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Supreme Court upholds decision to abide by IRS on mailbox rule for tax refund claims

The Supreme Court let stand an appeals ruling that precluded a tax refund to movie producers Howard and Karen Baldwin, deferring to an Internal Revenue Service regulation that ended the common-law mailbox rule for refund claims, even though Justice Clarence Thomas reversed his position on an earlier case.

In refusing Monday to agree to hear the case in Baldwin v. U.S., the justices upheld Thomas’s ruling in the earlier case. The Baldwins are film producers whose credits include the Academy Award-winner Ray, a 2004 movie about the life of Ray Charles. They had overpaid their 2005 taxes and filed to obtain a refund of $167,633. The couple mailed their amended return and other tax documents to the IRS on June 21, 2011, well before the limitations period deadline of Oct. 15, 2011. The IRS claimed it never received the return and denied the Baldwins’ refund claim as untimely.

What is the Timely Mailed Rule?

The 9th Circuit Court held that Treasury Regulation 301.7502-1(e)(2) provided the exclusive means to prove delivery, and recourse to the common law mailbox rule was no longer available. In this case, taxpayers relied on the common law mailbox rule to establish that the document was presumptively delivered to the IRS. Accordingly, the panel remanded with instructions to dismiss because taxpayers had not filed a timely claim for a refund with the IRS.

Treasury Regulation section 301.705-1(e)(2) states:

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.

When Does the Timely Mailed Rule Apply?

Internal Revenue Code section 7502 provides that any tax return or payment received after its due date is to be treated as filed or paid on the postmark date, provided all of the following requirements are met:

  1. The return or payment is deposited in the mail in the United States on or before the due date for filing or paying.
  2. The envelope containing the return or payment is properly addressed.
  3. The envelope contains sufficient postage for delivery.
  4. The envelope was deposited with the United States Postal Service or a designated private delivery service. For a list of designated private delivery services see

Contact a tax attorney if you have a question about current tax law procedures affecting either your IRS tax liability, audit, or Tax Court litigation.