Paying the IRS by mail may not work

[Lee B]

The follows up on a similar thread several months ago:

https://www.nj.com/news/2023/10/woman-takes-on-irs-after-it-charges-penalties-and-interest-on-her-tax-bill.html

 

[Gail in Virginia]

I thought they were required to keep a copy of the post mark. Guess not any more, especially if it is to their advantage not to.  

[jklcpa]

Boiled down from the article:

• The taxpayer's check goes to a lockbox of IRS-contracted banks that converts it to an ACH payment by means of electronic image and data file.
• IRS proper doesn’t receive the paper tax returns or the payment checks.
• The taxpayer's bank also settles electronically using only routing and account numbers, so the taxpayer's bank never receives a digital or physical copy of the check.
• There is no canceled check to use as evidence.

 

[Patrick Michael]

This is why I always tell clients to get, at a minimum, a certificate of mailing, certified mail with return receipt preferred.

[Abby Normal]

8 minutes ago, Patrick Michael said:

This is why I always tell clients to get, at a minimum, a certificate of mailing, certified mail with return receipt preferred.

We mailed something to MD at year end, a time when they get a ton of mail. It ended up going to an agent of the state to hold until MD was ready to handle it. Because of the 3rd party agent receiving it, it never showed as delivered on the USPS site and we never got back the green card proving delivery, but MD did eventually receive it.

[JohnH]

Even if you don’t get the green card back, the tracking can be downloaded from USPS. (Although recently I had one that the tracking did not reflect delivery but I got the green card back). Belt and suspenders - Maybe one or the other will work. 

[jklcpa]

2 minutes ago, JohnH said:

Even if you don’t get the green card back, the tracking can be downloaded from USPS. (Although recently I had one that the tracking did not reflect delivery but I got the green card back). Belt and suspenders - Maybe one or the other will work. 

Maybe, or you could just as easily get an agent that told me this years ago: "It only proves that an envelope was mailed and received, not its contents."

[JohnH]

They might say that, but their own rules say otherwise. At least that’s what I would point out to anyone who said that to me. 

[schirallicpa]

We highly encourage clients to pay ACH debit with the return.  If they are mailing, we give them the priory envelop and advise to pay for the tracking and to make a copy of the check before mailing.

And I agree with JohnH - the rules say you have to prove that you mailed it.  You don't have to prove that they got it.  

[Lion EA]

I've been trying to convert my clients that insist upon mailing checks to use IRS's DirectPay instead so they get an immediate confirmation. CT has a similar system; although, not as user-friendly as DirectPay. Most states I prepare have something similar.

Of course, I strongly encourage Direct Debit with e-filing, but sometimes clients have to move funds around before they can pay, or we're dealing with ES during the year.

[Catherine]

If you're going to send a check near a deadline, shell out for Priority Mail and get a receipt from the Post Office that you handed it in directly to them. 

I push people towards Direct Pay, too - and then find that instead of following my instructions, they pick estimated taxes or payment for notice or something else wrong. Then I tell them they have to call and get it moved. Not dummies, either; just sloppy or rushing or both.

[Slippery Pencil]

Priority Mail isn't an accepted proof of mailing by the irs.  If you're going to shell out for expensive mail, get registered or certified so it will be useful if needed.

[BrewOne]

and registered mail is for items of tangible value in excess of what can be covered by insurance.  So certified if using USPS.

[Catherine]

But what is the USE of registered or certified if the little green card never gets stamped or returned? At least with PM tracking, you know the day it was delivered. Mostly/more often than the others. 

[Catherine]

But what is the USE of registered or certified if the little green card never gets stamped or returned? At least with PM tracking, you know the day it was delivered. Mostly/more often than the others. #NothingWorksAnymore

[Lloyd Hudson]

I try to use priority mail to the street address of the campus. Not the lock box. Delivered to l8ve person with a signature. No guarntees that it will be processed, but is actually in the IRS compound. Direct debit YES

 

[Slippery Pencil]

One use, as stated above, is that certified or registered is proof of mailing.  This is what is needed if it doesn't arrive or the irs claims it was late.  The green card is unnecessary.

Another use is when you tell the client to use priority and the package doesn't arrive or get processed correctly, the client has a valid argument that you should pay the penalties, which are your fault since you didn't follow clearly stated irs instructions on what constitutes proof of mailing. 

There is no use of priority in this situation.

[TexTaxToo]

Here are the regs (bolding is mine) from 26 CFR § 301.7502-1:

Quote

(c)(2) Registered or certified mail. If the document or payment is sent by U.S. registered mail, the date of registration of the document or payment is treated as the postmark date. If the document or payment is sent by U.S. certified mail and the sender's receipt is postmarked by the postal employee to whom the document or payment is presented, the date of the U.S. postmark on the receipt is treated as the postmark date of the document or payment. Accordingly, the risk that the document or payment will not be postmarked on the day that it is deposited in the mail may be eliminated by the use of registered or certified mail.

But the above applies if the IRS received the document or payment and the date is in question.  This topic has to do with a payment that was not received (or so the IRS claims) - in that case, note that the exception does not apply to payments:

Quote

(e) Delivery—(1) General rule. Except as provided in section 7502(f) and paragraphs (c)(3) and (d) of this section, section 7502 is not applicable unless the document or payment is delivered by U.S. mail to the agency, officer, or office with which the document is required to be filed or to which payment is required to be made.

(2) Exceptions to actual delivery—(i) Registered and certified mail. In the case of a document (but not a payment) sent by registered or certified mail, proof that the document was properly registered or that a postmarked certified mail sender's receipt was properly issued and that the envelope was properly addressed to the agency, officer, or office constitutes prima facie evidence that the document was delivered to the agency, officer, or office. Other than direct proof of actual delivery, proof of proper use of registered or certified mail, and proof of proper use of a duly designated PDS as provided for by paragraph (e)(2)(ii) of this section, are the exclusive means to establish prima facie evidence of delivery of a document to the agency, officer, or office with which the document is required to be filed. No other evidence of a postmark or of mailing will be prima facie evidence of delivery or raise a presumption that the document was delivered.

The exceptions (c)(3) and (d) have to do with private delivery services (PDS) and electronic filing.