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Judge finds against debtor in tax return dispute.

Byline: Tom Egan

A debtor could not be granted credit for filing his federal tax returns based solely on his declaration attesting that he sent them by regular mail in a timely fashion, a U.S. Bankruptcy Court judge has decided.

The debtor argued that his returns should be deemed timely under the common-law "mailbox rule."

"[T]he Court rejects his position that he has satisfied this mailbox rule and proven that in 2012 he filed his federal tax returns for the Tax Years through the mere submission of the Declaration," Judge Diane Finkle stated.

The 15-page decision, In Re: Boudreau, Jason D., Lawyers Weekly No. 53-003-18, can be found here.

'Roadmap' for others

Debtor Jason Boudreau appeared pro se. He was opposed by trustee Stacy B. Ferrara, who did not respond to a request for comment.

But Pawtucket attorney Christopher M. Lefebvre, who was not involved in the case, noted that the debtor lacked corroboration that he mailed his tax returns as he claimed.

"He didn't have any type of documentary evidence to help substantiate his claim. He came to the plate empty-handed and thought his statement that he mailed his tax returns would be enough to carry the day," Lefebvre said, adding that certified mail is always best.

Lefebvre further noted that the debtor was incarcerated at the time the tax returns were due and that the judiciary has given prisoners a great deal of leeway in litigating claims.

"The IRS is not as forgiving and lenient as the judiciary in affording prisoners due process," he said.

Internal Revenue Code 7502(c) provides that a tax return sent by registered mail will be prima facie evidence that the return was delivered to the IRS on the date of the registered mail postmark, Lefebvre said.

"For non-prisoners, the law is pretty clear that the taxpayer has to use verified mail," he said, pointing out that the debtor instead sought the benefit of a common-law "prisoner mailbox rule."

"The prisoner mailbox rule is an attempt to bypass a clear provision of the IRS Code requiring certified mail," Lefebvre said, calling Finkle's opinion "a road map" for a subsequent prisoner to argue for a different result.

"The court would have to grapple with the unresolved issue of whether compliance with the prisoner rule, which is at odds with the IRS Code provision, would be enough," he added.

Incarcerated debtor

The debtor filed a voluntary petition under Chapter 7 of the Bankruptcy Code on Jan. 26, 2015. He received a discharge of his debts on April 21, 2015.

The debtor commenced an adversary proceeding against the IRS seeking a determination that his federal income taxes assessed for the years 2008, 2009, 2010 and 2011 were dischargeable.

The debtor alleged that sometime in April 2012 he placed the tax returns in a mailbox used by inmates at the Rhode Island Adult Correctional Institutions, where he was incarcerated. He acknowledged that he did not send the returns by registered or certified mail, instead electing to use first-class mail. He also did not request that prison officials create a prisoner mail log for him as a record of the mailing of the returns.

"At the hearing he stated that he did not use registered mail or request a prisoner mail log to be created because he did not give it much thought and did not consider it might be necessary," the judge noted.

The debtor presented no copies of the returns allegedly mailed in 2012 and no copy of the postmarked envelope in which he placed them.

The parties filed cross-motions for summary judgment.

"The determination of the issue hinges entirely on the date Mr. Boudreau filed his tax returns for the Tax Years," Finkle noted.

Lack of corroboration

The IRS relied on Internal Revenue Code 7502 in support of its motion for summary judgment. That statute provides that a tax return sent by registered mail shall be prima facie evidence that the return was delivered to the IRS on the date of the registered mail postmark

"Of course, Mr. Boudreau cannot avail himself of this statutory provision because he did not send the returns by registered or certified mail," the judge said.

The debtor argued that he could establish that he filed the returns on the date alleged by use of the mailbox rule. He relied on his declaration attesting to the placement of the tax returns in the ACI mailbox in 2012.

"The common law mailbox rule 'permit[s] a fact-finder to presume that properly mailed documents would actually be received in due course by the addressee' and 'allow[s] for the presumption that physical delivery occurred in the ordinary time after mailing,'" Finkle wrote.

"But, even presuming that the common law mailbox rule may be invoked in these circumstances (rather than limiting its application to the timing of filing), courts uniformly require more than the taxpayer's uncorroborated testimony," the judge said, adding that courts insist on additional supporting evidence such as a postmark, proof of actual delivery, copies of the dated and signed tax returns allegedly filed, or other witness testimony.

The debtor claimed that, while imprisoned in the ACI, he had written correspondence with the IRS in order to obtain the information necessary to file his 2008 to 2011 tax returns; that in April 2012 he mailed his 2008 to 2011 tax returns in the same large envelope to the IRS with first-class postage prepaid; and that the envelope was placed in the mailbox located at the ACI marked for outgoing mail.

"These communications with the IRS and Mr. Boudreau's statements in his Declaration do not bridge the evidentiary gap and are inadequate substitutes for the necessary corroborating evidence to apply the common law mailbox rule," Finkle found.

The debtor contended that the prison mailbox rule applied, requiring only his sworn declaration of mailing with no additional corroborating evidence. That rule first enunciated by the U.S. Supreme Court in 1988 in Houston v. Lack has been applied to court filings and provides that the date of a court filing by an incarcerated individual is deemed to be the date on which the inmate gives the document to prison officials for mailing, even if never received by the court.

But Finkle rejected his position, concluding that it was "simply not enough" for the debtor to aver in a declaration that, while incarcerated, he placed the returns in an envelope and deposited them in the outgoing mailbox, using first-class postage stamps purchased at the ACI's commissary.

"The wholesale abandonment of the requirement of corroborating evidence to prove the filing of tax returns would severely undermine Houston's rationale and the goal of a straightforward 'bright-line rule,'" Finkle said.

"For a pro se prisoner, requiring corroborating evidence such as registered mail or a prison log of the mailing is not overly burdensome," she added.

"A rational factfinder could resolve the issue of whether Mr. Boudreau filed the tax returns in 2012 only in favor of the IRS, and accordingly, the IRS is entitled to judgment as a matter of law," Finkle wrote.

CASE: In Re: Boudreau, Jason D., Lawyers Weekly No. 53-003-18

COURT: U.S. Bankruptcy Court

ISSUE: Could a debtor be found to have filed his federal tax returns based solely on his declaration attesting that he sent them by regular mail in a timely fashion?


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Title Annotation:In Re: Boudreau, U.S. Bankruptcy Court
Author:Egan, Tom
Publication:Rhode Island Lawyers Weekly
Date:Aug 16, 2018
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