Opinion ID: 1444730
Heading Depth: 2
Heading Rank: 2

Heading: Summary Judgment on the Issue of Timely Filing Was Improper

Text: The District Court erred in granting summary judgment to the Government on the issue of timely filing. As an initial matter, there is enough direct evidence of pre-June 25, 2003 receipt of the refund requests in the record to raise a genuine issue of material fact. Moreover, the common-law mailbox rule remains a way for taxpayers such as the Fund to prove receipt indirectly by proof of mailing, notwithstanding the enactment of 26 U.S.C.  7502.
Aside from any consideration of the mailbox rule's continued existence, we believe that there is enough direct evidence of pre-June 25, 2003 receipt by the IRS of the refund requests (per the May 8 and June 13 Letters) to preclude summary judgment for the Government. Drawing reasonable inferences in the Fund's favor (as we must), we are satisfied that a reasonable fact-finder could find that the IRS timely received the Fund's refund requests. Pontarelli testified that he received a phone message from Revenue Officer Dugan acknowledging receipt of the May 8 Letter. Dugan's testimony about this is inconclusive. Though he did not recall receiving the letter, he admitted it was possible that he did. And given Dugan's statement that he would have ultimately destroyed the file containing the May 8 and June 13 Letters if he had received them, the Government's assertion that it has no record of the letters does not resolve the question whether it received them. Finally, the IRS's actions after June 2003, in particular its meeting with the Fund's representatives in August 2003, suggest that there was a precipitating eventÔÇöperhaps receipt of a refund requestÔÇöthat triggered this governmental response.
Even if we had concluded that the Fund's direct evidence of receipt is insufficient to preclude summary judgment, it has an alternate method for showing receipt: the common-law mailbox rule. [5] Two of our sister Circuit CourtsÔÇöthe Second and SixthÔÇöhave held that the common-law mailbox rule has been preempted by 26 U.S.C.  7502. We disagree. Specifically, we hold that, where a taxpayer does not rely on  7502's protection and produces evidence beyond its own testimony that it mailed the tax document early enough to allow timely receipt by the IRS in the regular course of United States Post Office business, it may avail itself of the mailbox rule. [6] Accordingly, we vacate the District Court's order to the extent it concluded to the contrary.
A statutory filing requirement generally can be satisfied only by actual, physical delivery to the Government. United States v. Lombardo, 241 U.S. 73, 76, 78, 36 S.Ct. 508, 60 L.Ed. 897 (1916); Heard v. Comm'r of Internal Revenue, 269 F.2d 911, 913 (3d Cir.1959). This has come to be known as the physical delivery rule. To help determine when the pertinent document was physically delivered, courts developed the common-law mailbox rule. If a document is properly mailed, the court will presume the United States Postal Service delivered the document to the addressee in the usual time. Rosenthal v. Walker, 111 U.S. 185, 193, 4 S.Ct. 382, 28 L.Ed. 395 (1884); see also Hagner v. United States, 285 U.S. 427, 430, 52 S.Ct. 417, 76 L.Ed. 861 (1932). The Government then has the opportunity to rebut this presumption with evidence of untimely receipt. See Hagner, 285 U.S. at 430, 52 S.Ct. 417. In this context, the mailbox rule is merely a method for determining the date of physical delivery under the physical delivery rule. It does not ignore the physical delivery requirement, but merely creates a presumption that physical delivery occurred in the ordinary time after mailing.
In 1954, Congress enacted  7502 of the Internal Revenue Code. The current version provides in relevant part:  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. . . . . . (c) Registered and certified mailing; electronic filing. (1) Registered mail. For purposes of this section, if any return, claim, statement, or other document, or payment, is sent by United States registered mailÔÇö (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. 26 U.S.C.  7502. Subsection 7502(a)(1) relieves a taxpayer from the timely physical delivery requirement where it postmarks the document before the filing deadline but the Government actually receives the document after the deadline. The postmark date effectively becomes the delivery date. Subsection (c)(1) provides, for purposes of  7502, that registering one's mail with the Postal Service establishes a prima facie case of delivery and that the registration date shall be the postmark date (which, due to  7502(a), is also the delivery date). Subsection (c)(2), and 26 C.F.R.  301.7502-1(c)(2), (d) & (e) promulgated thereunder, extend this safe harbor to certified and electronic mail.
After the enactment of  7502, there are at least two types of the common-law mailbox rule that a taxpayer might seek to invoke, only one of which we deal with here. First, a taxpayer relying on  7502ÔÇöbecause it mailed the document before the deadline, but too late for that document to arrive on time in the ordinary course of post office businessÔÇömight seek to invoke a presumption of eventual delivery. It would need this presumption because  7502(a)(1) protects the taxpayer only where the IRS actually receives the document at some later time. See Sorrentino v. IRS, 383 F.3d 1187, 1191 n. 5 (10th Cir.2004). If the taxpayer sends the document by registered, certified, or electronic mail,  7502(c) affords it a presumption of receipt. If, however, it does not use one of these three methods, and then faces an IRS allegation of nonreceipt, the taxpayer must ask the court to recognize an additional presumption of receipt not listed in the statuteÔÇöone arising from proof of mere mailing or postmark. Such a taxpayer would have to argue that the circumstances giving rise to a prima facie case of delivery that are listed in  7502(c) are not exclusive. Several of our sister Circuit Courts have accepted this argument, at least where the taxpayer introduced circumstantial evidence of postmark beyond its own testimony. See id. at 1194-95; Anderson v. United States, 966 F.2d 487, 491 (9th Cir.1992); Estate of Wood v. Comm'r of Internal Revenue, 909 F.2d 1155, 1159-61 (8th Cir.1990). [7] We do not deal with such an intra- 7502 mailbox rule here. Instead, we have a second, more classic mailbox ruleÔÇö a taxpayer who allegedly mailed its refund requests with time (here, plenty of time) for them to arrive before the deadline. Such a taxpayer does not need the protection of  7502, as the statute's function is to excuse taxpayers for late receipt. The Fund does not ask us to specify either May 8, 2003 or June 13, 2003 (the dates it allegedly mailed its refund requests) as the date of filing. It only asks for a presumption of delivery of the letters in the ordinary time after mailing (here, one day after May 8 or the regular first class delivery time after June 13, as O'Neill allegedly sent the letters via overnight and first class mail, respectively), which would be well before the June 25 deadline. Accordingly, the dispute here is whether  7502 has completely supplanted the common-law mailbox rule in tax cases where the taxpayer does not even rely on the statute. For starters, the text of  7502 does nothing to affect the mailbox rule in cases such as the one before us. It is a well-established principle of statutory construction that the common law ought not to be deemed repealed, unless the language of a statute be clear and explicit for this purpose. Norfolk Redevelopment & Housing Auth. v. Chesapeake & Potomac Tel. Co., 464 U.S. 30, 35, 104 S.Ct. 304, 78 L.Ed.2d 29 (1983) (internal quotations, brackets, and ellipses omitted). By its terms,  7502(a) applies only to cases where the pertinent document was delivered to the Government after the filing deadline. Here, by contrast, neither party claims the refund requests were delivered after the filing deadline of June 25, 2003. To repeat, the Fund produced evidence that O'Neill sent the May 8 and June 13 letters by overnight and first class mail, respectively. If that is true, the letters would presumably have arrived well before the June 25 deadline. The Government, meanwhile, claims it has no record of having received the letters at all. The text of  7502(a), therefore, does not direct a result here. Thus  7502(c), which limits its application to cases in which  7502 generally applies, see  7502(c)(1) ( For purposes of this section, if any return, claim, statement, or other document, or payment, is sent by United States registered mail. . . .) (emphasis added), is also inapplicable. Even looking beyond the text, we see no indication that Congress intended to preempt the mailbox rule for taxpayers who do not seek  7502's protection. As an initial matter, we find nothing in the legislative history of  7502 to support the preemption argument. [8] Moreover, as a matter of logic, it is difficult to imagine that Congress, by passing a law that was designed to protect taxpayers who meet  7502's requirements, would (without so stating) simultaneously seek to roll back the protections for taxpayers that already exist at common law. Congress's intent, we believe, was to supplement, not supplant, means by which taxpayers can timely file documents with the IRS. See Estate of Wood, 909 F.2d at 1161. The Government draws our attention to Boccuto v. Commissioner of Internal Revenue, 277 F.2d 549, 553 (3d Cir.1960), where we decided that the taxpayers in that case could not satisfy  7502. It argues that in that case we recognized that[,] after the enactment of  7502, evidence of mailing other than that provided in that statute is no longer sufficient to establish timely filing. Government's Br. at 34. Unlike the current case, however, Boccuto involved a straightforward application of  7502 to taxpayers who had no choice but to rely on the provision. The taxpayers there delivered the document to the post office on the due date, the document was postmarked one day after the due date, and the tax authorities received the document the day after that. Boccuto, 277 F.2d at 551. The ordinary time after mailing would have been too late. Thus, the taxpayers needed to transform the date of mailing into the date of deliveryÔÇösomething only  7502 could accomplish. We denied the taxpayers use of  7502 because we concluded that the date of postmark, not the date of mailing, controlled under that statute. Id. at 553. [9] Here, by contrast, the Fund neither needs nor seeks  7502's protection. The Government makes too much of our statements in Boccuto that Congress has explicitly set forth the allowable exceptions to the rule of actual receipt by the Tax Court within the specified time, and that [u]nless a taxpayer can fit himself within one of the statutory exceptions, he is bound by this rule. Id. The Government treats the mailbox rule as an exception to the physical delivery rule which, because that exception is not enumerated in  7502, it argues must be preempted under this language in Boccuto. We are not persuaded by this argument, as Boccuto does not affect our case. Not only did it not concern the common-law mailbox rule, but we also do not think the mailbox rule we deal with here should be seen as an exception to the rule of actual receipt ... within the specified time. Unlike  7502, the mailbox rule invoked by the Fund in this case does not excuse untimely delivery; it is simply a method for determining when, under the physical delivery rule, a document is physically delivered. See Hagner, 285 U.S. at 430, 52 S.Ct. 417; In re Nimz Transp. Inc., 505 F.2d 177, 179 (7th Cir.1974). The Government is free to produce evidence that the document failed to arrive on time. If it does so convincingly, the taxpayer's claim to timeliness under the common-law mailbox rule will fail. Section 7502, by contrast, allows a taxpayer to establish timeliness even where it is conclusively shown that the document arrived after the deadline. Thus, Boccuto spoke to the degree to which  7502 confers benefits on taxpayers beyond what the common law provided. In that instance, it was simply cautious not to overread the extent of Congress's generosity. Here, by contrast, we address the degree to which existing common-law protections remain intact. [10] The Second and Sixth Circuit Courts, contrary to what we decide today, have seemingly concluded that  7502 preempts the common-law mailbox rule even where the taxpayer does not need  7502's protection. In Deutsch v. Commissioner of Internal Revenue, the Second Circuit invoked  7502 to prevent a taxpayer from proving, other than by production of a postmark or registration receipt, that he mailed the document on August 4, 1977, well before a September 27, 1977 deadline. 599 F.2d 44, 44-46 (2d Cir.1979). [11] It reasoned that  7502 demonstrates a penchant for an easily applied, objective standard. Id. at 46. The Sixth Circuit in Miller v. United States joined the Second Circuit's reading of  7502 and rejected application of the common-law mailbox rule. 784 F.2d 728, 730-31 (6th Cir.1986) ( per curiam ). In that case, the IRS's records established that no claim for refund was ever received, but the taxpayer offered proof of proper mailing well within the statutory period. Id. Rejecting this evidence, the Court concluded that the only exceptions to the physical delivery rule available to taxpayers are the two set out in section 7502. Id. at 731. [12] We decline to follow these decisions. The Second Circuit's reasoning in Deutsch ÔÇöessentially that Congress's desire was to create an easily applied and objective standardÔÇöis insufficient under the well-established principle that Congress must clearly indicate its intent to repeal a common-law rule. See Norfolk Redevelopment, 464 U.S. at 35, 104 S.Ct. 304. Even assuming the common-law mailbox rule is neither easily applied nor objective, an assumption about which we are skeptical, that alone is insufficient. It does not clearly follow from Congress's enactment of an additional taxpayer protection with easily applied standards that it sought simultaneously to repeal an existing common-law protection with less easily applied standards. The Sixth Circuit in Miller appears to have treated the mailbox rule as an exception to the physical delivery rule. Because Congress did not list the mailbox rule in  7502 along with other exceptions to the physical delivery rule, the Court reasoned, it must have intended to exclude the mailbox rule. See Miller, 784 F.2d at 730-31. We have already explained that while  7502 is truly an exception to the rule of actual timely receipt, the common-law mailbox rule is not. Indeed, the Sixth Circuit admitted as much in its later decision in Carroll, 71 F.3d at 1232 n. 2, thereby undercutting its own rationale in Miller despite reluctantly adhering to the case's holding as binding precedent. [13] Under the common-law mailbox rule, the ultimate question is still whether the document was physically delivered before the deadline; the mailbox rule simply helps determine when that delivery occurred. As noted,  7502, by contrast, actually excuses late receipt. That provision is thus an extra taxpayer protection beyond what the common-law mailbox rule provides. Even if Congress sought to limit the reach of  7502's extra-statutory protection via  7502(c), it does not follow that it simultaneously sought to repeal the more modest protection that already existed at common law. The text of the statute does not call for this result, and any conclusion that Congress intended it would be, in our view, speculation. In sum, we hold that, at least where a taxpayer does not rely on  7502's protection and produces circumstantial evidence beyond its own testimony that it mailed the tax document early enough to allow timely physical delivery, it may avail itself of the common-law mailbox rule. [14]
Here, the District Court should have applied, but did not apply, the mailbox rule. The Fund does not rely on  7502's protection, and the evidence suggesting that refund requests were mailed on May 8, 2003 and June 13, 2003 goes beyond the Fund's bare testimony. As the Fund points out, that evidence consists not only of Ms. O'Neill's sworn affidavit, but also, for instance, the following: Mr. Pontarelli's testimony that he drafted the May 8 Letter on or before May 8, 2003; Mr. Pontarelli's testimony that Revenue Officer Dugan expressly acknowledged receipt of the May 8 Letter; a computer printout showing that the June 13 Letter was in fact composed by Ms. O'Neill on June 13; the IRS's actions after June 2003, in particular its meeting with the Fund's representatives in August 2003, which suggest that there was a precipitating eventÔÇösuch as the mailing of a refund requestÔÇöthat triggered this governmental response; and Revenue Officer Dugan's own testimony that Mr. Pontarelli and Ms. O'Neill were frantic, in an uproar, and so nervous and concerned when they called him on May 7, 2003. Accordingly, the District Court erred in denying the Fund the benefit of the mailbox rule.