[Federal Register Volume 76, Number 163 (Tuesday, August 23, 2011)]
[Rules and Regulations]
[Pages 52561-52563]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-21416]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 301

[TD 9543]
RIN 1545-BA99


Timely Mailing Treated as Timely Filing

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Final regulations.

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SUMMARY: This document contains regulations amending a Treasury 
Regulation to provide guidance as to the only ways to establish prima 
facie evidence of delivery of documents that have a filing deadline 
prescribed by the internal revenue laws, absent direct proof of actual 
delivery. The regulations provide that the proper use of registered or 
certified mail, or a service of a private delivery service (PDS) 
designated under criteria established by the IRS, will constitute prima 
facie evidence of delivery. The regulations are necessary to provide 
greater certainty on this issue and to provide specific guidance. The 
regulations affect taxpayers who mail Federal tax documents to the 
Internal Revenue Service or the United States Tax Court.

DATES: Effective Date: These regulations are effective on August 23, 
2011.
    Applicability Date: These regulations apply to any payment or 
document mailed and delivered in accordance with the requirements of 
this section in an envelope bearing a postmark dated after September 
21, 2004.

FOR FURTHER INFORMATION CONTACT: Steven Karon, (202) 622- 4570 (not a 
toll-free number).

SUPPLEMENTARY INFORMATION:

Paperwork Reduction Act

    The collection of information contained in these final regulations 
has been reviewed and approved by the Office of Management and Budget 
in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
3507(d)) under control number 1545-1899. The collection of information 
in these final regulations is in Sec.  301.7502-1. This information is 
required in order for taxpayers to be able to establish the postmark 
date and prima facie evidence of delivery when using certified or 
registered mail.
    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.
    Books or records relating to a collection of information must be 
retained as long as their contents might become material in the 
administration of any internal revenue law. Generally, tax returns and 
return information are confidential, as required by 26 U.S.C. 6103.

Background

    This document contains regulations amending 26 CFR part 301 under 
section 7502 of the Internal Revenue Code (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 Federal 
circuit courts of appeal 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. 
Specifically, 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.
    A notice of proposed rulemaking (REG-138176-02) was published in 
the Federal Register (69 FR 56377) on September 21, 2004. The proposed 
regulations clarified 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. Under section 
7502(f)(3), the IRS may extend to a service provided by a PDS a rule 
similar to the prima facie evidence of delivery rule applicable to 
certified and registered mail. Prior to the publication of the notice 
of proposed rulemaking, the IRS had 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 Federal Register, 64 FR 
2606 (January 15, 1999). Because the IRS was clarifying what 
documentation it will accept as proof of delivery, additional comments 
were sought on this issue. Accordingly, in the notice of proposed 
rulemaking, the IRS and the Treasury Department encouraged the public 
to make comments regarding whether the prima facie evidence of delivery 
rule should be extended to a service provided by a PDS.
    Eighteen written comments were received in response to the notice 
of proposed rulemaking. Three commenters requested a public hearing. A 
notice of public hearing on proposed rulemaking was published in the 
Federal Register (69 FR 68282) on November 24, 2004. A public hearing 
was held on January 11, 2005. Three commenters appeared at the public 
hearing and commented on the notice of proposed rulemaking.
    All comments were considered and are available for public 
inspection upon request. After consideration of the written comments 
and the comments provided at the public hearing, the proposed 
regulations under section 7502 are adopted as revised by this Treasury 
Decision. The public comments, public hearing, and the revisions are 
discussed in this preamble.

Summary of Comments and Explanation of Provisions

    Four commenters expressed concern that the proposed regulations 
limited the proof to satisfy the timely mailing/timely filing rule of 
section 7502(a) rather than the prima facie evidence of delivery rule 
of section 7502(c). These final regulations do not limit the use of

[[Page 52562]]

U.S. Mail, other delivery options offered by the United States Postal 
Service (USPS), or a PDS for purposes of satisfying the timely mailing/
timely filing rule of section 7502(a). Instead, these final regulations 
clarify the prima facie evidence of delivery rule of section 7502(c).
    Seven commenters suggested that the proposed regulations provide 
that evidence of proper use of a service offered by a PDS should 
establish prima facie evidence of delivery of Federal tax documents to 
the IRS and the United States Tax Court. Seven commenters observed that 
PDSs offered services similar to certified and registered mail, and 
that the services offered by the PDSs were as reliable as registered 
mail and certified mail. Two commenters noted that PDSs generally 
provide a greater level of detail with respect to tracking and delivery 
information than certified and registered mail for purposes of 
establishing proof of delivery. Three commenters expressed concern that 
it is inconsistent to permit individuals to rely upon PDSs to satisfy 
the timely mailing/timely filing rule of section 7502(a), but not for 
section 7502(c). One commentator observed that section 7502(f)(3) 
requires that the Treasury Secretary and the IRS consider PDS 
alternatives as substitutes for certified and registered mail.
    After considering comments received on the proposed regulations, 
these final regulations provide that the Treasury Department and IRS 
will issue guidance that will establish the criteria to be used to 
designate PDSs for purposes of the prima facie evidence of delivery 
rule. Cf. Notice 2004-83 (2004-2 CB 1030) (listing PDSs that the 
Secretary has designated pursuant to section 7502(f)(2)) (see Sec.  
601.601(d)(2)(ii)(b) of this chapter); Rev. Proc. 97-19 (1997-1 CB 644) 
(providing the criteria to determine whether a PDS qualifies as a 
designated private delivery service under section 7502(f) and the 
procedures under which a PDS can apply to become a designated PDS) (see 
Sec.  601.601(d)(2)(ii)(b) of this chapter). Thus, these final 
regulations provide that, other than direct proof of actual delivery, 
proof of proper use of registered or certified mail (registered or 
certified mail sender's receipt), and proof of proper use of a PDS duly 
designated under criteria established by the IRS, are the sole means to 
establish prima facie evidence of delivery of documents that have a 
filing deadline prescribed by the internal revenue laws.
    The existing regulations under section 7502 are being reorganized. 
Section 301.7502-1(e) will still be entitled ``Delivery,'' but will now 
focus on the requirement for actual delivery or the use of one of the 
means discussed above to establish a presumption of delivery. Former 
paragraph (e)(2) and the example in paragraph (e)(3) are moved to 
paragraph (b)(2) to consolidate the discussion of the effect of section 
7502 on certain claims for refund.
    Seven commenters suggested that the proposed regulations should 
permit additional services offered by the USPS to establish prima facie 
evidence of delivery of Federal tax documents to the IRS and the United 
States Tax Court. Commenters recommended that the following USPS 
services should be permitted to establish prima facie evidence of 
delivery: Priority Mail, Certificate of Mailing, Express Mail Receipt, 
Delivery Confirmation Receipt, and Signature Confirmation.
    Section 7502 does not authorize the Treasury Department or the IRS 
to adopt a rule that would permit USPS services in addition to 
certified and registered mail to establish prima facie evidence of 
delivery. Congress has been clear when it intended to change section 
7502 to allow proof of delivery by other means. In 1958, Congress 
amended section 7502 to provide the IRS with the authority to treat 
certified mail the same as registered mail. See Technical Amendments 
Act of 1958, Public Law No. 85-866 (72 Stat. 1606 (1958)). Congress 
also amended section 7502 to authorize the IRS to publish rules 
providing the extent to which a PDS is the equivalent of certified 
mail. See Taxpayer Bill of Rights 2, Public Law 104-168 (110 Stat. 1452 
(1996)); Internal Revenue Service Restructuring and Reform Act of 1998, 
Public Law 105-206 (112 Stat. 685 (1998)). Similar legislation would be 
necessary to authorize the IRS to treat additional USPS services as 
prima facie evidence of delivery.
    Two commenters expressed concern that certified and registered mail 
services are expensive and inconvenient in comparison to first class 
mail. These commenters suggested that regular first class mail should 
suffice to establish prima facie evidence of delivery. As described 
above, the prima facie evidence of delivery rule provides an exception 
to the actual delivery rule. Absent actual delivery, however, first 
class mail without additional services provides nothing, such as 
certified or registered mail receipt, to establish proof of delivery. 
Moreover, without legislative action, the Treasury Department and the 
IRS cannot adopt regulations extending the prima facie evidence of 
delivery rule to first class mail.

Special Analyses

    It has been determined that this Treasury decision is not a 
significant regulatory action as defined in Executive Order 12866, as 
supplemented by Executive Order 13563. 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 these 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 Treasury decision 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 $2.80 and registered mail can be used for as little as $10.60. 
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) of the Code, the proposed rule that 
preceded this Treasury decision was submitted to the Chief Counsel for 
Advocacy of the Small Business Administration for comment on its impact 
on small businesses.

Drafting Information

    The principal author of these regulations is Steven L. Karon of the 
Office of the Associate Chief Counsel, Procedure and Administration.

List of Subjects in 26 CFR Part 301

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

Adoption of Amendments to the Regulations

    Accordingly, 26 CFR part 301 is amended as follows:

PART 301--PROCEDURE AND ADMINISTRATION

0
Paragraph 1. The authority citation for part 301 is amended by removing 
the

[[Page 52563]]

entry for Sec.  301.7502-1T to read in part as follows:

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


0
Par. 2. Section 301.7502-1 is amended by:
0
1. Revising paragraphs (b)(2) and (e).
0
2. Adding paragraphs (c)(3) and (g)(4).
    The additions and revisions read as follows:


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

* * * * *
    (b) * * *
    (2) Claims for refund--(i) In general. In the case of certain 
taxes, a return may constitute a claim for credit or refund. Section 
7502 is applicable to the determination of whether a claim for credit 
or refund is timely filed for purposes of section 6511(a) if the 
conditions of section 7502 are met, irrespective of whether the claim 
is also a return. For rules regarding claims for refund on late filed 
tax returns, see paragraph (f) of this section. Section 7502 is also 
applicable when a claim for credit or refund is delivered after the 
last day of the period specified in section 6511(b)(2)(A) or in any 
other corresponding provision of law relating to the limit on the 
amount of credit or refund that is allowable.
    (ii) Example. The rules of paragraph (b)(2)(i) of this section are 
illustrated by the following example:

    Example. (A) Taxpayer A, an individual, mailed his 2004 Form 
1040, ``U.S. Individual Income Tax Return,'' on May 10, 2005, but no 
tax was paid at that time because the tax liability disclosed by the 
return had been completely satisfied by the income tax that had been 
withheld on A's wages. On April 15, 2008, A mails, in accordance 
with the requirements of this section, a Form 1040X, ``Amended U.S. 
Individual Income Tax Return,'' claiming a refund of a portion of 
the tax that had been paid through withholding during 2004. The date 
of the postmark on the envelope containing the claim for refund is 
April 15, 2008. The claim is received by the IRS on April 18, 2008.
    (B) Under section 6511(a), A's claim for refund is timely if 
filed within three years from May 10, 2005, the date on which A's 
2004 return was filed. As a result of the limitations of section 
6511(b)(2)(A), if A's claim is not filed within three years after 
April 15, 2005, the date on which A is deemed under section 6513 to 
have paid his 2004 tax, A is not entitled to any refund. Because A's 
claim for refund is postmarked and mailed in accordance with the 
requirements of this section and is delivered after the last day of 
the period specified in section 6511(b)(2)(A), section 7502 is 
applicable and the claim is deemed to have been filed on April 15, 
2008.
* * * * *
    (c) * * *
    (3) Private delivery services. Under section 7502(f)(1), a service 
of a private delivery service (PDS) may be treated as an equivalent to 
United States mail for purposes of the postmark rule if the 
Commissioner determines that the service satisfies the conditions of 
section 7502(f)(2). Thus, the Commissioner may, in guidance published 
in the Internal Revenue Bulletin (see Sec.  601.601(d)(2)(ii)(b) of 
this chapter), prescribe procedures and additional rules to designate a 
service of a PDS for purposes of the postmark rule of section 7502(a).
* * * * *
    (e) Delivery--(1) General rule. Except as provided in section 
7502(f) and paragraphs (c)(3) and (d) of this section, section 7502 is 
not applicable unless the document or payment is delivered by U.S. mail 
to the agency, officer, or office with which the document is required 
to be filed or to which payment is required to be made.
    (2) Exceptions to actual delivery--(i) Registered and certified 
mail. In the case of a document (but not a payment) sent by registered 
or certified mail, proof that the document was properly registered or 
that a postmarked certified mail sender's receipt was properly issued 
and that the envelope was properly addressed to the agency, officer, or 
office constitutes prima facie evidence that the document was delivered 
to the agency, officer, or office. Other than direct proof of actual 
delivery, proof of proper use of registered or certified mail, and 
proof of proper use of a duly designated PDS as provided for by 
paragraph (e)(2)(ii) of this section, are 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.
    (ii) Equivalents of registered and certified mail. Under section 
7502(f)(3), the Secretary may extend the prima facie evidence of 
delivery rule of section 7502(c)(1)(A) to a service of a designated 
PDS, which is substantially equivalent to United States registered or 
certified mail. Thus, the Commissioner may, in guidance published in 
the Internal Revenue Bulletin (see Sec.  601.601(d)(2)(ii)(b) of this 
chapter), prescribe procedures and additional rules to designate a 
service of a PDS for purposes of demonstrating prima facie evidence of 
delivery of a document pursuant to section 7502(c).
* * * * *
    (g) * * *
    (4) Registered or certified mail as the means to prove delivery of 
a document. Section 301.7502-1(e)(2) will apply to all documents mailed 
after September 21, 2004.

Steven T. Miller,
Deputy Commissioner for Services and Enforcement.
    Approved: August 10, 2011.
Emily S. McMahon,
Acting Assistant Secretary (Tax Policy).
[FR Doc. 2011-21416 Filed 8-22-11; 8:45 am]
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