There is one tax rule that confuses business owners and it relates to the year-end practice of paying bills and receiving compensation for receivables. This is referred to as the ‘Mailbox Rule’. This is strictly a tax issue for cash basis taxpayers. I’m here to set the record straight!
Section 7502(a)(1) of the Internal Revenue Code addresses mailing of documents. Section 7502(a)(1) is the standard used for what is often referred to as the ‘Mailbox Rule‘.