What You Should Know about the IRS’ Mailbox Rule

Have you ever driven by a post office in the middle of April and wondered why there were so many people waiting in the checkout line? Chances are it was Tax Day! Some US Post Offices even stay open later to allow taxpayers additional time to get their tax returns mailed to the IRS. This is because of the IRS’ Mailbox Rule.

What is the IRS’ Mailbox Rule?

Simply stated, the IRS’ Mailbox Rule treats payments made through the mail, postmarked on or before the due date, as being received on time.

The IRS’ Mailbox Rule requires that a timely filed tax document or payment is:

  1. deposited in the US Post Office in a properly addressed envelope with adequate postage;
  2. postmarked on or before the filing date; and
  3. actually delivered by the US Post Office.

Example. Carlos mailed his payment to the IRS on the day it was due -- Tax Day, April 15th. It got lost for a few weeks, laid on the floor of the postal sorting center, where it was found by the cleaning crew at the end of August. They picked it up and put it back in the sorting bin. It was finally delivered by pack mule to the IRS at the beginning of September.

If that had been Carlos’ credit card payment, the bank would have charged late fees and interest. However, once received with the due date or earlier postmark, regardless of how long it took to make the journey, the IRS will apply the payment to the date of the postmark. This means in Carlos’ situation, even though the IRS did not receive the payment until months past the due date, it was considered made on time. He would not have been charged interest or penalties.

In 2011, the IRS clarified ways that taxpayers can prove their payments were mailed on time. Now, taxpayers can use registered or certified mail or a private company that meets IRS criteria, such as FedEx or UPS. If you have this information (included on most receipts now), you do not need direct proof of delivery, which otherwise can be difficult, burdensome, and nearly impossible to obtain unless you paid for a Return Receipt, which was signed and returned. Due to this change, it is best to use certified or registered mail when mailing tax documents or payments to the IRS and keep your receipt.

What about Electronic Payments made to the IRS?

Unlike payments made by mail, the IRS’ Mailbox Rule does not apply to electronic payments. Payments submitted through the electronic federal tax payment system must be submitted by 8:00 pm the day before the payment is due. It does not make sense that the IRS could get the payment sooner and yet penalize you for a late payment. The good news is that at least several lawmakers in the US House of Representatives agree. They are working on getting the IRS’ Mailbox Rule applied equally to both payments made electronically and through the mail.

The Bottom Line

Best practice is to make your payments and complete your tax paperwork on time and send them to the IRS by certified or registered mail and keep the receipt. This will be enough to establish the tax documents or payments were mailed in a timely manner even if delivery is delayed drastically like in Carlos’ situation. If you are just making electronic tax payments, remember to make them by 8:00 pm of the day before the due date for them to be considered received on time. If you cannot meet the electronic deadline but you can make them on the due date, it is better to mail them.

If you procrastinate and owe taxes, plan time for a trip to the post office if you wait until the due date. Unfortunately, until the IRS’ Mailbox Rule is updated, your payment would be considered late if you made it on the due date, even though the IRS would receive it quicker than if you were to drop it in the mail. This is because the IRS considers a payment postmarked on the date due to be received on the due date, whereas payments made electronically must be made by 8:00 pm on the day before the due date. The best thing to do, so you do not have to worry about the IRS’ Mailbox Rule, is to schedule an appointment today with the accounting and tax preparation professionals at Gudorf Tax Group. They will make sure your taxes are completed on time.

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