[House Report 119-45]
[From the U.S. Government Publishing Office]
119th Congress } { Report
HOUSE OF REPRESENTATIVES
1st Session } { 119-45
======================================================================
ELECTRONIC FILING AND PAYMENT FAIRNESS ACT
_______
March 27, 2025.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Smith of Missouri, from the Committee on Ways and Means, submitted
the following
R E P O R T
[To accompany H.R. 1152]
The Committee on Ways and Means, to whom was referred the
bill (H.R. 1152) to amend the Internal Revenue Code of 1986 to
provide for the application of the mailbox rule to documents
and payments electronically submitted to the Internal Revenue
Service, having considered the same, reports favorably thereon
with an amendment and recommends that the bill as amended do
pass.
CONTENTS
Page
I. SUMMARY AND BACKGROUND...................................... 2
A. Purpose and Summary................................. 2
B. Background and Need for Legislation................. 2
C. Legislative History................................. 3
D. Designated Hearing.................................. 3
II. EXPLANATION OF THE BILL..................................... 3
III. VOTE OF THE COMMITTEE5...................................... 5
IV. BUDGET EFFECTS OF THE BILL.................................. 6
A. Committee Estimate of Budgetary Effects............. 6
B. Statement Regarding New Budget Authority and Tax
Expenditures Budget Authority...................... 6
C. Cost Estimate Prepared by the Congressional Budget
Office............................................. 6
V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE.. 6
A. Committee Oversight Findings and Recommendations.... 6
B. Statement of General Performance Goals and
Objectives......................................... 6
C. Applicability of House Rule XXI, Clause 5(b)........ 6
D. Information Relating to Unfunded Mandates........... 7
E. Congressional Earmarks, Limited Tax Benefits, and
Limited Tariff Benefits............................ 7
F. Duplication of Federal Programs..................... 7
G. Tax Complexity Analysis............................. 7
VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED....... 8
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Electronic Filing and Payment Fairness
Act''.
SEC. 2. APPLICATION OF MAILBOX RULE TO DOCUMENTS AND PAYMENTS
ELECTRONICALLY SUBMITTED TO THE INTERNAL REVENUE
SERVICE.
(a) In General.--Section 7502(c) of the Internal Revenue Code of 1986
is amended--
(1) in the heading, by inserting ``and Payment'' after
``Filing'',
(2) in paragraph (2)--
(A) in the heading, by striking ``; electronic
filing'', and
(B) by striking ``and electronic filing'', and
(3) by adding at the end the following new paragraph:
``(3) Electronic filing and payment.--
``(A) In general.--If any return, claim, statement,
or other document required to be filed, or any payment
required to be made, within a prescribed period or on
or before a prescribed date under authority of any
provision of the internal revenue laws is sent
electronically by any person to the agency, officer, or
office with which such return, claim, statement, or
other document is required to be filed, or to which
such payment is required to be made, the date on which
such return, claim, statement, or other document, or
payment, is sent electronically by such person shall be
deemed to be the date of delivery or the date of
payment, as the case may be, regardless of the date on
which the applicable agency, officer, or office
receives or reviews such return, claim, statement,
document, or payment.
``(B) Regulations.--Not later than December 31, 2025,
the Secretary shall issue such regulations or other
guidance as the Secretary determines necessary to carry
out the purposes of this paragraph.''.
(b) Effective Date.--The amendments made by this section shall apply
to any document or payment sent after December 31, 2025.
I. SUMMARY AND BACKGROUND
A. Purpose and Summary
The bill, H.R. 1152, the ``Electronic Filing and Payment
Fairness Act,'' as ordered reported by the Committee on Ways
and Means on February 12, 2025.
The provision defines when a return, claim, statement, or
other document, or payment sent electronically is considered
timely. The document or payment is considered timely if the
date on which it is sent is on or before the due date of the
filing or payment, regardless of the date on which the
applicable agency, officer, or office receives the document or
payment. The provision requires the Secretary to promulgate
rules necessary to apply the mailbox rule to electronic filing
and payments by December 31, 2025.
B. Background and Need for Legislation
Currently, if a taxpayer mails a payment to the IRS that is
postmarked by midnight on the due date, the payment or tax
return is considered timely even if it is received a week
later.\1\ However, if a taxpayer submits the same payment or
return electronically on the due date, it may be considered
late if the IRS receives it and processes it on the next
day.\2\ In Fiscal Year 2023, more than 213 million returns and
other forms were filed electronically.\3\
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\1\Legislative Recommendation #3--Treat Electronically Submitted
Tax Payments and Documents as Timely If Submitted on or Before the
Applicable Deadline, National Taxpayer Advocate 2025 Purple Book (Dec.
31, 2024), https://www.taxpayeradvocate.irs.gov/reports/2024-annual-
report-to-congress/national-taxpayer-advocate-2025-purple-book/.
\2\Id.
\3\Id.
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This dichotomy between mail payments and electronic
payments harms taxpayers who make timely electronic submissions
and favors paper transmission over electronic transmission--the
opposite incentive IRS rules should provide. Electronic
payments are received more quickly, are cheaper to process, and
eliminate the risk that a mailed check will be lost or
misplaced.
The Committee on Ways and Means is committed to making
filing taxpayer-friendly and fair for all taxpayers regardless
of how they choose to file or make payments. This bill will
ensure that tax returns and payments filed digitally will now
receive the same treatment as those sent through the mail
instead of being treated worse than paper filings.
C. Legislative History
Background
H.R. 1152 was introduced on February 10, 2025, and was
referred to the Committee on Ways and Means.
Committee Hearings
On February 11, 2025, the Committee on Ways and Means held
a hearing titled, ``IRS Return on Investment and the Need for
Modernization''.
Committee Action
The Committee on Ways and Means marked up H.R. 1152, the
``Electronic Filing and Payment Fairness Act'' on February 12,
2025, and ordered the bill, as amended, favorably reported
(with a quorum being present).
D. Designated Hearing
Pursuant to clause 3(c)(6) of rule XIII, the following
hearings was used to develop and consider H.R. 1152:
``IRS Return on Investment and the Need for
Modernization'' on February 11, 2025.
II. EXPLANATION OF THE BILL
A. Application of Mailbox Rule to Documents and Payments Electronically
Submitted to the Internal Revenue Service (Sec. 2 of the Bill and Sec.
7502(c) of the Code)
PRESENT LAW
In general
Present law defines when a return, claim, statement, or
other document, or payment sent pursuant to the Internal
Revenue Code (``Code'') is considered timely.\4\ A document
generally is considered timely filed and payment is considered
timely made when the filing or payment is received by the
Internal Revenue Service (``IRS'') on or before the due date of
the return. As discussed in further detail below, if the
requirements of the Code are met, timely mailing is treated as
timely filing and timely paying, colloquially known as the
``mailbox rule.''\5\
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\4\Sec. 7502(a), Treas. Reg. sec. 301.7502-1(a).
\5\Sec. 7502.
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If a document or payment is delivered by the United States
Postal Service (``USPS''), the document or payment is
considered timely if the postmark date falls on or before the
prescribed due date, regardless of when it is deposited in the
mail,\6\ and if it is properly packaged and addressed with
prepaid postage.\7\ If the postmark is made other than by the
USPS, the document or payment is timely if the postmark is
legible and the agency receives it no later than it would
normally receive mail of the same class sent through the USPS
that is postmarked on the prescribed due date.\8\ If a document
or payment is sent by registered mail, the dated registration
statement is prima facie evidence of delivery and the date of
registration is deemed the postmark date.\9\ If a document or
payment is sent by certified mail, the postmark date is the
date stamped on the receipt by the postal employee.\10\ If a
document or payment is sent by a private delivery service, the
Secretary of the Treasury (the ``Secretary'') may deem the
delivery service as equivalent to the USPS for purposes of the
mailbox rule, but only if the service is available to the
general public, is as timely and reliable as USPS, records the
date it receives mail for delivery, and meets other criteria
prescribed by the Secretary.\11\
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\6\Sec. 7502(a), Treas. Reg. sec. 301.7502-1(c)(1)(2).
\7\Sec. 7502(a)(2)(B), Treas. Reg. sec. 301.7502-1(c)(1)(2).
\8\Treas. Reg. sec. 301.7502-1(c)(1)(iii)(B).
\9\Sec. 7502(c)(1).
\10\Treas. Reg. sec. 301.7502-1(c)(2).
\11\Sec. 7502(f), Treas. Reg. sec. 301.7502-1(c)(3). Additionally,
special rules apply to deposits required to be made to a financial
institution. Sec. 7502(e).
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Electronic filings and payments
The mailbox rule, as set forth in the Code and regulations,
does not cover electronic payments or electronic filings made
other than through an electronic return transmitter. Instead,
the mailbox rule applies only to mail delivered by the USPS,
unless otherwise authorized by the Secretary. For electronic
delivery, the Code authorizes the Secretary to define the
postmark date and evidence of delivery regarding electronic
filings, without mention of electronic payments.\12\ Acting
under such authorization, the Secretary has promulgated rules
in the specific case of electronic return transmitters, deeming
the electronic postmark date the date that an authorized
electronic return transmitter receives the transmission of a
taxpayer's electronically filed document on its host system,
regardless of when it is received by the IRS.\13\
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\12\Sec. 7502(c)(2).
\13\Treas. Reg. sec. 301.7502-1(d)(1), (3)(ii). The Commissioner
may authorize specific electronic return transmitters to provide
taxpayers with electronic postmarks to acknowledge the date and time
that the electronic return transmitter received the electronically-
filed document. Treas. Reg. sec. 301.7502-1(d)(2).
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REASONS FOR CHANGE
Present law applies the taxpayer-favorable mailbox rule
broadly to filings and payments sent by U.S. mail, but only to
electronic filings sent using an electronic return transmitter.
This approach creates a discrepancy depending on how the item
is sent: a mailed filing, mailed payment, or electronic return
sent through electronic return transmitter is deemed to be on
time if it is postmarked on or before the due date, but an
electronic payment or electronic filing sent other than via
electronic return transmitter is timely only if received by the
IRS on or before the due date. The Committee believes that, in
order to resolve this discrepancy, the mailbox rule should
apply broadly to both electronic payments and filings.
Additionally, while the statute currently authorizes the
Secretary to apply the mailbox rule to electronic filings, the
Committee believes this authorization should be extended to
electronic payments.
EXPLANATION OF PROVISION
The provision defines when a return, claim, statement, or
other document, or payment sent electronically is considered
timely. The document or payment is considered timely if the
date on which it is sent is on or before the due date of the
filing or payment, regardless of the date on which the
applicable agency, officer, or office receives the document or
payment. The provision requires the Secretary to promulgate
rules necessary to apply the mailbox rule to electronic filing
and payments by December 31, 2025.
EFFECTIVE DATE
The provision applies to any document or payment sent after
December 31, 2025.
III. VOTE OF THE COMMITTEE
Pursuant to clause 3(b) of rule XIII of the Rules of the
House of Representatives, the following statement is made
concerning the vote of the Committee on Ways and Means in its
consideration of H.R. 1152, the ``Electronic Filing and Payment
Fairness Act,'' on February 12, 2025.
The bill, H.R. 1152 was ordered favorably reported to the
House of Representatives as amended by a roll call vote of 41
yeas to 0 nays (with a quorum being present). The vote was as
follows:
----------------------------------------------------------------------------------------------------------------
Representative Yea Nay Present Representative Yea Nay Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith (MO)..................... X ...... ......... Mr. Neal............. X ...... .........
Mr. Buchanan....................... X ...... ......... Mr. Doggett.......... X ...... .........
Mr. Smith (NE)..................... X ...... ......... Mr. Thompson......... X ...... .........
Mr. Kelly.......................... ...... ...... ......... Mr. Larson........... X ...... .........
Mr. Schweikert..................... X ...... ......... Mr. Davis............ X ...... .........
Mr. LaHood......................... X ...... ......... Ms. Sanchez.......... X ...... .........
Mr. Arrington...................... ...... ...... ......... Ms. Sewell........... X ...... .........
Mr. Estes.......................... X ...... ......... Ms. DelBene.......... X ...... .........
Mr. Smucker........................ X ...... ......... Ms. Chu.............. X ...... .........
Mr. Hern........................... X ...... ......... Ms. Moore (WI)....... X ...... .........
Mrs. Miller (WV)................... X ...... ......... Mr. Boyle............ X ...... .........
Dr. Murphy......................... X ...... ......... Mr. Beyer............ X ...... .........
Mr. Kustoff........................ X ...... ......... Mr. Evans............ X ...... .........
Mr. Fitzpatrick.................... X ...... ......... Mr. Schneider........ X ...... .........
Mr. Steube......................... X ...... ......... Mr. Panetta.......... X ...... .........
Ms. Tenney......................... X ...... ......... Mr. Gomez............ ...... ...... .........
Mrs. Fischbach..................... X ...... ......... Mr. Horsford......... X ...... .........
Mr. Moore (UT)..................... X ...... ......... Ms. Plaskett......... X ...... .........
Ms. Van Duyne...................... X ...... ......... Mr. Suozzi........... X ...... .........
Mr. Feenstra....................... X
Ms. Malliotakis.................... X
Mr. Carey.......................... X
Mr. Yakym.......................... X
Mr. Miller (OH).................... X
Mr. Bean........................... X
Mr. Moran.......................... X
----------------------------------------------------------------------------------------------------------------
IV. BUDGET EFFECTS OF THE BILL
A. Committee Estimate of Budgetary Effects
In compliance with clause 3(d) of rule XIII of the Rules of
the House of Representatives, the following statement is made
concerning the effects on the budget of the bill, H.R. 1152 as
reported. The estimate prepared by the Congressional Budget
Office (CBO) is included below.
The bill is estimated to have a negligible effect on
Federal fiscal year budget receipts for the period 2025 through
2034.
B. Statement Regarding New Budget Authority and Tax Expenditures Budget
Authority
In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee states that the
bill involves no new or increased budget authority.
C. Cost Estimate Prepared by the Congressional Budget Office
The Congressional Budget Act of 1974, as amended stipulates
that revenue estimates provided by the staff of the Joint
Committee on Taxation (``JCT'') will be the official estimates
for all tax legislation considered by Congress. As such CBO
incorporates these estimates into its cos estimates of the
effects of the legislation. The estimates for the revenue
provisions of H.R. 1152 were provided by JCT.
V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE
A. Committee Oversight Findings and Recommendations
With respect to clause 3(c)(1) of rule XIII of the Rules of
the House of Representatives, the Committee made findings and
recommendations that are reflected in this report.
B. Statement of General Performance Goals and Objectives
With respect to clause 3(c)(4) of rule XIII of the Rules of
the House of Representatives, the Committee advises that the
bill does not authorize funding, so no statement of general
performance goals and objectives is required.
C. Applicability of House Rule XXI, Clause 5(b)
Rule XXI 5(b) of the Rules of the House of Representatives
provides, in part, that ``A bill or joint resolution,
amendment, or conference report carrying a Federal income tax
rate increase may not be considered as passed or agreed to
unless so determined by a vote of not less than three-fifths of
the Members voting, a quorum being present.'' The Committee has
carefully reviewed the bill, and states that the bill does not
provide such a Federal income tax rate increase.
D. Information Relating to Unfunded Mandates
This information is provided in accordance with section 423
of the Unfunded Mandates Reform Act of 1995 (Pub. L. No. 104-
4).
The Committee has determined that the bill does not contain
Federal mandates on the private sector. The Committee has
determined that the bill does not impose a Federal
intergovernmental mandate on State, local, or tribal
governments.
E. Congressional Earmarks, Limited Tax Benefits, and Limited Tariff
Benefits
With respect to clause 9 of rule XXI of the Rules of the
House of Representatives, the Committee has carefully reviewed
the provisions of the bill, and states that the provisions of
the bill do not contain any congressional earmarks, limited tax
benefits, or limited tariff benefits within the meaning of the
rule.
F. Duplication of Federal Programs
In compliance with clause 3(c)(5) of rule XIII of the Rules
of the House of Representatives, the Committee states that no
provision of the bill establishes or reauthorizes: (1) a
program of the Federal Government known to be duplicative of
another Federal program; (2) a program included in any report
from the Government Accountability Office to Congress pursuant
to section 21 of Public Law 111-139; or (3) a program related
to a program identified in the most recent Catalog of Federal
Domestic Assistance, published pursuant to the Federal Program
Information Act (Pub. L. No. 95-220, as amended by Pub. L. No.
98-169).
G. Tax Complexity Analysis
Section 4022(b) of the Internal Revenue Service Reform and
Restructuring Act of 1998 (the ``IRS Reform Act'') requires the
staff of the Joint Committee on Taxation (in consultation with
the Internal Revenue Service and the Treasury Department) to
provide a tax complexity analysis. The complexity analysis is
required for all legislation reported by the Senate Committee
on Finance, the House Committee on Ways and Means, or any
committee of conference if the legislation includes a provision
that directly or indirectly amends the Internal Revenue Code
and has widespread applicability to individuals or small
businesses.
The staff of the Joint Committee on Taxation has determined
that there are no provisions that are of widespread
applicability to individuals or small businesses.
VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
A. Text of Existing Law Amended or Repealed by the Bill, as Reported
Pursuant to clause 3(e) of rule XIII of the Rules of the
House of Representatives, the text of each section proposed to
be repealed by the bill is shown below:
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italics, and existing law in which no
change is proposed is shown in roman):
INTERNAL REVENUE CODE OF 1986
* * * * * * *
Subtitle F--Procedure and Administration
* * * * * * *
CHAPTER 77--MISCELLANEOUS PROVISIONS
* * * * * * *
SEC. 7502. TIMELY MAILING TREATED AS TIMELY FILING AND PAYING.
(a) General Rule.--
(1) Date of delivery.--If any return, claim,
statement, or other document required to be filed, or
any payment required to be made, within a prescribed
period or on or before a prescribed date under
authority of any provision of the internal revenue laws
is, after such period or such date, 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, or to which such payment is
required to be made, 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.
(2) Mailing requirements.--This subsection shall
apply only if--
(A) the postmark date falls within the
prescribed period or on or before the
prescribed date--
(i) for the filing (including any
extension granted for such filing) of
the return, claim, statement, or other
document, or
(ii) for making the payment
(including any extension granted for
making such payment), and
(B) the return, claim, statement, or other
document, or payment was, within the time
prescribed in subparagraph (A), deposited in
the mail in the United States in an envelope or
other appropriate wrapper, postage prepaid,
properly addressed to the agency, officer, or
office with which the return, claim, statement,
or other document is required to be filed, or
to which such payment is required to be made.
(b) Postmarks.--This section shall apply in the case of
postmarks not made by the United States Postal Service only if
and to the extent provided by regulations prescribed by the
Secretary.
(c) Registered and Certified Mailing; Electronic Filing and
Payment.--
(1) Registered mail.--For purposes of this section,
if any return, claim, statement, or other document, or
payment, is sent by United States registered mail--
(A) such registration shall be prima facie
evidence that the return, claim, statement, or
other document was delivered to the agency,
officer, or office to which addressed; and
(B) the date of registration shall be deemed
the postmark date.
(2) Certified mail[; electronic filing].--The
Secretary is authorized to provide by regulations the
extent to which the provisions of paragraph (1) with
respect to prima facie evidence of delivery and the
postmark date shall apply to certified mail [and
electronic filing].
(3) Electronic filing and payment.--
(A) In general.--If any return, claim,
statement, or other document required to be
filed, or any payment required to be made,
within a prescribed period or on or before a
prescribed date under authority of any
provision of the internal revenue laws is sent
electronically by any person to the agency,
officer, or office with which such return,
claim, statement, or other document is required
to be filed, or to which such payment is
required to be made, the date on which such
return, claim, statement, or other document, or
payment, is sent electronically by such person
shall be deemed to be the date of delivery or
the date of payment, as the case may be,
regardless of the date on which the applicable
agency, officer, or office receives or reviews
such return, claim, statement, document, or
payment.
(B) Regulations.--Not later than December 31,
2025, the Secretary shall issue such
regulations or other guidance as the Secretary
determines necessary to carry out the purposes
of this paragraph.
(d) Exceptions.--This section shall not apply with respect
to--
(1) the filing of a document in, or the making of a
payment to, any court other than the Tax Court,
(2) currency or other medium of payment unless
actually received and accounted for, or
(3) returns, claims, statements, or other documents,
or payments, which are required under any provision of
the internal revenue laws or the regulations thereunder
to be delivered by any method other than by mailing.
(e) Mailing of Deposits.--
(1) Date of deposit.--If any deposit required to be
made (pursuant to regulations prescribed by the
Secretary under section 6302(c)) on or before a
prescribed date is, after such date, delivered by the
United States mail to the bank, trust company, domestic
building and loan association, or credit union
authorized to receive such deposit, such deposit shall
be deemed received by such bank, trust company,
domestic building and loan association, or credit union
on the date the deposit was mailed.
(2) Mailing requirements.--Paragraph (1) shall apply
only if the person required to make the deposit
establishes that--
(A) the date of mailing falls on or before
the second day before the prescribed date for
making the deposit (including any extension of
time granted for making such deposit), and
(B) the deposit was, on or before such second
day, mailed in the United States in an envelope
or other appropriate wrapper, postage prepaid,
properly addressed to the bank, trust company,
domestic building and loan association, or
credit union authorized to receive such
deposit.
In applying subsection (c) for purposes of this
subsection, the term ``payment'' includes ``deposit'',
and the reference to the postmark date refers to the
date of mailing.
(3) No application to certain deposits.--Paragraph
(1) shall not apply with respect to any deposit of
$20,000 or more by any person who is required to
deposit any tax more than once a month.
(f) Treatment of Private Delivery Services.--
(1) In general.--Any reference in this section to the
United States mail shall be treated as including a
reference to any designated delivery service, and any
reference in this section to a postmark by the United
States Postal Service shall be treated as including a
reference to any date recorded or marked as described
in paragraph (2)(C) by any designated delivery service.
(2) Designated delivery service.--For purposes of
this subsection, the term ``designated delivery
service'' means any delivery service provided by a
trade or business if such service is designated by the
Secretary for purposes of this section. The Secretary
may designate a delivery service under the preceding
sentence only if the Secretary determines that such
service--
(A) is available to the general public,
(B) is at least as timely and reliable on a
regular basis as the United States mail,
(C) records electronically to its data base,
kept in the regular course of its business, or
marks on the cover in which any item referred
to in this section is to be delivered, the date
on which such item was given to such trade or
business for delivery, and
(D) meets such other criteria as the
Secretary may prescribe.
(3) Equivalents of registered and certified mail.--
The Secretary may provide a rule similar to the rule of
paragraph (1) with respect to any service provided by a
designated delivery service which is substantially
equivalent to United States registered or certified
mail.
* * * * * * *
[all]