Timely Mailing Treated as Timely Filing/Electronic Postmark

DEPARTMENT OF THE TREASURY
Internal Revenue Service 26 CFR Part 301 [TD 8807] RIN 1545-AW82

TITLE: Timely Mailing Treated as Timely Filing/Electronic Postmark

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Final and temporary regulations.

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 §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 §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 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
§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:

§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 §301.7502-1T(d).

* * * * *

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

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

(a) through (c) [Reserved]. For further guidance, see §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.6 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 §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
§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

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