TAX COURT OPINION

Case: Leonard & L. Melnik Grossman
Docket Number: 8662-04
Judge: Goeke
Opinion Type: memo
Filed: 07/05/2005
Pages: 8

T.C. Memo. 2005-164 UNITED STATES TAX COURT LEONARD AND L. MELNIK GROSSMAN, Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent Docket No. 8662-04. Filed July 5, 2005. On Jan. 5, 2004, R issued a notice of deficiency to The envelope containing Ps' petition was petitioners. postmarked by a private postage meter with a date of March 30, 2004. The envelope was properly addressed, but it was received by the Court after the 90-day period for filing prescribed by sec. 6213(a), case for lack of petition for redetermination was not timely filed. 6213(a), 7502(a) and (b), petition was timely filed because it was mailed in accordance with the timely-mailing/timely-filing rule in sec. 7502, thereunder. I.R.C., and the regulations prescribed jurisdiction on the ground that Ps' Ps contend that their I.R.C. I.R.C.. R moved to dismiss this Secs. Ps further contend that because they satisfied the requirements of sec. 7491(a), shifts to R on the issue of whether Ps' petition was timely filed. R argues that the plain language of sec. 7491(a)(1), I.R.C., indicates it is not applicable to the issue of whether Ps' petition was timely filed. the burden of proof R argues, I.R.C., in the It SERVED JUL - 5 2005 - 3 - $6,825 for their 2001 tax year. Petitioners' petition needed to be filed with the Court by April 5, 2004, which was not a Saturday, a Sunday, or a legal holiday in the District of Columbia, for it to be timely filed pursuant to section 6213(a). It was not received and filed by the Court until May 25, 2004; thus, respondent moved to dismiss this case for lack of jurisdiction pursuant to Rule 36(a). Petitioners' petition was sent in an envelope properly addressed to this Court by certified mail, article No. 7194 9102 2970 0000 1909. Petitioners' counsel received a return receipt confirming that the petition was received by the Court on May 25, 2004. The envelope containing the petition received by the Court (collectively termed, piece of mail at issue) did not bear a U.S. Postal Service postmark or any other U.S. Postal Service mark. Instead, the envelope bears a privately metered postmark dated March 30, 2004. Canceled Checks The Court received eight canceled checks into evidence at trial. Melvyn Ward, P.A., petitioners' counsel, was the payor of these checks. These checks were issued as follows: l(...continued) to the Tax Court Rules of Practice and Procedure. - 5 - certified mailpiece was delivered May 25, 2004 to the Tax Court and signed for by "K. Mitchell." Our records also indicated an intermittent scan in Clarksburg New Jersey on May 13, 2004. The Clarksburg scan appears to have been in error and should have been scanned missent. record show no acceptance scan for the mailpiece, we can only presume the letter did not enter the mails prior to May 12, 200(4] Code 07730. if it had been mailed from Zip * Since our * * * * * If the item had been mailed on March 30, 2004 according to information supplied by Mr. Ward, a Postal employee would have date stamped the receipt. The verification and date stamp by the Postal employee would also have been done [on) multiple items. Mr. Ward was unable or did not supply a dated receipt the mailpiece was accepted by a Postal employee to be deposited into the mails. a customer's "Firm Sheet" that indicated the date (or Firm Sheet) lists that * * * Irradiation of Mail In the June 9, 2004, letter to petitioners' counsel, the U.S. Postal Service indicated, among other things, that all mail addressed to any Government office in Washington, D.C., continues to be subjected to irradiation to eliminate any anthrax spores. OPINION This Court has limited jurisdiction. This Court's jurisdiction to redetermine a deficiency depends on the issuance of a valid notice of deficiency and a timely filed petition. Rule 13(a), (c); Levitt v. Commissioner, 97 T.C. 437, 441 (1991). Section 6213(a) provides that a petition for redetermination of a deficiency determined by respondent is timely filed if it is filed within 90 days, or 150 days if the notice is mailed to a - 7 - However, in a case such as this, the timely-mailing/timely- filing rule may apply to a postmark not made by the U.S. Postal Service to the extent provided by regulation. Sec. 7502(b). Under section 301.7502-1(c) (1) (iii) (B) (1), Proced. & Admin. Regs., the timely-mailing/timely-filing rule applies to non-U.S. Postal Service postmarks if the föllowing requirements are satisfied: (i) The postmark so made must bear a legible date on or before the last date, or the last day of period, prescribed for filing the document or making the payment; and the (ii) The document or payment must be received by later than the time when a the agency, officer, or office with which it is required to be filed not document or payment contained in an envelope that properly addressed, mailed, and sent by the same class of mail would ordinarily be received if it were postmarked at Postal Service on the last date, or the last day of period, prescribed for filing the document or making the payment. the same point of origin by the U.S. is the In this case, the postmark on the envelope containing petitioners' petition was within the prescribed filing period, and also was mailed in a properly addressed envelope. At respondent's behest, Stanley Wong (Mr. Wong), a delivery and retail analyst for the New York District of the U.S. Postal Service, credibly testified that the service standard mailing period from Hazlet, New Jersey, to Washington, D.C., is 2 days (the 2-day standard) for a piece of first-class mail properly addressed and postmarked by the U.S. Postal Service. The piece of mail at issue here was not received by the Court until May 25, Memo. 1975-195; Fishman v. Cömmissioner, 51 T.C. 869, 872 (1969), affd. per curiam 420 F.2d 491 (2d Cir. 1970). Before we address whether the piece of mail at issue satisfied the requirements of section 301.7502- 1(c)(1)(iii)(B) (2), Proced. & Admin. Regs., we are asked to decide which party bears the burden of proof. A. Burden of Proof Generally, a taxpayer bears the burden of proving that this Court has jurisdiction. See Patz Trust v. Commissioner, 69 T.C. 497, 503 (1977); Fehrs v. Commissioner, 65 T.C. 346, 348 (1975); Wheeler's Peachtree Pharmacy, Inc. v. Commissioner, 35 T.C. 177, 180 (1960); Natl. Comm. To Secure Justice v. Commissioner, 27 T.C. 837 (1957). Section 7491(a) shifts the burden of proof to the Commissioner under certain circumstances. The parties dispute whether section 7491(a)(1) applies to questions of jurisdiction. (cid:16)042Section 7491(a) (1) shifts the burden of proof to the Commissioner if the taxpayer "introduces credible evidence with respect to any factual issue relevant to ascertaining the liability of the taxpayer for any tax imposed by subtitle A and B" in any court proceeding. Subtitle A contains the Federal income tax, and subtitle B contains the Federal gift and estate tax. The burden shifts to the Commissioner under section 7491(a) (1) with respect to an issue only if the taxpayer has complied with the requirements imposed by the Internal Revenue Code (the Code) to - 11 - B. Section 301.7502-1(c)(1)(iii)(B)(2), Proced. Analysis & Admin. Regs. Petitioners must establish that their petition was mailed in compliance with three requirements for it to be deemed timely filed under section 301.7502-1(c)(1)(iii)(B) (2), Proced. & Admin. Regs. These requirements include: (1) The piece of mail at issue was actually deposited in the U.S. mail in a timely fashion; (2) the delay in receipt of the piece of mail at issue (cid:16)042was due to a delay in transmission; and (3) what caused the delay. Id. (1) Was Petitioners' Petition Actually Deposited in the U.S. Mail Before the Expiration of Prescribed for Filing? the 90-Day Period At trial, Brenda Bucco (Ms. Bucco) testified on petitioners' behalf. Ms. Bucco is employed by petitioners' counsel as an office manager, a position she has held for 11 years. Ms. Bucco testified that on March 29, 2004, she prepared petitioners' (cid:16)042petition to be mailed by placing it in a properly addressed envelope, affixing the proper postage, and completing the certified mail receipt. Ms. Bucco maintained a private postal meter mailing log in the ordinary course of business that shows March 29, 2004, as the date she prepared petitioners' petition. She further testified that on March 30, 2004, she personally handed the piece of mail at issue to a U.S. Postal Service employee who collected her employer's mail from his office in Hazlet, New Jersey. - 13 - piece of mail at issue was deposited in the U.S. mail on or before the last day of the period prescribed for filing petitioners' petition. (2) Was the Delay in Receiving Petitioners' Petition Due to a Delay in the Transmission of Mail? The Court, at trial, received into evidence a letter from the U.S. Postal Service dated August 26, 2004. The letter indicates that from May 13 through May 25, 2004, the piece of mail at issue was delayed due to the fault of the U.S. Postal Service. Mr. Wong, an employee of the U.S. Postal Service, interpreted the terms in this letter to mean that on May 13, .2004, the piece of mail at issue was incorrectly scanned as delivered. He also testified that a piece of mail sent from Hazlet, New Jersey, to Washington, D.C., usually does not go through Clarksburg, New Jersey, where it was received and incorrectly scanned as delivered. According to Mr. Wong, the piece of mail at issue should have been scanned as missent. A missent piece of mail is one that arrives at the wrong destination. When a missent piece of mail is properly scanned as missent, the post office that incorrectly received the piece of mail is identified. Respondent contends that the delay in the Court's receipt of the piece of mail containing petitioners' petition was not the result of a delay in the transmission of the mail. Specifically, respondent points to the U.S. Postal Service letters dated June 9 that petitioners' petition was delayed because of errors made by the U.S. Postal Service in the transmission of the mail. (3) What Caused the Delay? Mistakes occur and the delay at issue was the result of such. The facts indicate that the U.S. Postal Service missent the piece of mail at issue to Clarksburg, New Jersey, a location this piece of mail should have never reached had it been handled properly. There the U.S. Postal Service incorrectly scanned it delivered, instead of scanning it missent. This may have perpetuated the delay. A careful review of the envelope in which petitioners' petition was mailed supports a finding that it was properly addressed to this Court in Washington, D.C. Given these unique circumstances, together with all of the other evidence presented, we find that petitioners have provided specific evidence that the delay resulted from errors made by the U.S. Postal Service. (4) Conclusion We hold that the preponderance of the evidence establishes that petitioners have satisfied the timely-mailing/timely-filing requirements set forth in section 301.7502-1(c) (1)(iii) (B) (2), Proced. & Admin. Regs. Therefore, respondent's motion to dismiss for lack of jurisdiction will be denied. An appropriate order will be isued. R