District Court decision highlights mailbox rule

Tax Hot Topics newsletter The District Court for the Western District of Wisconsin ruled in Harrison v. U.S., 3:19-cv-00194-wmc (W.D. Wisc. 2020) on Jan. 29, 2020, that the taxpayers, a married couple, timely filed their claim for refund because the claim was submitted by certified mail prior to the close of the statute of limitations.

The decision by comes with some unusual procedural background based on relatively simple facts. The taxpayers had approximately $16,000 in income tax withheld for the tax year 2012. They filed an extension but did not timely file their return by Oct. 15, 2013. Rather, they filed their original return by certified mail on Oct. 11, 2016, and claimed a refund of approximately $7,000. Their claim for refund reached the IRS on Oct. 17, 2016.

In this context, for a refund claim to be proper, there must be 1) full payment of tax; 2) a timely filed claim for refund; and 3) the payment of tax must be within the relevant “look-back” period under Section 6511(b)(2)(A). The district court originally ruled on Jan. 9, 2020, prior to a motion for reconsideration, that under Section 6511(b)(2)(A), the look-back period began on the date the claim for refund was received by the IRS and not the date the claim was filed. The so-called “mailbox rule” of Section 7502 holds that if the claim is timely mailed, it is timely filed.

In coming to its decision, the court relied primarily on Pitre v. IRS, 938 F. Supp. 95 (D.N.H. 1996). However, neither the taxpayer nor the government, or the court itself, considered the Second Circuit’s opinion in Weisbart v. U.S., 222 F.3d 93 (2d. Cir. 2000), which held that the mailbox rule of Section 7502 applied in situations where the claim for refund was the original, late-filed return for purposes of Section 6511(b)(2)(A) and the look-back rule. Nor did any of the parties consider Notice 2001-019 or Treas. Reg. Sec. 301.7502-1(f), each of which adopted the decision by the Second Circuit in Weisbart.

The court reversed itself following the motion for reconsideration, recognizing that Weisbart, Notice 2001-019 and regulations all pointed to the mailbox rule applying for purposes of determining the look-back period of Section 6511(b)(2)(A). Because the taxes that were withheld were deemed paid on April 15, 2013, under Section 6513, the look-back period of three years plus the extension period included the taxpayer’s payment of their tax and importantly, their filing of the claim for refund on Oct. 11, 2016. Accordingly, the look-back period did not limit the amount of the refund the taxpayers claimed.

David Auclair
National Managing Principal
Washington National Tax Office
T +1 202 521 1515

Shamik Trivedi
Senior Manager
Washington National Tax Office
T +1 202 521 1511

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