Double Check the Postmark on Your Tax Return

The 12 million taxpayers who sought an extension on filing their taxes last April should consider sending in their returns a few days early if we are to learn from the experience of Mr. and Mrs. Stocker. Back in 2007, the couple waited until October 15th to mail their 2006 federal taxes, 2006 Michigan taxes, and amended 2003 federal taxes. Without obtaining proof that they postmarked their taxes by the deadline, the Stockers found themselves in a dilemma when Michigan received their filing with a postmark of October 15th, yet the IRS received one envelope with a postmark of October 15th, but the other envelope containing their amended 2003 taxes with a postmark of October 19th. The IRS thus ruled that the Stockers would not receive their $64,058 refund because of the late postmark. It gets stickier however. The IRS lost or destroyed the envelope that contained Mr. and Mrs. Stocker’s tax return, which is against IRS policy, but reports that it stamped the tax return upon receipt and the stamp reflects the late postmark. Without any proof such as a registered mail receipt, the Stockers appealed the IRS ruling and the trial court and the U.S. Court of Appeals for the Sixth Circuit have since ruled against them stating that only the actual physical envelope can be considered as evidence of what the postmark was. Any other evidence is not permissible. The Stockers have now appealed to the U.S. Supreme Court and the Tax Foundation has filed a friend-of-the-court brief supporting the Stockers effort to get the court to hear their case. The Tax Foundation writes that their brief argues the following points:

• “The Sixth Circuit's interpretation stacks the deck against taxpayers by adding a restrictive evidentiary rule that is not in the federal law governing tax filings. In future cases where the IRS 'loses' the only admissible evidence, taxpayers will automatically lose, which is not the intent of Congress.”
• “The statute in question has national application but the lower court ruling means taxpayers in some states face harsher treatment. The Supreme Court should resolve this uneven application and uncertainty.”
• “The implication of the 'extrinsic evidence' prohibition adopted by the lower court is that taxpayers should never be trusted to be truthful, but the IRS should always be trusted to be truthful. Such a standard threatens to foster general public disenchantment with the government and the law.”

Of course, using the IRS’s e-file option is always a good way to go for speed and convenience. According to IRS.gov, “Of the nearly 141.6 million returns received by the IRS so far this year, 83.5 percent of just over 118.2 million have been e-filed. To read the full brief issued by the Tax Foundation, click here.