Timely Mailing Treated as
Timely Filing/Electronic Postmark

DEPARTMENT OF THE TREASURY
Internal Revenue Service 26 CFR Part 301 [TD 8932] RIN 1545-AW81

TITLE: Timely Mailing Treated as Timely Filing/Electronic Postmark

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Final regulations; and removal of temporary regulations.

SUMMARY: This document contains regulations relating to timely
mailing treated as timely filing and paying under section 7502 of
the Internal Revenue Code. The regulations generally reflect changes
to the law made since 1960. In addition, the regulations provide
that the date of an electronic postmark will be the filing date
under certain circumstances. The regulations affect taxpayers who
file documents or make payments or deposits.

DATES: Effective Date: These regulations are effective January 11,
2001. Applicability Date: For dates of applicability, see
§§301.7502-1(g) and 301.7502-2(e).

FOR FURTHER INFORMATION CONTACT: Charles A. Hall, (202) 622-4940
(not a toll-free number).

SUPPLEMENTARY INFORMATION:

Background This document contains amendments to the Regulations on
Procedure and Administration (26 CFR part 301) under section 7502
relating to timely mailing treated as timely filing and paying..2 A
notice of proposed rulemaking (REG-115433-98) was published in the
Federal Register (64 FR 2606) on January 15, 1999. Temporary
regulations (TD 8807) relating to electronic postmarks for
electronically filed income tax returns were published in the
Federal Register for the same day (64 FR 2568). No public hearing
was requested or held. No comments were received from the public in
response to the notice of proposed rulemaking. The proposed
regulations under section 7502 are adopted as revised by this
Treasury decision and the corresponding temporary regulations are
removed. The revisions are discussed below.

Explanation of Revisions

In the notice of proposed rulemaking, the IRS and the Treasury
Department requested comments regarding whether section 7502 should
apply to claims for credit or refund made on late filed original
income tax returns. No comments were received on this issue.
However, the IRS and the Treasury Department have determined that,
in certain situations, a claim for credit or refund made on a late
filed original income tax return should be treated under section
7502 as timely filed on the postmark date for purposes of section
6511(b)(2)(A). This is consistent with the opinion of the United
States Court of Appeals for the Second Circuit in Weisbart v. United
States Department of Treasury and Internal Revenue Service, 222 F.3d
93 (2d Cir. 2000), rev'g 99-1 USTC (CCH)  50,549 (E.D.N.Y. 1999),
AOD-CC-2000-09 (Nov. 13, 2000).

The IRS and the Treasury Department have further determined.3 that
claims for credit or refund made on late filed original tax returns
other than income tax returns should also be treated under section
7502 as timely filed on the postmark date for purposes of section
6511(b)(2)(A). This would include returns such as Form 720,
Quarterly Federal Excise Tax Return, and Form 706, U.S. Estate Tax
Return. Moreover, the IRS and the Treasury Department have
determined that the late filed original tax return, as well as the
claim for credit or refund, should also be treated as filed on the
postmark date. These changes, which are reflected in
§301.7502-1(f), will assist taxpayers in filing timely claims
for credit or refund, and will be applied retroactively to certain
previously disallowed claims for credit or refund.

These changes are effective for any claim for credit or refund on a
late filed tax return described in §301.7502-1(f)(1) except for
those claims for credit or refund which (without regard to paragraph
(f) of this section) were barred by the operation of section 6532(a)
or any other law or rule of law (including res judicata) as of
January 11, 2001. See §301.7502- 1(g)(2), which provides the
effective date rules for §301.7502- 1(f).

Consistent with the effective date rules for §301.7502-1(f),
the IRS will attempt to identify as many claims as possible that
were filed on untimely original individual income tax returns and
that were previously disallowed based on the Government's position
in Weisbart. In these cases, the IRS intends to issue a. refund, or
credit the overpayment against a liability as provided in section
6402, without the need for the taxpayer to contact the IRS. Such
automatic reconsideration of the claim will generally occur if the
claim was filed on an individual income tax return for 1995 or a
subsequent calendar year. Claims filed on other types of original
returns will not receive automatic reconsideration under this
program, e.g., individual returns for years prior to 1995.

Because the IRS will be undertaking the automatic reconsideration
program described above and intends to complete the program by June
30, 2001, taxpayers who have filed income tax refund claims for tax
year 1995 and later years that qualify under §301.7502-1(f)
need not contact the IRS regarding their claims unless the two-year
period for filing a refund suit under section 6532(a) for their
denied claim will expire prior to June 30, 2001. In such cases,
taxpayers are advised to file a request for reconsideration with the
appropriate IRS Service Center. Such a request should include a
notation on the top of the first page that it is ouch taxpayers are
also advised to file a refund suit to protect their legal rights
with respect to the claim. The IRS will respond to the requests for
reconsideration after the IRS has finished identifying eligible
claims under the automatic reconsideration program and paying those
refunds. Taxpayers whose two-year period for filing a refund suit
under section 6532(a) does not expire until after June 30, 2001, and
who have not received a refund by that date,.5 are advised to file a
request for reconsideration with the appropriate IRS Service Center
at that time.

Special Analyses

It has been determined that this Treasury decision is not a
significant regulatory action as defined in Executive Order 12866.
Therefore, a regulatory assessment is not required. It also has been
determined that section 553(b) of the Administrative Procedure Act
(5 U.S.C. chapter 5) does not apply to these regulations, and
because these regulations do not impose a collection of information
on small entities, the Regulatory Flexibility Act (5 U.S.C. chapter
6) does not apply. Pursuant to section 7805(f) of the Internal
Revenue Code, the notice of proposed rulemaking preceding these
regulations was submitted to the Chief Counsel for Advocacy of the
Small Business Administration for comment on its impact on small
business.

Drafting Information The principal author of these regulations is
Charles A. Hall of the Office of Associate Chief Counsel, Procedure
and Administration (Administrative Provisions and Judicial Practice
Division). However, other personnel from the IRS and Treasury
Department participated in their development.

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.6 Accordingly, 26 CFR part
301 is amended as follows:

PART 301--PROCEDURE AND ADMINISTRATION

Paragraph 1. The authority citation for part 301 is amended by
adding entries in numerical order to read as follows: Authority: 26
U.S.C. 7805 * * *

Section 301.7502-1 also issued under 26 U.S.C. 7502.

Section 301.7502-2 also issued under 26 U.S.C. 7502. * * *

Par. 2. Section 301.7502-1 is revised to read as follows:

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

(a) General rule. Section 7502 provides that, if the requirements of
that section are met, a document or payment is deemed to be filed or
paid on the date of the postmark stamped on the envelope or other
appropriate wrapper (envelope) in which the document or payment was
mailed. Thus, if the envelope that contains the document or payment
has a timely postmark, the document or payment is considered timely
filed or paid even if it is received after the last date, or the
last day of the period, prescribed for filing the document or making
the payment. Section 7502 does not apply in determining whether a
failure to file a return or pay a tax has continued for an
additional month or fraction thereof for purposes of computing the
penalties and additions to tax imposed by section 6651. Except as
provided in section 7502(e) and §301.7502-2, relating to the
timely mailing of deposits, and paragraph (d) of this section,
relating to electronically filed documents, section 7502 is
applicable only. to those documents or payments as defined in
paragraph (b) of this section and only if the document or payment is
mailed in accordance with paragraph (c) of this section and is
delivered in accordance with paragraph (e) of this section.

(b) Definitions--(1) Document defined.

(i) The term document, as used in this section, means any return,
claim, statement, or other document required to be filed within a
prescribed period or on or before a prescribed date under authority
of any provision of the internal revenue laws, except as provided in
paragraph (b)(1)(ii), (iii), or (iv) of this section.

(ii) The term does not include returns, claims, statements, or other
documents that are required under any provision of the internal
revenue laws or the regulations thereunder to be delivered by any
method other than mailing.

(iii) The term does not include any document filed in any court
other than the Tax Court, but the term does include any document
filed with the Tax Court, including a petition and a notice of
appeal of a decision of the Tax Court.

(iv) The term does not include any document that is mailed to an
authorized financial institution under section 6302. However, see
§301.7502-2 for special rules relating to the timeliness of
deposits and documents required to be filed with deposits.

(2) Claims for refund. In the case of certain taxes, a return may
constitute a claim for credit or refund. In such a. case, section
7502 is applicable to the claim for credit or refund if the
conditions of such section 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.

(3) Payment defined.

(i) The term payment, as used in this section, means any payment
required to be made within a prescribed period or on or before a
prescribed date under the authority of any provision of the internal
revenue laws, except as provided in paragraph (b)(3)(ii), (iii),
(iv), or (v) of this section.

(ii) The term does not include any payment that is required under
any provision of the internal revenue laws or the regulations
thereunder to be delivered by any method other than mailing. See,
for example, section 6302(h) and the regulations thereunder
regarding electronic funds transfer.

(iii) The term does not include any payment, whether it is made in
the form of currency or other medium of payment, unless it is
actually received and accounted for. For example, if a check is used
as the form of payment, this section does not apply unless the check
is honored upon presentation.

(iv) The term does not include any payment to any court other than
the Tax Court.

(v) The term does not include any deposit that is required to be
made with an authorized financial institution under section 6302.
However, see §301.7502-2 for rules relating to the. timeliness
of deposits.

(4) Last date or last day prescribed. As used in this section, the
term the last date, or the last day of the period, prescribed for
filing the document or making the payment includes any extension of
time granted for that action. When the last date, or the last day of
the period, prescribed for filing the document or making the payment
falls on a Saturday, Sunday or legal holiday, section 7503 applies.
Therefore, in applying the rules of this paragraph (b)(4), the next
succeeding day that is not a Saturday, Sunday, or legal holiday is
treated as the last date, or the last day of the period, prescribed
for filing the document or making the payment. Also, when the last
date, or the last day of the period, prescribed for filing the
document or making the payment falls within a period disregarded
under section 7508 or section 7508A, the next succeeding day after
the expiration of the section 7508 period or section 7508A period
that is not a Saturday, Sunday, or legal holiday is treated as the
last date, or the last day of the period, prescribed for filing the
document or making the payment.

(c) Mailing requirements--

(1) In general. Section 7502 does not apply unless the document or
payment is mailed in accordance with the following requirements:

(i) Envelope and address. The document or payment must be contained
in an envelope, properly addressed to the agency, officer, or office
with which the document is required to be filed or to which the
payment is required to be made..10 (ii) Timely deposited in U.S.
mail. The document or payment must be deposited within the
prescribed time in the mail in the United States with sufficient
postage prepaid. For this purpose, a document or payment is
deposited in the mail in the United States when it is deposited with
the domestic mail service of the U.S. Postal Service. The domestic
mail service of the U.S. Postal Service, as defined by the Domestic
Mail Manual as incorporated by reference in the postal regulations,
includes mail transmitted within, among, and between the United
States of America, its territories and possessions, and Army post
offices (APO), fleet post offices (FPO), and the United Nations, NY.
(See Domestic Mail Manual, section G011.2.1, as incorporated by
reference in 39 CFR 111.1.) Section 7502 does not apply to any
document or payment that is deposited with the mail service of any
other country.

(iii) Postmark--(A) U.S. Postal Service postmark. If the postmark on
the envelope is made by the U.S. Postal Service, the postmark must
bear a date on or before the last date, or the last day of the
period, prescribed for filing the document or making the payment. If
the postmark does not bear a date on or before the last date, or the
last day of the period, prescribed for filing the document or making
the payment, the document or payment is considered not to be timely
filed or paid, regardless of when the document or payment is
deposited in the mail. Accordingly, the sender who relies upon the
applicability of section 7502 assumes the risk that the postmark
will bear a date. on or before the last date, or the last day of the
period, prescribed for filing the document or making the payment.
See, however, paragraph (c)(2) of this section with respect to the
use of registered mail or certified mail to avoid this risk. If the
postmark on the envelope is made by the U.S. Postal Service but is
not legible, the person who is required to file the document or make
the payment has the burden of proving the date that the postmark was
made. Furthermore, if the envelope that contains a document or
payment has a timely postmark made by the U.S. Postal Service, but
it is received after the time when a document or payment postmarked
and mailed at that time would ordinarily be received, the sender may
be required to prove that it was timely mailed.

(b) Postmark made by other than U.S. Postal Service--(1) In general.
If the postmark on the envelope is made other than by the U.S.
Postal Service--

(i) The postmark so made must bear a legible date on or before the
last date, or the last day of the period, prescribed for filing the
document or making the payment; and

(ii) The document or payment must be received by the agency,
officer, or office with which it is required to be filed not later
than the time when a document or payment contained in an envelope
that is properly addressed, mailed, and sent by the same class of
mail would ordinarily be received if it were postmarked at the same
point of origin by the U.S. Postal Service on the last date, or the
last day of the period, prescribed for filing. the document or
making the payment.

(2) Document or payment received late. If a document or payment
described in paragraph (c)(1)(iii)(B)(1) is received after the time
when a document or payment so mailed and so postmarked by the U.S.
Postal Service would ordinarily be received, the document or payment
is treated as having been received at the time when a document or
payment so mailed and so postmarked would ordinarily be received if
the person who is required to file the document or make the payment
establishes--

(i) That it was actually deposited in the U.S. mail before the last
collection of mail from the place of deposit that was postmarked
(except for the metered mail) by the U.S. Postal Service on or
before the last date, or the last day of the period, prescribed for
filing the document or making the payment;

(ii) That the delay in receiving the document or payment was due to
a delay in the transmission of the U.S. mail; and

(iii) The cause of the delay.

(3) U.S. and non-U.S. postmarks. If the envelope has a postmark made
by the U.S. Postal Service in addition to a postmark not so made,
the postmark that was not made by the U.S. Postal Service is
disregarded, and whether the envelope was mailed in accordance with
this paragraph (c)(1)(iii)(B) will be determined solely by applying
the rule of paragraph (c)(1)(iii)(A) of this section.

(2) Registered or certified mail. If the document or payment is sent
by U.S. registered mail, the date of registration. of the document
or payment is treated as the postmark date. If the document or
payment is sent by U.S. certified mail and the sender's receipt is
postmarked by the postal employee to whom the document or payment is
presented, the date of the U.S. postmark on the receipt is treated
as the postmark date of the document or payment. Accordingly, the
risk that the document or payment will not be postmarked on the day
that it is deposited in the mail may be eliminated by the use of
registered or certified mail.

(d) Electronically filed documents--

(1) In general. A document filed electronically with an electronic
return transmitter (as defined in paragraph (d)(3)(i) of this
section and authorized pursuant to paragraph (d)(2) of this section)
in the manner and time prescribed by the Commissioner is deemed to
be filed on the date of the electronic postmark (as defined in
paragraph (d)(3)(ii) of this section) given by the authorized
electronic return transmitter. Thus, if the electronic postmark is
timely, the document is considered filed timely although it is
received by the agency, officer, or office after the last date, or
the last day of the period, prescribed for filing such document.

(2) Authorized electronic return transmitters. The Commissioner may
enter into an agreement with an electronic return transmitter or
prescribe in forms, instructions, or other appropriate guidance the
procedures under which the electronic return transmitter is
authorized to provide taxpayers with an electronic postmark to
acknowledge the date and time that the. electronic return
transmitter received the electronically filed document.

(3) Definitions--

(i) Electronic return transmitter. For purposes of this paragraph
(d), the term electronic return transmitter has the same meaning as
contained in section 3.01(4) of Rev. Proc. 2000-31 (2000-31 I.R.B.
146 (July 31, 2000))(see §601.601(d)(2) of this chapter) or in
procedures prescribed by the Commissioner.

(ii) Electronic postmark. For purposes of this paragraph (d), the
term electronic postmark means a record of the date and time (in a
particular time zone) that an authorized electronic return
transmitter receives the transmission of a taxpayer's electronically
filed document on its host system. However, if the taxpayer and the
electronic return transmitter are located in different time zones,
it is the taxpayer's time zone that controls the timeliness of the
electronically filed document.

(e) Delivery--(1) Except as provided in section 7502(f) and
paragraph (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. However, 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.

(2) Section 7502 is applicable to the determination of whether a
claim for credit or refund is timely filed for purposes of section
6511(a), assuming all the requirements of section 7502 are
satisfied. 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.

(3) Example. The rules of paragraph (e)(2) of this section are
illustrated by the following example:

Example.

(i) Taxpayer A, an individual, mailed his 1998 Form 1040, 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, 2002, A mails in accordance with
the requirements of this section, a Form 1040X, claiming a refund of
a portion of the tax that had been paid through withholding during
1998. The date of the postmark on the envelope containing the claim
for refund is April 15, 2002. The claim is received by the Internal
Revenue Service (IRS) on April 18, 2002.

(ii) Under section 6511(a), A's claim for refund is timely if filed
within three years from May 10, 1999, the date on which A's 1998
return was filed. However, as a result of the limitations of section
6511(b)(2)(A), if his claim is not filed within three years after
April 15, 1999, the date on which he is deemed under section 6513 to
have paid his 1998 tax, he is not entitled to any refund. Thus,
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, 2002.

(f) Claim for credit or refund on late filed tax return--(1) In
general. Generally, an original income tax return may. constitute a
claim for credit or refund of income tax. See §301.6402-3(a)
(5). Other original tax returns can also be considered claims for
credit or refund if the liability disclosed on the return is less
than the amount of tax that has been paid. If section 7502 would not
apply to a return (but for the operation of paragraph (f)(2) of this
section) that is also considered a claim for credit or refund
because the envelope that contains the return does not have a
postmark dated on or before the due date of the return, section 7502
will apply separately to the claim for credit or refund if--

(i) The date of the postmark on the envelope is within the period
that is three years (plus the period of any extension of time to
file) from the day the tax is paid or considered paid (see section
6513), and the claim for credit or refund is delivered after this
three-year period; and

(ii) The conditions of section 7502 are otherwise met.

(2) Filing date of late filed return. If the conditions of paragraph
(f)(1) of this section are met, the late filed return will be deemed
filed on the postmark date.

(3) Example. The rules of this paragraph (f) are illustrated by the
following example: Example.

(i) Taxpayer A, an individual, mailed his 2001 Form 1040, 2005,
claiming a refund of amounts paid through withholding during 2001.
The date of the postmark on the envelope containing the return and
claim for refund is April 15, 2005. The return and claim for refund
are received by the Internal Revenue Service (IRS) on April 18,
2005. Amounts withheld in 2001 exceeded A's tax liability for 2001
and are treated as paid on April 15, 2002, pursuant to section 6513.

(ii) Even though the date of the postmark on the envelope is after
the due date of the return, the claim for refund and the late filed
return are treated as filed on the postmark date for purposes of
this paragraph (f). Accordingly, the return will be treated as filed
on April 15, 2005. In addition, the claim for refund will be treated
as timely filed on April 15, 2005. Further, the entire amount of the
refund attributable to withholding is allowable as a refund under
section 6511(b)(2)(A).

(g) Effective date--

(1) In general. Except as provided in paragraphs (g)(2) and (3) of
this section, the rules of this section 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 January
11, 2001.

(2) Claim for credit or refund on late filed tax return. Paragraph
(f) of this section applies to any claim for credit or refund on a
late filed tax return described in paragraph (f)(1) of this section
except for those claims for credit or refund which (without regard
to paragraph (f) of this section) were barred by the operation of
section 6532(a) or any other law or rule of law (including res
judicata) as of January 11, 2001.

(3) Electronically filed documents. This section applies to any
electronically filed return, claim, statement, or other document
transmitted to an electronic return transmitter that is authorized
to provide an electronic postmark pursuant to paragraph (d)(2) of
this section after January 11, 2001. §301.7502-1T [Removed]

Par. 3. Section 301.7502-1T is removed. Par. 4. Section 301.7502-2
is added to read as follows: §301.7502-2 Timely mailing of
deposits.

(a) General rule--(1) Two day rule. Section 7502(e) provides that,
if the requirements of that section are met, a deposit is deemed to
be received on the date the deposit was mailed even though it is
received after the date prescribed for making the deposit. The
requirements of the section are met if the person required to make
the deposit establishes that the date of mailing was on or before
the second day preceding the date prescribed for making the deposit.
If the date of mailing was not established to be on or before the
second day preceding the date prescribed for making the deposit, the
deposit will not be considered timely received unless it is actually
received on or before the date prescribed for making the deposit.
Section 7502(e) only applies to a deposit mailed to the financial
institution authorized to receive that deposit. Thus, section
7502(e) does not apply to any remittance mailed to an internal
revenue service center.

(2) Deposits of $20,000 or more. Paragraph (a)(1) of this section
does not apply with respect to any deposit of $20,000 or more by any
person required to deposit any tax more than once a month. Any such
deposit must be made by the due date for such deposit, regardless of
the method of delivery.

(b) Deposit defined. The term deposit, as used in this section,
means any deposit of tax required to be made on or before a
prescribed date at an authorized financial institution pursuant to
regulations prescribed under section 6302.

(c) Mailing requirements--

(1) In general. Section 7502(e).19 does not apply unless the deposit
is mailed in accordance with the requirements of paragraph (c)(2) of
this section.

(2) Requirements. The date of mailing must fall on or before the
second day preceding the prescribed date for making a deposit
(including any extension of time granted for making the deposit).
For example, if a deposit is due on or before January 15, the date
of mailing must fall on or before January 13. The deposit must be
contained in an envelope or other appropriate wrapper approved for
use in the mails by the U.S. Postal Service, properly addressed to
the financial institution authorized to receive the deposit. The
deposit must be deposited with sufficient postage prepaid in the
mail in the United States within the meaning of §301.7502-1 on
or before the second day preceding the prescribed date for making a
deposit.

(3) Registered and certified mail. The provisions of
§301.7502-1(c)(2) apply to a deposit sent by U.S. registered
mail or U.S. certified mail as if the deposit were a payment, except
that the date of registration or the date of the postmark on the
sender's receipt is considered the date of mailing of such deposit.

(d) Delivery. Section 7502(e) does not apply unless a deposit is
actually delivered by U.S. mail to the authorized financial
institution with which the deposit is required to be made and is
accepted by that financial institution. For rules relating to the
acceptance of deposits by authorized financial institutions see 31
CFR 203.18. The fact that a deposit is sent. by U.S. registered or
U.S. certified mail does not constitute prima facie evidence that
the deposit was delivered to the financial institution authorized to
receive the deposit. Section 7502(e) does not apply unless the
deposit is delivered after the date prescribed for making the
deposit.

(e) Effective date. This section applies to all deposits
required to be made after January 11, 2001.

Robert E. Wenzel
Deputy Commissioner of Internal Revenue

Approved: December 21, 2000

Jonathan Talisman
Acting Assistant Secretary of the Treasury

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