Wells Marine, Inc. v. Renegotiation Bd., Docket No. 1069-R.

• Decision Date: 03 June 1970
• Docket Number: Docket No. 1069-R.
• Parties: WELLS MARINE, INC. (DOING BUSINESS as Z-D PRODUCTS), PETITIONER v. RENEGOTIATION BOARD, RESPONDENT
• Court: U.S. Tax Court

54 T.C. 1189

WELLS MARINE, INC. (DOING BUSINESS as Z-D PRODUCTS), PETITIONER

v.RENEGOTIATION BOARD, RESPONDENT

Docket No. 1069-R.

United States Tax Court

Filed June 3, 1970.

Bruce I. Hochman and Harvey D. Tack for the petitioner.

William D. Ruckelshaus, Harland F. Leathers, and Robert N. Ford, for the respondent.

Held, sec. 7502(a), I.R.C. 1954, so-called timely mailing— timely filing statute, is applicable to petition filed in Tax Court for redetermination of excessive profits under Renegotiation Act of 1951.

DRENNEN, Judge:

Respondent filed a motion to dismiss the petition in this renegotiation case for lack of jurisdiction. The jurisdictional issue which we must decide involves the question whether the petition to this Court was timely filed.

FINDINGS OF FACT

Wells Marine, Inc. (doing business as Z-D Products), petitioner, is a California corporation. At the time it filed its petition herein, its principal office was located in Costa Mesa, Calif.

On June 12, 1969, the Renegotiation Board notified petitioner by registered mail that the Board had entered an order on June 12, 1969, determining that petitioner realized excessive profits in the amount of $325,000 in petitioner's fiscal year ended November 26, 1966, from a contract subject to the Renegotiation Act of 1951, as amended, 50 U.S.C.App.sec. 1211, et seq. The 90th day after the notice was mailed to petitioner was Wednesday, September 10.

The petition, contained in an envelope properly addressed to the clerk of the Tax Court of the United States,¹ Box 70, Washington, D.C. 20044, with instruction to be sent by airmail and containing sufficient postage, was deposited in the mailbox in front of the post office building in Costa Mesa, Calif., on Saturday, September 6. The envelope, which was sent by certified mail, was postmarked Costa Mesa, Calif., September 7, p.m.

As evidenced by the ‘delivery bill’ by which the Post Office records receipt of certified mail prior to its delivery to the addressee, the envelope was received in the Benjamin Franklin Station of the City Post Office in Washington, D.C., on September 15 where box 70, leased by the Tax Court, is located. The envelope was then either delivered to the box, or placed behind the counter where it was available for pickup by the Tax Court messengers. It was picked up by a messenger on September 16, on which date the petition was stamped ‘filed.’

There is evidence that the envelope, postmarked Costa Mesa, September 7, p.m., and traveling in the ordinary course of the mails from Costa Mesa, Calif., to the Benjamin Franklin Station, Washington, D.C., should have been delivered to box 70 (or behind the counter) before September 10. There is no evidence of any interruption in or interference with the regular movement of the mails between Costa Mesa and Washington, D.C., during this period of time.

OPINION

Section 1218 of the Renegotiation Act of 1951, providing for review by the Tax Court of an order of the Renegotiation Board determining an amount of excessive profits, provides that petitioner may ‘within ninety days (not counting Sunday or a legal holiday in the District of Columbia as the last day) after the mailing (of the notice of such order)‘ file a petition with the Tax Court for a redetermination of the order of the Board. In this case petitioner had until September 10, 1969, a Wednesday, to file its petition within the 90-day period.

Petitioner argues that the date of the U.S. postmark stamped on the envelope, i.e., September 7, is to be considered the date on which the petition was filed. He relies on section 7502, I.R.C. 1954.²

There is no question that, had we before us a petition for a redetermination of a tax deficiency, the petition would be deemed under section 7502 to have been filed on or before September 7— within the 90-day period. Respondent's limited contention is that section 7502 does not apply to a renegotiation petition and that, in effect, a different rule from that which applies to tax cases, which constitute the overwhelming majority of cases filed in this Court, applies to renegotiation cases, which constitute only a small percentage of the cases filed in this Court. It relies on the language of section 7502(a)(1) which limits application of the section to documents, etc., required to be filed within a prescribed period of time under authority of ‘any provision of the internal revenue laws,‘ contending that section 1218 of the Renegotiation Act of 1951, is not a provision of the internal revenue laws within the meaning of the section.

Prior to the enactment of section 7502 in 1954 it was a well-established rule that a petition is ‘filed’ in the Tax Court, and in other courts as well, see Charlson Realty Co. v. United States, 384 F.2d 434 (Ct. Cl-1967), and the cases cited therein, within the meaning of the limitation statutes when it is actually delivered to the Court. Numerous cases arose, particularly with respect to petitions filed with the Tax Court, in which a petition which was mailed in ample time was actually delivered to the Court after expiration of the prescribed period.

In order to mitigate what they recognized as harsh inequities resulting from a literal adherence to the filing requirement, the courts have resorted to a legal fiction— the presumption of delivery in due course of the mails. If a petition, properly addressed and stamped, was mailed within time to be timely delivered to the Court in the due course of the mails, it was presumed to have been so delivered. This presumption could be rebutted by affirmative evidence of nondelivery. Arkansas Motor Coaches v. Commissioner, 198 F.2d 189 (C.A. 8, 1952), reversing 28 T.C. 282; Central paper Co. v. Commissioner, 199 F.2d 902 (C.A. 6, 1952); and Detroit Automotive P. Corp. v. Commissioner, 203 F.2d 785 (C.A. 6, 1953). In applying this presumption the courts are often compelled to engage in embarrassing inquiries into the handling of the mails by the Post Office Department and particularly into the performance of their duties by the courts' own staff members. See Charlson Realty Co. v. United States, supra. The wholly fictional aspect of any presumption concerning ‘due course of the mails,‘ when it seems doubtful that mail actually travels in that course with any certainty or regularity, reveals one thing about resort to this presumption— that where circumstances permit,³ courts have generally, and wisely, managed to avoid denying a petitioner his day in court.

The hardship of our denying jurisdiction in this case is extreme; under 50 U.S.C.A.sec. 1218, this Court has exclusive jurisdiction to determine the amount, if any, of excessive profits. See United States v. California Eastern Line, 348 U.S. 351 (1955). The contractor cannot pay the amount of excessive profits determined by the Board and then file a suit for refund in another court, as can a taxpayer in a tax deficiency case.

Fortunately, in this case we need not rely on the presumption of delivery in due course of the mails⁴ because in 1954 Congress, in its wisdom, enacted section 7502 of the Internal Revenue Code to mitigate the harsh inequities of a literal adherence of the filing requirements with respect to petitions filed in the Tax Court. Under that section a petition to this Court is ‘deemed’ filed as of the date of the U.S. postmark stamped on the envelope in which it is mailed. The effect of section 7502 is to place in the control of the petitioner who chooses to transmit his petition to this Court through the U.S. mails the time when his petition will be deemed to be filed. He no longer has to depend upon the fortuitous voyage of this petition between and through various handling points in the postal system. In effect, section 7502 also allows a petitioner in the Tax Court the full benefit of the 90-day period within which to prepare his petition and thus achieves some degree of geographical uniformity, allowing a petitioner who is distant from the Tax Court the same period of time in which to mail his petition as one who, because he is nearer the office of the clerk of the Tax Court, may deliver his petition personally.

In the light of these considerations, we will not construe section 7502 narrowly as to defeat what we presume to have been the intent of Congress, i.e., that section 7502 applied to all petitions filed with this Court, unless that result is unavoidable under the terms of the statute. See concurring opinion of Judge Nichols in ...