The Challenge: The IRS claimed our client never filed their 2018 tax return, referencing only a blank taxpayer IRS transcript, ignoring valid electronic submission records (e-file confirmation letter from the tax return software) and threatening a heavy deficiency assessment. IRS Counsel even attempted to dismiss the electronic confirmation because it didn’t display a software logo.
The Strategy: We refused to take “no” for an answer. We obtained California filing records corroborating the electronic footprint, invoked Treasury Regulation § 301.7502-1(d), and prepared a Motion to Shift the Burden of Proof to the IRS under I.R.C. § 7491(a). We forced the IRS to acknowledge that an electronic postmark constitutes legal delivery, regardless of their internal database gaps.
IRS counsel refused to budge and wanted to take the case to trial. We happily obliged.
The Outcome: Right on the trial calendar call, faced with our complete trial strategy and uncontradicted digital data, the IRS conceded every single issue. Even with pushback from IRS counsel regarding the ultimate date of filing the return, which could determine if a refund is available because of the three-year statute to get a refund, we made sure IRS counsel read the settlement on record with the court. The settlement included the date of the filing the return to the date of the e-filing confirmation letter. Our client is to receive 100% of their refund, plus statutory interest beginning April 15, 2019.
