How to File a Tax Return or Document



We've all done this and we've done it many times.  What's there to discuss? To use a "Yogi-ism", filing a tax return isn't a problem until it's a problem. And when it is a problem it's likely going to be a bad one.
 
Over the years, stories were aswirl about tax returns being thrown away at various IRS service centers. What if your return was one of those tax returns that was either lost, misplaced or thrown away. What if the postal service lost it? Could you prove you filed your tax return?
 
EVERY tax filing you do, no matter how routine it is,  should be done by certified mail, return receipt requestedNo exceptions.  That includes every type of tax return or other tax documents.
 
Why is this so important? If you can not prove you filed on time then you risk being penalized for filing and paying late. The late filing penalty can be as high as 25% and the late payment penalty as high as 24%, both computed on the balance due. Tack on interest too. 
 
Throughout this website you've seen mention how important various tax elections, such as an S corporate election,  can be. You need to prove you did so, and did so on time. The tax cost of not being able to prove you filed an election,  return or other tax document on time can be staggering even if there is no balance due.
 
Let me share a horror story that happened to a client recently.  This particular business client got a notice from the IRS asking whether it wanted an overpayment to be credited or refunded. The client decided to call the IRS, at the telephone number provided on the notice,  to request that it be refunded. The IRS representative pulled up the business account and mentioned the IRS had no record of four separate corporate returns ever being filed. They were old returns, starting about ten years ago.  Needless to say the client was at first speechless then became panic stricken. The client dug deeply into its files and could only produce certified receipts for two of the four returns. The result? I don't know yet but he certainly can not prove that he filed those two questionable years. Learn from his mistake and don't let that happen to you.
 
The certified receipt will establish that you filed something and prove what day you filed it.  Make sure before you leave the post office that the date stamped on the certified receipt is dark and legible. It's no good if you can't the date.
 
    
 
The return receipt must be signed by someone at the destination and will prove that it was received.  It will be returned to you a few days later with someone's signature and will be dated.
 
 
You should also ask for a printed invoice tape from the post office. It will look like a grocery receipt tape. It contains the zip code and postage for each item sent. It is a secondary form of evidence.
 
Don't just keep these receipts in a pile or shoe box. In the moment of truth you might have trouble unearthing the receipt you need. Keep them organized or staple it to the client's copy of the document filed. 
 
I also recommend that you scan the stamped certified receipt, the signed return receipt and the printed postal receipt tape into your computer and store it digitally.  Please email me a copy of the scanned receipt and I can keep a copy for my files as well. Organize the scanned copies in folders by year or by form for easy retrieval. Sometimes the ink used on the post office stamp will fade over time making the receipt almost illegible.  You'll be glad you can produce a digital copy of the receipt if that happens.
 
 
 
 


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