What’s Wrong With The Tax Court Hallmark Opinion: Part 2

This is the second of a multipart post discussing the recent Tax Court opinion in Hallmark Research Collective v. Commissioner, 159 T.C. No. 6 (11/29/22). 

In this post, I will discuss the legislative history undergirding the argument over which provision provides the Tax Court’s deficiency jurisdiction and point out things that the Hallmark opinion oddly decided not to discuss about this legislative history, even though the taxpayer presented this information to the court.

The Hallmark opinion (slip opinion at pp. 11-18) takes the position that the jurisdictional grant to the Tax Court to redetermine deficiencies first appeared in the second sentence of Revenue Act of 1924 section 274(a) – the original predecessor of the first sentence of IRC 6213(a).  At slip opinion pp. 38-40, the court explicitly rejects the argument that IRC 6214(a) is the source of the Tax Court’s deficiency jurisdiction.  I disagree.


Section 274(a) of the Revenue Act of 1924 did two things:  It provided for the IRS to mail notices of deficiency concerning income taxes (what is currently IRC 6212).  And it stated, in its second sentence:  “Within sixty days after such notice is mailed the taxpayer may file an appeal with the Board of Tax Appeals established by section 900.”  Section 274 sets out what we would today call the deficiency procedures applicable to income taxes.  But, nowhere in § 274 can one find the word “jurisdiction”.  There are similarly-phrased sentences providing 60-day filing deadlines in the Board at Revenue Act of 1924 §§ 279(b) (for notices regarding claims for abatement of income tax jeopardy assessments), 308(a) (for notices of estate tax deficiency), and 312(b) (for notices regarding claims for abatement of estate tax jeopardy assessments). 

Congress did not think that the sentences in §§ 274(a), 279(b), 308(a), and 312(b) were sufficient to give the Board of Tax Appeals the power to hear cases, so at § 900(e) of the Revenue Act of 1924, Congress wrote:  “The Board and its divisions shall hear and determine appeals filed under Section 274, 279, 308, and 312.”  Thus, I would argue that Congress implicitly gave the Board the power – i.e., jurisdiction – to decide cases at § 900(e), not at §§ 274(a), 279(b), 308(a), and 312(b). 

In Estate of Young v. Commissioner, 81 T.C. 879, 884 (1983), Judge Dawson, writing for the en banc court, wrote:  “The origin of this Court lies in the Revenue Act of 1924, which established the Board of Tax Appeals. . . .  The act gave the Board jurisdiction to redetermine deficiencies determined by the Commissioner in a statutory notice.  Sec. 900(e), Revenue Act of 1924.”; some citations omitted).  So, you would think that Judge Dawson agrees with me.

However, the Hallmark opinion (slip opinion at pp. 39-40) includes an expanded quote from Young that retains the above quote, but also quotes from Young:  “We think that the jurisdiction conferred by section 6214(a) is merely complementary to the jurisdiction conferred by section 6213.” Id.  I disagree with this statement in Young.

In 1926, Congress decided to make the Board more court-like, including providing for direct appeals to Courts of Appeals.  One of the changes in the Revenue Act of 1926 was to explicitly, for the first time, use the word “jurisdiction” with respect to the Board.   Section 1001 of the Revenue Act of 1926 amended Title IX of the Revenue Act of 1924 to include, at a new § 904, the following:  “The Board and its divisions shall have such jurisdiction as is conferred on them by Title II and Title III of the Revenue Act of 1926 or by subsequent laws.”  Title II is headed “Income Tax”, and the procedures for income tax deficiencies and claims for abatement of jeopardy assessments relating to income taxes are found therein.  Title III is headed “Estate Tax”, and the procedures for estate tax deficiencies and claims for abatement of jeopardy assessments relating to estate taxes are found therein.

Thus, unlike § 900(e) of the Revenue Act of 1924, § 904 (as enacted by § 1001) of the Revenue Act of 1926 did not give the Board jurisdiction to redetermine deficiencies, but it also did not pin the Board’s jurisdiction to only §§ 274(a) and 308(a) of the Revenue Act of 1926 (the provisions that set out the filing deadlines).  Section 904 referred to the entire second and third titles of the Revenue Act of 1926 as the sources of the Board’s jurisdiction, which included new provisions under the income and estate taxes that, for the first time, referred to the Board’s “jurisdiction”.   Current IRC 7442 is similar to § 904 of the Revenue Act of 1926 (no jurisdictional grant), not § 900(e) of the Revenue Act of 1924 (granting jurisdiction).

In Title II of the Revenue Act of 1926, among the income tax deficiency procedures, Congress enacted three new provisions that explicitly use the word “jurisdiction” in connection with the Board, but Congress did not alter to include the word “jurisdiction” the second sentence of § 274(a) of the Revenue Act of 1924 that provides the Board income tax deficiency petition filing deadline. Congress in 1926 also did not alter to include the word “jurisdiction” the filing deadline sentence in § 308(a) of the Revenue Act of 1924 that provides the Board estate tax deficiency petition filing deadline.

Section 274(e) of the Revenue Act of 1926 provided, for the first time:

The Board shall have jurisdiction to redetermine the correct amount of the deficiency even if the amount so redetermined is greater than the amount of the deficiency, notice of which has been mailed to the taxpayer, and to determine whether any penalty, additional amount or addition to the tax should be assessed, if claim therefor is asserted by the Commissioner at or before the hearing or a rehearing.

(Emphasis added).  IRC 6214(a) is the successor to this provision and a similar new one at Revenue Act of 1926 § 308(e) for deficiencies in estate tax.

Section 274(g) of the Revenue Act of 1926 provided, for the first time:

The Board in redetermining a deficiency in respect of any taxable year shall consider such facts with relation to the taxes for other taxable years as may be necessary correctly to redetermine the amount of such deficiency, but in doing so shall have no jurisdiction to determine whether or not the tax for any other taxable year has been overpaid or underpaid.

(Emphasis added).  The first sentence of IRC 6214(b) is the successor to this provision.

Section 284(e) of the Revenue Act of 1926 provided, for the first time, in part:

If the Board finds that there is no deficiency and further finds that the taxpayer has made an overpayment of tax in respect of the taxable year in respect of which the Commissioner determined the deficiency, the Board shall have jurisdiction to determine the amount of such overpayment, and such amount shall, when the decision of the Board becomes final, be credited or refunded to the taxpayer. . . .

(Emphasis added).  The first sentence of IRC 6512(b)(1) is the successor to this provision and a similar new one at Revenue Act of 1926 § 319(c) for overpayments of estate tax.

The second sentences of §§ 274(a) and 308(a) of the Revenue Act of 1926 differ from the second sentences of §§ 274(a) and 308(a) of the Revenue Act of 1924 in that the 1926 sentences newly exclude Sundays from ending the deficiency petition filing deadline.  However, at the same time when Congress saw the need to write the word “jurisdiction” into multiple other provisions of the Revenue Act of 1926 in connection with the Board (see also, e.g., section 283) when redrafting the sentences providing for the Board’s deficiency petition filing deadlines, Congress did not insert the word “jurisdiction” or otherwise modify the sentences to speak to the power of the Board.  That seems a highly unlikely accident if Congress wanted to clarify the Board’s main deficiency jurisdiction.  It is often said that “[w]here Congress includes particular language in one section of a statute but omits it in another section of the same Act, it is generally presumed that Congress acts intentionally and purposely in the disparate inclusion or exclusion.”  Russello v. United States, 464 U.S. 16,23 (1983) (cleaned up).    Congress knowns how to provide jurisdictional grants and appears not to have done so in drafting §§ 274(a) and 308(a) of the Revenue Act of 1926 and their successors, including current IRC 6213(a).

Hallmark conceded that probably the main reason for the enactment of §§ 274(e) and 308(e) of the Revenue Act of 1926 (the predecessors of IRC 6214(a)) was to expand the Board’s “jurisdiction” to cover increased deficiencies and penalties, but pointed out that new statutory language often serves multiple purposes, and some of those purposes are considered too technical to merit discussion in Committee reports.  The way those 1926 provisions are written, their first 13 words also literally provide the Tax Court jurisdiction to redetermine the deficiency to an amount lower than shown in the notice because claims for that deficiency are, automatically, asserted before the hearing – i.e., they are asserted in the notice and/or the answer.  The next phrase in those statutes is “even if the amount so redetermined is greater than the amount of the deficiency”.  “Even if” is an idiom that confirms the preceding words.  The Collins Dictionary states:  “You use even if or even though to indicate that a particular fact does not make the rest of your statement untrue:  ‘Cynthia is not ashamed of what she does, even if she ends up doing something wrong.’”

“Even if” is similar to “whether or not”, and, interestingly, at least one 1926 Committee report uses the phrase “whether or not” in describing the portion of § 274(e) granting the Board “jurisdiction . . . to determine whether any penalty, additional amount or addition to the tax should be assessed, if claim therefor is asserted by the Commissioner at or before the hearing or a rehearing.”  The Senate Finance Committee Report states:

It sometime occurs that after the deficiency letter has been-sent out fraud or negligence is for the first time discovered by the commissioner.  In order to avoid the necessity of sending out a second notice to the taxpayer in such cases and other similar cases, it is provided in section 274(e) that the board shall have jurisdiction upon the appeal form the original deficiency letter to determine whether any penalty, additional amount, or addition to the tax should be assessed whether or not the commissioner has asserted such claim in the deficiency letter or in his pleadings.

S. Rep. 52, 69th Cong., 1st Sess. (1926) at 27-28, 1939-1 C.B. (pt. 2) 332  (emphasis added).  Note that there is no statement in this sentence “that it is provided in” § 274(a) (setting out the filing deadline) that the Board has jurisdiction to determine these items set out in the notice of deficiency.  I think the quoted sentence confirms Congress’ understanding that § 274(e) is the jurisdictional grant for the Board to determine these items, both those set out in notices of deficiency and in pleadings.

The Committee Reports accompanying the Revenue Act of 1926 contain no discussions of (1) why the word “jurisdiction” is, for the first time, used in that act in connection with the Board, (2) why §§ 274(a) and 308(a), although amended, were not amended to include the word “jurisdiction”, or (3) the modification of § 900(e) of the Revenue Act of 1924 from granting the Board the power to hold hearings to § 904 of the Revenue Act of 1926 (locating the “jurisdiction” of the Board in earlier provisions of the Revenue Act of 1926).  H. Rep. 69-1 at 10-11, 17-21; S. Rep. 69-52 at 25-28, 34-38, 1939-1 C.B. (pt. 2) 332; H. Rep. (Conf.) 69-356 at 39-40, 53-55, 1939-1 C.B. (pt. 2) 361.

The Hallmark opinion never addressed why, when Congress in 1926 amended §§ 274(a) and 308(a), Congress never included the word “jurisdiction”, but in 1926 Congress enacted three provisions giving the Board “jurisdiction”.  Nor did the Tax Court in Hallmark mention any of the opinions of Tax Court judges over the years (the ones quoted in part 1 of this post) that, contrary to Young, stated that IRC 6124(a) is the basis of the Tax Court’s deficiency jurisdiction.  I think the Hallmark opinion, in failing to discuss this and merely citing Young, did the public a disservice.

What’s Wrong with the Tax Court’s Hallmark Opinion: Part 1

After the Supreme Court decided the Boechler case last April, the Tax Court decided that it should review its jurisprudence regarding the timely filing of Tax Court petitions as a jurisdictional issue in cases invoking its deficiency jurisdiction.  As Boechler involved the language in the Collection Due Process (CDP) basis for the Tax Court’s jurisdiction, the Supreme Court’s decision did not directly impact the timeliness issue in the Court’s other jurisdictional bases.  

The Court assigned the writing of the decision reviewing the timeliness to Judge Gustafson in the case of Hallmark v. Commissioner.  At the same time, it began holding in abeyance decisions on dismissals of deficiency cases pending the outcome of the Hallmark decision.  Last week the Court decided 17-0 that Boechler had no impact on its jurisdiction in deficiency cases and untimely petitions in deficiency cases still required dismissal no matter what reason petitioner had for filing past the 90 (or 150) day time period.  It also immediately began dismissing the hundreds of cases awaiting this decision.

Carl Smith was the architect of the arguments advanced by the Tax Clinic at the Legal Services Center of Harvard Law School that eventually led to the Boechler decision which reversed a 17-0 start in the Tax Court ruling that those arguments were wrong.  Carl provided significant assistance to Hallmark in the arguments it made to the Tax Court which received the same chilly reception in the Tax Court the CDP arguments received almost seven years ago.

Carl has written an eight part series breaking down the Hallmark decision and explaining how it fails to provide a supportable legal basis for its outcome.  We know that many of our readers will not want to take a deep dive into the world of jurisdiction and will run this series as a second post each day for the next week.  For those of you with an interest in the issue and an appetite for the technical arguments at issue here, Carl has provided a significant service to the taxpayer community.  Keith

This is the first of a multipart post discussing the recent Tax Court opinion in Hallmark Research Collective v. Commissioner, 159 T.C. No. 6 (11/29/22, corrected). 

Full disclosure:  Hallmark’s lawyers on their own decided to make the argument that the deficiency petition filing deadline is not jurisdictional, citing Boechler’s pendency in the Supreme Court.  However, after the Tax Court dismissed its petition anyway on April Fools Day and Boehcler was decided on April 21, Hallmark’s attorneys approached me, and I helped them, uncredited, with the arguments that they presented to the Tax Court in their May 2 timely motion to vacate the dismissal.  Anyone reading the Hallmark motion to vacate filings can see that they often parallel some of the things Keith and I have posted here before – sometimes verbatim.  And, anyone reading the filings in the pending Third Circuit test case, Culp v. Commissioner, Third Circuit Docket No. 22-1789, on which we blogged here, will see that there are verbatim parallels between the Hallmark and Culp filings – particularly in the Center for Taxpayer Rights amicus brief filed in Culp. (By the way, Culp is fully briefed – after the Third Circuit denied the DOJ motion for summary affirmance – but it is not yet clear that the case will get oral argument.)

I am writing this series of posts because I believe that anyone reading the Tax Court’s Hallmark opinion (ruling 17-0 against the taxpayer) would probably think that there is no chance of getting the Tax Court reversed.  I concede that, just as in the case of IRC 6330(d)(1), probably most appellate judges would (in my view, incorrectly) vote to affirm the Tax Court’s Hallmark position.  Keith and I, though, are of the opinion that if the Hallmark motion could have been presented instead directly to the Supreme Court, Hallmark would have won there, though not necessarily unanimously like that Court ruled for the taxpayer in Boechler (overruling the Tax Court’s earlier 17-0 ruling in Guralnik v. Commissioner 146 T.C. 230 (2016)).

There will be further appellate litigation over whether the deficiency petition filing deadline is jurisdictional or subject to equitable tolling.  I think it would be useful that any tax lawyer who winds up with such a late-filed case (whether their client brings in an originally-pro se case or the lawyer volunteers to do an appellate test case) read my series of posts so that they can see what I would argue the Tax Court got wrong in Hallmark.

The first two posts will discuss the taxpayer’s argument that IRC 6214(a), not IRC 6213(a), is the jurisdictional grant to the Tax Court to hear cases involving deficiencies set out in notices of deficiency.  This is an argument that would be very helpful for the taxpayers to win.  However, even if IRC 6213(a) provides the jurisdictional grant in such cases, I think the taxpayer should win for lack of a clear statement by Congress in IRC 6213(a) (which lacks the word “jurisdiction”, unlike IRC 6330(d)(1) analyzed in Boechler) that the filing deadline is meant to be jurisdictional. 

In today’s post, I will show that many judges of the Tax Court (including some judges who voted against the taxpayer’s argument in Hallmark) have previously written in opinions that IRC 6214(a) is the basis of the Tax Court’s deficiency jurisdiction – writing this in opinions where the IRS was not seeking an increased deficiency.  In the next post, I will discuss the legislative history undergirding the argument over which provision provides the Tax Court’s deficiency jurisdiction and point out things that the Hallmark opinion oddly decided not to discuss about this legislative history, even though the taxpayer presented this information to the court.


Here is just a partial listing of cases in which Tax Court judges have previously stated that IRC 6214(a) is the source of its deficiency jurisdiction.  These quotes appear in opinions that did not involve any attempt by the IRS to seek an increased deficiency under IRC 6214(a). 

Judge Morrison has written:  “This case arises from Abdi’s timely petition. We have jurisdiction pursuant to section 6214(a).”  Abidi v. Commissioner, T.C. Memo. 2015-41 at *2.  “We have jurisdiction, pursuant to section 6214, to redetermine the deficiency and the penalty determined in the notice of deficiency. See sec. 6214(a).”  Longino v. Commissioner, T.C. Memo. 2013-80 at *3.  “Mr. and Ms. Thoma filed a timely petition for redetermination of the income-tax deficiencies and accuracy-related penalties for both years under section 6213(a).  We have jurisdiction under section 6214(a).”  Thoma v. Commissioner, T.C. Memo. 2020-67 at *4.  See Moyer v. Commissioner, T.C. Memo. 2016-236 at *2 (same).

Judge Paris has written:  “Petitioner received a notice of deficiency and invoked the Court’s jurisdiction by filing a petition for redetermination of a deficiency under section 6213(a).  Section 6214(a) grants the Court jurisdiction to redetermine the correct amount of a deficiency. . . .”  Trimble v. Commissioner, T.C. Memo. 2018-36 at *5.

Judge Ashford has written:  “Section 6214(a) establishes our deficiency jurisdiction”.  Dees v. Commissioner, 148 T.C. 1, 13 (2017) (Ashford, J., concurring in the result only).

Senior Judge Halpern has written:  “”Section 6214(a) establishes our jurisdiction to redetermine (i.e., determine de novo) deficiencies determined by the Secretary.”  Moya v. Commissioner, 152 T.C. 182, 198 (2019).  He also wrote, “We thus conclude that the notices of deficiency respondent issued to petitioners for their 2007 taxable years were valid, so that petitioners’ filing of a petition in response to those notices gave us jurisdiction under section 6214(a) to redetermine the deficiencies reflected in the notices.”  Stevens v. Commissioner, T.C. Memo. 2020-118 at *47.

Senior Judge Holmes has written:  “Our Court has for decades had the power, when we have jurisdiction over a particular taxpayer for a particular tax year, to determine or redetermine the correct amount of his deficiency – including any penalties.  See sec. 6214(a).”  Graev v. Commissioner, 149 T.C. 485, 502 (2017) (Holmes, J., concurring in the result).

Former Judge Simpson has written:

Section 6214(a) was initially enacted as part of the Revenue Act of 1926.  In addition to authorizing the Court to redetermine a deficiency, the statute provided that the Court had the authority to “determine whether any penalty, additional amount or addition to the tax should be assessed”.  Sec. 274(e), Revenue Act of 1926, ch. 27, 44 Stat. 56.

Bregin v. Commissioner, 74 T.C. 1097, 1103 (1980) (emphasis added).

Hallmark cited all of these opinions in its filings.  If Judges Morrison, Ashford, and Paris read the filings, I don’t see how they could sign on to an opinion saying the exact opposite – without at least explaining themselves in a mea cupla concurrence.

Tax Court Issues Another 17-0 Ruling Regarding The Jurisdictional Nature Of Filing A Tax Court Petition

Today the Tax Court ruled in Hallmark v. Commissioner, 159 T.C. No. 6 (2022) that the time period for filing a petition in a deficiency case is jurisdictional.  The Court relies heavily on history and on 7459.  We will write more as we digest the full opinion but once again the Court does not find Supreme Court case law regarding jurisdiction, including the recent decision in Boechler, to deter it from the conclusion that the time period for filing a petition is jurisdictional.  The decision will no doubt set off litigation in the circuit courts around the country and may lead again to a decision by the Supreme Court which last time reversed the 17-0 decision of the Tax Court in Guralnik v. Commissioner with a 9-0 decision in Boechler.

Second Circuit Agrees with Third That Time to File an Innocent Spouse Petition is Jurisdictional and Not Subject to Equitable Tolling

We welcome back frequent guest blogger Carl Smith who writes about a case he has assisted the Harvard Tax Clinic in litigating before the Second Circuit.  The court found the time for filing a Tax Court petition is jurisdictional meaning that our client’s reliance on the IRS statement regarding the last date to file her petition has landed her outside of the court without a judicial remedy for review of the innocent spouse determination unless she can come up with the money to fully pay the liability which she cannot.  Keith

This post updates a post on Rubel v. Commissioner, 856 F.3d 301 (3d Cir. May 9, 2017).  In Rubel, the IRS told the taxpayer the wrong date for the end of the 90-day period in section 6015(e)(1)(A) to file a Tax Court innocent spouse petition.  The taxpayer relied on that date – mailing the petition on the last date the IRS told her.  Then, the IRS moved to dismiss her case for lack of jurisdiction as untimely.  In response, the taxpayer argued that the IRS should be estopped from making an untimeliness argument, having caused the late filing.  But, the Tax Court and, later, the Third Circuit held that the filing period is jurisdictional.  Jurisdictional periods are never subject to equitable exceptions.

Keith and I litigated Rubel.  We also litigated a factually virtually-identical case in the Second Circuit named Matuszak v. Commissioner.  On July 5, the Second Circuit reached the identical conclusion as the Third Circuit.


The reasoning of both opinions is almost the same:  Under recent Supreme Court case law, time periods to file are no longer jurisdictional.  But, there are two exceptions:

One is that if the Supreme Court has called a time period jurisdictional in multiple past opinions issued over decades, the time period is still jurisdictional under stare decisis.  This stare decisis exception can’t apply to the innocent spouse petition filing period because the Supreme Court has never called any time period to file in the Tax Court jurisdictional or not jurisdictional.

The other exception is the “rare” case where Congress makes a “clear statement” that it wants a time period to be jurisdictional, notwithstanding the ordinary rule.  Both Rubel and Matuszak rely on the language of section 6015(e)(1)(A) as providing such a clear statement through the words “and the Tax Court shall have jurisdiction . . . if” the petition is filed within 90 days of the notice of determination’s issuance.

Keith and I think this “clear statement” analysis is a bit too pat:  The words “and the Tax Court shall have jurisdiction” appear only in a parenthetical.  Further, the “if” clause does not immediately follow that parenthetical.  We think that, based on Supreme Court case law on this clear statement exception, one can fairly argue that the parenthetical only applies to the language immediately following it – i.e., “to determine the appropriate relief available to the individual under this section” – and which precedes the “if”.  In any case, if the language is not “clear”, then the time period should be held nonjurisdictional.

Both the Rubel and Matuszak opinion also pointed out the provision in section 6015(e)(1)(B)(ii) that gives the Tax Court jurisdiction to enjoin the IRS from collection of the disputed amount while the request for relief and all judicial appeals is pending.  There is a sentence in this provision that limits the Tax Court’s injunctive jurisdiction only to cases of the “timely” filing of a Tax Court petition under section 6015(e)(1)(A).  Keith and I don’t see the relevance of this injunctive provision to the clear statement exception, and we don’t see that “timely” means not considering any extensions provided under statutes (such as sections 7502 (tolling for timely mailing), 7508 (combat zone tolling), or 7508A (disaster zone tolling)) or judicial equitable exceptions.

And as to the context of the statute, remember both (1) that the statute explicitly invokes equity (in subsections (b) and (f)) and (2) that section 6015(e) was adopted joined in the same 1998 act to a legislative overruling of United States v. Brockamp, 519 U.S. 347 (1997).  In Brockamp, the Supreme Court held that, due to the high volume of administrative refund claims and the complexity of section 6511, the time periods therein were not subject to equitable tolling under the presumption in favor of equitable tolling against the government laid down in Irwin v. Department of Veterans Affairs, 498 U.S. 89 (1990).  Congress adopted section 6511(h) to provide what it called a legislative “equitable tolling” in cases of financial disability.  Does anyone think Congress’ desire to overrule the Supreme Court as to equitable tolling in section 6511 means that the same Congress did not want equitable tolling to apply in its new equitable innocent spouse provision?

In Rubel, the Third Circuit also cited Brockamp for the proposition that Congress in 1998 would have thought all time periods in the Internal Revenue Code jurisdictional.  Keith and I pointed out to both Circuits, however, that Brockamp doesn’t even contain the word “jurisdiction” or “jurisdictional”.  About the only significant difference between the opinions of the two Circuits is that the Second Circuit declines to include this questionable characterization of Brockamp.

No other Circuit has yet considered whether the time period in section 6015(e)(1)(A) is jurisdictional or not.  Keith and I are about to litigate the identical issue in the Fourth Circuit.  Clearly, the opinions in Rubel and Matuszak are not helping us.

Time Stands Still for Snow – Expanding Section 7503 on the Last Day to Timely Complete a Task

We have all prayed for snow days since entering kindergarten. Now, we have another reason to continue those prayers. The Tax Court is posed to turn a snow day from day creating terrible results for those trying to get in its doors to another legal holiday extending the time upon which to act. Let’s hope it succeeds.

Special Trial Judge Armen has issued an extraordinary order in Guralnik v. Commissioner pursuant to Tax Court Rules 182(e) and 183. Depending on what happens to this order in the Tax Court and, on appeal if the Government goes that route, a new basis for getting a petition into the Court on time may have just come into being. The facts in the case cry out for relief. Judge Armen found two possible routes to relief. Perhaps a third exists. The private carrier list update in May 2015 also gets attention in the order and deserves your attention as you read about this case.


The Order

Perhaps the first matter to address is the order itself. Petitioner filed a petition seeking relief in a collection due process case (CDP) following the issuance of a determination letter. The letter was issued on January 16, 2015. The determination letter itself is not at issue. It seems to have been properly mailed and addressed. The last date to file a Tax Court petition in a CDP case runs 30 days after the mailing of a determination letter. In this case it would ordinarily have run on February 15, 2015. That date was a Sunday. The following date was a federal holiday, President’s Day, and the following day was a snow day in Washington, D.C., when all Federal and District offices, including the Tax Court were closed. So, the first day the Tax Court was open after February 15 was Wednesday February 18 and the petition arrived in the Tax Court early that morning.

Unfortunately, petitioner mailed the petition to the Tax Court on Friday, February 13 (an appropriate day for what he has gone through in this case) using FedEx “First Overnight” service – the most expedited and expensive service that FedEx offers. You might be thinking FedEx is an approved private carrier and you would be right; however, not every FedEx delivery service is approved. The “First Overnight” service did not exist in 2004 when the IRS had last published its list of approved private delivery services and so was not on the list. In May 2015, when the IRS next updated the list, this service did make it on the list as it logically should since it is better than all of the other FedEx services already on the list. Now you are starting to get a sense of why you should not send important documents on Friday the 13th. You are also getting a sense of why the Court might want to find a way to help Mr. Guralnik in this situation since he seems to have tried to do the right thing only to have not one but two odd things prevent him from reaching his goal.

The IRS filed a motion to dismiss the petition as untimely. Judge Armen’s order, an order ordinarily issued following such a motion, resolves the motion but in an extraordinary way. This past May 28, the Chief Judge assigned this case to Special Trial Judge Armen “for disposition”. Under 7443A(b)(4) and (c), Special Trial Judges are authorized to enter the decision of the Tax Court in CDP cases. It would appear that Judge Armen could rule on this motion without any further review.  However, he issued a “recommended” ruling that is attached to his order.  The recommended ruling is in the format of a T.C. Opinion (complete with proposed headnote).  The accompanying order says that this is governed by Rules 182 and 183, and that the parties can submit comments on the recommended ruling — the procedure the Tax Court adopted in response to Ballard v. Commissioner. The order itself gives you some sense of the importance of the decision in this case. If the proposed order stands, it may well get issued as a fully reviewed opinion of the Court because of the new ground that it stakes out in the last date to perform an act area. Since the Court started putting up designated orders on its website in 2011, this may be the first order that attached a recommended opinion.

Oddly, this issue of a snow day has apparently not come up before in deficiency cases.  Based on (1) the legislative history of 7503, (2) the Federal Rule of Civil Procedure rule governing this circumstance, and (3) a belief that Congress would want this result, Judge Armen recommends finding that the Court has jurisdiction over the case. Therefore, his proposed order restores the case to the general docket for eventual trial.

The Statute

The timely mailing rule of IRC 7502 provides that if a document is mailed timely it may be treated as timely filed. Section 7503 provides that “When the last day prescribed under authority of the internal revenue laws for performing any act falls on Saturday, Sunday, or a legal holiday, the performance of such act shall be considered timely if it is performed on the next succeeding day which is not a Saturday, Sunday, or a legal holiday.” The term legal holiday refers to legal holidays in the District of Columbia. Thus, a petition received by the Tax Court “after the expiration of the statutory filing period … is nevertheless deemed to be timely filed if the date of the U.S. Postal Service postmark stamped on the envelope in which the petition was mailed is within the time prescribed for filing.” Reg 301.7502-1.

If the petition comes to the court through a “designated delivery service”, it may also meet the timely mailing requirement as if it was mailed through the USPS. See 26 U.S.C. § 7502(f)(1). The IRS says what meets the requirements of a designated delivery service and here, for the reasons discussed above, petitioner did not meet that requirement. No dispute exists, however, concerning the date petitioner gave the petition to FedEx and the fact that the petition was delivered to the Court on the first day it was open after petitioner gave the petition to FedEx. Agreeing with the IRS that the delivery service did not meet the statutory requirements, Judge Armen nevertheless found that “we hold that the petition was timely filed and that the Court has jurisdiction to hear petitioner’s case… because section 7503 served to extend the filing deadline to Wednesday, February 18, 2015, thereby making the receipt of the petition on that date timely.” To reach this conclusion, he found that the “official closing of both District and Federal government offices, specifically including the Tax Court, on Tuesday, February 17, 2015, because of a winter snowstorm as a legal holiday in the District of Columbia for purposes of section 7503.”

How did Judge Armen work his way past many decades of the Tax Court not recognizing snow days as legal holidays for purposes of the timeliness of petitions in the Tax Court? He did it by looking back at the long history and purpose of the statute which came into existence as a result of the position that if the last day for performing an act fell on a Sunday and the taxpayer had not performed the act by that date the taxpayer had missed the deadline. See Section 274(a) of the Revenue Act of 1926, ch.27, 44 Stat at 55. See also Satovsky v. Commissioner, 1 B.T.A. 22 (1924). The Sunday rule was changed about a decade later to include legal holidays in the District of Columbia. See Section 272(a), Rev Act of 1934, ch.277, 48 Stat at 741. See also S. Rept No. 558 (1034), 1939-1 C.B. (Part 2) 586. See also S.Cal. Loan Ass’n v. Commissioner, 4 B.T.A. at 237-238. The rule was changed again after another decade to include Saturdays. See Pub. L. No. 79-291, sec. 203, 59 Stat. at 673 (1945). The change in 1945 to add Saturdays to the list of days not counted as the last day to perform an act resulted because the Tax Court closed its docket room on Saturdays after September 8, 1945 to comply with the Federal Employees Pact Act of 1945. See Pub. L. No. 79-106, 59 Stat. at 303. See also Pleasant Valley Wine Co. v. Commissioner 14 T.C. 519 (1950).

In reviewing the changes to the law regarding the days that would no longer count as the last day to perform an act, Judge Armen determined that the reasons for the changes resulted from the fact that the Tax Court was closed for business on those days. He then reasoned that the same basis for not allowing the last day to fall on a day when the Tax Court was not opened because it was not a federal work day also applied when the office was closed due to weather. In some ways it is even more logical to extend the rule to weather related closings because taxpayers cannot predict them. Before the changes to the law concerning the counting of weekend days or federal holidays, taxpayers at least knew that if the last day to perform an act fell on a day the Court would not be open it was incumbent upon them to perform the act on the last day the Court was open before the deadline passed. It is not possible to predict, at least not with certainty, when a weather related closing will occur. Allowing a weather related closing, or any externally created closing, to serve as a day not counted as the last date for filing, gives taxpayers a result that places them in a position to know when to act and does not punish them for a failure caused by an external source.

The Rule

Having worked through the legal basis for interpreting section 7503 to allow a weather closing to push forward the last date to perform an act, Judge Armen circled back to the Tax Court rules. There is no Tax Court rule dealing with this situation, though there is an FRCP that would extend the filing date in these circumstances.  Rule 6(a)(3)(A) of the FRCP addresses the issue of computing and extending time when the clerk’s office is inaccessible. Judge Armen cites In re Swine Flu Immunization Prod. Liab. Litig., where the court held that the last day to file an administrative claim under the Federal Tort Claims Act excluded both Sunday and the following Monday which was a snow day when government offices were closed. The decision looked to the FRCP.

Similarly, Rule 26(a)(3)(A) of the Federal Rules of Appellate Procedure extend the filing time when the clerk’s office is inaccessible. Tax Court Rule 25 is silent regarding inaccessibility of the Tax Court; however, that silence implicates Tax Court Rule 1(b) which provides “Where in any instance there is not applicable rule of procedure, the Court or the Judge before whom the matter is pending may prescribe the procedure, giving particular weight to the Federal Rule of Civil Procedure to the extent that they are suitably adaptable to govern the matter at hand.”

Equitable Tolling

If the IRS appeals this decision, petitioner may have another avenue for arguing that the time period should be held open for the filing of this petition – equitable tolling. We have written on equitable tolling many times and will probably write on it many more times. I credit Carl Smith with keeping this issue in our thinking and for many of the thoughts expressed here. Mr. Guralnik’s facts certainly present the type of situation in which one would want to raise equitable tolling. Denying him the opportunity to have his petition heard under these circumstances would not seem equitable. The IRS in its response in this case to the Court’s order to address the impact of the official closing of the Court due to snow acknowledged that dismissal of petitioner’s case “may seem harsh.” With a concession like that how could equitable tolling not apply?

This discussion needs to start by acknowledging that the Tax Court held that section 6330(d)(1)’s 30-day filing deadline is jurisdictional and not subject to extension in Boyd v. Commissioner, 124 T.C. 296, 303 (2005), aff’d 451 F.3d 8 (1st Cir. 2006).  The Tax Court made that ruling based on the since-rejected view of “jurisdictional” as any mandatory deadline.  Since the recent narrowing of the use of the word “jurisdictional” by the Supreme Court, the Tax Court has not revisited that Boyd holding.  Yet, Judge Armen has called the 30-day period jurisdictional in the recommended ruling. Even including the 1st Cir. in Boyd, no Circuit has ruled on the 6330(d)(1) period’s jurisdictional status one way or the other.  See Carlton M. Smith, “Equitably Tolling Innocent Spouse and Collection Due Process Periods”, Tax Notes Today, 2010 TNT 41-8 (Mar. 3, 2010) and several prior posts for a detailed discussion of equitable tolling issues as they might apply to this situation.

Within the last year, the Tax Court in Lippolis v. Commissioner has cited Supreme Court case law for the proposition that proximity of a dollar-amount requirement in whistleblower cases to the jurisdictional grant does not make that other requirement jurisdictional. Raising the equitable tolling argument here may provide another path to success even though it would require overturning the Tax Court’s decision in Boyd.    Since section 7503 does not literally mention snow days or other non-holidays when the federal government in D.C. is closed down, it is possible that the IRS will appeal this decision and seek to limit the scope of section 7503. Opening up another pathway for possible success could not hurt Mr. Guralnik’s chances to ultimately have his CDP argument heard on the merits.

Under recent case law, “filing deadlines ordinarily are not jurisdictional.”  Sebelius v. Auburn Regional Med. Center, 133 S. Ct. 817, 825 (2013). The Supreme Court in Auburn wrote:  “”We inquire whether Congress has ‘clearly state[d]’ that the rule is jurisdictional; absent such a clear statement, we have cautioned, ‘courts should treat the restriction as nonjurisdictional in character.’” Id. at 824. In a number of recent cases, the Supreme Court has found filing deadlines not to be jurisdictional. See Henderson v. Shinseki, 131 S. Ct. 1197 (2011) (time to file in Art. I Veterans Appeals Ct.); Auburn (time to file in a Medicare reimbursement contest forum); United States v. Wong, 135 S. Ct. 1625 (4-22-15) (FTCA times to file administrative claims and court suits under 28 usc 2401(b)).


This is an important case changing a long held position on the last day for performing an act. The procedural aspect of the case is interesting as well. Watch closely to see what the Tax Court does and how the IRS reacts. I suspect this is not the last time we write about Mr. Guralnik.