (I.R.C.). The tax court concluded that the filing was untimely and dismissed the petition. We affirm.

On February 5, 1975, notices of deficiency were mailed to taxpayers, George K. and Charlene C. Drake, for their tax years 1966-1969. ¹ At 6:00 p. m. on the ninetieth day following the mailing of the notices May 6, 1975 taxpayers' attorney personally mailed a petition for redetermination of tax liability to the tax court in a properly addressed, stamped airmail certified envelope at the main post office in Galveston, Texas. The envelope containing the petition for redetermination was not postmarked in Galveston, but was "regionally" postmarked in Houston on the following afternoon. The postmark appears as follows: "P.M. May 7, 1975, 770." This regional postmark represents the ninety-first day following the mailing of the notices of deficiency. We are called upon to determine whether the petition was filed within the time permitted by statute.

Section 6213(a) of the I.R.C. provides in relevant portion that "(w)ithin 90 days . . . after the notice of deficiency . . . is mailed . . ., the taxpayer may file a petition with the Tax Court for a redetermination of the deficiency." The notices of deficiency in this case were unquestionably mailed on February 5, 1975. Section 7502(a)(1) of the I.R.C. states in relevant part:

If any return, claim, statement, or other document required to be filed . . . within a prescribed period . . . is . . . 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 . . ., 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.

Indisputedly, the petition for redetermination was delivered to the tax court after the prescribed period and the envelope containing the petition was postmarked beyond the statutory time, to wit; the ninety-first day. Upon application of the plain words of the statute, it appears that taxpayers' petition for redetermination was not timely.

Taxpayers argue that a change in post office procedure whereby mail is "regionally" cancelled rather than cancelled at the local post office should excuse them for their untimely filing. Thus, in 1954 when Congress enacted the so-called "timely mailing-timely filing" provision, each local post office cancelled mail within several hours of deposit. Under this scheme the envelope containing the petition for redetermination would have been timely cancelled in Galveston. However, under the recently adopted "area processing system" ² the envelope was transported by truck to Houston and cancelled some twenty-one hours after deposit in Galveston. Under these circumstances taxpayers assert that they should be excused and their petition considered timely.

On its face taxpayers' argument has some equitable appeal. The government concedes that the petition for redetermination was in fact timely deposited in the mail in Galveston on the ninetieth day. There is no contention made that taxpayers or their attorney knew of the new "area processing system" which evidently produced the time lapse spawning this dispute. Even so, however, we are persuaded that the decision of the tax court should be upheld.

This is not the first occasion that this court has had to apply the "timely mailing-timely filing" provision. While admitting in Rich v. Commissioner of Internal Revenue, 250 F.2d 170 (5th Cir. 1957) that the case presented a "grossly inequitable situation," the court held that "(t)he language of that section (7502) is clear, explicit, and strictly limited. It applies only if there is a postmark date or a date of registration falling within the prescribed period." Id. at 174. Prior to enactment of the 1954 Code, there was no similar provision with regard to timely mailing equalling timely filing. Timely filing depended upon the time of delivery of a petition to the tax court in Washington, D.C. and varied with the geographical area of mailing and the vicissitudes of the mails. Section 7502 was enacted in an attempt to alleviate inequities resulting from variations in postal performance. See Sylvan v. Commissioner of Internal Revenue, 65 T.C. 548 (1975). Congress was clearly attempting to establish an easily ascertainable point...