Judge Morrison’s exposition in John Peter Zaimes, T. C. Memo. 2023-118, filed 9/26/23, is more formal than the title first set forth at the head hereof would imply. But I recommend it as a comprehensive essay on reasonable cause for failure to file and pay timely, a drilldown into Section 6651 and Section 7502.

Judge Morrison believes JP when he says he mailed his return and a check for part (but not all) of the tax he owed. JP was rushing to the airport, and his trusty CPA gave him the return, but did not e-file it until a year later, after JP discovered his mailed return was never received nor his check cashed.

Tax owed is not an issue; JP concedes. The issue is the late-filing and late-paying add-ons.

Section 7502, and its regs, get a workout. Judge Morrison prints it in extenso at pp. 12-20. JP fails to prove he put adequate postage on the envelope, or that he properly addressed the envelope. And IRS says they never got it; getting it within the time when mail ordinarily gets from sender to proper IRS processing office is also required. Nonreceipt nullifies JP’s credible testimony that he put a private postage meter mark with the magic date on the envelope. And 9 Cir, whence JP is Golsenized, says extrinsic evidence can’t prove timely mailing if the return was never received.

And reliance on CPA doesn’t work, unless advice given was legal advice, but all JP has it that his CPA never told him to file certified. Relying on the instructions to Form 1040 doesn’t work, especially if you can’t testify that you read said instructions. If JP could prove USPS lost the return, he might have reasonable cause, but he can’t prove that.

As for failure to pay, reasonable cause must exist at due date without regard to extensions. Reasonable cause that arises later, say at a subsequent month, does not excuse the 0.5% add on for that month. And partial payment doesn’t excuse, only reduce the amount of tax due on which the add-on is computed. IRS gave JP credit for his partial payments when they computed the add-on.

In short, file certified, registered or IRS-approved PDS if filing paper. Otherwise, e-file. And tell ’em JP sent ya.