Timely Mailing Treated as Timely Filing/Electronic Postmark

DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 301

[TD 8807]

RIN 1545-AW82

Timely Mailing Treated as Timely Filing/Electronic Postmark

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Final and temporary regulations.

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SUMMARY: This document contains temporary and final regulations

relating to timely mailing treated as timely filing and paying under

section 7502. The temporary regulations generally reflect changes to

the law made by the Internal Revenue Service Restructuring and Reform

Act of 1998. The temporary regulations affect taxpayers that file

documents or make payments or deposits. The text of the temporary

regulations is also set forth in the notice of proposed rulemaking on

this subject in the Proposed Rules section of this issue of the Federal

Register.

DATES: Effective date: These regulations are effective January 15,

1999.

Applicability date: For dates of applicability, see Sec. 301.7502-

1T(f)(3).

FOR FURTHER INFORMATION CONTACT: Charles A. Hall (202) 622-4940 (not a

toll-free call).

SUPPLEMENTARY INFORMATION:

Background

This document contains amendments to the Regulations on Procedure

and Administration (26 CFR part 301) under section 7502 relating to

timely mailing treated as timely filing and paying. Section 7502(c)(2)

was amended by section 2003(b) of the Internal Revenue Service

Restructuring and Reform Act of 1998, Public Law 105-206 (112 Stat. 725

(1998)), to authorize the Secretary to provide the extent to which the

prima facie evidence of delivery and postmark date rules apply to

electronic filing.

Explanation of Provisions

These temporary regulations add Sec. 301.7502-1T(d) to provide that

the date of an electronic postmark given by an authorized electronic

return transmitter will be deemed the filing date if the date of the

electronic postmark is on or before the filing due date. It also

permits the Commissioner to enter into an agreement with an electronic

return transmitter or to prescribe in forms, instructions, or other

appropriate guidance the procedures under which the electronic return

transmitter is authorized to provide taxpayers with an electronic

postmark to acknowledge the date and time that the electronic return

transmitter received the electronically filed document.

An electronic return transmitter is defined for purposes of the

regulation the same as in the revenue procedures governing the

Electronic Filing Program, currently Rev. Proc. 98-50 (1998-38 I.R.B. 8

(September 21, 1998)), and the On-Line Filing Program, currently Rev.

Proc. 98-51 (1998-38 I.R.B. 20 (September 21, 1998)). An electronic

postmark is a record of the date and time that an authorized electronic

return transmitter receives the transmission of the taxpayer's

electronically filed document on its host system.

For tax year 1998, the rules on electronic postmarks are effective

for income tax returns filed through electronic return transmitters

authorized to provide an electronic postmark pursuant to an agreement

under the

[[Page 2569]]

Electronic Tax Administration's Request for Agreement released on

November 26, 1997. For taxable years beginning after 1998, the rules on

electronic postmarks are effective for documents submitted to

electronic return transmitters that are authorized to provide an

electronic postmark pursuant to Sec. 301.7502-1T(d)(2).

Special Analyses

It has been determined that this Treasury decision is not a

significant regulatory action as defined in EO 12866. Therefore, a

regulatory assessment is not required. It also has been determined that

section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5)

does not apply to these regulations, and because these regulations do

not impose a collection of information on small entities, the

Regulatory Flexibility Act (5 U.S.C. chapter 6) does not apply.

Pursuant to section 7805(f) of the Internal Revenue Code, these

regulations will be submitted to the Chief Counsel for Advocacy of the

Small Business Administration for comment on their impact on small

business.

Drafting information: The principal author of these regulations is

Charles A. Hall, Office of Assistant Chief Counsel (Income Tax &

Accounting). However, other personnel from the IRS and Treasury

Department participated in their development.

List of Subjects in 26 CFR Part 301

Employment taxes, Estate taxes, Excise taxes, Gift taxes, Income

taxes, Penalties, Reporting and recordkeeping requirements.

Adoption of Amendments to the Regulations

Accordingly, 26 CFR part 301 is amended as follows:

PART 301--PROCEDURE AND ADMINISTRATION

Paragraph 1. The authority citation for part 301 is amended by

adding an entry in numerical order to read as follows:

Authority: 26 U.S.C. 7805 * * *

Section 301.7502-1T also issued under 26 U.S.C. 7502(c) * * *

Par. 2. Section 301.7502-1 is amended by:

1. Redesignating paragraphs (d) and (e) as paragraphs (e) and (f)

respectively.

2. Adding new paragraph (d).

The addition reads as follows:

Sec. 301.7502-1 Timely mailing treated as timely filing.

* * * * *

(d) [Reserved]. For further guidance regarding timely filing of

electronically filed documents for taxable years beginning after

December 31, 1997, see Sec. 301.7502-1T(d).

* * * * *

Par. 3. Section 301.7502-1T is added to read as follows:

Sec. 301.7502-1T Timely mailing treated as timely filing (temporary).

(a) through (c) [Reserved]. For further guidance, see

Sec. 301.7502-1(a) through (c).

(d) Electronically filed documents--(1) In general. A document

filed electronically with an electronic return transmitter (as defined

in paragraph (d)(3)(i) of this section and authorized pursuant to

paragraph (d)(2) of this section) in the manner and time prescribed by

the Commissioner is deemed to be filed on the date of the electronic

postmark (as defined in paragraph (d)(3)(ii) of this section) given by

the authorized electronic return transmitter. Thus, if the electronic

postmark is timely, the document is considered filed timely although it

is received by the agency, officer, or office after the last date, or

the last day of the period, prescribed for filing such document.

(2) Authorized electronic return transmitters. The Commissioner may

enter into an agreement with an electronic return transmitter or

prescribe in forms, instructions, or other appropriate guidance the

procedures under which the electronic return transmitter is authorized

to provide taxpayers with an electronic postmark to acknowledge the

date and time that the electronic return transmitter received the

electronically filed document.

(3) Definitions--(i) Electronic return transmitter. For purposes of

this paragraph (d), the term electronic return transmitter has the same

meaning as contained in section 3.02(4) of Rev. Proc. 98-50 (1998-38

I.R.B. 8 (September 21, 1998)), and section 3.02(3) of Rev. Proc. 98-51

(1998-38 I.R.B. 20 (September 21, 1998)) (See Sec. 601.601(d)(2) of

this chapter.), or in procedures subsequently prescribed by the

Commissioner.

(ii) Electronic postmark. For purposes of this paragraph (d), the

term electronic postmark means a record of the date and time (in a

particular time zone) that an authorized electronic return transmitter

receives the transmission of a taxpayer's electronically filed document

on its host system. However, if the taxpayer and the electronic return

transmitter are located in different time zones, it is the time in the

taxpayer's time zone that controls the timeliness of the electronically

filed document.

(e) through (f)(2) [Reserved]. For further guidance, see

Sec. 301.7502-1(e) through (f)(2).

(f)(3) Electronically filed documents--(i) For taxable year 1998.

For taxable year 1998, paragraph (d) of this section only applies to

electronically filed income tax returns transmitted to an electronic

return transmitter that was authorized to provide an electronic

postmark pursuant to an agreement entered into in response to

submissions received in reply to the Electronic Tax Administration's

Request for Agreement released on November 26, 1997.

(ii) For taxable years after 1998. For taxable years after 1998,

paragraph (d) of this section applies to any electronically filed

return, claim, statement, or other document transmitted to an

electronic return transmitter that is authorized to provide an

electronic postmark pursuant to paragraph (d)(2) of this section. This

section expires on January 14, 2002.

Robert E. Wenzel,

Deputy Commissioner of Internal Revenue.

Approved: December 30, 1998.

Donald C. Lubick,

Assistant Secretary of the Treasury.

[FR Doc. 99-700 Filed 1-14-99; 8:45 am]

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