AICPA Supports Extending Tax Mailbox Rule to E-Filed Returns and Payments

In a recent letter to Senators Marsha Blackburn (R-TN) and Catherine Cortez Masto (D-NV), the American Institute of CPAs (AICPA) expressed strong support for an issue identified by the Internal Revenue Service National Taxpayer Advocate (IRS NTA) in its Annual Report to Congress, or Purple Book.

The IRS NTA expressed the need to amend section 7502(c) so that electronically submitted tax payments and documents will be treated as submitted on the day they are transmitted, even if the IRS processes them at a later date. This practice – known as the “mailbox rule” – already applies to payments and documents sent to the IRS through traditional mail.

Currently, payments or tax returns mailed to the IRS that are postmarked on or before the due date are considered timely even if they are received and processed by the IRS at a later date. However, payments or tax returns transmitted to the IRS electronically may be considered late if the IRS processes them after the deadline, even if they were transmitted on or before the deadline.

As noted by the Purple Book, the Department of the Treasury does not currently have the authority to apply the mailbox rule to electronic payments, therefore, legislation is necessary to address the issue. Legislation introduced by Senators Blackburn and Cortez Masto would provide equity by treating both mailed and electronically submitted payments and documents the same.

“The AICPA has long supported the IRS’ modernization efforts; allowing the flexibility to make payments and file electronically under the same rules as traditional mail would be an extension of those efforts and has our strong support,” said Peter Mills, Senior Manager for Tax Policy & Advocacy with the AICPA. “We are grateful to Senators Blackburn and Cortez Masto for their leadership on this issue and will continue to support this effort as the legislation moves forward.”