Eighth Circuit Holds Tax Court CDP Filing Deadline Jurisdictional Under SCOTUS Case Law

For those interested, the DOJ Tax Division is currently advertising for experienced attorneys in the Civil Trial Sections in Washington, DC.  The job posting can be found on the Department of Justice’s Website at https://www.justice.gov/legal-careers/job/trial-attorney-451 and on USAJobs at https://www.usajobs.gov/GetJob/ViewDetails/573997200. Keith.

In Boechler, P.C. v. Commissioner, 2020 U.S. App. LEXIS 23306, on July 24, the Eighth Circuit aligned itself with the Ninth Circuit in Duggan v. Commissioner, 879 F.3d 1029 (9th Cir. 2018), and held that, even considering recent Supreme Court case law that generally treats filing deadlines as not jurisdictional, the Collection Due Process (CDP) Tax Court filing deadline at section 6330(d)(1) is jurisdictional.  The majority predicated its holding on an exception that Congress may override the general rule by making a clear statement in the statute that Congress wants the filing deadline to be jurisdictional.  In ruling that Congress had made a clear enough statement in the CDP provision, the Boechler majority rejected the D.C. Circuit’s opinion in Myers v. Commissioner, 928 F.3d 1025 (D.C. Cir. 2019), holding that the similarly-worded Tax Court filing deadline at section 7623(b)(4) for whistleblower award actions is not jurisdictional.  A concurring judge in Boechler said she felt bound to agree with the majority because of prior Eighth Circuit precedent, but if she were presented with the issue without that precedent, she would hold the filing deadline not jurisdictional.

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The facts of Boechler are simple:  The IRS mailed a CDP notice of determination to the taxpayer by certified mail at its last known address.  The taxpayer received the notice three days later, but did not mail a petition to the Tax Court until 31 days after the notice was mailed.  (Having spoken with Boechler’s lawyer who prepared and mailed the petition, I was told that he did not see the notice until the date he mailed the petition.  Unlike in many recent litigated cases we have discussed on PT, therefore, you can’t blame the lawyer here.)

In the Tax Court, Boechler argued that Due Process required that the 30 days to file a petition must be counted from the date of the notice’s receipt, not the date of its mailing.  In the alternative, Boechler argued that, under recent Supreme Court case law, the filing deadline is not jurisdictional, but is subject to equitable tolling.  Boechler did not set out any facts supporting equitable tolling in its case, but the Tax Court would not have cared if Boechler had, anyway.  In an unpublished order , the Tax Court, citing its opinion in Guralnik v. Commissioner, 146 T.C. 230, 237-238 (2016), held that the filing deadline is jurisdictional and thus is not subject to equitable tolling.  Jurisdictional filing deadlines can never be equitably tolled.  The order also found no Due Process violation, noting that “the method reflects the standard and consistent way that various periods provided for under the Internal Revenue Code and other Federal statutes are calculated.”

There were two prior opinions of the Eighth Circuit that had stated that the CDP filing deadline is jurisdictional, but neither of those opinions discussed recent Supreme Court case law or Due Process. 

The first Eighth Circuit opinion, Tschida v. Commissioner, 57 Fed. Appx. 715 (8th Cir. 2003), was decided before the Supreme Court in Kontrick v. Ryan, 540 U.S. 443 (2004), made clear that filing deadlines are generally no longer to be considered jurisdictional.  The Tschida court wrote: “the untimely filing deprived the tax court of jurisdiction”.  While Tschida is on all fours with Boechler factually, it was not a published, precedential opinion.

The second Eighth Circuit opinion was precedential, Hauptman v. Commissioner, 831 F.3d 950 (8th Cir. 2016).  In that case, a taxpayer timely filed a Tax Court CDP petition, and, during the case, Appeals issued a Supplemental Notice of determination.  The Tax Court upheld the Supplemental Notice.  On appeal, the taxpayer argued that the Tax Court lacked jurisdiction to consider the Supplemental Notice.  The parties did not brief the issue of whether the CDP filing deadline is jurisdictional, but in some prefatory remarks before reaching its holding that the Tax Court had jurisdiction to consider the Supplemental Notice, the Eighth Circuit stated that there were only two jurisdictional requirements for a Tax Court CDP suit: issuance of a notice of determination and timely filing.  For that timely filing requirement, the Eighth Circuit inserted a “see” cite to the Seventh Circuit opinion in Gray v. Commissioner, 723 F.3d 790 (7th Cir. 2013)

In Gray, a taxpayer filed late original returns, which the IRS accepted, but she did not pay the taxes shown due on the returns (or a late-filing penalty later imposed by the IRS).  She had a CDP hearing, after which the IRS issued a notice of determination.  She then filed two Tax Court petitions – both after the 30-day period in section 6330(d)(1) had expired.  The Tax Court dismissed the petitions for lack of jurisdiction.  On appeal, pro se, she argued that the petitions were timely under the 90-day period applicable to deficiency petitions at section 6213(a).  The parties did not brief whether the filing deadlines at sections 6213(a) or 6330(d)(1) are jurisdictional.  But, the Seventh Circuit, in the course of getting to its ruling that the 30-day period applied, cited a couple of Tax Court opinions holding that the CDP filing deadline is jurisdictional.  The Gray court did not discuss the recent Supreme Court case law (as, neither did the Tax Court in the cited pre-Guralnik opinions).

In Boechler, the majority of the panel first held that it was not bound by the prior Eighth Circuit opinions. The court wrote that “the jurisdictional test laid out in Hauptman was obiter dicta addressing an issue not before the court”.  Slip op. at 4.

At this point, the Eighth Circuit could have written that it need not decide whether the CDP filing deadline is jurisdictional because Boechler had not even alleged any facts showing its entitlement to equitable tolling.  That’s the approach the Fourth Circuit took in Cunningham v. Commissioner, 716 Fed. Appx. 182 (4th Cir. 2018).  But, the panel chose to decide the issue of whether the filing deadline is jurisdictional in light of the recent Supreme Court case law.  The court wrote:

We find the Ninth Circuit’s analysis [in Duggan] persuasive. The statutory text of § 6330(d)(1) is a rare instance where Congress clearly expressed its intent to make the filing deadline jurisdictional. The provision states: The person may, within 30 days of a determination under this section, petition the Tax Court for review of such determination (and the Tax Court shall have jurisdiction with respect to such matter). 26 U.S.C. § 6330(d)(1). The parenthetical “(and the Tax Court shall have jurisdiction with respect to such matter)” is clearly jurisdictional and renders the remainder of the sentence jurisdictional. See Fort Bend Cty. v. Davis, 139 S. Ct. 1843, 1849 (2019).

A plain reading demonstrates that the phrase “such matter” refers to a petition to the tax court that: (1) arises from “a determination under this section” and (2) was filed “within 30 days” of that determination. See Myers, 928 F.3d at 1039 (Henderson, J., dissenting) (reaching the same conclusion when analyzing the identically worded parenthetical in § 7623(b)(4)); see also 26 U.S.C. § 6330(e)(1) (“The Tax Court shall have no jurisdiction under this paragraph to enjoin any action or proceeding unless a timely appeal has been filed under subsection (d)(1). . .”). Unlike other statutory provisions that have been found to be non-jurisdictional by the Supreme Court, § 6330(d)(1) speaks “in jurisdictional terms.” Musacchio, 136 S. Ct. at 717 (finding 18 U.S.C. § 3282(a) non-jurisdictional). The use of “such matter” “plainly show[s] that Congress imbued a procedural bar with jurisdictional consequences.” Kwai Fun Wong, 575 U.S. at 410. This phrase provides the link between the 30-day filing deadline and the grant of jurisdiction to the tax court that other statutory provisions lack. While there might be alternative ways that Congress could have stated the jurisdictional nature of the statute more plainly, it has spoken clearly enough to establish that § 6330(d)(1)’s 30-day filing deadline is jurisdictional.

Slip op. at 6-7 (footnote and some citations omitted; emphasis in original).  The court rejected the Myers’ majority holding that similar language in the whistleblower award provision of section 7623(b)(4), while clearly predicating Tax Court jurisdiction on a notice of determination, was not sufficiently clear also to refer, with the words “such matter”, to the filing deadline.

As to Boechler’s Due Process argument, the court stated that both Due Process and Equal Protection arguments in this case must be analyzed under a rational basis standard.  The court held that it was rational for Congress to make the 30-day period begin on the date of mailing:

[C]alculating the filing deadline from the date of determination streamlines and simplifies the complex undertaking of enforcing the tax code. If the IRS were required to wait 30 days from the date that each individual received notice, it would be unable to levy at the statutory, uniform time. Calculating from the date of determination guards against taxpayers refusing to accept delivery of the notice and promotes efficient tax enforcement by ensuring a reasonable and workable timeframe and deadline.

Slip op. at 8.

Concurring Judge Kelly argued that the panel was wrong not to follow Hauptman, contending that while the issue of whether the filing deadline is jurisdictional was not briefed in Hauptman, the statement therein that the filing deadline is jurisdictional was necessary to the ultimate holding that the Tax Court had jurisdiction to consider the Supplemental Notice and so was binding on the current panel.

Judge Kelly indicated that, had she not felt bound by the holding in Hauptman, she would have come out differently with the majority on the nature of the filing deadline.  She wrote:

As the court notes, deeming the 30-day filing deadline in 26 U.S.C. § 6330(d)(1) jurisdictional is an unusual departure from the ordinary rule that filing deadlines are “quintessential claim-processing rules.” See Henderson ex rel. Henderson v. Shinseki, 562 U.S. 428, 435 (2011). This may have “drastic” consequences for litigants, id., and I am concerned the burden may fall disproportionately on low-income taxpayers, as the amicus [the Tax Clinic at the Legal Services Center of Harvard Law School] suggests. I am not convinced the statute contains a sufficiently clear statement to justify this result. See Myers v. Comm’r, 928 F.3d 1025, 1036 (D.C. Cir. 2019) (holding that the “nearly identical” filing deadline in 26 U.S.C. § 7623(b)(4) is not jurisdictional). But in light of our long-standing precedent, I concur in the court’s judgment.

Slip op. at 10.

Observations

Nine appellate judges have now considered the filing deadline language in the Tax Court’s CDP and whistleblower award jurisdictions (in Duggan, Myers, and Boechler).  Of those nine, six have held that the filing deadlines should be jurisdictional and three have held the deadlines should not be (at least, if writing on a blank slate).  Thus, one should not be embarrassed to continue litigating this issue. 

In fact, the issue is currently before another Circuit – the Second Circuit, in a case named Castillo v. Commissioner, Second Circuit Docket No. 20-1635.  The case was filed in the Tax Court by the tax clinic at Fordham Law School headed by Prof. Elizabeth Maresca.  The clinic’s client never received a CDP notice of determination that the IRS had mailed to the client’s last known address.  USPS records state that the notice is still “in transit”.  Several months after the notice was sent, Elizabeth saw an IRS transcript indicating that such a notice had been issued.  Within 30 days after seeing the transcript, the clinic filed a Tax Court petition.  In response to a motion to dismiss, the clinic argued (1) that the filing deadline is not jurisdictional and should be equitably tolled under the facts of the case, and (2) that the Tax Court was wrong in Weber v. Commissioner, 122 T.C. 258 (2004), to have imported into its CDP jurisdiction case law from its deficiency jurisdiction holding that a notice of deficiency mailed to the taxpayer’s last known address starts the filing period, even if the notice is never received.  The Tax Clinic at the Legal Services Center of Harvard Law School has filed an amicus brief  in Castillo limited to making the second (anti-Weber) argument.  Ms. Castillo’s opening brief is due October 22.  An amicus brief from some other party arguing that the filing deadline is not jurisdictional and is subject to equitable tolling is also expected.

Ninth Circuit Holds the Deficiency Petition Filing Deadline Still Jurisdictional

The Tax Court and every Circuit court has long held the deadline to file a Tax Court deficiency petition at section 6213(a) to be a jurisdictional condition of the suit.  Of course, jurisdictional deadlines are never subject to equitable tolling, waiver, estoppel, or forfeiture.  But, nearly every court opinion so holding had been issued before the Supreme Court changed the rules in 2004 making filing deadlines now almost never jurisdictional.

In 2016, a panel of the Seventh Circuit, sua sponte, at oral argument, questioned whether the section 6213(a) filing deadline is still jurisdictional under the recent Supreme Court case law.  In Tilden v. Commissioner, 846 F.3d 882 (7th Cir. 2017), on which we blogged here, in spite of the Tax Court’s dismissing the petition for lack of jurisdiction as untimely, on appeal, the IRS and taxpayer both agreed that the petition was timely under section 7502.  The panel wondered why the IRS was not waiving any untimeliness argument if the filing deadline isn’t still jurisdictional.  However, after some post-argument supplemental briefing on the issue of whether the filing deadline is still jurisdictional, the panel ruled that it is. Id. at 886-887.  (The panel went on to rule the filing timely.)

No other Circuit had since addressed in a published opinion whether the deficiency filing deadline is still jurisdictional under recent Supreme Court case law.  (Though, in an unpublished last known address case, where the parties did not brief the issue, the Third Circuit last year stated that the filing deadline still jurisdictional under recent Supreme Court case law.  Garrett v. Commissioner, 798 Fed. Appx. 731, 733.)  That changed on June 18, 2020, when the Ninth Circuit issued its opinion in Organic Cannabis Foundation v. Commissioner, ___________, in which it affirmed the Tax Court’s dismissal of two deficiency petitions of California marijuana dispensaries.  The Ninth Circuit, aligning with the Seventh Circuit in Tilden, held that untimely petitions should be dismissed for lack of jurisdiction, even under current Supreme Court case law. 

As will be discussed below, the fact pattern in Organic Cannabis paralleled that in the CDP case of Guralnik v. Commissioner, 146 T.C.230 (2016) – an opinion that was never appealed.  Organic Cannabis adopts and expands upon the Tax Court’s additional analysis in Guralnik of what consequences ensue when the Tax Court Clerk’s Office is inaccessible for filing and what makes the Clerk’s Office inaccessible.

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Organic Cannabis Facts

Both Organic Cannabis Foundation LLC and its sister company, Northern California Small Business Assistants, Inc., ran California marijuana dispensaries.  On the same date, the IRS issued separate notices of deficiency to the two taxpayers disallowing, under section 280E, all their deductions.  (For a Tax Court opinion involving the latter company’s taxes for a different tax year and where the application of section 280E was upheld, see Northern California Small Business Assistants, Inc. v. Commissioner, 153 T.C. 65 (2019).) 

A single law firm represented both taxpayers.  That law firm sent the petitions jointly in a single envelope by FedEx on the day before the petitions were due.  Like the taxpayer in Guralnik, the firm used the FedEx First Overnight Service, which, at the time (as opposed to a few weeks later), was not listed by the IRS as an approved private delivery service under section 7502(f).  First Overnight differs from the previously-approved Standard Overnight and Priority Overnight FedEx services only in promising the earliest possible delivery.  Thus, even if First Overnight was not an approved service, the petitions still should have gotten to the Tax Court Clerk’s Office on the last date to file.

But, there was a problem.  For some reason, the FedEx driver didn’t deliver the envelope on the last date to file, but delivered it a day later.  A secretary in the law firm’s office, concerned that she had not received delivery confirmation from FedEx, called FedEx and learned of the non-delivery mid-day on the last date to file.  FedEx told her something like that the driver couldn’t get through to the Clerk’s Office because of construction or police activity nearby.  Unwisely, the secretary did not think to mail out new petitions that afternoon or evening, say, by certified mail.  There would have been no Ninth Circuit opinion had she done so.

The IRS filed answers in both cases.  Neither answer raised any issue of untimely filing.  About a year later, the IRS moved to dismiss both cases for lack of jurisdiction as having been late filed.  When the taxpayers then went back to FedEx for the driver’s written explanation of what had gone wrong, FedEx told the taxpayers that it had deleted all delivery information, which it did not keep for that long a period.

Tax Court Orders

In responses to the motions to dismiss, the taxpayers argued that the petitions were timely filed because FedEx First Overnight should be deemed to be the same service as FedEx Standard Overnight or Priority Overnight, just with a faster delivery feature.  In Guralnik, the Tax Court had rejected this very argument, and it did so in the two unpublished orders in which it dismissed the taxpayers’ petitions for lack of jurisdiction as being untimely, here and here.

The taxpayers also argued that the Clerk’s Office was not accessible at the time the FedEx driver arrived, citing Guralnik, so that the last date to file should be moved to the following day, making the petitions timely.  In Guralnik, the last date to file turned out to be a day on which the Clerk’s Office was closed all day due to a snowstorm.  The Guralnik court borrowed from FRCP 6 and held that when its Clerk’s Office is inaccessible, the last date to file is moved to the next day when the Clerk’s Office is open.  In the two taxpayers’ cases, though, the Tax Court distinguished Guralnik as follows: “Unlike the snow emergency closing in Guralnik, here, the Court’s Clerk’s office was open during its normal business hours and was not inaccessible the entire day due to inclement weather, government closings, or other reasons.”

Finally, the taxpayers had contended that the notices of deficiency were not mailed to the taxpayer’s last known addresses, citing discrepancies in the address of one (omission of a P.O. Box, though the box number was shown as part of the 9-digit ZIP Code) and a wrong digit on the Form 3877 proving mailing of the other.  The Tax Court said it need not determine whether the deficiency notices were sent to the last known addresses, since the taxpayers clearly got the notices 78 days before the filing date, which was enough to make the notices valid under Tax Court precedent, even if they were not sent to the last known addresses.

Ninth Circuit Holdings

On appeal, the taxpayers made the same arguments (except the taxpayers abandoned the Form 3877 argument).  The taxpayers also added the argument that the filing deadline is no longer jurisdictional and is subject to forfeiture, waiver, and equitable tolling.  The taxpayers argued that the IRS had waived or forfeited the right to complain about late filing by waiting too long to raise the issue – i.e., at a time when FedEx had deleted the driver’s notes concerning what had happened. 

In the Ninth Circuit, the Harvard clinic filed amicus briefs supporting the taxpayers only in the arguments that the filing deadline is no longer jurisdictional and is subject to forfeiture, waiver, and equitable tolling.

The Ninth Circuit began its opinion stating, “This unhappy case presents a cautionary tale about the need for lawyers to ensure that they have done exactly what is statutorily required to invoke a court’s jurisdiction.”  Slip op. at 4. 

In its 28-page opinion (of which I give only a thumbnail sketch here), the Ninth Circuit first accepted the Tax Court’s Guralnik adoption of FRCP 6 – which the Ninth Circuit was probably compelled to do, since the Tax Court, under section 7453, is entitled to set up its own rules, and its rules (i.e., Rule 1) allow it to borrow FRCP rules in the absence of a Tax Court rule directly on point. 

The Ninth Circuit acknowledged that case law under FRCP 6 did not limit the word “inaccessible” only to the situation where the Clerk’s Office was closed for the day – citing the inaccessibility holding of several appellate courts making clear that, even if a Clerk’s Office is technically open, it is still “inaccessible” if it would only be possible to access the office through “heroic” measures.  See, e.g., U.S. Leather, Inc. v. H&W P’ship, 60 F.3d 222, 226 (5th Cir. 1995) (where “ice storm . . . temporarily knocks out an area’s power and telephone service and makes travelling dangerous, difficult or impossible,” clerk’s office, even though open, was rendered “inaccessible to those in the area near the courthouse”), abrogated on other grounds by Kontrick v. Ryan, 540 U.S. 443 (2004).  The court held that,

for non-electronic filings (such as those at issue here), a clerk’s office is “inaccessible” on the “last day” of a filing period only if the office cannot practicably be accessed for delivery of documents during a sufficient period of time up to and including the point at which “the clerk’s office is scheduled to close.” Fed. R. Civ. P. 6(a)(3), (4)(B). Because, as the Tax Court noted, Appellants presented no evidence to show that the clerk’s office could not be accessed during the substantial remaining portion of the day after FedEx’s unsuccessful earlier delivery attempt, the extension in Rule 6(a)(3) did not apply.

Slip op. at 14-15. 

Of course, it is hard to criticize the taxpayers for lack of proof on how long the obstruction to the Clerk’s Office lasted, since, by the time anyone asked about it, FedEx had no evidence of what happened in this case or to other drivers perhaps attempting to deliver envelopes to the Tax Court later in the day.

Next, agreeing with the Tax Court, the Ninth Circuit held that the FedEx First Overnight service was a different service from the other two approved FedEx services, so was not yet an approved delivery service under section 7502(f) on the date of its use. 

As to Organic Cannabis’s complaint that its notice was not mailed to its last known address because the address was lacking “P.O. Box 5286”, the Ninth Circuit affirmed the Tax Court, but on different reasoning.  The Tax Court held that actual receipt of the notice with 78 days left to file was good enough to make the notice valid, even if the notice might not have been mailed to the last known address.  Apparently concerned because the taxpayer had pointed out that the Ninth Circuit had never held an incorrectly-addressed notice to be valid when the taxpayer did not timely file that Tax Court petition, the Ninth Circuit decided to hold that the notice was indeed sent to the taxpayer’s last known address.  The panel observed that the first 5 digits of the 9-digit ZIP Code were not only the ZIP Code of the post office, but was only used for post office boxes at that office.  The panel observed that the last 4 digits of the 9-digit ZIP Code showed the P.O. Box number.  Thus, in this case, the ZIP Code alone could constitute the last known address.  Query if this means that any 9-digit ZIP Code that only relates to a single location (e.g., an individual’s apartment number) alone can constitute a last known address if the street address, city, and state are all omitted from the IRS address used?

Finally, the Ninth Circuit faced the question of whether the filing deadline was still jurisdictional.  The DOJ asked the court not to rule on the issue, since it had not been properly raised below.  However, the Ninth Circuit exercised its discretion to consider this issue, since it was purely a question of law, “[a]nd the issue has been well briefed by both sides, including with the helpful participation of amicus curiae from a law school clinic.”  Slip op. at 19 n.6.

Readers of PT know from too numerous posts that current Supreme Court case law begins with the general rule that filing deadlines are no longer jurisdictional.  The two exceptions to the rule are (1) if Congress made a clear statement in the statute that it wanted the filing deadline to be jurisdictional, and (2) a stare decisis exception to a long line of Supreme Court case law holding the deadline to be jurisdictional.

The Ninth Circuit found three reasons why the deadline should be still treated as jurisdictional. 

First, in the fourth sentence of section 6213(a), the Tax Court is also awarded injunctive jurisdiction to enforce a stay on collection after a notice of deficiency is issued, but only in the case of a petition that is “timely filed”.  The Ninth Circuit apparently assumed that a timely filing can’t occur through equitable tolling, forfeiture, or waiver, so said that, if the injunctive jurisdiction was one limited to timely filed petitions, then the regular deficiency jurisdiction must also be limited to timely filed petitions.  (I think that a non sequitur, but who am I?)  The Ninth Circuit adopted the reasoning of Tilden that the appearance of the word “jurisdiction” in the fourth sentence in section 6213(a) (giving the Tax Court injunctive jurisdiction only in the case of timely filed petitions) meant that the filing deadline in the first sentence – a sentence that does not contain the word “jurisdiction” – must also be jurisdictional.  The Ninth Circuit also argued that accepting the taxpayers’ arguments would cause discontinuities in the periods in which the IRS was prohibited from assessment if the Tax Court could later accept a petition under equitable tolling.  We addressed this issue in the Harvard clinic amicus brief, arguing that there was no discontinuity, since the word “timely filed” must necessarily include filings made under statutory extensions (such as those allowed by sections 7502, 7508, and 7508A), and we saw no reason why equitable exceptions could not also be considered in whether a Tax Court petition had been timely filed.

Second, the Ninth Circuit raised a problem with section 7459(d) if the filing deadline is not jurisdictional.  Tilden had not discussed this section.  Section 7459(d) provides that dismissals from the Tax Court in deficiency cases uphold the deficiency on the merits, except in cases where the dismissal is for lack of jurisdiction.  The Ninth Circuit noted the long-standing belief of the courts (which it imputed to Congress) that the jurisdictional dismissal exception allowed a person who had filed a late Tax Court petition to later pay and sue for a refund, without having a res judicata issue of a merits finding from the prior Tax Court dismissal.  The Ninth Circuit did not want to undermine that judicial understanding, though I would note that the exception for jurisdictional dismissals was added by the Revenue Act of 1928, and Congress nowhere explained why the jurisdictional exception was being adopted.  Dismissals can be for lack of jurisdiction on ground other than untimeliness – e.g., a petition (1) filed challenging the validity of the notice of deficiency, (2) filed by the wrong taxpayer, or (3) filed by the right taxpayer, but who lost corporate capacity or who filed during a bankruptcy stay.

Third, the Ninth Circuit noted the long-standing judicial interpretations of section 6213(a)’s filing deadline being jurisdictional.  The Ninth Circuit wrote,

As noted earlier, the circuits have uniformly adopted a jurisdictional reading of § 6213(a) or its predecessor since at least 1928. See supra at 20. Congress presumptively “‘legislates against the backdrop of existing law,’” Parker Drilling Mgmt. Servs., Ltd. v. Newton, 139 S. Ct. 1881, 1890 (2019) (citation omitted), and despite multiple amendments to the Code (including two substantial overhauls in 1954 and 1986), Congress has never seen fit to disturb this long-settled understanding of § 6213(a). Cf. Fort Bend County v. Davis, 139 S. Ct. 1843, 1849 (2019) (“[T]he Court has stated it would treat a requirement as jurisdictional when a long line of Supreme Court decisions left undisturbed by Congress attached a jurisdictional label to the prescription.” (cleaned up)).

Slip op. at 25-26.  In response, I would point out (as the Harvard clinic told the court) that the Supreme Court has never ruled one way or the other on whether the deficiency filing deadline is jurisdictional and has 7 times (most recently in the above quote from Fort Bend) stated that the stare decisis exception from the current treatment of claims processing rules (including filing deadlines) as not jurisdictional only applies to a long line of Supreme Court opinions.  Reed Elsevier, Inc. v. Muchnick, 559 U.S. 154, 173-174 (2010) (Ginsburg, J, concurring, joined by Stevens and Breyer, JJ.) (“[I]n Bowles and John R. Sand & Gravel Co. . . . we relied on longstanding decisions of this Court typing the relevant prescriptions ‘jurisdictional.’  Amicus cites well over 200 opinions that characterize § 411(a) as jurisdictional, but not one is from this Court. . . .”; emphasis in original; citations omitted).  All the opinions on which the Ninth Circuit relies are opinions of lower courts.  Sigh.

Finally, in prior posts, I have mentioned the CDP case dismissed for late filing for lack of jurisdiction that is before the Eighth Circuit, Boechler, P.C. v. Commissioner, Eighth Circuit Docket No. 19-2003.  In that case, the parties are litigating whether the CDP Tax Court filing deadline at section 6330(d) is still jurisdictional and not subject to equitable tolling.  Oral argument occurred in Boechler the day before the Ninth Circuit ruled in Organic Cannabis. The day Organic Cannabis was issued, the DOJ immediately brought the opinion to the attention of the Eighth Circuit through an FRAP 28(j) letter.

Federal Circuit Panel Calls For Reconsidering the Court’s Precedent Holding Refund Claim Filing and Timing Requirements Jurisdictional to a Refund Suit

In posts too numerous to cite, I have been calling for the courts to reexamine their prior precedents calling many tax filing deadlines and administrative exhaustion requirements jurisdictional.  In non-tax opinions issued by the Supreme Court since 2004, the Court has changed its precedent and held that “claims processing rules” that merely move litigation along are now almost never jurisdictional.  See, e,g. United States v. Wong, 575 U.S. 402 (2015) (Federal Tort Claims Act suit filing deadlines in agency and courts are not jurisdictional and are subject to equitable tolling); Fort Bend County v. Davis, 139 S. Ct. 1843 (2019) (Title VII charge filing requirement is not jurisdictional) (see here for my thoughts on the implications of Fort Bend to the tax world).  Now, a panel of the Federal Circuit in a pro se tax protester case, Walby v. United States, 2020 U.S. App. LEXIS 13711 (Apr. 29, 2020), has joined a panel of the Seventh Circuit in Gillepsie v. United States, 670 F. App’x 393, 394–95 (7th Cir. 2016), in questioning their Circuit’s precedent holding that the administrative tax refund claim filing requirement at section 7422(a) is a jurisdictional requirement to the brining of a refund suit.  Further, the Federal Circuit panel in the Walby opinion stated it believes that the filing deadlines for tax refund administrative claims at section 6511(a) are no longer jurisdictional, also calling for overturning its Circuit’s precedent.

It will take an en banc Federal Circuit opinion to overrule the Circuit’s prior precedents, so the panels’ opinion in Walby doesn’t change that court’s precedents, yet.  But, it certainly makes it likely that the issues will reach an en banc panel soon.

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What is perhaps most surprising about the Walby panel’s statements is that the opinion below did not raise these concerns about recent Supreme Court opinions, but simply followed the Federal Circuit precedents holding that sections 6511(a)’s and 7422(a)’s requirements are jurisdictional.  Further, the DOJ brief in Walby in the Federal Circuit did not discuss the potential impact of the recent Supreme Court case law on this question, but merely cited prior Federal Circuit precedent.  And the pro se taxpayer, of course, did not complain about the Circuit precedents.  So, the panel on its own chose to research these issues and make its statement in a published opinion.

Here is what the Federal Circuit panel wrote in Walby on these issues:

In Walby’s case, her 2014 claims were deemed paid on April 15, 2015 because withheld income taxes are deemed to have been paid on April 15th of the following year. I.R.C. § 6513(b). To be timely, her administrative refund claim should have been filed with the IRS by April 15, 2017. But Walby did not file her refund claim until December 22, 2017. Walby’s 2014 refund claim was, therefore, untimely and the Claims Court properly dismissed that claim.

There is one aspect of the court’s conclusion regarding this claim, however, that warrants additional examination. The Claims Court concluded that, because Walby’s 2014 administrative refund claim was untimely, pursuant to 26 U.S.C. § 7422(a), it lacked subject matter jurisdiction over that claim. Although this conclusion is correct under our existing case law, see, e.g.Stephens v. United States, 884 F.3d 1151, 1156 (Fed. Cir. 2018), it may be time to reexamine that case law in light of the Supreme Court’s clarification that so-called “statutory standing” defects — i.e., whether a party can sue under a given statute — do not implicate a court’s subject matter jurisdiction. Lexmark Int’l, Inc. v. Static Control Components, Inc., 572 U.S. 118, 128 n.4 (2014)see also Lone Star Silicon Innovations LLC v. Nanya Tech. Corp., 925 F.3d 1225, 1235 (Fed. Cir. 2019) (recognizing that, following Lexmark, it is incorrect to classify “so-called” statutory-standing defects as jurisdictional).

The Tucker Act grants the Claims Court jurisdiction to render judgment “upon any claim against the United States founded either upon the Constitution, or any Act of Congress . . . in cases not sounding in tort.” 28 U.S.C. § 1491(a)(1). Additionally, 28 U.S.C. § 1346(a) provides that the Claims Court shall have original jurisdiction (concurrent with the district courts) of “[a]ny civil action against the United States for the recovery of any internal-revenue tax alleged to have been erroneously or illegally assessed or collected.” As such, Walby’s failure to meet the § 7422(a) statutory requirement of a timely administrative claim for her 2014 tax claim would not seem to implicate the Claims Court’s subject matter jurisdiction; rather, it appears to be a simple failure to meet the statutory precondition to maintain a suit against the government with respect to those taxes.

The Supreme Court has not addressed § 7422(a) following Lexmark. We note, however, that the Court’s most recent discussion of § 7422(a) does not describe it as “jurisdictional.” See Clintwood Elkhorn Mining Co., 553 U.S. 1 at 4–5, 11–12. And, although our court has continued to refer to this statute as jurisdictional following Lexmark, we have not yet addressed the implications of that case and the many Supreme Court cases applying it.2

In view of the Supreme Court’s guidance in Lexmark, it may be improper to continue to refer to the administrative exhaustion requirements of § 7422(a) and § 6511 as “jurisdictional prerequisites.” That these provisions concern the United States’ consent to be sued would not seem to change this conclusion. The Supreme Court has “made plain that most time bars are nonjurisdictional.” United States v. Kwai Fun Wong, 575 U.S. 402, 410 (2015). In Kwai Fun, the Court held that the time bar in the Federal Tort Claims Act is nonjurisdictional. In doing so, it rejected the Government’s argument that, because that time bar is a precondition to the FTCA’s waiver of sovereign immunity, the time bar must be jurisdictional. As it had in Lexmark, the Court distinguished jurisdictional statutes from “quintessential claim-processing rules which seek to promote the orderly progress of litigation, but do not deprive a court of authority to hear a case.” Id. (internal quotation marks omitted). It did not except statutes that implicate the government’s waiver of sovereign immunity from that distinction.

In reaching this conclusion, the Court relied on Arbaugh v. Y&H Corp., where, finding Title VII’s numerical employee threshold nonjurisdictional, the Supreme Court stated:

“If the Legislature clearly states that a threshold limitation on a statute’s scope shall count as jurisdictional, then courts and litigants will be duly instructed and will not be left to wrestle with the issue. But when Congress does not rank a statutory limitation on coverage as jurisdictional, courts should treat the restriction as nonjurisdictional in character.”

546 U.S. 500, 515–16 (2006). This “clear statement” rule “does not mean Congress must incant magic words. But traditional tools of statutory construction must plainly show that Congress imbued a procedural bar with jurisdictional consequences.” Kwai Fun, 575 U.S. at 410 (internal quotation marks omitted). There is no such clear statement apparent in the statutes at issue here, 28 U.S.C. § 7422(a) and § 6511(a).3 Other courts also have begun to question whether the time limits and administrative exhaustion requirements in these and other tax provisions should continue to be deemed jurisdictional. See Gillespie v. United States, 670 F. App’x 393, 394–95 (7th Cir. 2016) (whether § 7422(a) is jurisdictional); Bullock v. I.R.S, 602 F. App’x 58, 60 n.3 (3d Cir. 2015) (whether I.R.C. § 7433 is jurisdictional). As to at least one administrative exhaustion requirement, one court has held that it should not be deemed jurisdictional. See Gray v. United States, 723 F.3d 795, 798 (7th Cir. 2013) (I.R.C. § 7433 “contains no language suggesting that Congress intended to strip federal courts of jurisdiction when plaintiffs do not exhaust administrative remedies”); cf. Duggan v. Comm’r of Internal Revenue, 879 F.3d 1029, 1034 (9th Cir. 2018) (I.R.C. § 6630(d)(1)‘s 30-day filing deadline “expressly contemplates the Tax Court’s jurisdiction . . . the filing deadline is given in the same breath as the grant of jurisdiction.”).

Accordingly, although the Claims Court properly dismissed Walby’s 2014 refund claim because she did not meet the prerequisite for bringing such a claim, we think that, under LexmarkArbaugh, and their progeny, the court likely did not lack subject matter jurisdiction over this claim.

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2. See, e.g., Stephens v. United States, 884 F.3d 1151, 1156 (Fed. Cir. 2018); see also Ellis v. United States, 796 F. App’x 749, 750 (Fed. Cir. 2020); Langley v. United States, 716 F. App’x 960, 963 (Fed. Cir. 2017).

3. We are mindful of the Supreme Court’s pre-Lexmark jurisprudence concerning § 7422(a). In United States v. Dalm, the Court held that the district court lacked jurisdiction over gift tax refund suit because “[d]espite its spacious terms, § 1346(a)(1) must be read in conformity with [§ 7422(a) and § 6511(a)] which qualify a taxpayer’s right to bring a refund suit upon compliance with certain conditions.” 494 U.S. 596, 601 (1990). The Court referred to the statutes as “controlling jurisdictional statutes.” Id. at 611. But this view was a departure from the Court’s prior commentary on a predecessor to § 7422(a), recognizing that it “was not a jurisdictional statute at all; it simply specified that suits for recovery of taxes, penalties, or sums could not be maintained until after a claim for refund had been submitted.” Flora v. United States, 362 U.S. 145 (1960).

If you would like to read a little of the Gillespie opinion of the Seventh Circuit, see my post on it here.  It was the statements within Gillespie questioning whether section 7422(a)’s claim-filing requirement is still jurisdictional that the DOJ cited for its decision, post-oral argument, in Tilden v. Commissioner, 846 F.3d 882 (7th Cir. 2017), to file a memorandum of law arguing that the section 6213(a) Tax Court deficiency jurisdiction filing deadline is still jurisdictional – a point with which the Seventh Circuit in Tilden agreed, despite Gillepsie.  See my post on Tilden here.  Of course, as I have noted before, the Harvard tax clinic continues to litigate the issues under section 6213(a) of whether the filing deadlines are still jurisdictional or subject to equitable tolling; companion cases on that issue are currently pending in the Ninth Circuit (and have been pending for over 6 months after oral argument there).

Observations

For most refund suit plaintiffs, it will make little difference whether the section 6511(a) and 7422(a) requirements are jurisdictional, since no one expects the Supreme Court to overturn its ruling in United States v. Brockamp, 519 U.S. 347 (1997), that the filing deadline of section 6511(a) is, in any case, not subject to equitable tolling.  So, who might benefit from making these two requirements nonjurisdictional?  Well, there are always a small number of cases where the DOJ could make an argument that the refund claim filing deadline was missed or that a refund claim was not in proper form, but the DOJ either chose not to raise those issues or just missed that the DOJ had potential arguments under those provisions.  Under current law, treating the requirements as jurisdictional, courts should step in in such cases and police their jurisdiction by raising issues not raised by the DOJ.  But, if the claim filing requirement and claim filing deadline are not jurisdictional to a refund suit, then, in such cases, the court will no longer worry about the issues if the DOJ never raises them.  Non-jurisdictional conditions of suit are merely affirmative defenses.  If the DOJ doesn’t raise an affirmative defense (either accidentally or knowingly), it simply forfeits or waives the defense.  Indeed, if the DOJ wanted to expeditiously litigate a test case brought by a plaintiff who hadn’t yet filed a refund claim, if the claim filing requirements is no longer jurisdictional, the DOJ could choose to waive any argument that a claim should have been filed before suit was brought.

Tax Court Jurisdiction in Late-Filed Deficiency Cases

Yesterday, PT put up a post providing guidance in the timing of the filing of Tax Court petitions and noting the different time frames for filing caused by the Tax Court shutdown and IRS Notice 2020-23 exercising the power to extend Tax Court filing deadlines granted in IRC 7508A. If last year’s government shutdown is any indication of what will happen in 2020, it is almost a certainty that some taxpayers who try to get into the Tax Court will miss the deadline for one reason or another.  Some of those reasons are good reasons.  Those taxpayers will face a motion to dismiss filed by the IRS or an order to show cause generated by the Tax Court seeking to knock them out of Tax Court because of a late filing.  For those of you who read yesterday’s post and have a good grasp of the time to file your Tax Court petition and the need to file using the USPS, certified mail with a filing slip, this post is unnecessary.  For the rest of you, including those who come to the rescue of pro se taxpayers who may have filed late, this post will provide you with assistance if yesterday’s post did not keep you, or your current client from the shoals of a jurisdictional dismissal.

In a post last month, I called for a legislative clarification that judicial filing deadlines in most tax cases are not jurisdictional and are subject to equitable tolling.  The extensions for filing Tax Court petitions provided by the IRS in its recent Notice 2020-23 (from April 1, 2020 to July 15, 2020) and, effectively, by the Tax Court itself in Guralnik v. Commissioner, 146 T.C. 230 (2016) (from March 19, 2020 [when the Clerk’s Office first closed] until the Clerk’s Office reopens) may not be sufficient for all COVID-19 sufferers.  Reports are that people coming out of the hospital are often extremely weakened by the virus.  They may not be physically able to meet even these extended deadlines.  That’s where equitable tolling may help, for one of the most common grounds for equitable tolling is the plaintiff being prevented by circumstances beyond his or her control from complying with the filing deadline.  Using equitable tolling, judges using their equity hats can give extensions after hearing all the facts and circumstances and making sure the taxpayer behaved at least with reasonable diligence under the circumstances.

Over the last year, The Tax Clinic at the Legal Services Center of Harvard Law School (The Clinic) has been looking to litigate test cases in the Tax Court concerning whether the deficiency filing deadline of section 6213(a) is still jurisdictional or is subject to equitable tolling under recent Supreme Court case law that, starting in 2004, made filing deadlines now almost never jurisdictional and usually subject to equitable tolling.  I assist The Clinic in finding good test cases by nightly scouring Tax Court orders in this area (not just designated orders).

I thought it would be useful to tell the story of the cat and mouse game that has been going on between The Clinic and the IRS since last fall in The Clinic’s attempt to litigate these issues.  In the three best test cases that I found, and where Keith and I entered appearances and filed lengthy papers to litigate the issues, in each case, the IRS took steps to avoid having to respond – in one case reissuing the notice of deficiency just before The Clinic filed its response to an order to show cause and in two others conceding the underlying deficiency shortly after The Clinic filed motions to vacate dismissal orders, leading to withdrawal of the motions to vacate as moot.  Is the IRS that afraid that The Clinic may be right? 

With this post, I also share the filing we made in one such case, since there is no reason that others shouldn’t be able to borrow from it for purposes of making these same arguments in their cases.  All I would ask is that you keep Keith or me informed if you do use it and have such a test case for yourself.

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You know from prior posts (too many, so I won’t give cites) that The Clinic initially tried to argue that the Tax Court innocent spouse (section 6015(e)(1)(A)) and Collection Due Process (section 6330(d)(1)) petition filing deadlines are not jurisdictional and are subject to equitable tolling under recent Supreme Court case law.  We lost the innocent spouse cases in three Circuits.  We lost the Collection Due Process cases in the Tax Court (Guralnik) and the Ninth Circuit (as amicus).  But, we won a case in the D.C. Circuit (as amicus with the court adopting significant portions of our brief) concerning the section 7623(b)(4) whistleblower award petition filing deadline, where the statutory language regarding the time period for filing the petition was taken almost verbatim, from the Collection Due Process provision. And for further discussion of these issues, see Bryan Camp’s article on jurisdictional tax deadlines (Prof. Camp argues that the deficiency, CDP and refund deadlines are non-jurisdictional, but that the innocent spouse deadline is jurisdictional).

However, probably 90% of Tax Court petitions are not under these jurisdictions, but are deficiency cases, where section 6213(a) supplies the deadline.  Initially, The Clinic avoided litigating the section 6213(a) deadline because of concerns that under section 7459(d), any late-filed petition that was dismissed would end up being dismissed on the merits and upholding the deficiency – thereby precluding by res judicata the taxpayer from subsequently paying and suing for a refund in district court. 

Only later, by doing a little research and thinking did we conclude that almost no one who is dismissed from the Tax Court for having late filed a deficiency case ever pays and sues for a refund.  There are only about 200 refund suits brought in the entire U.S. each year, and Keith and I don’t recall seeing any having been brought after a Tax Court dismissal for late filing.  So, the section 7459(d) concern is extremely unlikely as a factual matter. 

On the other hand, if the filing deadline is no longer jurisdictional, judges wouldn’t police the filing deadline themselves as they now do.  Our research showed that, each month, Tax Court judges on their own find 7 to 10 cases in which the IRS failed to notice a possible late filing and so the judges issue orders to show cause why the cases should not be dismissed.  So, 7 to 10 taxpayers a month might benefit if the deficiency filing deadline were not jurisdictional.  If the IRS fails to raise late filing as to a nonjurisdictional deadline, the IRS simply forfeits the issue.

The Tax Court and every Circuit court has long held that the deficiency filing deadline is jurisdictional.  But, surprisingly, only two Circuit courts to date and no Tax Court opinion has analyzed whether the deficiency filing deadline is still jurisdictional or is subject to equitable tolling under recent Supreme Court case law.  The one Circuit court precedential opinion, Tilden v. Commissioner, 846 F.3d 882 (7th Cir. 2017), held that the filing deadline is still jurisdictional, but its reasoning is subject to substantial criticism.  Another Circuit court opinion reaches the same result in an unpublished opinion; Garrett v. Commissioner, 2019 U.S. App. LEXIS 37483 (3d Cir. 2019); yet the case was a last known address case in which the parties did not even discuss in their briefs the issue of whether the filing deadline is still jurisdictional, and the court’s reasoning is similar to Tilden (which it doesn’t even cite).  So, since 2004 (when the Supreme Court changed its precedent), the issues have somehow been avoided in the Tax Court and most Circuits.

There are pending two companion cases in the Ninth Circuit presenting the issues of whether the section 6213(a) filing deadline is still jurisdictional or is subject to equitable tolling under the recent Supreme Court case law, Organic Cannabis Foundation v. Commissioner, Ninth Circuit Docket No. 17-72874, and Northern California Small Business Assistants, Inc. v. Commissioner, Ninth Circuit Docket No. 17-72877.  The cases had oral argument on October 22, 2019.  An opinion

could issue in the cases any day.  However, because of another issue presented in the cases, the Ninth Circuit may never reach the jurisdiction and equitable tolling issues.  (The Clinic filed amicus briefs in the cases.)

Because the issues may be avoided in those two Ninth Circuit cases, since last year, Keith and I have been looking in pro se Tax Court cases for fact patterns that would make great test cases on the issue.  We find the cases by searching orders issued daily by the Tax Court.  The orders are ones of dismissal or to show cause why the petition should not be dismissed for late filing.  Some of the orders come from S cases, which presents an extra layer of problem because, to date, no court has held that an S case petitioner can appeal a Tax Court dismissal of a petition for lack of jurisdiction.  (That’s another issue The Clinic is litigating and in another Ninth Circuit case – but I will not go into that issue here.)  If the order we find is one for dismissal, we try to enter an appearance and, within 30 days, move to vacate the dismissal, arguing that the Tax Court erred in treating the filing deadline as still jurisdictional.  If it is an order to show cause, we try to enter an appearance and respond to the order on behalf of the taxpayer.  If the case is an S case, we also move to remove the S designation, since it would be easier to appeal if that designation were removed.  To date, we have found about a half dozen apparently great test cases on the facts, but taxpayers have only responded to our approaches in three cases.

The funny thing about those three cases, though, is that the IRS attorneys in the cases have done everything possible to avoid having to respond to our papers.  In two cases, where we had moved to vacate dismissal orders, the IRS, before responding, looked into the facts of the underlying deficiency and represented that the deficiency would be abandoned by the IRS.  Such actions made our pursing further Tax Court litigation moot, so we moved to withdraw our motions to vacate (and, in one case, to remove the S designation).  The Tax Court granted our motion to withdraw without comment in one case and we are awaiting the outcome of the motion to withdraw in the other.  In effect, The Clinic helped the taxpayers in these cases to win the cases by other means.

In the third case, the IRS felt so bad about what had happened that it reissued the notice of deficiency and represented that it would not try to assess the deficiency sent out in the first notice.  The IRS sent out the new notice of deficiency shortly after the Tax Court issued an order to show cause why the case should not be dismissed and just prior to our entry of appearance though neither the taxpayers nor The Clinic knew this at the time of filing the taxpayers’ response to the order.  Only after The Clinic filed its response did the IRS inform The Clinic and the court that the IRS had sent out a new notice of deficiency. The new notice of deficiency afforded the taxpayers an opportunity to timely file in the Tax Court which the IRS hoped would make any fight on the first notice moot. 

However, the Tax Court has not cooperated with the IRS strategy (at least, yet).  The court does not simply dismiss a petition as duplicative when it might be that the petition did give the Tax Court jurisdiction.  Parties can’t stipulate the court into or out of jurisdiction.  So, in the case involving the first notice of deficiency, where the court had issued an order to show cause, and The Clinic filed papers, the Court has ordered the IRS to respond to our papers by April 27.  This may result in a Tax Court opinion, not just an unpublished order – especially if the Tax Court decides that the deficiency filing deadline is not jurisdictional and is subject to equitable tolling (which would no doubt be a court-reviewed opinion).

This third case is an S case, Rosenthal v. Commissioner, T.C. Docket No. 18392-19S[WMS1] , possibly appealable to the Ninth Circuit.  Here are the facts that we think present an excellent case for equitable tolling:  The taxpayers received a notice of deficiency and filled out a Tax Court Form 2 petition.  They incorrectly mailed the petition to the IRS Laguna Nigel office.  That office stamped the petition “received” four days before the end of the 90-day filing deadline.  Weeks later, the IRS forwarded the petition to the Tax Court, which filed it as of the date the Tax Court received the petition.  One of the classic grounds for equitable tolling is timely filing in the wrong forum.  Just in case anyone wants to read our response to the order to show cause (or copy from it), here it is in Word.

Since the first two cases got resolved in favor of the taxpayers without an opinion or order, for privacy purposes, I won’t identify them here by name or docket number.  But, one of those cases presented the exact same factual pattern as Rosenthal – i.e., timely filing of the Form 2 petition with the IRS office that generated the notice of deficiency. 

In sum, it is rather curious that the IRS keeps trying to prevent The Clinic from litigating in the Tax Court the issues of whether the deficiency petition filing deadline is not jurisdictional and is subject to equitable tolling.  But, these issues won’t be dodged forever.  If the Ninth Circuit rules favorably in the two pending test cases in which The Clinic filed amicus briefs, I expect the DOJ to seek en banc rehearing and Supreme Court review, if necessary.  In the event The Clinic loses in the Ninth Circuit, it is not yet prepared to give up on these issues in other appellate courts.  So, we will continue looking for Tax Court deficiency test cases.

Tax Court Filing Deadlines in a Time of Coronavirus

This post seeks to set out sample Tax Court filing deadlines under the two different extraordinary filing extensions at play at this moment.  The Tax Court closed on March 19, 2020.  The closure of the Tax Court triggered an extended time to file Tax Court petitions as a result of the case of Guralnik v. Commissioner, 146 T.C. 230 (2016) (en banc).  It is unknown at the moment how long the Tax Court will remain closed.  For purposes of this post, we will assume that it remains closed until June 30, 2020.  Of course, it is important to watch the date the Tax Court reopens.  If it reopens after July 15, 2020, or before June 30, 2020, the answers here will change. 

We have discussed Guralnik on several occasions here, here, here, and here.  Guralnik was the first case in which the tax clinic at Harvard Law School made the argument that time frames in the Tax Court are not jurisdictional under the prevailing Supreme Court precedent.  Although the Tax Court rejected the clinic’s argument in a close vote (16-0), it determined, instead, that it had jurisdiction in that Collection Due Process (CDP) case.  It did so because the clerk’s office of the Tax Court was closed, the Tax Court had no rule regarding the closure of the clerk’s office, but the Tax Court had a rule that if it lacked a rule it could look to the Federal Rules of Civil Procedure (FRCP).  In FRCP 4 the rule provides that if the clerk’s office is closed the party can perform the act on the next day the clerk’s office opens.

In addition to the extension of time to file a Tax Court petition created by Guralnik, Congress gave the IRS the power to extend the Tax Court filing deadline.  IRC 7508A grants this power in the event of a federally determined disaster.  The COVID-19 pandemic caused the US President to declare the entire nation a disaster area which opened up the ability of the IRS to use its power under IRC 7508A.  On April 9, 2020, the IRS issued Notice 2020-23 exercising that power and stating that any Tax Court petition due between April 1, 2020 and July 15 2020 was due on July 15, 2020.

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The two provisions now at play that impact the timing of filing a Tax Court petition will have varying impacts depending on when the taxpayer is due to file a petition.  The examples used in this post will address the time frame for a notice of deficiency which is normally 90 days from the due date of the notice.  Here, the Tax Court closure occurred prior to the declaration of disaster and the Tax Court will reopen (at least at this moment it appears that way) prior to the date that the Notice 2020-23 will cause the time to start running again.  Note that the time frame for other types of Tax Court cases, such as CDP, runs only 30 days after the notice of determination and the examples here would not apply but would need to be adapted to the applicable time if other than 90 days.

Example 1 – Statutory Notice of Deficiency (SNOD) issued Monday, December 15, 2019 – last date to file petition March 16, 2020

The 90-day period runs on Sunday March 15.  IRC 7503 provides that the where the last date to perform an act falls on a Saturday, Sunday or Holiday the act moves to the next day.  Here, that day is Monday March 16.  Because the Tax Court was still open on Monday March 16, the last day to file the petition is March 16. 

Note that the Tax Court and the IRS consider this date a jurisdictional time period.  Tomorrow’s post will offer an alternative view.  We anticipate that there will be many transmission problems in getting petitions to the Tax Court following this closure just as there were the last time the Court closed.  If you represent someone who missed the deadline for a good reason, consider arguing that Supreme Court cases matter in this situation.

Example 2 – SNOD issued on Tuesday, December 31, 2019 – last day to file the petition July 1, 2020

The 90-day period runs on Monday, March 30.  On Monday, March 30 the Tax Court was closed.  Because the Tax Court was closed it was not possible to file the petition.  This causes the Guralnik exception to apply.  Applying that exception, the petition should be filed on the first day the Tax Court reopens.  That day, under the presumption used in this post, is Wednesday, July 1, 2020.

Of course, it would be reckless to wait and file on July 1, 2020 if you know about the need to file a petition prior to that date.  So, you should mail the petition to the Tax Court prior to July 1, 2020. 

In mailing the petition to the Tax Court prior to the reopening of the Court, the petition will not be delivered to the Court since it is closed.  The press release closing the court, linked above, contains the following statement:

Mail will not be delivered to the Court until the building reopens. Taxpayers may comply with statutory deadlines for filing petitions or notices of appeal by timely mailing a petition or notice of appeal to the Court. Timeliness of mailing of the petition or notice of appeal is determined by the United States Postal Service’s postmark or the delivery certificate of a designated private delivery service. Petitions and other documents may not be hand delivered to the Court.

The petition will be held somewhere waiting for the Court to reopen.  The best advice on mailing during this period is to send the petition via certified mail return receipt request.  The USPS will hold mail sent to the Court through it and deliver the mail to the Court when it reopens.  [If anyone in the Tax Court clerk’s office would be willing to do an interview about what it was like in that office when it reopened after the government shutdown, we would be glad to interview you if you have permission to do so and will not get in trouble for talking to us.] 

While it is permissible to use private delivery services to send petitions to the Court and have the timely mailing rule of IRC 7502 apply, in the 2019 government shutdown there were some problems with the way the private delivery services handled the situation.  You can read about one such case here.    I don’t think that was the only case in which private delivery service caused some problems.  You should also read the Guralnik case for a cautionary tale on which private delivery service to choose.  Go and find the most recent IRS notice setting out the approved delivery services.  The most recent one on the day of the publishing of this post is Notice 2016-30

No matter how you choose to mail the petition to the Tax Court, please please please send it in a way that allows you to have a receipt of the mailing.  This could become very important.

Note that in Example 2 the issuance of Notice 2020-23 by the IRS may have no importance because the IRS did not issue the Notice until after the due date of the petition and the notice covers actions with deadlines beginning on April 1, 2020 which comes after the deadline for filing this petition.  It is not known how the closure of the Tax Court and the extended time to file the petition interacts with the extension granted in Notice 2020-23 pursuant to IRC 7508A.  The Notice says, “This notice does not provide relief for the time period for filing a petition with the Tax Court, or for filing a claim or bringing a suit for credit or refund if that period expired before April 1, 2020.”

We recommend against assuming that the Notice provides a further extension because the last day to file the petition in the Tax Court was still open at the time the Notice became effective.  Of course, if you represent someone who misses the July 1 deadline in this circumstance, in addition to arguing equitable tolling which will be discussed in tomorrow’s post, you might also argue that the interplay of the two periods of extension allows your client to file the petition by Wednesday, July 15 for the reasons discussed below.

Example 3 – SNOD issued on Wednesday, January 15, 2020 – last day to file Wednesday, July 15, 2020

Here, the normal due date of the petition would be Tuesday, April 14.  Because this falls when both the closure of the Tax Court and the disaster declaration by the IRS provide an extension, the taxpayer could file the petition on the later of the two extended periods.

Note that the extended periods do not suspend the time period to file the petition for the period of the closure or the period of disaster relief but provide a hard date for extended relief after which anyone whose time to act fell within that period must perform the act.  As with the last example, we would not recommend waiting until the last day to file the petition.  All of the advice regarding mailing the petition remains the same. The two extenders operate a little differently at the end of their time.  The Tax Court extends the time period until the next day the Tax Court is open.  So, if the Tax Court is closed until June 30, the first day it is open is July 1 and that becomes the deadline.  The Notice 2020-23 extension extends the time to the date listed in the Notice and not the day after.  So, if the taxpayer relies on the Notice the last day to perform the act, here to file the petition, is Wednesday, July 15.

Example 4 – SNOD issued on Friday, January 31, 2020 – last day to file Wednesday, July 15, 2020

The reasoning remains the same as in Example 3.  Here, the normal due date of the Tax Court petition is Thursday, April 30, 2020.  Because this falls when both the closure of the Tax Court and the disaster declaration by the IRS provide an extension, the taxpayer could file the petition on the later of the two extended periods.

Example 5 – SNOD issued any date between Friday, January 31 and Wednesday, April 15 – last day to file Wednesday, July 15, 2020

The reasoning remains the same as in Example 3.  Here, the normal due date of the Tax Court petition will fall before Wednesday, July 15.  Because the dates for these taxpayers receiving a SNOD prior to April 16 falls when both the closure of the Tax Court and the disaster declaration by the IRS provide an extension, the taxpayer could file the petition on the later of the two extended periods.

Example 6 – SNOD issued on Thursday, April 16 or later – last day to file is 90 days from the date of the notice

Neither the closure of the Tax Court (through June 30) nor the disaster declaration by the IRS provides an extension to taxpayers who receive a SNOD dated April 16 or later.

Conclusion

The analysis provided here is not like an analysis provided in an IRS notice or a pronunciation from the Tax Court.  This is only one private citizen speculating on due dates with no authority to provide coverage for you if you rely on this analysis to your detriment.  Do your own math and your own legal research to assure yourself of the correct last date for filing a petition, but we hope that these examples will assist in providing some clarity to the current situation with respect to filing a Tax Court petition.  As always, we welcome and encourage comments that add to this discussion.

The Coronavirus Shows Why We Need Equitable Tolling Legislation Now for Judicial Tax Filing Deadlines

Note that after this post below was written, at 9 pm March 18, the Tax Court issued a press release stating that its building is closed and that:

Mail will be held for delivery until the Court reopens. Taxpayers may comply with statutory deadlines for filing petitions or notices of appeal by timely mailing a petition or notice of appeal to the Court. Timeliness of mailing of the petition or notice of appeal is determined by the United States Postal Service’s postmark or the delivery certificate of a designated private delivery service. The eAccess and eFiling systems remain operational. Petitions and other documents may not be hand delivered to the Court.

Under Guralnik, this now extends — to the date the Clerk’s Office reopens — the time for filing in person or mailing a Tax Court petition.

Things are moving fast (finally) in D.C.  On March 13, the President sent a letter to three Cabinet Secretaries and the Administrator of FEMA invoking his power under the Stafford Act to declare a national emergency because of the coronavirus.  Part of the letter stated:  “I am also instructing Secretary Mnuchin to provide relief from tax deadlines to Americans who have been adversely affected by the COVID-19 emergency, as appropriate, pursuant to 26 U.S.C. 7508A(a).”

On March 18, the IRS issued Notice 2020-17, providing for a 3-month extension (from April 15, 2020 to July 15, 2020) to “Affected Taxpayers” to pay 2019 income taxes (i.e., not any other taxes) – limited to $1 million for individuals and $10 million for C  corporations or consolidated groups.  Affected Taxpayers are defined as “any person with a Federal income tax payment due April 15, 2020” – apparently regardless of where in the world the taxpayers are located.

A paragraph in the Notice also reads:

Affected Taxpayers subject to penalties or additions to tax despite the relief granted by this section III may seek reasonable cause relief under section 6651 for a failure to pay tax or seek a waiver to a penalty under section 6654 for a failure by an individual or certain trusts and estates to pay estimated income tax, as applicable. Similar relief with respect to estimated tax payments is not available for corporate taxpayers or tax-exempt organizations under section 6655.

I take this to mean that if, say, an individual taxpayer paid $1.5 million in income taxes on July 15, the IRS will impose a late-payment penalty on $500,000 of the payment, but the IRS encourages the taxpayers to seek abatement of that penalty by explaining why the coronavirus prevented payment of that $500,000, as well.  I assume that the IRS will be liberal in granting abatements, but a taxpayer will have to ask.

The IRS has, to date, has said nothing about extending any filing deadlines, though I expect it will act on that in the near future.  

Section 7508A allows the IRS to grant payment and filing extensions of up to one year (including for making refund claims, filing refund suits, and filing Tax Court petitions and notices of appeal; Reg. § 301.7508A-1(c)(1)(iv)-(vi)) for people affected by a Presidentially-declared disaster.  However, unless the IRS extends filing deadlines to people and entities worldwide (don’t forget our overseas U.S. taxpayers and foreigners who are taxpayers in the U.S.) and with respect to all taxes, this provision would not be sufficient to help all the persons who reasonably would need extensions to file tax cases in court.  Further, even a one-year extension for all taxes may not be enough, given that it is estimated that a vaccine for the coronavirus might not be available for 18 months.

I hope at least one person reading this post is a Congressional staffer, who can get what I propose into the next round of legislation to address the coronavirus pandemic.  Taxpayers dealing with the coronavirus will understandably miss tax judicial filing deadlines, such as the 30-day period to file a Collection Due Process petition in the Tax Court under § 6330(d)(1) or the 90-day (or 150-day) periods to file deficiency or innocent spouse petitions in the Tax Court under §§ 6213(a) and 6015(e)(1)(A).  Those taxpayers should be forgiven for missing those deadlines in appropriate cases, even if they are not covered by any announced extension to file under § 7508A.  However, currently, the power of the courts to forgive late judicial filings in the tax area is, according to most courts, nonexistent.  I ask Congress to change the law to clarify that tax judicial filing deadlines are not jurisdictional and are subject to equitable tolling.

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Most courts have held that statutory tax judicial filing deadlines are jurisdictional and not subject to equitable tolling.  That’s the case despite the few appellate rulings that Keith and I have yet won holding that certain tax judicial filing deadlines are not jurisdictional and are subject to equitable tolling.  Although we hope for more, we have, to date, only two Circuit Court victories that only apply to tax filing deadlines used by very few people:  The district court wrongful levy filing deadline of § 6532(c); Volpicelli v. United States,  777 F.3d 1042 (9th Cir. 2015); and the Tax Court whistleblower award filing deadline of § 7623(b)(4)Myers v. Commissioner, 928 F.3d 1025 (D.C. Cir. 2019).  Fewer than 200 such petitions/complaints are currently filed each year (combined) in those kinds of cases, and even all the other Circuits to have ruled on the issue of the wrongful levy deadline have ruled the other way. 

Whatever reason that impelled the Supreme Court to hold in United States v. Brockamp, 519 U.S. 347 (1997), that the refund claim filing and payment deadlines of §6511(a) and (b) are not subject to equitable tolling (including administrative problems that might arise because almost a hundred million 1994 returns included claims for refund), the problem of tax judicial filing deadlines is confined to a comparatively very small number of cases.  Currently, fewer than 30,000 tax complaints/petitions are filed annually, and the vast majority of these are filed on time.  It would not be a huge burden on the tax system if equitable tolling could be allowed for the few late-filed complaints/petitions where a plaintiff/taxpayer can give a good excuse for late filing – such as dealing with coronavirus.

If the Article I Court of Appeals for Veterans Claims can employ equitable tolling and district courts can employ equitable tolling in connection with Federal Tort Claims Act suits, I see no reason why tax suits should be excluded from equitable tolling.  So, legislation to change the tax law is urgently needed.

For filings in tax cases in the district courts and the Tax Court, if the clerk’s offices of those courts close during this pandemic, that will give automatic extensions to file initial pleadings until those offices reopen.  See, e.g., Guralnik v. Commissioner, 146 T.C. 230 (2016) (borrowing a rule from the FRCP).  But, it is not clear that clerks offices will have to close during this pandemic.  Indeed, while the Tax Court has canceled certain upcoming trial calendars, it has not (at least yet) closed its clerk’s office to hand-delivered petitions.  Indeed, the Tax Court has announced that its Clerk’s office is still open for filing petitions, though only for four hours a day.  So, Guralnik can’t apply.

Reg. § 301.9100-1 et seq. allows the IRS to extend statutory and regulatory deadlines for making elections.  But, the IRS can’t extend judicial filing deadlines. 

Equitable tolling is generally appropriate only where the defendant [1] has actively misled the plaintiff respecting the cause of action, or [2] where the plaintiff has in some extraordinary way been prevented from asserting his rights, or [3] has raised the precise statutory claim in issue but has mistakenly done so in the wrong forum.

Mazurkiewicz v. New York City Health & Hosps. Corp., 356 Fed. Appx. 521, 522 (2d Cir. 2009) (cleaned up).  Accord Mannella v. Commissioner, 631 F.3d 115, 125 (3d Cir. 2011).  While coronoavirus interference with taxpayer lives (be it illness, quarantine, tending to others who are sick, or simply not being able to access necessary paperwork because of lock-downs) would likely fall into the “extraordinary circumstances” usual reason, equitable tolling is not limited to only those usual reasons.  As the Supreme Court has said:

The “flexibility” inherent in “equitable procedure” enables courts “to meet new situations [that] demand equitable intervention, and to accord all the relief necessary to correct . . . particular injustices.”  [Hazel-Atlas Glass Co. v. Hartford Empire Co., 322 U.S. 238, 248 (1944)] (permitting postdeadline filing of bill of review).  Taken together, these cases recognize that courts of equity can and do draw upon decisions made in other similar cases for guidance.  Such courts exercise judgment in light of prior precedent, but with awareness of the fact that specific circumstances, often hard to predict in advance, could warrant special treatment in an appropriate case.

Holland v. Florida, 560 U.S. 631, 650 (2010).

The former and current National Taxpayer Advocates have agreed with my push to get equitable tolling into judicial tax filing deadlines.  NTA 2017 Annual Report to Congress, Vol. 1, at pp. 283-292 (Legislative Recommendation Number 3); NTA 2018 Annual Report to Congress, 2019 Purple Book at pp. 88-90; NTA 2019 Annual Report to Congress, 2020 Purple Book at pp. 85-87.

And, I long ago drafted legislation to accomplish this.  Here’s my draft.  No doubt Congressional staffers should give it a review, as I am no expert drafter of legislation.  I would:

Amend section 7442 to add new section (b) as follows:

(b) Timely Filing Nonjurisdictional.—Notwithstanding any other provision of this title,

  • all periods of limitations for filing suit in the Tax Court are subject to waiver, forfeiture, estoppel, and equitable tolling; and
  • an order of the Tax Court dismissing a suit for untimely filing shall not be considered a ruling on the merits and shall not preclude the litigation of any later claim or issue brought in the Tax Court or any other court.

Amend section 7459(d)’s last sentence to add before the period:  “or untimely filing”.

Amend section 6532 to add a new subsection (d) reading:

(d) Timely Filing Nonjurisdictional.—The time periods set out in subsections (a) and (c) are subject to waiver, forfeiture, estoppel, and equitable tolling.

Jurisdiction of Wrongful Levy Claims

The case of i3Assembly, LLC v. United States, No. 3:18-cv-00599 (N.D.N.Y 2020) presents a sad outcome for a company taking over a government contract from a delinquent taxpayers and raises issues of jurisdiction discussed here on many occasions.  Because of a snafu, the IRS took money that should have been paid to i3Assembly and used it to satisfy the outstanding tax liability of the company that had the government contract before i3Assembly took it over. 

Although the company raises issues of equitable tolling in litigating the case, it is not clear that either the company or the Department of Justice Tax Division attorney have been closely following the many threads of discussion on jurisdiction present in this blog.  That’s unfortunate for the company, which may have had some arguments that it did not yet present, and disappointing from the government’s perspective if it neglected to cite to on point case law in other circuits adverse to the position it took in this case.

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 In 2015 i3Assembly acquired certain assets from VMR Electronics and it assumed certain liabilities; however, it expressly did not assume VMR’s outstanding liability to the IRS.  i3Assembly had a different EIN, used its own labor to fulfill the contracts and then sent invoices for the work it performed.  Instead of paying i3Assembly, the government sent the money to the IRS in response to a levy.  This levy was a Federal Payment Levy Program levy served on July 18, 2016.  The IRS sent a post-levy CDP notice to VMR, which probably was surprised and delighted to find out its obligation was being paid by i3Assembly.

After the first levy, a second levy occurred on July 22, 2016 and a third on November 16, 2016.  All of the notices were going to VMR.  i3Assembly was probably trying to figure out what was happening and attributed some of the delay in payment to dealing with the Defense Department and the government in general but it was trying to find out what was happening to its invoices.  The VP of i3Assembly had several telephone conversations with IRS officials regarding the wrongful levy of its funds starting in October 2016 and going through July 18, 2017, but i3Assembly never received a notice of levy.

On October 31, 2017, i3Assembly submitted an administrative wrongful levy claim to the IRS.  The IRS disallowed the wrongful levy claim for the first and second seizure stating that the claims were not filed within nine months of the levy.  It subsequently disallowed the claim for the third levy stating that i3Assembly failed to establish that the payment did not belong to VMR or that i3Assembly had an interest in the payment superior to the IRS.

On May 21, 2018 i3Assembly filed suit.  The IRS moved to dismiss and alternatively moved for summary judgment.  The court discussed the Federal Payment Levy (FPL) and the fact that it acts as a continuous levy.  The IRS argued that i3Assembly had to raise its concerns with nine months of the time the IRS put out the FPL, even though it had no idea the FPL existed or that it would take money intended for i3Assembly. 

i3Assembly admitted that it did not file its claim for wrongful levy within nine months of the first and second levies under the FPL but argued that equitable tolling should suspend the time frame for filing the wrongful levy claim.  It argues that its claim was timely for the third levy based on the date the funds were actually seized and i3Assembly put on notice of the seizure.  According to i3Assembly that occurred on July 22, 2017.  The IRS argued that the date of the notice is irrelevant because it had no duty to notify i3Assembly, and the time limit starts to run on the date the person possessing the property received the notice of levy back in July 2016.

i3Assembly pointed out the IRS argument creates an absurd result, because the period for filing a claim could pass before any property was seized or the party whose property was taken would have any idea of the taking.  The IRS responded that the statute and case law do not require notice to the person claiming their property was wrongfully taken and that the Second Circuit in Williams v. United States, 947 F.2d 37, 39 (2d Cir. 1991) had already determined that notice to the third party was unnecessary when calculating the time period.  The levy at issue in Williams, however, was not a continuous levy like the FPL.  When the FPL was served, there was no property to which it attached.  So, i3Assembly would not under any circumstances have received notice at that time.

The court states that:

On this record, the Court cannot determine what, if any, notice was provided to Plaintiff regarding the continuing levy under FPLP before the statute of limitations [on filing the wrongful levy claim] had run.  Absent any evidence regarding what information was provided to Plaintiff, and further briefing from the Defendant regarding due process, the Court at this time denies the motion to dismiss Count One with prejudice to renewal.

The court then discussed equitable tolling.  It found that i3Assembly had not alleged facts that would support equitable tolling for the first and second levies. With respect to the third levy, the court seems to find it possible that i3Assembly did have facts in the record that could support equitable tolling, but then it shifted to the need for i3Assembly to show that the statute at issue is one to which equitable tolling could apply.  In other words, the court needs to know if the time period for filing a wrongful levy claim is a jurisdictional time period.  In looking at this issue, it cites to cases from the 1990s and ignores all of the law on this issue that has occurred in the past 15 years.

I have not looked at the briefs but even if i3Assembly attorneys did not find the relevant case law, I would have expected the DOJ attorney to cite to the more recent case law.  In particular the 9th Circuit has ruled in Volpicelli v. United States, 777 F.3d 1042 (9th Cir. Jan. 30, 2015) that the time period in the wrongful levy statute is not a jurisdictional time frame.  I would have expected this decision to receive some mention as I would have expected the more recent and relevant law on jurisdiction to receive some mention.  Perhaps, i3Assembly’s attorneys will find the newer case law and find the Volpicelli opinion and file an appeal.  Carl has written a post on the last Second Circuit case, Mottahedeh v. United States, to seek equitable tolling in the context of wrongful levy. In that case, the court declined to grant equitable tolling but did so without citing to the recent Supreme Court case law as well.

For the Second Time in About Five Years, the SG Decides Not to Take a Tax Equitable Tolling Case to SCOTUS

Just another short update on Myers v. Commissioner, 928 F.3d 1025 (D.C. Cir. 2019), on which I blogged here.  In that opinion, the D.C. Circuit held that the 30-day deadline in section 7623(b)(4) in which to file a whistleblower award petition in the Tax Court is not jurisdictional and is subject to equitable tolling under recent non-tax Supreme Court case law.  The DOJ had initially sought en banc rehearing of the Myers opinion, contending that the opinion could not be reconciled with the opinion in Duggan v. Commissioner, 879 F.3d 1029 (9th Cir. 2018), on which I blogged hereDuggan held that the 30-day deadline in section 6330(d)(1) in which to file a Collection Due Process petition in the Tax Court is jurisdictional and not subject to equitable tolling.  Since the 2006 language of section 7623(b)(4) was rather obviously cribbed from the 2000-version language in section 6330(d)(1), I agree with the DOJ that the two opinions cannot be reconciled.

After the D.C. Circuit denied rehearing, the Solicitor General had to consider seeking certiorari in Myers.  Clearly, there was some struggle in the DOJ to figure out what to do, since the SG twice requested extensions of the time to file a cert. petition.  But, the last extension expired on March 2, and no further extension was sought or petition was filed by that date.  Thus, the D.C. Circuit’s opinion in Myers now controls all Tax Court whistleblower award cases under Golsen, since, under section 7482(b)(1), unlike most Tax Court cases, whistleblower award cases are only appealable to the D.C. Circuit.

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This is the second time in about five years that the DOJ, after losing a tax equitable tolling case and being unsuccessful in seeking en banc rehearing because of a conflict among the Circuits, has, in the end, decided not to seek cert.  The prior case was Volpicelli v. United States, 777 F.3d 1042 (9th Cir. 2015), on which I blogged hereVolpicelli held that the then-9-month (now 2-year) deadline in section 6532(c) in which to file a district court wrongful levy complaint is not jurisdictional and is subject to equitable tolling under recent non-tax Supreme Court case law.  Volpicelli is in conflict with several section 6532(c) opinions of other Circuits, including Becton Dickinson and Co. v. Wolckenhauer, 215 F.3d 340 (3d Cir. 2000), but all of the conflicting cases were decided before the new Supreme Court case law on jurisdiction began in 2004.

I am a little bummed out by the SG’s chickening out on seeking cert. in Myers, since in both Volpicelli and Myers, I wrote or co-wrote amicus briefs in the cases on behalf of tax clinics with which I had been then affiliated (Cardozo and Harvard, respectively).  And, more than the usual amicus, I was otherwise instrumental in pushing these cases forward as test cases.  I guess it is just my luck that any potential Supreme Court case I help generate gets passed on by the SG after much furor and ado below.  Given that I am retired and now just volunteering with the Harvard clinic, Myers was likely my last chance at getting to SCOTUS on an issue I cared strongly about.  But, maybe I should be like Yoda and sigh, “After all, there is another”.  In Boechler, P.C. v. Commissioner, Eight Circuit Docket No. 19-2003, the Eight Circuit has been asked to hold the section 6330(d)(1) filing deadline not jurisdictional and subject to equitable tolling.  Keith and I (on behalf of the Harvard clinic) are amicus there, as well.  Oral argument is expected shortly in Boechler, as the briefing is complete.

In a December post, I pointed out that the Tax Court had been holding back from deciding a number of whistleblower award cases pending the SG’s action regarding cert. in Myers.  See Tax Court orders in Aghadjanian v. Commissioner, Docket No. 9339-18W (dated 9/4/19 and 12/9/19); McCrory v. Commissioner, Docket No. 3443-18W (dated 9/4/19 and 12/6/19); Bond v. Commissioner, Docket No. 5690-19W (dated 10/8/19); Bond v. Commissioner, Docket No. 6267-19W (dated 10/30/19); Bond v. Commissioner, Docket No. 6982-19W (dated 11/5/19).  That has continued in other dockets.  See Tax Court orders in Berleth v. Commissioner, Docket No. 21414-18W (dated 1/22/20 and 2/2/20); Friedel v. Commissioner, Docket No. 11239-19W (dated 2/14/20); Damiani v. Commissioner, Docket No. 14914-19W (dated 2/18/20).

And, in the remand of Myers from the D.C. Circuit, we can all look forward to the Tax Court for the first time being confronted with deciding what constitutes substantive grounds for equitable tolling of a Tax Court filing deadline.  To decide this question, the Tax Court will have to borrow case law from other courts, including the Supreme Court, since the Tax Court has never before believed it had the power to grant equitable tolling.