Legal Case Summary

The Commission of the Internal Revenue, number 06-3798. It's a great, it's a great, it's a great, it's a great, it's a great, it's a great, it's a great, it's a great, it's a great, it's a great, спасибо, see you then. for a bottle

. Yes sir. I'd like to acknowledge Joe Serbak who is on the brief and you're on to this is in a peel from an action for refund for $79,000 tax penalty for failure to file payroll taxes electronically

. Get you right to the car. You're on right to the decision in both Qdo or however

. How do you say that? I would convey around a book. I tell Serbak that it's Bucado

. I guess I'm having a little bit of a struggle understanding how we could view that as a victim. You seem to be saying hey even though that says what it says it's it's dictated it's not binding on the court

. I understand your right? Yes Your Honor I don't even believe that that's a 7502 case. Even though it's starting 7502

. Yes that's the the gloss that that Congress put on the physical delivery role. The statute that allows there to be a retroactive proof of delivery if mailing a curse before the delivery

. What happened to Bucado was that the tax payer sent in I'm not sure if it was a refund request. Send in a refund request but the postmark itself was after the deadline for filing

. Deadline was February 11 in the post mark was February 12. Which takes it right out of 7502 so there was no need for the court to address

. The testimony that in fact they had sent it on the 11th was trumped by the postmark. Yes Your Honor so so when the court passed the 7502 there was really no need to address to address that issue and the court volunteered that there was the way to prove that there was a postmark was not through a presumption but was only under 7502

. So let's assume so I don't think of discussion that you're right and that the court made a statement about 75 or two that didn't need to and so it was taken. What's wrong with the reasoning of Bucado where the court said look there's a statute it lays out what the exceptions are and the common take Trump's what's worse than fall in that let's assume I'll assume it says it trumps the common law there are that case judges is unusual I put back in the three judge how it's what happens is a judge you get three judges but if somebody for some reason that or whatever okay two judges are allowed to decide on the subject. Yeah well Judge Staley committed the court I don't believe we don't believe that Judge Staley committed this court in 1960 to an interpretation of a statute that more contemporary cases from 1990 to 2004 have held otherwise okay well then explain why the other ones do because I'm asking you about the reason what's wrong with the read the logical flow of the Staley's interpretation the effect of 75. 7502 is not mutually exclusive with common law mail box what's wrong with it really can be summed up by Judge beam in that state of wood case where he said simply if Congress intended that there not be a presumption other than what's in the statute it was said so and that that really sums it up here 7502 is not our I should say it is not our case we've never relied on 7502 what we have here your honor is two letters that everyone agrees including the court were letters valid informal requests for refunds those letters are dated before the drop bed date of June 23rd date really isn't all that significant the fact of receipt is the significant thing here and what you're on the mailbox rule the mailbox rule is presumptive not preclusive the mailbox rule doesn't stop you from bringing in other evidence the mailbox rule is helpful when you don't have any other evidence but here you've got other evidence and the mailbox rule does not stop people bringing at it and you want to agree with the district court did stop it yeah well the district court said what you got here is the government saying our administrative files don't have the letters in therefore there is proof of non-delivery and you're not allowed to bring in any extrinsic evidence to show that you actually did make the mailing on the date that was prior to the drop bed date there's significant evidence without a postmark that we did make that mailing as a matter of fact the proof of the putting is that there was a refund for the second quarter 2000 penalty and the only way there could have been a refund is if the IRS determined that the letters that were sent in May of 03 and June of 03 are timely so an additional request for refund after the original yes your honor that's this case this case what happened was I'm sorry there was a meeting with the revenue agent yeah there was there was a formal request but the government acknowledges and judge Pratter found that those in those letters were valid informal request letters which under the law are sufficient to protect the taxpayer to timely file visit her appeal which I either did and and in reading the opinion it looks like with some with some reservation said look all you can do is rely on 7502c the only presumption you got as if you send it by registered mail or certified mail but you don't need a presumption well here we're relying on the presumption we're saying 7502 doesn't mean anything to us we're saying we can prove actual mailing well and we'll receipt to and to bridge the gap between the actual mailing and the timely receipt we have to bridge that some way 7502 bridges it but it also can be bridged by a common law mailbox rule as the eighth ninth tenth circuits have said so yeah we can rely on the president I mean see to me you don't even need to comment on the mailbox you can testify that you had a conversation with so and so the IRS about what was in the letters on a date which would validate the receipt of the letters oh sure judge but and we do and I have a whole list here of all the facts where at a minimum there is a genuine there can be a genuine issue of disputed facts as to the mailing the problem here is the unusual circumstance where the revenue agent who tried to be helpful did not put these letters in the administrative file because the administrative file was closed because the money had been levied he created his own work five put it on his desk and work with these folks but then he later claimed that he didn't get it right no he said it's I possibly could have gotten it I can't recall but I can't say I didn't get it however I can tell you I destroyed my own personal file where though where if I got those letters they would have been in there why would he destroy his own personal I don't know especially if we're still in the statute of limitations period did he recall the May 7th 2003 discussion yes he did and one of our witnesses says he missed Dougan the revenue agent not dumping on your honor he tried to be helpful told him that I got your May 8th letter and if you look at everything that followed that there was a precipitating event because these folks they went bananas that $160,000 we have to pay in the tax fee and Mr

. Yeah well Judge Staley committed the court I don't believe we don't believe that Judge Staley committed this court in 1960 to an interpretation of a statute that more contemporary cases from 1990 to 2004 have held otherwise okay well then explain why the other ones do because I'm asking you about the reason what's wrong with the read the logical flow of the Staley's interpretation the effect of 75. 7502 is not mutually exclusive with common law mail box what's wrong with it really can be summed up by Judge beam in that state of wood case where he said simply if Congress intended that there not be a presumption other than what's in the statute it was said so and that that really sums it up here 7502 is not our I should say it is not our case we've never relied on 7502 what we have here your honor is two letters that everyone agrees including the court were letters valid informal requests for refunds those letters are dated before the drop bed date of June 23rd date really isn't all that significant the fact of receipt is the significant thing here and what you're on the mailbox rule the mailbox rule is presumptive not preclusive the mailbox rule doesn't stop you from bringing in other evidence the mailbox rule is helpful when you don't have any other evidence but here you've got other evidence and the mailbox rule does not stop people bringing at it and you want to agree with the district court did stop it yeah well the district court said what you got here is the government saying our administrative files don't have the letters in therefore there is proof of non-delivery and you're not allowed to bring in any extrinsic evidence to show that you actually did make the mailing on the date that was prior to the drop bed date there's significant evidence without a postmark that we did make that mailing as a matter of fact the proof of the putting is that there was a refund for the second quarter 2000 penalty and the only way there could have been a refund is if the IRS determined that the letters that were sent in May of 03 and June of 03 are timely so an additional request for refund after the original yes your honor that's this case this case what happened was I'm sorry there was a meeting with the revenue agent yeah there was there was a formal request but the government acknowledges and judge Pratter found that those in those letters were valid informal request letters which under the law are sufficient to protect the taxpayer to timely file visit her appeal which I either did and and in reading the opinion it looks like with some with some reservation said look all you can do is rely on 7502c the only presumption you got as if you send it by registered mail or certified mail but you don't need a presumption well here we're relying on the presumption we're saying 7502 doesn't mean anything to us we're saying we can prove actual mailing well and we'll receipt to and to bridge the gap between the actual mailing and the timely receipt we have to bridge that some way 7502 bridges it but it also can be bridged by a common law mailbox rule as the eighth ninth tenth circuits have said so yeah we can rely on the president I mean see to me you don't even need to comment on the mailbox you can testify that you had a conversation with so and so the IRS about what was in the letters on a date which would validate the receipt of the letters oh sure judge but and we do and I have a whole list here of all the facts where at a minimum there is a genuine there can be a genuine issue of disputed facts as to the mailing the problem here is the unusual circumstance where the revenue agent who tried to be helpful did not put these letters in the administrative file because the administrative file was closed because the money had been levied he created his own work five put it on his desk and work with these folks but then he later claimed that he didn't get it right no he said it's I possibly could have gotten it I can't recall but I can't say I didn't get it however I can tell you I destroyed my own personal file where though where if I got those letters they would have been in there why would he destroy his own personal I don't know especially if we're still in the statute of limitations period did he recall the May 7th 2003 discussion yes he did and one of our witnesses says he missed Dougan the revenue agent not dumping on your honor he tried to be helpful told him that I got your May 8th letter and if you look at everything that followed that there was a precipitating event because these folks they went bananas that $160,000 we have to pay in the tax fee and Mr. Dougan the revenue agent described the accountant and the O'Neill's as an panic is frantic and if after that there was a lot of discussion and communication and then a meeting in August at that meeting the revenue agent was very helpful he said file 843 which is the formal request for refund that was filed in September possibly October I don't know why we have difference there and the IRS said okay with respect to two of the three quarters that you were penalized for we're going to give you a refund but with respect to the fourth the second quarter of 1999 we're not going to give you a refund because even because it was on time it was too late but you can't say that and still give a refund for the 2000 second quarter 2000 penalty without implicitly acknowledging that those letters that were sent before the two-year statute would end which ended on June 23rd 03 which they which they used to deny the 1999 penalty was ignored for the 2000 second quarter 2000 penalty because they granted the refund so if nothing else you're honored we're presenting you we don't think that in 1960 Judge Stale and Judge Goodridge committed to what we view as a more modern view of this statute and one that reconciles in a personal view more fairly and less harshly and with a less wooden respect and myopic approach that the government I think you are constricting your argument too much I think you can also say this statute is irrelevant to us we know it is it is we don't we have other evidence so forget we got a ton of it Judge and what I'm saying at a minimum I think there's enough evidence in the record now for this court to say the issue a decision but at a minimum this is summary judgment and Judge Prather did not look at any evidence with regard to the data the mailing nor with regard to the data the delivery other than to say the government's position is excuse me or I don't know I read late so that's great that we're gonna other than the government saying the letters aren't in our administrative file and they can see because the revenue agent said I didn't put them in there the file was closed I put them in my own file we had a meeting things look good look like you're gonna get the refund and I just and I threw my file away so I asked you a question on the refund the the the sanction was for file not filing electronic yeah yeah and you didn't file electronic so how do you get a refund I mean because the penalty was 10% we filed by coupon we paid we paid the money instead of yeah no you paid the money but you you were the payment was emphasized that it was required to be done electronically yes so you got a penalty ten other penalty was deserved so how can you get a refund on a penalty that's deserved because the I not in the record but there was there's was some issue back then with the electronic mailing system okay the government was saying this is all three of them said I tried to set it up and the IRS wouldn't complete the set up is that the base okay yeah there was some problem with the donor and that's the merits that'll go to the merits of the case in front of the other because you know we in the other case where the IRS is now trying to get the refund back yeah the yes you're on the yeah thank you not but I'm not done with you we still got another issue understanding yes spring for case Williams doesn't help you all that much does it yeah I mean the question here is you've got an entity that's cooperating with you the fund in filing this you file for it and you looks like you filed quite properly for it the entity isn't although you have reimbursed it you've done the you know the what a lot of professionals would say is the best practices by reimbursing it but it's still a party here right yes sir still cooperating with you isn't it not O'Neal actually it's no I mean it's the reverse our the P.M

. Dougan the revenue agent described the accountant and the O'Neill's as an panic is frantic and if after that there was a lot of discussion and communication and then a meeting in August at that meeting the revenue agent was very helpful he said file 843 which is the formal request for refund that was filed in September possibly October I don't know why we have difference there and the IRS said okay with respect to two of the three quarters that you were penalized for we're going to give you a refund but with respect to the fourth the second quarter of 1999 we're not going to give you a refund because even because it was on time it was too late but you can't say that and still give a refund for the 2000 second quarter 2000 penalty without implicitly acknowledging that those letters that were sent before the two-year statute would end which ended on June 23rd 03 which they which they used to deny the 1999 penalty was ignored for the 2000 second quarter 2000 penalty because they granted the refund so if nothing else you're honored we're presenting you we don't think that in 1960 Judge Stale and Judge Goodridge committed to what we view as a more modern view of this statute and one that reconciles in a personal view more fairly and less harshly and with a less wooden respect and myopic approach that the government I think you are constricting your argument too much I think you can also say this statute is irrelevant to us we know it is it is we don't we have other evidence so forget we got a ton of it Judge and what I'm saying at a minimum I think there's enough evidence in the record now for this court to say the issue a decision but at a minimum this is summary judgment and Judge Prather did not look at any evidence with regard to the data the mailing nor with regard to the data the delivery other than to say the government's position is excuse me or I don't know I read late so that's great that we're gonna other than the government saying the letters aren't in our administrative file and they can see because the revenue agent said I didn't put them in there the file was closed I put them in my own file we had a meeting things look good look like you're gonna get the refund and I just and I threw my file away so I asked you a question on the refund the the the sanction was for file not filing electronic yeah yeah and you didn't file electronic so how do you get a refund I mean because the penalty was 10% we filed by coupon we paid we paid the money instead of yeah no you paid the money but you you were the payment was emphasized that it was required to be done electronically yes so you got a penalty ten other penalty was deserved so how can you get a refund on a penalty that's deserved because the I not in the record but there was there's was some issue back then with the electronic mailing system okay the government was saying this is all three of them said I tried to set it up and the IRS wouldn't complete the set up is that the base okay yeah there was some problem with the donor and that's the merits that'll go to the merits of the case in front of the other because you know we in the other case where the IRS is now trying to get the refund back yeah the yes you're on the yeah thank you not but I'm not done with you we still got another issue understanding yes spring for case Williams doesn't help you all that much does it yeah I mean the question here is you've got an entity that's cooperating with you the fund in filing this you file for it and you looks like you filed quite properly for it the entity isn't although you have reimbursed it you've done the you know the what a lot of professionals would say is the best practices by reimbursing it but it's still a party here right yes sir still cooperating with you isn't it not O'Neal actually it's no I mean it's the reverse our the P.M.T.A

.T.A. and the I.L

. and the I.L.A. still cooperating with O'Neal O'Neal paid the money out of O'Neal's pocket but so does it Williams make it clear that well it granted relief in that case it third party administrator here doesn't look like it would have standing that case was one where the woman had a lien against her house yeah the lady and you voluntarily paid how does that allow you I mean you was okay you was okay subjugation but how does that really allow you to step into the shoes for standing purposes in this particular case to paraphrase a famous quote well what is meant by was what is meant by voluntary here the money O'Neal is a fiduciary as fiduciary it's a close relationship with the fund the fund has no the fund has been paid the fund has no incentive the fund is still a party right the fund is still a party yes funds in the case making the claim right pardon me I mean the fund is in this case making it claim right and cooperatively so and O'Neal even under Williams you honor it was involuntary otherwise we would have had to go through another litigation that is the PMTA suing O'Neal having an actual liability and then O'Neal coming in here and under Williams O'Neal would have but it but it had a party if PMTA is is a party even if O'Neal didn't have standing the fund has to I mean I'm sorry oh sure yes the fund has been yes that's right now I assume that it was ultimately were to prevail it would give you the money back that you're still out of pocket were there be a lawsuit were there be a lawsuit I bet you there would be yeah they would have to but it but in any event there's somebody here who's got standing and we can rest assured of that oh yes sir yes there is because I mean it's a twofold test one of the close relationship and the others hindrance and and listen soon for the moment each of there's of course we're not relationship yeah that's that's actually I'm glossing over what is that what is a difficult question but as to a hindrance I think what Judge Jordan and I are saying is how how are you hindered from getting to the merits of this case and having a resolution if we decide in your favor with regard to the 7502 mailing issue I refer you to Kowalski or honored such as this friend question you said when there's a lack of a Kowalski was a case that actually denied standing right but in defining what is a hindrance he said when there's a lack of incentive to challenge by the taxpayer or the necessary zeal but it sounds like we're beyond incentive the party is actually working with you we are the fund is working with the Neil under an agreement but at last lean on I'm sorry I feel apologetic at the time if you look at the same Joe title insurance case that title agent was in the same exact position as so Neil the title agent screwed up and sent thirty thousand dollars to the government the person was financing his home said they know that's my money the title agent said oh we're sorry title agent took the thirty thousand dollars gave it to the mortgage or like here a Neil gave us the hundred and sixty thousand dollars the title agent's brought an action because the thirty thousand dollars was a runnally paid to the IRS that title agent no different than on the deal the title agent had standing the title agent didn't pay the tax the tax came out of the the guy who was refinancing his house was funds so it's it's in my view in the same spot thank you thank you green funny runners kind of green on behalf of the commission like to start by making a few factual well let me see if I can just ask some questions of facts see if I understand the great did oh Neil tried to enter the fund in the IRS's electronic tax payment program is that correct I am I am not sure about that goes to the merits and the merits weren't no it didn't need to try to enter the fund this this is leading up to the procedural issue that we spent most of our time on did oh Neil attempt to enroll the fund in the IRS's electronic tax payment program I can't answer that question I don't think it's in the record you know it no I do not know yeah that goes to the merits of the issue and I don't know well we know here if it goes to the merits or if it's not in the record we just want to know yes I don't know the answer to the question do you know whether the IRS thought that the fund was supposed to file electronic yes that's why the penalty was set against it but do you know okay so the the IRS thought that they were to file electronically but apparently was there a glitch between the IRS and the fund because the fund didn't know necessarily what it was to do in fact the understanding was at least what was said and maybe not in the record the fund tried to file electronically didn't get confirmation that it could file electronically was unsure what to do and thought that the default would be looked which is filed by paper turns out that the IRS had agreed that they could file electronically and therefore because they didn't file electronically assessed the penalty you're speaking to the facts regarding the merits and I simply cannot answer that question I simply do not know I can find out and send the letter of the court so desires but I simply do not actually I would appreciate if you would do that okay because do you know if the IRS is ever assessed another penalty like this before I do not know so was this the first time that this kind of penalty in other words the argument they're making is look we tried to comply we tried to do what we could the IRS is a big entity they didn't get information to us we then found out although there was a screw up with Mr

.A. still cooperating with O'Neal O'Neal paid the money out of O'Neal's pocket but so does it Williams make it clear that well it granted relief in that case it third party administrator here doesn't look like it would have standing that case was one where the woman had a lien against her house yeah the lady and you voluntarily paid how does that allow you I mean you was okay you was okay subjugation but how does that really allow you to step into the shoes for standing purposes in this particular case to paraphrase a famous quote well what is meant by was what is meant by voluntary here the money O'Neal is a fiduciary as fiduciary it's a close relationship with the fund the fund has no the fund has been paid the fund has no incentive the fund is still a party right the fund is still a party yes funds in the case making the claim right pardon me I mean the fund is in this case making it claim right and cooperatively so and O'Neal even under Williams you honor it was involuntary otherwise we would have had to go through another litigation that is the PMTA suing O'Neal having an actual liability and then O'Neal coming in here and under Williams O'Neal would have but it but it had a party if PMTA is is a party even if O'Neal didn't have standing the fund has to I mean I'm sorry oh sure yes the fund has been yes that's right now I assume that it was ultimately were to prevail it would give you the money back that you're still out of pocket were there be a lawsuit were there be a lawsuit I bet you there would be yeah they would have to but it but in any event there's somebody here who's got standing and we can rest assured of that oh yes sir yes there is because I mean it's a twofold test one of the close relationship and the others hindrance and and listen soon for the moment each of there's of course we're not relationship yeah that's that's actually I'm glossing over what is that what is a difficult question but as to a hindrance I think what Judge Jordan and I are saying is how how are you hindered from getting to the merits of this case and having a resolution if we decide in your favor with regard to the 7502 mailing issue I refer you to Kowalski or honored such as this friend question you said when there's a lack of a Kowalski was a case that actually denied standing right but in defining what is a hindrance he said when there's a lack of incentive to challenge by the taxpayer or the necessary zeal but it sounds like we're beyond incentive the party is actually working with you we are the fund is working with the Neil under an agreement but at last lean on I'm sorry I feel apologetic at the time if you look at the same Joe title insurance case that title agent was in the same exact position as so Neil the title agent screwed up and sent thirty thousand dollars to the government the person was financing his home said they know that's my money the title agent said oh we're sorry title agent took the thirty thousand dollars gave it to the mortgage or like here a Neil gave us the hundred and sixty thousand dollars the title agent's brought an action because the thirty thousand dollars was a runnally paid to the IRS that title agent no different than on the deal the title agent had standing the title agent didn't pay the tax the tax came out of the the guy who was refinancing his house was funds so it's it's in my view in the same spot thank you thank you green funny runners kind of green on behalf of the commission like to start by making a few factual well let me see if I can just ask some questions of facts see if I understand the great did oh Neil tried to enter the fund in the IRS's electronic tax payment program is that correct I am I am not sure about that goes to the merits and the merits weren't no it didn't need to try to enter the fund this this is leading up to the procedural issue that we spent most of our time on did oh Neil attempt to enroll the fund in the IRS's electronic tax payment program I can't answer that question I don't think it's in the record you know it no I do not know yeah that goes to the merits of the issue and I don't know well we know here if it goes to the merits or if it's not in the record we just want to know yes I don't know the answer to the question do you know whether the IRS thought that the fund was supposed to file electronic yes that's why the penalty was set against it but do you know okay so the the IRS thought that they were to file electronically but apparently was there a glitch between the IRS and the fund because the fund didn't know necessarily what it was to do in fact the understanding was at least what was said and maybe not in the record the fund tried to file electronically didn't get confirmation that it could file electronically was unsure what to do and thought that the default would be looked which is filed by paper turns out that the IRS had agreed that they could file electronically and therefore because they didn't file electronically assessed the penalty you're speaking to the facts regarding the merits and I simply cannot answer that question I simply do not know I can find out and send the letter of the court so desires but I simply do not actually I would appreciate if you would do that okay because do you know if the IRS is ever assessed another penalty like this before I do not know so was this the first time that this kind of penalty in other words the argument they're making is look we tried to comply we tried to do what we could the IRS is a big entity they didn't get information to us we then found out although there was a screw up with Mr. Kuala but we later found out within two years after the June 25th of 2001 we found out within two years that there was a hundred and sixty thousand dollars assessed according to Mr. Duke and apparently I think what is in the record is on May 7th of 2003 they got on the phone and they were very disturbed as you know trying to figure out what's going on and there was a letter composed that they claim that they sent out on May 8th and then subsequently there was a letter composed that they said that they sent on June 13th isn't so your argument then is what simply that 7502 preamps I mean 7502 is what was put into 54 that allows you and me to file 1159 PM right right so we can go to the post office and if I file on April 15th at 1159 I'm okay what the back to Judge Ross point what's that got to do with the testimony that hey we got stuff to you we we're telling you we sent stuff to you prior to June 25th 2003 the deadline for making an objection but what's 7502 the first of all the only testimony that they had is they have no proof that the government actually received any document well Mr

. Kuala but we later found out within two years after the June 25th of 2001 we found out within two years that there was a hundred and sixty thousand dollars assessed according to Mr. Duke and apparently I think what is in the record is on May 7th of 2003 they got on the phone and they were very disturbed as you know trying to figure out what's going on and there was a letter composed that they claim that they sent out on May 8th and then subsequently there was a letter composed that they said that they sent on June 13th isn't so your argument then is what simply that 7502 preamps I mean 7502 is what was put into 54 that allows you and me to file 1159 PM right right so we can go to the post office and if I file on April 15th at 1159 I'm okay what the back to Judge Ross point what's that got to do with the testimony that hey we got stuff to you we we're telling you we sent stuff to you prior to June 25th 2003 the deadline for making an objection but what's 7502 the first of all the only testimony that they had is they have no proof that the government actually received any document well Mr. Dugan said they might have gotten to me he destroyed his file he said he may or may not have he have no recollection of receiving it in any conversation they're saying they sent it any that's just their testimony that they sent it that does not mean they have no point in the proceedings it's the plaintiff's testimony that determines whether or not the case will judgment will be granted that the court cannot make as you well know a determination of fact the plaintiff's evidence is that we mailed the letter we have corroborating evidence from the the date on the computer file we have corroborating evidence from the discussion with the IRS agent that's where I would disagree with you they do not have corroborating evidence because the letter was made they look we are talking about their evidence I understand in that evidence they they have not a putting it in the mail that will they have their testimony 7502 C says you look exasperated 7502 C says that the registration or certification is pre-maphasia evidence of mailing pre-maphasia evidence is not exclusive evidence is not preclusive evidence right and if they have other evidence of mailing or if they had a princess of photograph of the letter lying on the IRS agents desk with a copy of the New York Times of that day that would be evidence of receipt correct and they are claiming that they've got various evidence other than a postmark of mailing and receipt including conversations with the IRS agent about what was in the letter now is that not creating an issue of fact which would prevent the grant of summary judgment in this case well there is one incorrect assertion in your statement and that is that they have even offered any evidence of receipt what they have offered is a conversation before these letters were allegedly sent where the no they're offering a conversation after the letters were sent and at that about the subject matter that was in the letter so arguably how did the IRS agent know what to talk about in this conversation if the information had not been conveyed to him in some manner and the plaintiffs are saying that that information was conveyed to him via the letters it had been conveyed to him by the conversation prior to the sending of the legend sending of the letters that's not the way I read the issues here and they were precluded by the district report from further presentation of this evidence but if they create an issue of fact that they have mailed the letters even simply I would think by the testimony that they did mail the letters then how can we grant some regent or how can we affirm a grant of summary judgment when there is an issue of fact as to whether the letters were in fact mailed and received so far as I understand the record there is nothing in the record that establishes that okay so then if there is something in the record would you agree that some regent was in problem if there was something in the record that established actual receipt evidence of actual receipt you know let me ask because I think that's where we're getting to hang up you use the word establish and not to drop a forgivey for interpreting her words I think the question she's putting to you is premised on the summary judgment standard we're bound by which requires us to draw every inference in favor of your home every inference from the fact you're they stand up here and tell us we have proof and there's evidence indications in the record that they have proof of people who will say look at the mailbox rule I'm telling you I mailed it and I talked to this guy and he tells me he got it and when you see Agent Dugan's comments they're equivocal at best you could draw inferences that indicate he did get it when you draw all these inferences in their favor if if the standard you want us to apply is do they have evidence establishing receipt aren't you asking us to ignore the summary judgment standard which requires us to draw every inference in their favor I think the bottom line well if there was if they could have evidence of actual receipt there may be some argument that summary judgment was inappropriate even then however I think that the whole point of 7502 was to preempt these kinds of factual disputes where there is any question as to and I will grant you do you have the second and stick circuit saying that which also the eighth ninth and 10 circuits going the other way and so we have to make a decision well now the 502c says it's prima facie evidence it did not say it's the only evidence the eighth ninth and the 10th circuit in Judge Bauldoch what they said is that there could be certain evidence to establish proof of postmark not proof of mailing but proof of postmark but isn't that important when it's the date of mailing that's important and if these letters exist the date of their mailing is it's not a question was it mailed one day or the next and those cases or where you want to prove that you mailed your letter on April 15th and not on April 16th well that is correct what the the taxpayers here have never made the argument that they proved actual receipt their whole argument is that the only thing that they want to do is to be real able to rely on the they want to be able to put in evidence to show that in fact they had objected properly prior to June 25th and that was precluded because there was an interpretation of 7502 preempting here was what what you're hearing is that that may not be the only way to show I mean here you got a case where somebody filed on time they filed what by what they thought was the only way they could file which was my paper because they didn't know that they could file electronically they paid the right amount of tax so then what happens is they assessed a hundred and sixty thousand dollar penalty for in effect writing a paper check rather than paying electronically and you're saying that's too bad so said and they object to the penalty within the two years and they say they sent a letter which the district court has held would be a valid informal request for refund and which you have not appealed so the issue is was that letter in fact sent or not did that letter exist it's not the issue of when was it sent it's the issue of did this letter exist and the plaintiffs testify that they drafted the letter they met they retype the letter they mailed the letter and they discussed the letter after it's mailing with the IRS agent who acknowledged it's receipt now that seems to me to raise a real issue of fact that this letter did exist first of all we don't agree that necessarily was a valid informal claim for refund well the district court has so how did you have not the district court held it for the purposes of the summary judgment motion okay we have agreed that for the purposes of the summary judgment motions in formal claim for refund it was a final order and you didn't appeal so I think you're I think that's the law of the case now you didn't appeal it that was a final order for the purposes of the summary judgment motion correct and that was a final order on appeal and when the plaintiffs appealed you did not cross appeal so I think you got the law of the case there but anyway if you want to file that argue that later on that's not what we're dealing with today again I go back to the point that I don't believe that the taxpayers here have ever argued actual receipt have ever specifically stated that during their conferences subsequent to the sending the letter there was ever an agreement that the letter was received so what they are doing and back and it's an important point and I want you to help because what I understand you being saying is you're hearing for the first time this argument that there's evidence of receipt in the record is that what I hear you outside of reliance on the common law presumption their whole argument is I yes as I understand that their whole argument has been that 7502 is totally irrelevant to this case and that they are relying on a common law presumption that he properly mailed envelope prior to a due date is determined received within a normal period of time and that they mailed it well before the due date which if they're out if they mailed it when alleged would be true and that the common law presumption of mailing would be sufficient to them and so if we've if we've heard argument today that look there's evidence in the record that shows a precipitating event you don't have to be fanciful about this third circuit there there's evidence to show there was mailing and there's a fair inference of receipt because there were discussions things happen after that that you can infer happen because there was received and can I remember you that's that's something you're hearing for the first time well if you look at the blue brief page nine they quote revenue officer Dugan reported that he had received the May age 2003 letter and attachments that everything looked good and that we're going to put it through and get you a refund appendix pages two ten to eleven contra rally deposition sounds like they've been arguing all along that there is acknowledgement from the IRS that the letter was received well that that does suggest that they have stated that the focus of their argument as I understood it and their only argument was not actual receipt was the common law presumption and that the hope and that's the way the district court understood their entire argument all said that the mailbox rule will not permit you to make that to make that argument well but they make the common law presumption yeah they have the facts in the record which demonstrate acknowledgement by the IRS that the letter was received so so for the sake of discussion even though you've got no more time for discussion let me ask you this if I could excuse assume for the purposes of this conversation now that what that what we're talking about is an assertion by the taxpayer that there's there's evidence in the record from which it could be fairly inferred that there was actually receipt and so 7502 or not that should be enough to get us past summary judgment what's your response to that well I would go back to what Judge Baldock said in the Sartino case that mere self-serving testimony simply can't be enough to even jump over a summary judgment hurdle under these circumstances there has to be some actual proof some some corroborating evidence other than one person say so and then the other person saying I don't remember they were so agitated on May 7 why in the world would they not sent the letter on May 8 or on June 13th when they didn't hear back I can't answer that and the fact that they may have sent it simply would be irrelevant if it had not been received that's the whole point to 7502 the doogan is saying that there or I should say Panturelli is saying the doogan had told him in conversation that he had received it I mean why can't that at least come in there if that is an issue of fact what what is well again that simply self-serving testimony that is not is an all testimony self-serving with absolutely no corroborating evidence and in the face it isn't that for the jury to decide in the face of Congress enacting 7502 which was supposed to do away with all these sorts of factual disputes and have a clean rule giving the taxpayer an easy method by which to establish delivery and timely delivery I think that the court here would be correct in saying that self-serving testimony as Judge Baldoch said in Sarantino is simply not sufficient okay but if there were some corroboration for example the the precipitating event argument that's not testimony from the other side that's something in the record that shows yeah there was a response IRS started doing things the fact that there was the government response action is that not corroborative of their version of the facts if you view the inferences in their favor again there was a conversation prior to the alleged sending of the letter there were meetings thereafter I got you thank you very much thank you I'm going to hold it here your time yes you're on it just some question is just I guess some questions jumped out of me for a minute one here can't you just send the darn thing registered mail or sort of or or or bed X I don't know your honor I can tell you I'm a dumb question don't have the operation but but I'll give you some advice on it if you're going to mail your tax return of 1159 you better make sure you have proof that you're mailed it or you have somebody in the car who says you walked in the post office with the with the return and walk that in post office without because if the IRS tells you later two years later they never got your return you're done when I paid my estimated tax after I read your brief I took it and had a stamp for steam so you know there's you didn't want to do the stamp did you you better I go to the post office and stand in line like a fool but get that 35 cent proof of mailing also your honor judge Jordan you asked me a question about policy 75-0 was was remedial it wanted to put gloss on the harshness of the prior actual physical delivery rule which the courts had already begun to do by applying the common law mailbox rule it's not the exclusive means and also to answer your inquiry and simple and it's tried and I'm sure we've all argued it if you walk like a duck and talk like a duck and act like a duck but then maybe you're a duck and we we should have that chance to present that evidence it's not simply miss O'Neill saying she mailed it I have eight or nine points I can give you of other corroborative evidence and that raises an issue and to correct the record I didn't I don't believe I said we have new proof of evidence of receipt I did make the argument that there was a precipitating event and a whole series which would inferentially show the receipt thank you and my comments on the other evidence is what I got out of your brief which that's and that's only some year I thank you both counsel the argument I'd like it as counsel if they could get together with the clerk's office I believe in Philadelphia and I request that a transcript be prepared of be prepared to this or argument and then also Mr. Green for the questions I ask you to get back to me how much time do you think you would need can you get back to us in two weeks the kindlier friendlier IRS will they well on the on the attempt to file electronically on whether there had been an attempt whether that had been approved did they attempt to enroll in the IRS electronic tax payment system when was confirmation given to them the one other question I asked where the taxes timely pay has anyone else been by fine and as some of the last question was anybody as anybody else paid a penalty paid a penalty this type of penalty were paying by paper check rather than electronically the taxes I gather that's not an issue yeah they were timely paid in full but they were paid not like well if you would get together with the clerk's office in Philadelphia then did you get one give them a number Thank you very much

. Dugan said they might have gotten to me he destroyed his file he said he may or may not have he have no recollection of receiving it in any conversation they're saying they sent it any that's just their testimony that they sent it that does not mean they have no point in the proceedings it's the plaintiff's testimony that determines whether or not the case will judgment will be granted that the court cannot make as you well know a determination of fact the plaintiff's evidence is that we mailed the letter we have corroborating evidence from the the date on the computer file we have corroborating evidence from the discussion with the IRS agent that's where I would disagree with you they do not have corroborating evidence because the letter was made they look we are talking about their evidence I understand in that evidence they they have not a putting it in the mail that will they have their testimony 7502 C says you look exasperated 7502 C says that the registration or certification is pre-maphasia evidence of mailing pre-maphasia evidence is not exclusive evidence is not preclusive evidence right and if they have other evidence of mailing or if they had a princess of photograph of the letter lying on the IRS agents desk with a copy of the New York Times of that day that would be evidence of receipt correct and they are claiming that they've got various evidence other than a postmark of mailing and receipt including conversations with the IRS agent about what was in the letter now is that not creating an issue of fact which would prevent the grant of summary judgment in this case well there is one incorrect assertion in your statement and that is that they have even offered any evidence of receipt what they have offered is a conversation before these letters were allegedly sent where the no they're offering a conversation after the letters were sent and at that about the subject matter that was in the letter so arguably how did the IRS agent know what to talk about in this conversation if the information had not been conveyed to him in some manner and the plaintiffs are saying that that information was conveyed to him via the letters it had been conveyed to him by the conversation prior to the sending of the legend sending of the letters that's not the way I read the issues here and they were precluded by the district report from further presentation of this evidence but if they create an issue of fact that they have mailed the letters even simply I would think by the testimony that they did mail the letters then how can we grant some regent or how can we affirm a grant of summary judgment when there is an issue of fact as to whether the letters were in fact mailed and received so far as I understand the record there is nothing in the record that establishes that okay so then if there is something in the record would you agree that some regent was in problem if there was something in the record that established actual receipt evidence of actual receipt you know let me ask because I think that's where we're getting to hang up you use the word establish and not to drop a forgivey for interpreting her words I think the question she's putting to you is premised on the summary judgment standard we're bound by which requires us to draw every inference in favor of your home every inference from the fact you're they stand up here and tell us we have proof and there's evidence indications in the record that they have proof of people who will say look at the mailbox rule I'm telling you I mailed it and I talked to this guy and he tells me he got it and when you see Agent Dugan's comments they're equivocal at best you could draw inferences that indicate he did get it when you draw all these inferences in their favor if if the standard you want us to apply is do they have evidence establishing receipt aren't you asking us to ignore the summary judgment standard which requires us to draw every inference in their favor I think the bottom line well if there was if they could have evidence of actual receipt there may be some argument that summary judgment was inappropriate even then however I think that the whole point of 7502 was to preempt these kinds of factual disputes where there is any question as to and I will grant you do you have the second and stick circuit saying that which also the eighth ninth and 10 circuits going the other way and so we have to make a decision well now the 502c says it's prima facie evidence it did not say it's the only evidence the eighth ninth and the 10th circuit in Judge Bauldoch what they said is that there could be certain evidence to establish proof of postmark not proof of mailing but proof of postmark but isn't that important when it's the date of mailing that's important and if these letters exist the date of their mailing is it's not a question was it mailed one day or the next and those cases or where you want to prove that you mailed your letter on April 15th and not on April 16th well that is correct what the the taxpayers here have never made the argument that they proved actual receipt their whole argument is that the only thing that they want to do is to be real able to rely on the they want to be able to put in evidence to show that in fact they had objected properly prior to June 25th and that was precluded because there was an interpretation of 7502 preempting here was what what you're hearing is that that may not be the only way to show I mean here you got a case where somebody filed on time they filed what by what they thought was the only way they could file which was my paper because they didn't know that they could file electronically they paid the right amount of tax so then what happens is they assessed a hundred and sixty thousand dollar penalty for in effect writing a paper check rather than paying electronically and you're saying that's too bad so said and they object to the penalty within the two years and they say they sent a letter which the district court has held would be a valid informal request for refund and which you have not appealed so the issue is was that letter in fact sent or not did that letter exist it's not the issue of when was it sent it's the issue of did this letter exist and the plaintiffs testify that they drafted the letter they met they retype the letter they mailed the letter and they discussed the letter after it's mailing with the IRS agent who acknowledged it's receipt now that seems to me to raise a real issue of fact that this letter did exist first of all we don't agree that necessarily was a valid informal claim for refund well the district court has so how did you have not the district court held it for the purposes of the summary judgment motion okay we have agreed that for the purposes of the summary judgment motions in formal claim for refund it was a final order and you didn't appeal so I think you're I think that's the law of the case now you didn't appeal it that was a final order for the purposes of the summary judgment motion correct and that was a final order on appeal and when the plaintiffs appealed you did not cross appeal so I think you got the law of the case there but anyway if you want to file that argue that later on that's not what we're dealing with today again I go back to the point that I don't believe that the taxpayers here have ever argued actual receipt have ever specifically stated that during their conferences subsequent to the sending the letter there was ever an agreement that the letter was received so what they are doing and back and it's an important point and I want you to help because what I understand you being saying is you're hearing for the first time this argument that there's evidence of receipt in the record is that what I hear you outside of reliance on the common law presumption their whole argument is I yes as I understand that their whole argument has been that 7502 is totally irrelevant to this case and that they are relying on a common law presumption that he properly mailed envelope prior to a due date is determined received within a normal period of time and that they mailed it well before the due date which if they're out if they mailed it when alleged would be true and that the common law presumption of mailing would be sufficient to them and so if we've if we've heard argument today that look there's evidence in the record that shows a precipitating event you don't have to be fanciful about this third circuit there there's evidence to show there was mailing and there's a fair inference of receipt because there were discussions things happen after that that you can infer happen because there was received and can I remember you that's that's something you're hearing for the first time well if you look at the blue brief page nine they quote revenue officer Dugan reported that he had received the May age 2003 letter and attachments that everything looked good and that we're going to put it through and get you a refund appendix pages two ten to eleven contra rally deposition sounds like they've been arguing all along that there is acknowledgement from the IRS that the letter was received well that that does suggest that they have stated that the focus of their argument as I understood it and their only argument was not actual receipt was the common law presumption and that the hope and that's the way the district court understood their entire argument all said that the mailbox rule will not permit you to make that to make that argument well but they make the common law presumption yeah they have the facts in the record which demonstrate acknowledgement by the IRS that the letter was received so so for the sake of discussion even though you've got no more time for discussion let me ask you this if I could excuse assume for the purposes of this conversation now that what that what we're talking about is an assertion by the taxpayer that there's there's evidence in the record from which it could be fairly inferred that there was actually receipt and so 7502 or not that should be enough to get us past summary judgment what's your response to that well I would go back to what Judge Baldock said in the Sartino case that mere self-serving testimony simply can't be enough to even jump over a summary judgment hurdle under these circumstances there has to be some actual proof some some corroborating evidence other than one person say so and then the other person saying I don't remember they were so agitated on May 7 why in the world would they not sent the letter on May 8 or on June 13th when they didn't hear back I can't answer that and the fact that they may have sent it simply would be irrelevant if it had not been received that's the whole point to 7502 the doogan is saying that there or I should say Panturelli is saying the doogan had told him in conversation that he had received it I mean why can't that at least come in there if that is an issue of fact what what is well again that simply self-serving testimony that is not is an all testimony self-serving with absolutely no corroborating evidence and in the face it isn't that for the jury to decide in the face of Congress enacting 7502 which was supposed to do away with all these sorts of factual disputes and have a clean rule giving the taxpayer an easy method by which to establish delivery and timely delivery I think that the court here would be correct in saying that self-serving testimony as Judge Baldoch said in Sarantino is simply not sufficient okay but if there were some corroboration for example the the precipitating event argument that's not testimony from the other side that's something in the record that shows yeah there was a response IRS started doing things the fact that there was the government response action is that not corroborative of their version of the facts if you view the inferences in their favor again there was a conversation prior to the alleged sending of the letter there were meetings thereafter I got you thank you very much thank you I'm going to hold it here your time yes you're on it just some question is just I guess some questions jumped out of me for a minute one here can't you just send the darn thing registered mail or sort of or or or bed X I don't know your honor I can tell you I'm a dumb question don't have the operation but but I'll give you some advice on it if you're going to mail your tax return of 1159 you better make sure you have proof that you're mailed it or you have somebody in the car who says you walked in the post office with the with the return and walk that in post office without because if the IRS tells you later two years later they never got your return you're done when I paid my estimated tax after I read your brief I took it and had a stamp for steam so you know there's you didn't want to do the stamp did you you better I go to the post office and stand in line like a fool but get that 35 cent proof of mailing also your honor judge Jordan you asked me a question about policy 75-0 was was remedial it wanted to put gloss on the harshness of the prior actual physical delivery rule which the courts had already begun to do by applying the common law mailbox rule it's not the exclusive means and also to answer your inquiry and simple and it's tried and I'm sure we've all argued it if you walk like a duck and talk like a duck and act like a duck but then maybe you're a duck and we we should have that chance to present that evidence it's not simply miss O'Neill saying she mailed it I have eight or nine points I can give you of other corroborative evidence and that raises an issue and to correct the record I didn't I don't believe I said we have new proof of evidence of receipt I did make the argument that there was a precipitating event and a whole series which would inferentially show the receipt thank you and my comments on the other evidence is what I got out of your brief which that's and that's only some year I thank you both counsel the argument I'd like it as counsel if they could get together with the clerk's office I believe in Philadelphia and I request that a transcript be prepared of be prepared to this or argument and then also Mr. Green for the questions I ask you to get back to me how much time do you think you would need can you get back to us in two weeks the kindlier friendlier IRS will they well on the on the attempt to file electronically on whether there had been an attempt whether that had been approved did they attempt to enroll in the IRS electronic tax payment system when was confirmation given to them the one other question I asked where the taxes timely pay has anyone else been by fine and as some of the last question was anybody as anybody else paid a penalty paid a penalty this type of penalty were paying by paper check rather than electronically the taxes I gather that's not an issue yeah they were timely paid in full but they were paid not like well if you would get together with the clerk's office in Philadelphia then did you get one give them a number Thank you very much. Thank you. Take the matter under advisement

. Thank you. Take the matter under advisement. Call the next case, which is Scott be beard at all Number 06-4439 Ms Goldstein and Mr. alone

The Commission of the Internal Revenue, number 06-3798. It's a great, it's a great, it's a great, it's a great, it's a great, it's a great, it's a great, it's a great, it's a great, it's a great, спасибо, see you then. for a bottle. Yes sir. I'd like to acknowledge Joe Serbak who is on the brief and you're on to this is in a peel from an action for refund for $79,000 tax penalty for failure to file payroll taxes electronically. Get you right to the car. You're on right to the decision in both Qdo or however. How do you say that? I would convey around a book. I tell Serbak that it's Bucado. I guess I'm having a little bit of a struggle understanding how we could view that as a victim. You seem to be saying hey even though that says what it says it's it's dictated it's not binding on the court. I understand your right? Yes Your Honor I don't even believe that that's a 7502 case. Even though it's starting 7502. Yes that's the the gloss that that Congress put on the physical delivery role. The statute that allows there to be a retroactive proof of delivery if mailing a curse before the delivery. What happened to Bucado was that the tax payer sent in I'm not sure if it was a refund request. Send in a refund request but the postmark itself was after the deadline for filing. Deadline was February 11 in the post mark was February 12. Which takes it right out of 7502 so there was no need for the court to address. The testimony that in fact they had sent it on the 11th was trumped by the postmark. Yes Your Honor so so when the court passed the 7502 there was really no need to address to address that issue and the court volunteered that there was the way to prove that there was a postmark was not through a presumption but was only under 7502. So let's assume so I don't think of discussion that you're right and that the court made a statement about 75 or two that didn't need to and so it was taken. What's wrong with the reasoning of Bucado where the court said look there's a statute it lays out what the exceptions are and the common take Trump's what's worse than fall in that let's assume I'll assume it says it trumps the common law there are that case judges is unusual I put back in the three judge how it's what happens is a judge you get three judges but if somebody for some reason that or whatever okay two judges are allowed to decide on the subject. Yeah well Judge Staley committed the court I don't believe we don't believe that Judge Staley committed this court in 1960 to an interpretation of a statute that more contemporary cases from 1990 to 2004 have held otherwise okay well then explain why the other ones do because I'm asking you about the reason what's wrong with the read the logical flow of the Staley's interpretation the effect of 75. 7502 is not mutually exclusive with common law mail box what's wrong with it really can be summed up by Judge beam in that state of wood case where he said simply if Congress intended that there not be a presumption other than what's in the statute it was said so and that that really sums it up here 7502 is not our I should say it is not our case we've never relied on 7502 what we have here your honor is two letters that everyone agrees including the court were letters valid informal requests for refunds those letters are dated before the drop bed date of June 23rd date really isn't all that significant the fact of receipt is the significant thing here and what you're on the mailbox rule the mailbox rule is presumptive not preclusive the mailbox rule doesn't stop you from bringing in other evidence the mailbox rule is helpful when you don't have any other evidence but here you've got other evidence and the mailbox rule does not stop people bringing at it and you want to agree with the district court did stop it yeah well the district court said what you got here is the government saying our administrative files don't have the letters in therefore there is proof of non-delivery and you're not allowed to bring in any extrinsic evidence to show that you actually did make the mailing on the date that was prior to the drop bed date there's significant evidence without a postmark that we did make that mailing as a matter of fact the proof of the putting is that there was a refund for the second quarter 2000 penalty and the only way there could have been a refund is if the IRS determined that the letters that were sent in May of 03 and June of 03 are timely so an additional request for refund after the original yes your honor that's this case this case what happened was I'm sorry there was a meeting with the revenue agent yeah there was there was a formal request but the government acknowledges and judge Pratter found that those in those letters were valid informal request letters which under the law are sufficient to protect the taxpayer to timely file visit her appeal which I either did and and in reading the opinion it looks like with some with some reservation said look all you can do is rely on 7502c the only presumption you got as if you send it by registered mail or certified mail but you don't need a presumption well here we're relying on the presumption we're saying 7502 doesn't mean anything to us we're saying we can prove actual mailing well and we'll receipt to and to bridge the gap between the actual mailing and the timely receipt we have to bridge that some way 7502 bridges it but it also can be bridged by a common law mailbox rule as the eighth ninth tenth circuits have said so yeah we can rely on the president I mean see to me you don't even need to comment on the mailbox you can testify that you had a conversation with so and so the IRS about what was in the letters on a date which would validate the receipt of the letters oh sure judge but and we do and I have a whole list here of all the facts where at a minimum there is a genuine there can be a genuine issue of disputed facts as to the mailing the problem here is the unusual circumstance where the revenue agent who tried to be helpful did not put these letters in the administrative file because the administrative file was closed because the money had been levied he created his own work five put it on his desk and work with these folks but then he later claimed that he didn't get it right no he said it's I possibly could have gotten it I can't recall but I can't say I didn't get it however I can tell you I destroyed my own personal file where though where if I got those letters they would have been in there why would he destroy his own personal I don't know especially if we're still in the statute of limitations period did he recall the May 7th 2003 discussion yes he did and one of our witnesses says he missed Dougan the revenue agent not dumping on your honor he tried to be helpful told him that I got your May 8th letter and if you look at everything that followed that there was a precipitating event because these folks they went bananas that $160,000 we have to pay in the tax fee and Mr. Dougan the revenue agent described the accountant and the O'Neill's as an panic is frantic and if after that there was a lot of discussion and communication and then a meeting in August at that meeting the revenue agent was very helpful he said file 843 which is the formal request for refund that was filed in September possibly October I don't know why we have difference there and the IRS said okay with respect to two of the three quarters that you were penalized for we're going to give you a refund but with respect to the fourth the second quarter of 1999 we're not going to give you a refund because even because it was on time it was too late but you can't say that and still give a refund for the 2000 second quarter 2000 penalty without implicitly acknowledging that those letters that were sent before the two-year statute would end which ended on June 23rd 03 which they which they used to deny the 1999 penalty was ignored for the 2000 second quarter 2000 penalty because they granted the refund so if nothing else you're honored we're presenting you we don't think that in 1960 Judge Stale and Judge Goodridge committed to what we view as a more modern view of this statute and one that reconciles in a personal view more fairly and less harshly and with a less wooden respect and myopic approach that the government I think you are constricting your argument too much I think you can also say this statute is irrelevant to us we know it is it is we don't we have other evidence so forget we got a ton of it Judge and what I'm saying at a minimum I think there's enough evidence in the record now for this court to say the issue a decision but at a minimum this is summary judgment and Judge Prather did not look at any evidence with regard to the data the mailing nor with regard to the data the delivery other than to say the government's position is excuse me or I don't know I read late so that's great that we're gonna other than the government saying the letters aren't in our administrative file and they can see because the revenue agent said I didn't put them in there the file was closed I put them in my own file we had a meeting things look good look like you're gonna get the refund and I just and I threw my file away so I asked you a question on the refund the the the sanction was for file not filing electronic yeah yeah and you didn't file electronic so how do you get a refund I mean because the penalty was 10% we filed by coupon we paid we paid the money instead of yeah no you paid the money but you you were the payment was emphasized that it was required to be done electronically yes so you got a penalty ten other penalty was deserved so how can you get a refund on a penalty that's deserved because the I not in the record but there was there's was some issue back then with the electronic mailing system okay the government was saying this is all three of them said I tried to set it up and the IRS wouldn't complete the set up is that the base okay yeah there was some problem with the donor and that's the merits that'll go to the merits of the case in front of the other because you know we in the other case where the IRS is now trying to get the refund back yeah the yes you're on the yeah thank you not but I'm not done with you we still got another issue understanding yes spring for case Williams doesn't help you all that much does it yeah I mean the question here is you've got an entity that's cooperating with you the fund in filing this you file for it and you looks like you filed quite properly for it the entity isn't although you have reimbursed it you've done the you know the what a lot of professionals would say is the best practices by reimbursing it but it's still a party here right yes sir still cooperating with you isn't it not O'Neal actually it's no I mean it's the reverse our the P.M.T.A. and the I.L.A. still cooperating with O'Neal O'Neal paid the money out of O'Neal's pocket but so does it Williams make it clear that well it granted relief in that case it third party administrator here doesn't look like it would have standing that case was one where the woman had a lien against her house yeah the lady and you voluntarily paid how does that allow you I mean you was okay you was okay subjugation but how does that really allow you to step into the shoes for standing purposes in this particular case to paraphrase a famous quote well what is meant by was what is meant by voluntary here the money O'Neal is a fiduciary as fiduciary it's a close relationship with the fund the fund has no the fund has been paid the fund has no incentive the fund is still a party right the fund is still a party yes funds in the case making the claim right pardon me I mean the fund is in this case making it claim right and cooperatively so and O'Neal even under Williams you honor it was involuntary otherwise we would have had to go through another litigation that is the PMTA suing O'Neal having an actual liability and then O'Neal coming in here and under Williams O'Neal would have but it but it had a party if PMTA is is a party even if O'Neal didn't have standing the fund has to I mean I'm sorry oh sure yes the fund has been yes that's right now I assume that it was ultimately were to prevail it would give you the money back that you're still out of pocket were there be a lawsuit were there be a lawsuit I bet you there would be yeah they would have to but it but in any event there's somebody here who's got standing and we can rest assured of that oh yes sir yes there is because I mean it's a twofold test one of the close relationship and the others hindrance and and listen soon for the moment each of there's of course we're not relationship yeah that's that's actually I'm glossing over what is that what is a difficult question but as to a hindrance I think what Judge Jordan and I are saying is how how are you hindered from getting to the merits of this case and having a resolution if we decide in your favor with regard to the 7502 mailing issue I refer you to Kowalski or honored such as this friend question you said when there's a lack of a Kowalski was a case that actually denied standing right but in defining what is a hindrance he said when there's a lack of incentive to challenge by the taxpayer or the necessary zeal but it sounds like we're beyond incentive the party is actually working with you we are the fund is working with the Neil under an agreement but at last lean on I'm sorry I feel apologetic at the time if you look at the same Joe title insurance case that title agent was in the same exact position as so Neil the title agent screwed up and sent thirty thousand dollars to the government the person was financing his home said they know that's my money the title agent said oh we're sorry title agent took the thirty thousand dollars gave it to the mortgage or like here a Neil gave us the hundred and sixty thousand dollars the title agent's brought an action because the thirty thousand dollars was a runnally paid to the IRS that title agent no different than on the deal the title agent had standing the title agent didn't pay the tax the tax came out of the the guy who was refinancing his house was funds so it's it's in my view in the same spot thank you thank you green funny runners kind of green on behalf of the commission like to start by making a few factual well let me see if I can just ask some questions of facts see if I understand the great did oh Neil tried to enter the fund in the IRS's electronic tax payment program is that correct I am I am not sure about that goes to the merits and the merits weren't no it didn't need to try to enter the fund this this is leading up to the procedural issue that we spent most of our time on did oh Neil attempt to enroll the fund in the IRS's electronic tax payment program I can't answer that question I don't think it's in the record you know it no I do not know yeah that goes to the merits of the issue and I don't know well we know here if it goes to the merits or if it's not in the record we just want to know yes I don't know the answer to the question do you know whether the IRS thought that the fund was supposed to file electronic yes that's why the penalty was set against it but do you know okay so the the IRS thought that they were to file electronically but apparently was there a glitch between the IRS and the fund because the fund didn't know necessarily what it was to do in fact the understanding was at least what was said and maybe not in the record the fund tried to file electronically didn't get confirmation that it could file electronically was unsure what to do and thought that the default would be looked which is filed by paper turns out that the IRS had agreed that they could file electronically and therefore because they didn't file electronically assessed the penalty you're speaking to the facts regarding the merits and I simply cannot answer that question I simply do not know I can find out and send the letter of the court so desires but I simply do not actually I would appreciate if you would do that okay because do you know if the IRS is ever assessed another penalty like this before I do not know so was this the first time that this kind of penalty in other words the argument they're making is look we tried to comply we tried to do what we could the IRS is a big entity they didn't get information to us we then found out although there was a screw up with Mr. Kuala but we later found out within two years after the June 25th of 2001 we found out within two years that there was a hundred and sixty thousand dollars assessed according to Mr. Duke and apparently I think what is in the record is on May 7th of 2003 they got on the phone and they were very disturbed as you know trying to figure out what's going on and there was a letter composed that they claim that they sent out on May 8th and then subsequently there was a letter composed that they said that they sent on June 13th isn't so your argument then is what simply that 7502 preamps I mean 7502 is what was put into 54 that allows you and me to file 1159 PM right right so we can go to the post office and if I file on April 15th at 1159 I'm okay what the back to Judge Ross point what's that got to do with the testimony that hey we got stuff to you we we're telling you we sent stuff to you prior to June 25th 2003 the deadline for making an objection but what's 7502 the first of all the only testimony that they had is they have no proof that the government actually received any document well Mr. Dugan said they might have gotten to me he destroyed his file he said he may or may not have he have no recollection of receiving it in any conversation they're saying they sent it any that's just their testimony that they sent it that does not mean they have no point in the proceedings it's the plaintiff's testimony that determines whether or not the case will judgment will be granted that the court cannot make as you well know a determination of fact the plaintiff's evidence is that we mailed the letter we have corroborating evidence from the the date on the computer file we have corroborating evidence from the discussion with the IRS agent that's where I would disagree with you they do not have corroborating evidence because the letter was made they look we are talking about their evidence I understand in that evidence they they have not a putting it in the mail that will they have their testimony 7502 C says you look exasperated 7502 C says that the registration or certification is pre-maphasia evidence of mailing pre-maphasia evidence is not exclusive evidence is not preclusive evidence right and if they have other evidence of mailing or if they had a princess of photograph of the letter lying on the IRS agents desk with a copy of the New York Times of that day that would be evidence of receipt correct and they are claiming that they've got various evidence other than a postmark of mailing and receipt including conversations with the IRS agent about what was in the letter now is that not creating an issue of fact which would prevent the grant of summary judgment in this case well there is one incorrect assertion in your statement and that is that they have even offered any evidence of receipt what they have offered is a conversation before these letters were allegedly sent where the no they're offering a conversation after the letters were sent and at that about the subject matter that was in the letter so arguably how did the IRS agent know what to talk about in this conversation if the information had not been conveyed to him in some manner and the plaintiffs are saying that that information was conveyed to him via the letters it had been conveyed to him by the conversation prior to the sending of the legend sending of the letters that's not the way I read the issues here and they were precluded by the district report from further presentation of this evidence but if they create an issue of fact that they have mailed the letters even simply I would think by the testimony that they did mail the letters then how can we grant some regent or how can we affirm a grant of summary judgment when there is an issue of fact as to whether the letters were in fact mailed and received so far as I understand the record there is nothing in the record that establishes that okay so then if there is something in the record would you agree that some regent was in problem if there was something in the record that established actual receipt evidence of actual receipt you know let me ask because I think that's where we're getting to hang up you use the word establish and not to drop a forgivey for interpreting her words I think the question she's putting to you is premised on the summary judgment standard we're bound by which requires us to draw every inference in favor of your home every inference from the fact you're they stand up here and tell us we have proof and there's evidence indications in the record that they have proof of people who will say look at the mailbox rule I'm telling you I mailed it and I talked to this guy and he tells me he got it and when you see Agent Dugan's comments they're equivocal at best you could draw inferences that indicate he did get it when you draw all these inferences in their favor if if the standard you want us to apply is do they have evidence establishing receipt aren't you asking us to ignore the summary judgment standard which requires us to draw every inference in their favor I think the bottom line well if there was if they could have evidence of actual receipt there may be some argument that summary judgment was inappropriate even then however I think that the whole point of 7502 was to preempt these kinds of factual disputes where there is any question as to and I will grant you do you have the second and stick circuit saying that which also the eighth ninth and 10 circuits going the other way and so we have to make a decision well now the 502c says it's prima facie evidence it did not say it's the only evidence the eighth ninth and the 10th circuit in Judge Bauldoch what they said is that there could be certain evidence to establish proof of postmark not proof of mailing but proof of postmark but isn't that important when it's the date of mailing that's important and if these letters exist the date of their mailing is it's not a question was it mailed one day or the next and those cases or where you want to prove that you mailed your letter on April 15th and not on April 16th well that is correct what the the taxpayers here have never made the argument that they proved actual receipt their whole argument is that the only thing that they want to do is to be real able to rely on the they want to be able to put in evidence to show that in fact they had objected properly prior to June 25th and that was precluded because there was an interpretation of 7502 preempting here was what what you're hearing is that that may not be the only way to show I mean here you got a case where somebody filed on time they filed what by what they thought was the only way they could file which was my paper because they didn't know that they could file electronically they paid the right amount of tax so then what happens is they assessed a hundred and sixty thousand dollar penalty for in effect writing a paper check rather than paying electronically and you're saying that's too bad so said and they object to the penalty within the two years and they say they sent a letter which the district court has held would be a valid informal request for refund and which you have not appealed so the issue is was that letter in fact sent or not did that letter exist it's not the issue of when was it sent it's the issue of did this letter exist and the plaintiffs testify that they drafted the letter they met they retype the letter they mailed the letter and they discussed the letter after it's mailing with the IRS agent who acknowledged it's receipt now that seems to me to raise a real issue of fact that this letter did exist first of all we don't agree that necessarily was a valid informal claim for refund well the district court has so how did you have not the district court held it for the purposes of the summary judgment motion okay we have agreed that for the purposes of the summary judgment motions in formal claim for refund it was a final order and you didn't appeal so I think you're I think that's the law of the case now you didn't appeal it that was a final order for the purposes of the summary judgment motion correct and that was a final order on appeal and when the plaintiffs appealed you did not cross appeal so I think you got the law of the case there but anyway if you want to file that argue that later on that's not what we're dealing with today again I go back to the point that I don't believe that the taxpayers here have ever argued actual receipt have ever specifically stated that during their conferences subsequent to the sending the letter there was ever an agreement that the letter was received so what they are doing and back and it's an important point and I want you to help because what I understand you being saying is you're hearing for the first time this argument that there's evidence of receipt in the record is that what I hear you outside of reliance on the common law presumption their whole argument is I yes as I understand that their whole argument has been that 7502 is totally irrelevant to this case and that they are relying on a common law presumption that he properly mailed envelope prior to a due date is determined received within a normal period of time and that they mailed it well before the due date which if they're out if they mailed it when alleged would be true and that the common law presumption of mailing would be sufficient to them and so if we've if we've heard argument today that look there's evidence in the record that shows a precipitating event you don't have to be fanciful about this third circuit there there's evidence to show there was mailing and there's a fair inference of receipt because there were discussions things happen after that that you can infer happen because there was received and can I remember you that's that's something you're hearing for the first time well if you look at the blue brief page nine they quote revenue officer Dugan reported that he had received the May age 2003 letter and attachments that everything looked good and that we're going to put it through and get you a refund appendix pages two ten to eleven contra rally deposition sounds like they've been arguing all along that there is acknowledgement from the IRS that the letter was received well that that does suggest that they have stated that the focus of their argument as I understood it and their only argument was not actual receipt was the common law presumption and that the hope and that's the way the district court understood their entire argument all said that the mailbox rule will not permit you to make that to make that argument well but they make the common law presumption yeah they have the facts in the record which demonstrate acknowledgement by the IRS that the letter was received so so for the sake of discussion even though you've got no more time for discussion let me ask you this if I could excuse assume for the purposes of this conversation now that what that what we're talking about is an assertion by the taxpayer that there's there's evidence in the record from which it could be fairly inferred that there was actually receipt and so 7502 or not that should be enough to get us past summary judgment what's your response to that well I would go back to what Judge Baldock said in the Sartino case that mere self-serving testimony simply can't be enough to even jump over a summary judgment hurdle under these circumstances there has to be some actual proof some some corroborating evidence other than one person say so and then the other person saying I don't remember they were so agitated on May 7 why in the world would they not sent the letter on May 8 or on June 13th when they didn't hear back I can't answer that and the fact that they may have sent it simply would be irrelevant if it had not been received that's the whole point to 7502 the doogan is saying that there or I should say Panturelli is saying the doogan had told him in conversation that he had received it I mean why can't that at least come in there if that is an issue of fact what what is well again that simply self-serving testimony that is not is an all testimony self-serving with absolutely no corroborating evidence and in the face it isn't that for the jury to decide in the face of Congress enacting 7502 which was supposed to do away with all these sorts of factual disputes and have a clean rule giving the taxpayer an easy method by which to establish delivery and timely delivery I think that the court here would be correct in saying that self-serving testimony as Judge Baldoch said in Sarantino is simply not sufficient okay but if there were some corroboration for example the the precipitating event argument that's not testimony from the other side that's something in the record that shows yeah there was a response IRS started doing things the fact that there was the government response action is that not corroborative of their version of the facts if you view the inferences in their favor again there was a conversation prior to the alleged sending of the letter there were meetings thereafter I got you thank you very much thank you I'm going to hold it here your time yes you're on it just some question is just I guess some questions jumped out of me for a minute one here can't you just send the darn thing registered mail or sort of or or or bed X I don't know your honor I can tell you I'm a dumb question don't have the operation but but I'll give you some advice on it if you're going to mail your tax return of 1159 you better make sure you have proof that you're mailed it or you have somebody in the car who says you walked in the post office with the with the return and walk that in post office without because if the IRS tells you later two years later they never got your return you're done when I paid my estimated tax after I read your brief I took it and had a stamp for steam so you know there's you didn't want to do the stamp did you you better I go to the post office and stand in line like a fool but get that 35 cent proof of mailing also your honor judge Jordan you asked me a question about policy 75-0 was was remedial it wanted to put gloss on the harshness of the prior actual physical delivery rule which the courts had already begun to do by applying the common law mailbox rule it's not the exclusive means and also to answer your inquiry and simple and it's tried and I'm sure we've all argued it if you walk like a duck and talk like a duck and act like a duck but then maybe you're a duck and we we should have that chance to present that evidence it's not simply miss O'Neill saying she mailed it I have eight or nine points I can give you of other corroborative evidence and that raises an issue and to correct the record I didn't I don't believe I said we have new proof of evidence of receipt I did make the argument that there was a precipitating event and a whole series which would inferentially show the receipt thank you and my comments on the other evidence is what I got out of your brief which that's and that's only some year I thank you both counsel the argument I'd like it as counsel if they could get together with the clerk's office I believe in Philadelphia and I request that a transcript be prepared of be prepared to this or argument and then also Mr. Green for the questions I ask you to get back to me how much time do you think you would need can you get back to us in two weeks the kindlier friendlier IRS will they well on the on the attempt to file electronically on whether there had been an attempt whether that had been approved did they attempt to enroll in the IRS electronic tax payment system when was confirmation given to them the one other question I asked where the taxes timely pay has anyone else been by fine and as some of the last question was anybody as anybody else paid a penalty paid a penalty this type of penalty were paying by paper check rather than electronically the taxes I gather that's not an issue yeah they were timely paid in full but they were paid not like well if you would get together with the clerk's office in Philadelphia then did you get one give them a number Thank you very much. Thank you. Take the matter under advisement. Call the next case, which is Scott be beard at all Number 06-4439 Ms Goldstein and Mr. alon