UPS Grounded. E-filing is the best way to make sure your filing is timely, but sometimes it’s just not available. If you do an old-fashioned paper filing, you can rely on the “mailbox rule,” which says that a tax filing postmarked by the deadline is considered filed on-time. The mailbox rule used to only apply to returns sent via the U.S. Postal Service, but the IRS expanded it to private carriers like UPS and Federal Express. The availability of private delivery services for timely last-minute filing has been a boon to procrastinators. Few post offices stay open late anymore to receive last-minute tax filings, but there are 24-hour FedEx and UPS stores. Unfortunately, the IRS rules on private delivery services are tricky, and they tripped up one taxpayer in Tax Court yesterday. The IRS lists qualifying private delivery services in Notice 2004-83. The notice identifies specific services for DHL, UPS and FedEx that qualify for the mailbox rule. The UPS services that qualify:
UPS Next Day Air, UPS Next Day Air Saver, UPS 2nd Day Air, UPS 2nd Day Air A.M., UPS Worldwide Express Plus, and UPS Worldwide Express.
The taxpayer in yesterday’s case sent his package via UPS Ground, and while sent before the 90-day deadline for Tax Court filings, it arrived after the deadline. The Tax Court said that didn’t work:
UPS Ground has not been designated by the Commissioner as a private delivery service. Notice 2004-83, supra. Thus, the timely mailing/timely filing rule of section 7502 does not apply to “UPS Ground” service… In so holding we acknowledge that the result may appear harsh, notwithstanding the fact that petitioner had nearly 90 days to file his petition but waited until the last moment to do so. However, the Court cannot rely on general equitable principles to expand the statutorily prescribed time for filing a petition.
The Moral? If you use a private delivery service, make sure you use one that qualifies. If you are filing with an IRS service center, be sure to use the correct street address, as the private delivery services can’t deliver to the service center post-office box addresses.
Today’s news media are largely ignoring the IRS scandal, and it is impossible to have confidence in the current investigations by the FBI, Justice Department, and House committee. I am not suggesting that the current scandal in the end will rise to the level of Watergate. But the allegations are serious, and fair-minded Americans of both parties should agree that a thorough investigation needs to be undertaken to either debunk them or confirm them. Step one should be to give Lois Lerner full immunity from prosecution in exchange for her testimony. And then let the chips fall where they may.
True all around. Journalists don’t care to investigate their own team.
Even without legislation, OPR Director Karen Hawkins stated that IRS will take a narrow interpretation of Loving insofar as it relates to its ability to regulate practitioners. As to the policy relating to regulating preparers, Director Hawkins announced that IRS will soon begin a voluntary testing and education plan that will provide some benefits to preparers who opt in to a regulatory regime.
What does it take to teach some people? You got whipped, IRS. The courts ruled that you grossly overreached. How do you find a “narrow interpretation” of that? It sounds to me like they will make their new program “voluntary” in the same way the national accounting firm I used to work at made United Way contributions “voluntary” — they always had 100% participation.
She (and allegedly her husband) created nominee accounts at UBS and other foreign banks; of course, that income didn’t find its way to her tax return. Her half of the sale of the medical schools also didn’t find its way to the tax return. Those nominee accounts were at foreign banks; she didn’t file a Report of Foreign Bank and Financial Accounts (FBAR). And the money was used for conspicuous consumption: an airplane and three homes.
If you cheat on your taxes, it’s not wise to call attention to your wealth.
Jack Townsend, When is Booker Variance Too Much? Per DOJ, Certainly in the Ty Warner Case. “What I draw from the sentence is that, when the hypothetical client is in the criminal cross-hairs asks the hypothetical reasonably welleducated and experienced criminal tax attorney with good judgement whether he [the client] will be treated as well as Ty Warner, the right answer is likely to be: ‘You’re not rich enough to get that quality of justice.’ “
TaxGrrrl: What If Congressional Elections Were Run Like The NFL Draft?. Well, a large percentage of football players are broke within three years of being drafted. I’d favor that for congresscritters.
Kay Bell, IRS getting sneakier in tracking tax cheats. ” If you’re bragging on Facebook about buying a Ferrari but reporting only $30,000 in annual income on your Form 1040, your social media comments will probably prompt the IRS to take an interest in you.”
It’s Tuesday Buzz-time! At the Robert D. Flach emporium.
Lyman Stone, The Facts on Interstate Migration: Part One (Tax Policy Blog):
CBPP’s new report says that “State taxes have a negligible impact on Americans’ interstate moves,” and so falls pretty comfortably in the “taxes don’t affect migration” camp. … What we’ve consistently argued at the Tax Foundation is that taxes matter on the margin, but that they’re just one of many factors. After reviewing Mazerov’s main arguments, this theme will be apparent: that his analysis doesn’t address the effect of taxes on the margin.
Any practitioner has dealt with cases where taxes do make a difference where people choose to live. It’s painfully obvious when you live in a high-rate state with a zero-rate state (South Dakota) next door. And to assume taxes don’t matter is to assume incentives don’t matter, which is like assuming gravity doesn’t hold things down.
Renu Zaretsky, Pizza, Expats and Drugs. The TaxVox headline roundup covers today’s expected senate vote on extenders, take and bake pizza, and the high costs of FATCA for foreign companies who hire Americans abroad.
That’s clupeida roseus to you, Judge. States’ Failed Tax Policies Have Some Governors Throwing Red Herrings (Tax Justice Blog).
Career Corner. Helicopter Parents are Hitting Alumni Groups on LinkedIn to Find Junior a Job Now (Going Concern)