With the extended filing deadlines quickly approaching for those who timely filed requests for extensions (September 17, 2018 for entities and October 15, 2018 for individuals), the North Carolina Department of Revenue (NCDOR) just released Directive TA-18-1 regarding the timely mailing of returns, documents, and payments. Though the directive contains no new information, it serves as an important reminder of the availability as well as the limitations of using the United States Postal Service (USPS) or an approved private courier for timely filing of returns, documents, and payments.
As the directive points out, North Carolina law incorporates the provisions of IRC §§ 7502 and 7503 regarding the timely mailing of tax documents and payments. These sections are commonly referred to as the “mailbox rule” and provide that a tax document or payment is deemed timely filed if the postmark is dated on or before the filing deadline. The mailbox rule applies to North Carolina and federal tax documents and payments. When using the mailbox rule, the best postmark for proof of mailing is a USPS postmark.
If you are relying on the mailbox rule, here are some tips to make sure your tax documents are deemed timely filed. First, use certified mail, return receipt requested. Though rare, occasionally government agencies misplace a document once after receipt. The tax agencies are no exception. More than once the certified mail return receipt saved the day because it established receipt by the tax agency. Second, use a cover letter and reference the article number of the certified mail in the cover letter. That ties the letter to that specific receipt. Third, always deliver the mailing to the post office at the counter and get the mailing receipt for the certified mail “hand canceled.” Do not simply deposit the tax document in the USPS mailbox or slot in the post office. Handing it to a living, breathing person is the only way to get the mailing “hand cancelled.”
“Hand cancelled” means the post office stamps the receipt by hand with the date it receives the mailing from you. A word of warning: Not all post offices hand cancel. Check in advance to make sure the post office you plan on using does hand cancel mail. Simply relying on the automated postmark date may cause problems. Last, save the hand cancelled receipt and attach it to the return receipt once you receive it and save the receipt of mailing and the return receipt along with the return.
Internet postmarks provided by the various internet postage programs are permitted under Treas. Reg. § 301.7502-1(c)(iii)(B), provided the tax document or payment is “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.” Though permitted, the better practice is to obtain a USPS postmark by taking the mailing to the post office and asking that it be hand cancelled as previously mentioned.
The directive also reminds us that certain private couriers are approved by the IRS and by NCDOR. Though large metropolitan areas may still have post offices open until midnight, many areas do not, including the Piedmont Triad. In these cases the extra few hours some approved private couriers are open may make the difference between a timely and an untimely filing.
The IRS maintains a list of approved private couriers and which particular services, i.e. same day, next day, etc…,on the IRS website at: https://www.irs.gov/filing/private-delivery-services-pds. The website also lists the physical delivery address for use with a private courier. The list of approved private couriers is an exclusive list. Use of non-approved private couriers will not permit the taxpayer to use the mailbox rule! The taxpayer must deliver the mailing to the private delivery service on or before the filing deadline. As with certified mail, always obtain a receipt from the private delivery service showing the date of acceptance for delivery. Do not rely on pick-up times at drop-off locations. Hand deliver the document to a person at a private delivery facility and obtain a receipt.
Following these tips will help prevent any problems that may arise from mailing tax documents to the IRS or NCDOR. Hagan Barrett, PLLC is a full service law firm, including tax planning and advocacy, serving businesses and individuals. We would be honored to assist you.