Penny Wise Pound Foolish

Today TaxMama® hears from Kyong in the TaxQuips Forum with a sad question. “Nov 15, 2011 was the last day to file a tax court petition. The Tax Court petition was filed using Fedex Saver, which is not one of the designated private delivery services listed under IRC sec. 7502. I have a proof of receipt from Fedex showing the date they received it was Nov. 15, 2011. The tax petition was received by the Tax Court on Nov. 17, 2011. Tax Court has filed a motion to dismiss, claiming that the petition was not filed timely. Even though Fedex Saver is not listed as a designated private delivery service under sec. 7502, will the proof of receipt from Fedex be sufficient to show that the petition was filed timely?” 

 

 Dear Kyong, 

When I read this case in Forbes about a week ago, I wondered. Why would anyone be so foolish as to try to save a few measly dollars, when they had many thousands of dollars at stake? 

Also, if you are that frugal, why wait until the very last day to file your Tax Court petition? After all, you knew you would be filing it, didn’t you? 

Well, FedEx Saver is not one of the acceptable private delivery services. And the Tax Court has, in fact, denied a petition as a result. (Read Scaggs v Commissioner.)

The one argument in your favor is – the file arrived within 2 days. In the case reference in the Forbes article, it arrived in 5 days. Perhaps you can argue that the Court would have accepted FedEx 2 Day service – and it did arrive within 2 days. 

If not, what does this mean to you? It means having to pay the tax FIRST, then contesting it in one of the Federal Courts – Federal District Court or the U.S. Court of Federal Claims. The advantage of Tax Court is – you don’t have to pay the IRS first. Big expensive difference!

And remember, you can find answers to all kinds of questions about Tax Court petitions and other tax and business issues, free. Where? Where else? At www.TaxMama.com.

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