Hotel Equities Corp. v. Comm'r of Internal Revenue

• Citation: 65 T.C. 528
• Decision Date: 15 December 1975
• Docket Number: Docket No. 7538-73.
• Parties: HOTEL EQUITIES CORPORATION, PETITIONER v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT
• Court: United States Tax Court

65 T.C. 528

HOTEL EQUITIES CORPORATION, PETITIONER

v.COMMISSIONER OF INTERNAL REVENUE, RESPONDENT

Docket No. 7538-73.

United States Tax Court

Filed December 15, 1975.

Burton W. Kanter, Donald A. Statland, and Alan F. Segal, for the petitioner.

Rule 121, Tax Court Rules of Practice and Procedure.— On July 14, 1970, petitioner's tax return, which was due on July 15, 1970, was mailed in a properly addressed envelope, postage prepaid. The other requirements of sec. 7502, I.R.C. 1954, were met for the return to be deemed under sec. 7502 as filed on July 14, 1970. The return was stamped with respondent's stamp as received on July 17, 1970. Respondent mailed a notice of deficiency to petitioner on July 17, 1973. Held, the 3-year statute of limitations on assessments under sec. 6501, I.R.C. 1954, had expired at the time the notice of deficiency was mailed.

OPINION

SCOTT, Judge:

Petitioner Hotel Equities Corp., on February 10, 1975, filed a motion for summary judgment pursuant to Rule 121, Tax Court Rules of Practice and Procedure. The issue presented for decision is whether a tax return, which is timely mailed within the provisions of section 7502, I.R.C. 1954, ¹ with the other requirements of that section being met, is to be considered filed as of the postmark date for the purposes of determining when the statute of limitations for assertion of a deficiency expires.

The facts, which are undisputed for the purpose of the determination of the issue raised by the summary judgment, show that petitioner's tax return for its taxable year ended January 31, 1970, which otherwise would have been due on April 15 of that year, was due on July 15, 1970, pursuant to a properly secured extension of time.² On July 14, 1970, an officer of petitioner mailed from Burlingame, Calif., in a postage prepaid envelope, properly addressed to the Internal Revenue Service Center in Odgen, Utah, the United States corporate income tax return of petitioner for the year ending January 31, 1970. The respondent did not keep the envelope in which the return was mailed.³

Petitioner's return for its fiscal year 1970 had affixed thereto a stamp reading ‘Received, Western Service Center, July 17, 1970, No. 57, Internal Revenue Service, Odgen, Utah.’ On July 17, 1973, respondent mailed to petitioner a statutory notice determining a deficiency for petitioner's taxable year 1970. Petitioner timely filed with this Court a petition seeking review of that determination. The petition alleged that assessment and collection of the deficiency set forth in the notice with respect to the fiscal year ending January 31, 1970, are barred by section 6501(a), alleging in substance the facts we have heretofore recited.

Section 6501(a) states that except as otherwise provided any tax ‘shall be assessed within 3 years after the return was filed (whether or not such return was filed on or after the date prescribed)‘ and section 6501(b) provides that an income tax return ‘filed before the last day prescribed by law * * * shall be considered as filed on such last day.'⁴ Petitioner takes the position that its return was filed on July 14, 1970, the date of mailing of its tax return and presumably the postmark date on the properly addressed envelope in which that return was mailed. Petitioner contends that July 14, 1970, is the date its return was filed under the provisions of section 7502.⁵

While petitioner in its memorandum in reply to respondent's memorandum, refers to section 6501(b) as an answer to respondent's argument that to interpret section 7502(a) in the manner petitioner contends is appropriate would require respondent ‘to indulge in a guessing game,‘ it does not specifically discuss whether under section 6501(b) its return should be deemed as filed on July 15, 1970, rather than its July 14 mailing date. However, since July 14, 1970, was a Tuesday and July 15, 1970, was a Wednesday, whether the return was filed on July 14 or July 15 is immaterial to the issue here presented.

Respondent, while conceding that petitioner's return was timely filed for the purpose of avoiding any addition to tax under section 6651(a)(1)⁶ which might otherwise be determined against petitioner, contends that for the purpose of section 6501(a) the filing date of the return is the date on which the return was stamped received, July 17, 1970, and not the date of filing as determined in accordance with section 7502.

Section 6501 does not define the word ‘filed.’ However, the longstanding definition of the word ‘filed’ as used in Federal statutes is ‘delivered.’ In United States v. Lombardo, 241 U.S. 73 (1916), a document was stated to be filed ‘when it is delivered.’ That filing means ‘delivered’ has been reiterated on numerous occasions in cases involving the filing date for purposes of applying the revenue laws to documents such as tax refund claims and tax returns. In Phinney v. Bank of Southwest National Assn., Houston, 335 F.2d 266, 268 (5th Cir. 1964), the court, relying on the Lombardo case, held an estate tax return to be filed ‘upon delivery’ to the Office of the District Director. In holding a declaration of estimated tax not to be timely filed the court in Heard v. Commissioner, 269 F.2d 911, 913 (3d Cir. 1959), modifying 30 T.C. 1093 (1958), stated that ‘unless otherwise defined by statute, filing does not occur until the paper to be filed is delivered.’

Against the background of the longstanding definition of ‘filed’ as being when the document is ‘delivered’ Congress enacted section 7502(a) providing that when a return, after the date prescribed for its filing, is ‘delivered’ by United States mail to the proper office, the date of the United States postmark stamped on the cover in which the return is mailed ‘shall be deemed to be the date of delivery.’

There is no qualification contained in section 7502(a) that the postmark date is ‘deemed’ to be the date of ‘delivery’ making the postmark date the delivery date only for a limited purpose. That the words ‘deemed to be the date of delivery’ are synonymous with deemed to be the date of ‘filing’ is clear since, if the ‘deemed delivery’ date were not intended to be the date of ‘filing,‘ the provisions of section 7502(a) would be meaningless. Section 6651(a) provides for an addition to tax for failure to ‘file’ a return on the prescribed date not for failure to ‘deliver’ the return on that date. The word ‘file’ in section 6651(a) is the same as the words ‘was filed’ in section 6501 providing for limitations on assessments. There is no rational basis for giving the word ‘file’ a different interpretation under section 6651(a) from that given it in section 6501.⁷ To hold one date to be the filing date under section 6651(a) and another date to be the date the return was filed under section 6501 finds no support in the statutes or legislative history. Respondent in his memorandum relies on the following statement in S. Rept. No. 1625, 89th Cong., 2d Sess., to accompany Pub. L. 89-713, 1966-2 C.B. 803, 809:

The provision of this bill which permits the Secretary of the Treasury to require the filing of tax returns at service centers would technically require many taxpayers (for example, those in Hawaii) to mail their returns * * * at a much earlier date * * *

For these reasons, the bill amends the existing timely-mailing-timely-filing provisions to include returns and payments of tax. * * * In our view, even if this limited quotation from the Senate report properly reflects the underlying reasons for the enactment of section 7502, it does not cause that section not to be properly interpreted in accordance with its clear language. However, other portions of the same Senate report give a clear indication that the Senate considered that when the provisions of section 7502 had been met the postmark date of the envelope in which the return was mailed was the filing date of the return.⁸

Further, in our view the case of Brown v. United States, 391 F.2d 653 Ct.Cl. 1968), dealing with the date of filing of a return to which the provisions of section 7503 are applicable indicates that provisions of such statutes as section 7502 and section 7503 are applicable to all sections of the Code with reference to the date a return is ‘filed.’ That case involved a return which was ‘delivered’ to the Office of the District Director on Monday, April 16. Section 7503,⁹ there involved, provides that when the last day for performance of an act falls on Sunday ‘the performance of such act shall be considered timely’ if that act is performed on the next succeeding day. Therefore, the delivery on Monday, April 16, of a return was held to be a timely filing on April 16 and not a ‘deemed’ filing on April 15. The Court referred to April 16 as being ‘the stipulated actual filing date.’ Here the question is whether the ‘actual filing date’ is the date of July 17 stamped on the return as the date of its receipt or is the statutory delivery date of the return of July 14 as shown by the postmark.

In the Brown case, the court stated its disagreement with the taxpayer's contention that the effect of section 7503 ‘is to treat’ the return as if filed on April since the clear words of the statute ‘merely considers' the filing on Monday, April 16, timely. In the present case, had the return been ‘actually filed’ on July 17 it would have been untimely and not considered timely under section 7502(a) or any other provision of the Code. It is because under section 7502(a) the return was by statute ‘actually filed’ on July 14 that it was timely. The import of the Brown case is that section 6501 is dependent on the sections governing filing, there section 7503 but here section 7502(a), for its application.

As contrasted to the ‘considered timely’ words of section 7503, the provision of section 7502(a) is that the postmark date is ‘deemed’ or is to be ‘treated as' the delivery date.

In our view, had section 7502(a) been intended to apply only to alleviate the...