[Federal Register Volume 69, Number 182 (Tuesday, September 21, 2004)]
[Proposed Rules]
[Pages 56377-56379]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-21218]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 301

[REG-138176-02]
RIN 1545-BA99


Timely Mailing Treated as Timely Filing

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Notice of proposed rulemaking.

-----------------------------------------------------------------------

SUMMARY: This document contains proposed regulations amending a 
Treasury Regulation to provide that, other than direct proof of actual

[[Page 56378]]

delivery, a registered or certified mail receipt is the only prima 
facie evidence of delivery of documents that have a filing deadline 
prescribed by the internal revenue laws. The proposed regulations are 
necessary to provide greater certainty on this issue and to provide 
specific guidance. The proposed regulations affect taxpayers who mail 
Federal tax documents to the Internal Revenue Service or the United 
States Tax Court.

DATES: Written or electronic comments and requests for a public hearing 
must be received by December 20, 2004.

ADDRESSES: Send submissions to: CC:PA:LPD:PR (REG-138176-02), room 
5203, Internal Revenue Service, POB 7604, Ben Franklin Station, 
Washington, DC 20044. Submissions may be hand-delivered between the 
hours of 8 a.m. and 4 p.m. to CC:PA:LPD:PR (REG-138176-02), Courier's 
Desk, Internal Revenue Service, 1111 Constitution Avenue, NW., 
Washington, DC or sent electronically, via the IRS Internet site at: 
www.irs.gov/regs or via the Federal eRulemaking Portal at http://www.regulations.gov/ (IRS--REG-138176-02).

FOR FURTHER INFORMATION CONTACT: Concerning the regulations, Charles A. 
Hall, (202) 622-4940; concerning submissions, Sonya Cruse, (202) 622-
7180 (not toll-free numbers).

SUPPLEMENTARY INFORMATION:

Paperwork Reduction Act

    The collection of information contained in this notice of proposed 
rulemaking has been submitted to the Office of Management and Budget 
for review in accordance with the Paperwork Reduction Act of 1995 (44 
U.S.C. 3507(d)). Comments on the collection of information should be 
sent to the Office of Management and Budget, Attn: Desk Officer for the 
Department of the Treasury, Office of Information and Regulatory 
Affairs, Washington, DC 20503, with copies to the Internal Revenue 
Service, Attn: IRS Reports Clearance Officer, SE:CAR:MP:T:T:SP, 
Washington, DC 20224. Comments on the collection of information should 
be received by November 22, 2004. Comments are specifically requested 
concerning:
    Whether the proposed collection of information is necessary for the 
proper performance of the functions of the Internal Revenue Service, 
including whether the information will have practical utility;
    The accuracy of the estimated burden associated with the proposed 
collection of information (see below);
    How the quality, utility, and clarity of the information to be 
collected may be enhanced;
    How the burden of complying with the proposed collection of 
information may be minimized, including through the application of 
automated collection techniques or other forms of information 
technology; and
    Estimates of capital or start-up costs and costs of operation, 
maintenance, and purchase of service to provide information.
    The collection of information in this proposed regulation is in 
Sec.  301.7502-1(e). This collection of information is voluntary. The 
likely recordkeepers are taxpayers who want to have evidence to 
establish the postmark date and prima facie evidence of delivery when 
using registered or certified mail.
    Estimated total annual recordkeeping burden: 1,084,765 hours.
    Estimated average annual burden hours per recordkeeper: 6 minutes 
(.10 hours).
    Estimated number of recordkeepers: 10,847,647.
    An agency may not conduct or sponsor, and a person is not required 
to respond to, a collection of information unless it displays a valid 
control number assigned by the Office of Management and Budget.
    Books or records relating to a collection of information must be 
retained as long as their contents may become material in the 
administration of any internal revenue law. Generally, tax returns and 
tax return information are confidential, as required by 26 U.S.C. 6103.

Background

    This document contains proposed regulations amending 26 CFR part 
301 under section 7502 of the Internal Revenue Code. Section 7502(a) 
first appeared as part of the recodification of the Code in 1954. 
Section 7502(a) is commonly known as the timely mailing/timely filing 
rule. Section 301.7502-1 of the Procedure and Administration 
Regulations provides rules for taxpayers to follow to qualify for 
favorable treatment under section 7502. There is a conflict among the 
Circuits of the United States Court of Appeals as to whether the 
provisions in section 7502 provide the exclusive means to establish 
prima facie evidence of delivery of a document to the IRS or the United 
States Tax Court. In particular, courts have reached differing 
conclusions regarding whether a taxpayer may raise a presumption of 
delivery of Federal tax documents to the IRS and the United States Tax 
Court only in situations in which the taxpayer uses registered or 
certified mail. These proposed regulations clarify the existing 
regulations and provide guidance on the need to use registered or 
certified mail to file documents with the IRS and the United States Tax 
Court to enjoy a presumption of delivery.

Explanation of Provisions

    These proposed regulations amend Sec.  301.7502-1(e)(1) to clarify 
that, other than direct proof of actual delivery, the exclusive means 
to establish prima facie evidence of delivery of Federal tax documents 
to the IRS and the United States Tax Court is to prove the use of 
registered or certified mail. The IRS currently accepts only a 
registered or certified mail receipt to establish a presumption of 
delivery if the IRS has no record of ever having received the document 
in question. This policy not only is consistent with section 7502(c) 
but also provides taxpayers with certainty that, under the Code, a 
certified or registered mail receipt will establish prima facie 
evidence of delivery. Accordingly, the proposed regulations merely 
clarify and confirm current IRS practice under the existing 
regulations. These proposed regulations provide that the final 
regulations, to which these proposed regulations relate, will be 
effective for all documents mailed after the publication date of these 
proposed regulations.
    Under section 7502(f)(3), the IRS may extend to a service provided 
by a private delivery service (PDS) a rule similar to the prima facie 
evidence of delivery rule applicable to registered and certified mail. 
To date the IRS has not received any comments or suggestions for 
extending this rule even though the IRS and the Treasury Department 
previously requested comments in a prior notice of proposed rulemaking 
under section 7502. See 64 FR 2606 (Jan. 15, 1999). As the IRS is 
clarifying what documentation it will accept as proof of delivery, it 
is appropriate to solicit comments on this issue again. Accordingly, 
the IRS and the Treasury Department encourage the public to make 
comments regarding whether the IRS and the Treasury Department should 
extend the prima facie evidence of delivery rule to a service provided 
by a PDS. These comments should address the reasons why the IRS should 
treat a service provided by a PDS as substantially equivalent to 
registered or certified mail, including a comparison of the benefits to 
taxpayers and the IRS of the PDS service with the benefits of 
registered and certified mail.

[[Page 56379]]

Special Analyses

    It has been determined that this notice of proposed rulemaking is 
not a significant regulatory action as defined in Executive Order 
12866. Therefore, a regulatory assessment is not required. It has also 
been determined that section 553(b) of the Administrative Procedure Act 
(5 U.S.C. chapter 5) does not apply to the regulations.
    It is hereby certified that the collection of information contained 
in this regulation will not have a significant economic impact on a 
substantial number of small entities. Accordingly, a regulatory 
flexibility analysis is not required. Although the collection of 
information in this notice of proposed rulemaking affects a substantial 
number of small entities, the economic impact on these small entities 
is not substantial. If a small entity uses registered or certified mail 
to file a document with the IRS, the additional burden (filling out the 
appropriate United States Postal Service forms) over and above using 
regular mail is not substantial. Furthermore, the extra cost to use 
registered or certified mail is not substantial as certified mail costs 
only $2.30 and registered mail can be used for as little as $7.50. 
Finally, the added burden of retaining the certified or registered mail 
sender's receipt will be minimal as the receipt can be associated with 
the small entity's copy of the document that it filed with the IRS.
    Pursuant to section 7805(f), this notice of proposed rulemaking 
will be submitted to the Chief Counsel for Advocacy of the Small 
Business Administration for comment on its impact on small businesses.

Comments and Requests for Public Hearing

    Before these proposed regulations are adopted as final regulations, 
consideration will be given to any written (a signed original and 8 
copies) or electronic comments that are submitted timely to the IRS. 
The IRS and the Treasury Department request comments on the clarity of 
the proposed rules and how they can be made easier to understand. All 
comments will be available for public inspection and copying. A public 
hearing may be scheduled if requested in writing by any person that 
timely submits written comments. If a public hearing is scheduled, 
notice of the date, time, and place for the public hearing will be 
published in the Federal Register.

Drafting Information

    The principal author of the regulations is Charles A. Hall of the 
Office of the Associate Chief Counsel, Procedure and Administration 
(Administrative Provisions and Judicial Practice Division).

List of Subjects in 26 CFR Part 301

    Employment taxes, Estate taxes, Excise taxes, Income taxes, 
Penalties, Reporting and recordkeeping requirements.

Proposed Amendments to the Regulations

    Accordingly, 26 CFR part 301 is proposed to be amended as follows:

PART 301--PROCEDURE AND ADMINISTRATION

    Paragraph 1. The authority citation for part 301 continues to read 
in part as follows:

    Authority: 26 U.S.C. 7805 * * *

    Par. 2. Section 301.7502-1 is amended by:
    1. Adding two new sentences at the end of paragraph (e)(1).
    2. Adding paragraph (g)(4).
    The additions read as follows:


Sec.  301.7502-1  Timely mailing of documents and payments treated as 
timely filing and paying.

* * * * *
    (e) * * * (1) * * * Other than direct proof of actual delivery, 
proof of proper use of registered or certified mail is the exclusive 
means to establish prima facie evidence of delivery of a document to 
the agency, officer, or office with which the document is required to 
be filed. No other evidence of a postmark or of mailing will be prima 
facie evidence of delivery or raise a presumption that the document was 
delivered.
* * * * *
    (g) * * *
    (4) Registered or certified mail as the means to prove delivery of 
a document. The last two sentences of paragraph (e)(1) of this section, 
when published as final regulations, will apply to all documents mailed 
after September 21, 2004.

Mark E. Matthews,
Deputy Commissioner for Services and Enforcement.
[FR Doc. 04-21218 Filed 9-20-04; 8:45 am]
BILLING CODE 4830-01-P