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Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 28931
Experience:  Taxes, Immigration, Labor Relations
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Our CPA filed our tax return extention via regular mail . The

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Our CPA filed our tax return extention via regular mail . The IRS now says it was late. Will the IRS or Tax court if necessary accept a sworn affidavit by the CPA as suffient proof of asking for the extention in a timely fashion?
Hi and welcome to Just Answer!
The general rule is that the tax document is considered filed when it is delivered to the IRS.
However in case of postal delivery of documents - the law specifically allows the postmark date to suffice as evidence of timely filing.
A sworn affidavit by the CPA as a proof of timely filing will not be accepted.
Sorry if you expected a different answer.
Let me know if you need any clarification of other concerns.

Please see for reference - http://www.law.cornell.edu/uscode/usc_sec_26_00007502----000-.html
(a) General rule
(1) Date of delivery If any return, claim, statement, or other document required to be filed, or any payment required to be made, within a prescribed period or on or before a prescribed date under authority of any provision of the internal revenue laws is, after such period or such date, delivered by United States mail to the agency, officer, or office with which such return, claim, statement, or other document is required to be filed, or to which such payment is required to be made, the date of the United States postmark stamped on the cover in which such return, claim, statement, or other document, or payment, is mailed shall be deemed to be the date of delivery or the date of payment, as the case may be.
(2) Mailing requirements This subsection shall apply only if—
(A) the postmark date falls within the prescribed period or on or before the prescribed date—
(i) for the filing (including any extension granted for such filing) of the return, claim, statement, or other document, or
(ii) for making the payment (including any extension granted for making such payment), and
(B) the return, claim, statement, or other document, or payment was, within the time prescribed in subparagraph (A), deposited in the mail in the United States in an envelope or other appropriate wrapper, postage prepaid, properly addressed to the agency, officer, or office with which the return, claim, statement, or other document is required to be filed, or to which such payment is required to be made.
(b) Postmarks This section shall apply in the case of postmarks not made by the United States Postal Service only if and to the extent provided by regulations prescribed by the Secretary.
Customer: replied 5 years ago.
Relist: Other.
This answer does not state how the tax courts would typically rule on this type of question. It would appear that if the IRS says that a return was late that they should be required to tell you that in a timely fashion as they are now saying that a 2007 return was late in 2011 and the CPA swears that he filed the extention request on time. The question is will a tax court uphold the CPA's sworn testimony as he has always filed extentions for us every year for the past 15 years and the year 2007 was no different. How would the IRS courts rule on this type of question?

Hello,

You requested to know how the tax court would rule on the CPA making a sworn statement. Their are numerous cases on file dealing with late filing penalties. For the most part unless the taxpayer could prove the reason was due to gross negligence of the agent (CPA, return preparer....) the penalties stood.

Here is one where the taxpayer claimed the preparer assured that the extension was sent but the court ruled against the taxpayer based on their education level and their ultimate responsibility to file their return.

http://www.ustaxcourt.gov/InOpHistoric/SCHIRLE1.TCM.WPD.pdf

 

Even if you find a case that follows yours specifically, pursuant to Internal Revenue Code Section 7463(b), summary opinions may not be treated as precedent for any other case.

 

Would the tax court accept the sworn statement of the CPA, only the sitting judge on that day would be able to give the answer to that.

The tax court will base their ruling on the section 7502 that I referenced above which indicates that the date of filing is the date of the United States postmark stamped on the cover.

The statute specifically states that in the case of postmarks not made by the United States Postal Service - that section will not be applied - means the incoming IRS registration will be treated as the date of filing.

According to this section - any other supporting documents including a sworn affidavit by the CPA as a proof of timely filing will not be accepted.

 

In the part the IRS did not accept postmarks - and the Tax Court on several occasions ruled that postmarks should be accepted - that later resulted the law change - so we have the statute 7502.

Unless you will create a new precedent - most likely the Tax Court will not accept your position.

 

On the other hand as Robin stated above - you may ask the IRS to abate penalties.

Because the penalty is assessed to the client - only a client may request to abate the penalty.
File a form 843 - http://www.irs.gov/pub/irs-pdf/f843.pdf to request the "accuracy related penalty" be abated based on the preparer's honest mistake.
Here are instructions - http://www.irs.gov/pub/irs-pdf/i843.pdf

 

I am sorry if you expected a different answer.
Let me know if you need any help.

Lev, Tax Advisor
Category: Tax
Satisfied Customers: 28931
Experience: Taxes, Immigration, Labor Relations
Lev and 2 other Tax Specialists are ready to help you

My goal - to have you 100% satisfied.

Please feel free to ask for clarification if needed.

You replied - Disappointed response does not give probability of success for tax payer appeal Re: waiver of Penalties for something not caused by tax payer.

 

I may not evaluate the probability of success as that depends on many circumstances that we may not know. I may only express my opinion.

If you appeal based on the ground that your tax return extension was timely filed and do not have the postmark to support the date of filing - the probability of success in my opinion is zero.

If apply to abate late filing penalties based on negligence of your preparer - your chances to have late filing penalties waived are very high.
Regardless - you still will be responsible for late payment penalties and interest charges.

Let me know if you need any clarification or help with other tax related issues.