Menard, Inc. v. Commissioner, Docket No. 16919-80.

• Citation: 1981 TC Memo 182,41 TCM (CCH) 1279
• Decision Date: 20 April 1981
• Docket Number: Docket No. 16919-80.
• Parties: Menard, Inc. v. Commissioner.
• Court: United States Tax Court

41 TCM (CCH) 1279

1981 TC Memo 182

T.C. Memo. 1981-182.

Menard, Inc. v. Commissioner.

Docket No. 16919-80.

United States Tax Court.

Filed April 20, 1981.

John T. Candell, Saul A. Bernick, and Neal J. Shapiro, 1008 Soo Line Bldg., Minneapolis, Minn., for the petitioners. Ellen T. Friberg, for the respondent.

Memorandum Opinion

EKMAN, Judge:

This case is presently before this Court on respondent's "Motion to Dismiss for Lack of Jurisdiction". Respondent contends that the petitioner did not file a petition within the statutory period prescribed by sections 6213(a) and 7502 and therefore this Court has no jurisdiction. A hearing was held in Milwaukee, Wisconsin on March 2, 1981. At the conclusion of the hearing the Court took the motion under advisement.

Respondent determined a deficiency in petitioner's Federal income tax of $588,595.37 and an addition to tax under section 6653(a) of $29,429.77 for the tax year ending January 31, 1975; of $34,804.00 and an addition to tax under section 6653(a) of $1,740.20 for the tax year ending January 31, 1976; and of $485,184.00 and an addition to tax under section 6653(a) of $24,259.20 for the tax year ending January 31, 1977. On June 6, 1980, respondent mailed to petitioner by certified mail a notice of deficiency. The 90-day period for timely filing a petition with this Court expired on Thursday, September 4, 1980, which date was not a legal holiday in the District of Columbia. The petition was received in this Court on September 8, 1980, and the envelope containing the petition bore no postmark. The envelope was properly addressed and had a sufficient amount of postage attached.

Section 6213(a) provides that within 90 days after a valid statutory notice of deficiency is mailed (unless the notice is addressed to a person outside the United States), the taxpayer may file a petition with this Court for a redetermination of the deficiency. Failure to file within the prescribed period requires that the case be dismissed for lack of jurisdiction. Estate of Moffat v. Commissioner Dec. 28,033, 46 T.C. 499 (1966); Vitale v. Commissioner Dec. 31,600, 59 T.C. 246 (1972). Filing is completed when the petition is received by the Court unless the exception provided by section 7502 is applicable. Under section 7502, a petition received through the mail is generally deemed filed on the date of the U.S. postmark on the envelope containing the petition if such postmark bears a timely date.¹ Since the petition in the present case was not received by the Court within the 90 day period, petitioner relies on section 7502.

Respondent contends that inasmuch as the petition was received after the expiration of the statutory 90-day period and that the envelope containing the petition bore no postmark, evidence as to the time of mailing of the petition is irrelevant in determining whether the petition was timely filed. Respondent contends that there is a significant difference between "illegible postmark" and "no postmark" and asks us once again to reconsider our decision in Sylvan v. Commissioner Dec. 33,546, 65 T.C. 548 (1975), in which we overruled Rappaport v. Commissioner Dec. 30,635, 55 T.C. 709 (1971), affd. in open court without opinion 72-1 USTC ¶ 9292 456 F. 2d 1335 (2d Cir. 1972), and in which we stated (65 T.C. at 553):

We have held that evidence is admissible to ascertain the date of mailing when the postmark is illegible (Alexander Molosh Dec. 27,800, 45 T.C. 320 (1965); see also Skolski v. Commissioner 65-2 USTC ¶ 9703, 351 F. 2d 485 (3d Cir. 1965)), and when the original cover is destroyed and the petition is rewrapped in an envelope with no postmark (Perry Segura & Associates, Inc. Dec. 33,110(M), T.C. Memo. 1975-80). In both of these instances the time of mailing was not "indicated by the postmark" as contemplated by Congress. For the purpose Congress had in mind in referring to a postmark, a postmark was simply not available.

For purposes of interpreting the specific statute before us, these cases cannot fairly be distinguished from cases where the postal service inadvertently neglects to postmark a properly mailed item. It certainly makes no sense to continue to distinguish between part of a postmark consisting of an empty or obliterated circle (or part of a circle), and no postmark at all. In all of these cases, there simply is not a postmark that serves the purpose of the statute as contemplated by Congress.

In the case of illegible postmarks and damaged envelopes, we have properly concluded evidence as to timely mailing is admissible. We think the answer is the same where a postmark is entirely (rather than partially) omitted through oversight. To hold otherwise would make the important right to a prepayment hearing depend entirely on the form by which a postal omission is manifested. Fn. refs. omitted.

As we stated in Ruegsegger v. Commissioner Dec. 34,492, 68 T.C. 463, 465-467 (1977), on facts very similar to the present case:

The question before us is not new. We must decide whether evidence of timely mailing is admissible as evidence of timely filing in the absence of a postmark on the envelope in which the petition was mailed. We have spent many long and tumultuous hours considering this issue in the past, with the result that the Court is strongly divided on the merits. See Sylvan v. Commissioner Dec. 33,546, 65 T.C. 548 (1975). It is not our intention to reconsider the issue at this time. Rather, we are simply confronted with the consequences flowing from the Sylvan decision.

In Sylvan we overruled our decision in Rappaport v. Commissioner Dec. 30,635, 55 T.C. 709 (1971), affd. in open court without opinion 456 F. 2d 1335 (2d Cir. 1972), and held that evidence of the date of mailing was admissible to show the date of the postmark which would have been stamped on the envelope containing the petition had the postal workers performed their duties properly.

* * *

Because the affirmance of Rappaport by the Second Circuit does not have any precedential value either in this Court or in the Second Circuit, we do not feel bound to follow it under the rule of Golsen v. Commissioner, supra.

We choose then to follow our decision in Sylvan v. Commissioner and admit evidence of the date of mailing of the petition. We are mindful, however, that the date of mailing is only circumstantial evidence of the date of the postmark which should have been stamped on the envelope containing the petition. And it is the date of the postmark which governs the applicability of section 7502. Thompson v. Commissioner Dec. 33,938, 66 T.C. 737, 741 (1976); Estate of Moffat v. Commissioner Dec. 28,033, 46 T.C. 499 (1966); Molosh v. Commissioner Dec. 27,800, 45 T.C. 320 (1965); Madison v. Commissioner Dec. 22,596, 28 T.C. 1301 (1957). Fn. ref. omitted.

Suffice it to say that we see no reason to depart now from our previous decisions as to this matter. Also cf. Cassell v. Commissioner Dec. 36,062, 72 T.C. 313, 317-318 (1979).

Petitioner, with the consent of respondent, submitted five affidavits for purposes of proving that the petition was timely filed. The first affidavit is that of John T. Candell, an attorney representing petitioner. In that affidavit, Mr. Candell states, inter alia, that he and associate counsel, Saul A. Bernick, an attorney from another firm, prepared the petition and completed it on September 3, 1980, that it was signed by him and Mr. Bernick in the presence of each other and in the presence of Margaret L. Knowlton, an employee of Mr. Candell's law firm, at approximately 5:00 p.m. on September 3, 1980, that thereafter he and David J. Butler, an attorney in Mr. Candell's firm, drove to the United States Post Office in Minneapolis, Minnesota, and that he arrived inside the Post Office at approximately 5:35 p.m. on September 3, 1980, and found all the service windows closed. Mr. Candell further states in his affidavit that:

The sign near one of the service windows indicated that closing time was 5:30 p.m. Your Affiant then knocked on the window and on an adjacent door in an attempt to obtain service from a postal employee. An employee of the United States Post Office opened the door and your Affiant requested that he be allowed to purchase postage, to deposit the Petition with the postal employee and receive proof of mailing. The postal employee stated that this would not be possible since the service windows were closed

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