Imperfect Petitions in Tax Court

The Tax Court has a practice of taking letters, notices of deficiency with handwritten notes and other documents and treating these documents as petitions.  It does so in order to aid petitioners by giving them a greater chance to meet the deadline for filing a petition in the Court.  I looked back over our seven years of blog posts for a post on imperfect petitions and could not find one directly examining this Tax Court practice (but see these two posts for related discussions). 

Chief Counsel, IRS in its portion of the Internal Revenue Manual discusses imperfect petitions here; however, it deems the discussion so sensitive that it prevents the public from seeing its views on this subject.  I am a bit surprised that the whole of the discussion on imperfect petitions would be of such a sensitive nature that it is protected from public view.  I would think that all or almost all of the discussion would be material that would not need such protection. So, I thought I would write about these special petitions for anyone who wondered what they were or wondered what the Tax Court was doing when it ordered the filing of a perfected petition.


Tax Court Rule 13(c) provides:

(c) Timely Petition Required: In all cases, the jurisdiction of the Court also depends on the timely filing of a petition.

Readers of the blog know that we do not adhere to this statement about the Court’s jurisdiction and, indeed, the D.C. Circuit has specifically said that the time period for filing is not jurisdictional and equitable tolling can apply in whistleblower cases.  After the decision in Myers, the government did not seek Supreme Court review of the decision.  The fact that the jurisdiction for all whistleblower cases lies in the D.C. Circuit coupled with Golsen rule of the Tax Court requires the Court to follow the decision in every whistleblower case.  Nonetheless, moving past those technical points, the general requirement of Court and the Tax Court’s view of the applicable statutes is that taxpayers must file by the date listed in the provision giving the court jurisdiction over a matter.  Except for the Myers case, the Tax Court’s view of jurisdiction has been upheld by the circuit courts ruling on this issue thus far.  This narrow view of the role of time frames and the Court’s otherwise generally kind view toward petitioners causes the Court to seek to treat documents filed, even if they do not look like petitions, as potential petitions. This is a way to get past the jurisdictional barriers that could arise if the Court tried to correspond with a petitioner in an effort to obtain a “normal” petition by the due date.

Tax Court Rule 20(a) provides:

(a) General: A case is commenced in the Court by filing a petition with the Court. See Rule 13.

Tax Court Rule 34(a)(1) provides:

(a) General: (1) Deficiency or Liability Action: The petition with respect to a notice of deficiency or a notice of liability shall be substantially in accordance with Form 1 shown in Appendix I, and shall comply with the requirements of these Rules relating to pleadings. Ordinarily, a separate
petition shall be filed with respect to each notice of deficiency or each notice of liability. However, a single petition may be filed seeking a redetermination with respect to all notices of deficiency or liability directed to one person alone or to such person and one or more other persons or to a husband and a wife individually, except that the Court may order a severance and a separate case to be maintained with respect to one or more of such notices. Where the notice of deficiency or liability is directed to more than one person, each such person desiring to contest it shall file a petition, either separately or jointly with any such other person, and each such person must satisfy all the requirements of this Rule in order for the petition to be treated as filed by or for such person. The petition shall be complete, so as to enable ascertainment of the issues intended to be presented. A petition may be filed electronically under the electronic filing procedures established by the Court, or a petition may be
filed by properly mailing or hand delivering it to the Court. No paper will be recognized as a petition if it is submitted to the Court in any other way. The address to be used to mail or hand deliver a petition is set forth in Rule 10(e). Petitions may be hand delivered to the Court only during business hours, see Rule 10(d). Failure of the petition to satisfy applicable requirements may be ground for dismissal of the case. As to the joinder of parties, see Rule 61; and as to the effect of misjoinder of parties, see Rule 62. For the circumstances under which a timely mailed petition will be treated as having been timely filed, see Code section 7502.

Tax Court Rule 34(b) provides:

(b) Content of Petition in Deficiency or Liability
The petition in a deficiency or liability action shall
contain (see Form 1, Appendix I):
(1) In the case of a petitioner who is an individual, the petitioner’s name and State of legal residence; in the case of a petitioner other than an individual, the petitioner’s name and principal place of business or principal office or agency; and, in all cases, the petitioner’s mailing address and the office of the Internal Revenue Service with which the tax return for the period in controversy was filed. The mailing address, State of legal residence, principal place of business, or principal office or agency shall be stated as of the date of filing the petition. In the event of a variance between the name set forth in the notice of deficiency or liability and the correct name, a statement of the reasons for such variance shall be set forth in the petition.
(2) The date of the notice of deficiency or liability, or other proper allegations showing jurisdiction in the Court, and the City and State of the office of the Internal Revenue Service which issued the notice.
(3) The amount of the deficiency or liability, as the case may be, determined by the Commissioner, the nature of the tax, the year or years or other periods for which the determination was made; and, if different from the Commissioner’s determination, the approximate amount of
taxes in controversy.
(4) Clear and concise assignments of each and every error which the petitioner alleges to have been committed by the Commissioner in the determination of the deficiency or liability. The assignments of error shall include issues in respect of which the burden of proof is on the Commissioner. Any issue not raised in the assignments of error shall be deemed to be conceded. Each assignment of error shall be separately lettered.
(5) Clear and concise lettered statements of the facts on which petitioner bases the assignments of error, except with respect to those assignments of error as to which the burden of proof is on the Commissioner.
(6) A prayer setting forth relief sought by the petitioner.
(7) The signature, mailing address, and telephone number of each petitioner or each petitioner’s counsel, as well as counsel’s Tax Court bar number.
(8) A copy of the notice of deficiency or liability, as the case may be, which shall be appended to the petition, and with which there shall be included so much of any statement accompanying the notice as is material to the issues raised by the assignments of error. If the notice of deficiency or liability or accompanying statement incorporates by reference any prior notices, or other material furnished by the Internal Revenue Service, such parts thereof as are material to the issues raised by the assignments of error likewise shall be appended to the petition. A claim for reasonable litigation or administrative costs shall not be included in the petition in a deficiency or liability action. For the requirements as to claims for reasonable litigation or administrative costs, see Rule 231.

Nothing in the Tax Court Rules talks about accepting a letter that says something to the effect of “I disagree with the IRS.”  Yet, the Tax Court will take that letter, stamp it as an imperfect petition and send the taxpayer a letter requesting that the taxpayer file a petition using the Tax Court’s form petition package.  In sending out the letter to the taxpayer, the Court will generally give the petitioner 30 days but it sometimes extends that period.  If the person sending in the letter files the petition that substantially conforms to the form petition within the allotted time period, the Tax Court will treat the case as timely filed, even though it may take much more than 30 or 90 days to get the petition package into the Court.  The Court may also allow the addition of another individual on the case in a situation in which H mailed the letter that the Court treats as an imperfect petition, but W signs onto the later filed form petition.

Sometimes a bit of confusion to the IRS can occur at the beginning of a case when the Court seeks to obtain a perfected petition.  Remember that the filing of a petition stops assessment of the liability proposed in the deficiency.  The IRS gets notified of the imperfect petition and must seek to stop the assessment.  Sometimes it seeks to do so with a very small amount of information about the person filing the imperfect petition.  Sometimes the attorney for the IRS does not know exactly when to file an answer.

The practice of accepting imperfect petitions extends back for as long as I can remember, which takes it back into the 1970s.  I do not know when it started or what rules may exist in the Tax Court for what makes an imperfect petition, how much leeway to give an imperfect petitioner or other questions that might exist about this practice.  The Tax Court bends over backwards to help petitioners who send something into the Court before the filing deadline to have a chance.  There are a pair of 5th Circuit cases,  Crandall v. Comm’r, 650 F.2d 659 (5th Cir. 1981) and United States v. Jenkins, 780 F.2d 518 (5th Cir. 1986)(affirming the decision in Crandall and not directly speaking to the Tax Court) admonishing the Tax Court to give taxpayers plenty of opportunity to explain their reasons for delay in responding to court orders to perfect.  There is also an Action on Decision following the Crandall case in which the IRS recommends not seeking cert because of a lack of a circuit split on the issue.  My observation is that the Tax Court generally follows the guidance provided in Crandall and gives taxpayers ample opportunities to explain once they are in the door.

You will see the orders in docketed cases if you peruse through them regularly.  Even petitioners whose cases get off to a slow start because of the imperfect nature of their petition still have every opportunity going forward for success and for defeating the proposed assessment if they have a good case.  I hope to do a study of imperfect petitions at some point to gather some empirical data on the ultimate outcomes of these special cases.

Oversharing on Social Media Reaches the Tax Court

Today guest blogger James Creech brings us a cautionary tale of social media undermining a taxpayer’s credibility. After reading this post, practitioners may want to read this article by Marie V. Lim of the ABA Section of Litigation, on how to use social media at trial.

As James notes, social media also brings up ethical concerns for lawyers. In addition to the issues discussed below, attorneys must be careful as they investigate their opponents. The issue is not so much “who” can be investigated but “how”. Under Rule 8.4 it is professional misconduct for a lawyer to engage in conduct involving dishonesty, deceit, or misrepresentation. If an opponent’s social media account is not public, how can one go about accessing the incriminating posts that are certain to exist? Before engaging in any schemes, practitioners would be well advised to research the applicable ethics opinions. The Philadelphia Bar Association, for example, has advised that attempting to “friend” a witness to gain access to information on Facebook or Myspace is pretextual and violates Rule 8.4(c), even if there is no fake name or falsehood used. However, the State Bar of Oregon came out the other way. Christine

Most of us know social media is a double-edged sword. It allows us to share events and thoughts in real time regardless of the substance. Sometimes those thoughts are genius and inspire others, other times those thoughts are inane, banal, or outright stupid. Occasionally these posts cost (or make) people real money. One of these situations where social media posts perhaps cost a taxpayer real money is the recently decided Tax Court case of Brzyski v. Commissioner, T.C. Summary Opinion 2020-25 released on August 27.


The facts of Brzyski are complicated and highly factual. Mr. Brzyski claimed the children of his significant other as qualifying children for the dependency exemption. The IRS disallowed the dependency exemption because Mr. Brzyski was not formally married to the children’s mother and without a marriage the children cannot be qualifying stepchildren. Mr. Brzyski claims that while not formally married in his home state of California, one night while he and his significant other were in Missouri they crossed the border into Kansas for dinner and declared themselves married. Thus, according to Mr. Brzyski, they were legally common-law married in Kansas and the children met the relationship test. To provide support for this Mr. Brzyski testified to this effect and produced affidavits from family members to the same effect.

While the facts might be unusual, even more unusual is how the taxpayer’s version of events was discredited. At trial social media posts were entered into evidence (presumably by Chief Counsel) that showed Mr. Brzyski referring to his significant other as his fiancée after the date of their alleged common law marriage. This plus a host of other inconsistencies (which were probably enough to carry the day for the respondent without mention of the social media post) were enough to satisfy Judge Copeland that the testimony regarding a Kansas common law marriage was unreliable and not enough for the taxpayer to carry their burden of proof. As a result the dependency deduction was denied.

From a quick search it appears that Brzyski may be the first Tax Court decision in which social media posts are cited to as direct evidence of a taxpayer’s lack of credibility. It also appears to be the first decision where the social media posts introduced into evidence could have only come from Chief Counsel’s office.

To get a sense of just how novel this is, it is worth looking at the totality of social media in Tax Court decisions. Tax Court decisions do not cite to social media frequently. Excluding Brzyski, a keyword search using the Tax Court’s website for even a single mention of “social media” returns six cases. A search using the term “Facebook” as a proxy for social media returns eight cases and of those eight cases two of the “Facebook” cases refer to Facebook’s Taxpayer Bill of Rights litigation. This leaves a grand total of twelve cases that cite to social media.

Of the twelve cases that remain for social media, nine of the cases involve the petitioner introducing social media as evidence of a for profit enterprise or as part of a business plan, one case discusses the business expense of a computer that was also used for work and personal social media usage, one opinion from Judge Holmes mentions the company Facebook to set the stage for discussing a petitioner’s career in technology, and one case memorializes a laundry list of the taxpayer’s grievances including the notion that social media websites were conspiring against his vaporizer business.

One common thread that Brzyski shares with the other nine relevant cases is that each of the social media cases is about mindset. Posts on social media are generally inadmissible hearsay if offered by the declarant for the truth of the matter asserted. A part time horse breeder cannot claim a Facebook post stating “We are now a legitimate stable conducting a for profit enterprise” is substantive evidence in his favor for purposes of section 183.

However, as an indicator of mindset social media posts can be useful. The low threshold for publication and our cultural habit of oversharing and introspection mean that they are probably a fairly accurate indicator of the declarant’s mental state. (See FRE 803(3)). One could also imagine social media posts that might plausibly qualify for the  excited utterance exception to the hearsay rules under the Federal Rules of Evidence Rule 803(2). Present sense impression is a third exception that might apply. (FRE 803(1)). As a result, social media posts have been useful in the past for practitioners to reconstruct the mindset of a client. For instance, one could learn a lot from the social media posts of a struggling small business owner who has lost money four straight years.

Now that the Tax Court is on the record giving more weight to a spontaneous social media post that hurts the taxpayer than to the taxpayer’s actual testimony at trial, practitioners should beware that these posts cut both ways. As a result of Brzyski, due diligence as to a client’s social media should be conducted if the case relies heavily on the petitioner’s credibly on the witness stand. However, this potentially opens up the Pandora’s box of what to do if practitioner learns prior to trial that the petitioner’s version of events does not match the story social media tells. This can lead to conflicts between Model Rule 3.3’s Duty of Candor Towards the Tribunal vs Model Rule 1.6’s Duty of Confidentiality. As with many social media issues today, solving one problem invariably leads to another.

Degrees of Compliance with Charitable Contribution Regulations, Designated Orders June 29 – July 3 and July 27 – 31, 2020

Three of the orders designated during the my (mostly) July weeks involved whether petitioners had met the requirements under two different charitable contribution deduction regulations. The answer depended upon whether the regulations at issue required strict compliance, or if substantial compliance was sufficient.  

One of the two regulations at issue is Treas. Reg. section 1.170A-14(g)(6), which has been a hot topic due the Court’s decisions in Coal Property Holdings, LLC and Oakbrook Land Holdings, LLC (opinion and memorandum) and the IRS’s ongoing efforts to settle similar cases, as announced in an August 31, 2020 news release here.

read more…

The Oakbrook decisions were blogged about by Monte (here) and Les (here) with the focus on Administrative Procedure Act considerations related to the regulation’s validity. I won’t reiterate what they have already discussed, except to say that the Tax Court found the regulation was valid and applied it to disallow Oakbrook’s charitable contribution deduction.

Relying upon its reasoning in Oakbrook, the Court granted partial summary judgment for the IRS in orders in Docket No. 24201-15, Harris v. CIR (order here) and consolidated Docket Nos. 14433-17, 14434-17, and 14435-17, Habitat Investments, LLC, MM Bulldawg Manager, LLC, Tax Matters Partner, et al. v. CIR (order here). In both cases language in petitioners’ conservation easement deeds excluded the value of any post-gift improvements when determining the proportionate the amount the donee organization must receive in the event the easement is extinguished. The Court has held that Treas. Reg. section 1.170A-14(g)(6)(ii) requires strict compliance and such language violates the perpetuity requirement. See Kaufman I v. Commissioner. The regulation “imposes a technical requirement, it is a requirement intended to preserve the conservation purpose,” and petitioners must “strictly” follow the proportionality formula set forth in the regulation. See Carroll v. Commissioner.

The other charitable contribution regulation raised in my weeks’ worth of the designated orders is Treas. Reg. section 1.170A-13(c)(3). It was raised in consolidated Docket Nos. 28440-15 and 19604-16, WT Art Partnership LP, Lonicera, LLC, Tax Matters Partner, et al. v. CIR (order here) and the Court finds that substantial compliance with this regulation is sufficient.

The regulation lists the requirements for a “qualified appraisal,” which is required when a contribution of property is valued in excess of $500,000. Petitioner is a partnership that was formed in order to acquire 12 Chinese painting which were later donated to the New York Metropolitan Museum of Art (commonly known as “The Met”). Each of the donated paintings were valued at amounts between $6.23 and $26 million dollars. The IRS argues that the appraisals do not meet the requirements for a number of reasons, including because the auction company who performed the appraisal did not regularly perform appraisals for compensation and did not possess appraisal certifications or otherwise have the requisite background, experience or education.  

The Court previously addressed the qualified appraisal regulations in Bond v. Commissioner when the appraiser failed to include his qualifications with the appraisals. In Bond, the Court held petitioners were entitled to the charitable contribution deduction because the taxpayer did all that was reasonably possible while not perfectly complying with the requirements.

In the order, the Court holds that petitioner is not required to strictly comply with these regulations, but also notes that whether an appraiser is a qualified is a question of material fact which precludes summary judgment for the IRS.

Strict compliance and substantial compliance are both judicially created doctrines. Treas. Reg. section 1.170A-13(g)(6) and Treas. Reg. section 1.170A-14(c)(3) were both subject to notice and comment procedures, as is the case for most regulations. The language in both regulations also state that the requirements “must” or “shall” be met. This begs the question – how does the Court distinguish between regulations that require strict compliance and those that may not?

Strict compliance is required when the regulations relate “to the substance or essence of the statute” or are consistent with the statute as written. See Fred J. Sperapani v. Commissioner, 42 T.C. 308, 331 (1964) and Michaels v. Commissioner, 87 T.C. 1412, 1417 (1986).

On the other hand, the substantial compliance doctrine may be used to forgive “minor discrepancies” in the taxpayer’s reporting. See Costello v. CIR, T.C. Memo. 2015-87. It is permissible when the regulations are “directory and not mandatory” and “not of the essence of the thing to be done but are given with a view to the orderly conduct of business” See Bond and Dunavant v. Comissioner, 63 T.C. 316 (1974). In the world of charitable contribution regulations, substantial compliance has been permitted if the regulation is “only helpful to IRS in the processing and auditing of returns on which charitable deductions are claimed” and does “not relate to the substance or essence of whether or not a charitable contribution was actually made.” See Taylor v. Commissioner, 67 T.C. 1071 at 1078-1079 (1977).

Taxpayers (and practitioners) should not rely upon the idea that substantial compliance will be enough in any case as it is not liberally applied. When it is allowed, substantial compliance is permissible when a taxpayer shows reasonable efforts were made to follow the regulation.

Other orders designated, included:

  • Docket No. 498-19, Patrinicola v. CIR (order here): Petitioners received a notice informing them that their bank records had been subpoenaed, but they thought it was notifying them of forced collections and move to enjoin collection. There is no levy at issue, so the Court denies petitioners’ motion.
  • Docket No. 16605-18W and Docket No. 16947-18W, Kline v. CIR (order here): Petitioners move to vacate the Court’s decision with the mistaken understanding that it could not be appealed. The Court explains it can be appealed since it is not a small tax case and denies the motion.
  • Docket No. 15964-19, Swanson v. CIR (order here): Petitioner’s CDP case with an alleged section 6751(b) component is dismissed as moot, because Court’s jurisdiction is limited and the balance has been paid.
  • Docket No. 13309-19, Ishaq v. CIR (order here): IRS’s motion to dismiss is granted because the Court lacks jurisdiction since neither party can produce the notice of deficiency.
  • Docket No. 6345-14, Larkin v. CIR (order here): Petitioners’ motion for reconsideration for a case involving a foreign tax credit is denied.
  • Docket No. 1312-16L, Smith v. CIR (order here): A section 6751(b) case is remanded to appeals because it not clear whether an immediate supervisor signed off on the penalty.

Inside a Virtual Settlement Day

Today guest blogger Bob Probasco returns with a detailed account of his recent Virtual Settlement Day experiences in Texas. Bob also offers some advice for those participating in future VSD events. Christine

Virtual Settlement Days are the new craze, as IRS Counsel and the Tax Court press for making progress on cases even under our current difficult circumstances.  Several of you likely have already participated in one or more VSD; many others at least have heard about them from others who have participated.  Counsel put a team together to establish a general process and issued a “Best Practices” guide.  But the VSDs are organized by local offices, and likely there is some degree of variety from place to place.  So I thought there might be some benefit to PT readers from additional sharing of experiences by those of us who have already been through this.  I hope to hear more from others.


The Pre-COVID History

Some of my comments may make more sense if I start out with a brief overview of what Texas was doing, for both calendar calls and settlement days, before the coronavirus.  The environment within which we operated influenced how VSDs were organized and operated and may have resulted in some differences (good and bad?) from VSDs elsewhere.

Texas has five different cities where the Tax Court holds trial sessions – Dallas, El Paso, Houston, Lubbock, and San Antonio.  The IRS Counsel office in Dallas handles Dallas and Lubbock trials; their office in Austin handles San Antonio and El Paso trials; their office in Houston handles Houston trials.  Texas has eight LITCs and our state bar Tax Section has a long-established calendar call program, created by Elizabeth Copeland back in 2008.  The state bar program has coordinators for Dallas, Houston, and San Antonio; the coordinators generally have a small group of volunteers they rely on regularly. 

Texas’s experience with in-person settlement days dates to 2014, with the first one in San Antonio.  Rachael Rubenstein, when she directed the LITC at St. Mary’s University School of Law, brought the idea back to Texas from an LITC conference and helped organize it with Counsel.  It was a successful trial, although only one IRS attorney came down from Austin.  (The need to travel is usually a complication for the IRS.)  Dallas started its settlement days in 2016, normally on a Saturday morning at one of the local clinics.  They’ve been very successful.  Houston and San Antonio started more recently.

Enter the VSDs

Texas was not the first location to have a VSD, but Counsel quickly scheduled three this summer.  The first, organized by Counsel’s Dallas office, for cases in Dallas and Lubbock, was scheduled over three days, Thursday 6/25 through Saturday 6/27.  Counsel sent out 96 invitation letters; 26 petitioners replied to make an appointment.  We were ultimately only able to hold meetings with 18 of them, as we ran low on volunteers.  More about that later.  I took four appointments, the SMU clinic took three, we had eight state bar volunteers who took nine appointments, and two petitioners had other representation and didn’t ask to meet with a pro bono volunteer.  Three petitioners cancelled or no-showed and one settled in advance of the appointment.  All told, nine cases settled and another five moved toward settlement.  This was a very successful event, with better turnout than we usually had in Dallas for in-person settlement days.

The Houston and Austin offices of Counsel scheduled their VSDs for the week of July 20th.  Houston had about twelve appointments; Austin had five.  I haven’t heard yet as much about how those events went, other than one appointment I had, but my impression was that those also were very successful.

That’s the high-level summary; what follows are my specific experiences.

Thursday, June 25:  Dallas Counsel sent out the invitation letters and scheduled appointments as petitioners contacted them.  Counsel then emailed a link to the WebEx meeting to petitioners with confirmed appointments a couple of days in advance of the meeting.  The email asked the petitioners whether they wanted to talk with the pro bono volunteer in advance.  My first appointment was an EITC substantiation case and talking in advance and sharing documents might have been very helpful.  But the petitioner didn’t ask to talk with me in advance and I met her only at the beginning of the virtual session.  My understanding of WebEx is that the host can allow any participant to share their screen.  Depending on how tech-savvy the petitioner was, she might have been able to share her documentation with us during the meeting and we might have been able to settle.

But we ran into a snag.  Two WebEx servers crashed that morning and the meeting had to be rescheduled as an IRS telephone conference call.  The petitioner had documents but couldn’t share them over the phone.  The IRS attorney had virtually nothing; the petitioner had submitted documents to Appeals last fall, but they hadn’t been uploaded and the physical administrative file was of course not available to Counsel.  In a situation like that, you can discuss generalities, but you may not be able to settle until later.  My clinic later took on the petitioner as a client and I’m hopeful we’ll settle soon.

Friday, June 26:  This petitioner, whose case was for Lubbock, did send me a lot of documents in advance.  My schedule precluded a telephone or Zoom meeting before the appointment, but I was able to evaluate his situation and we communicated by email.  The actual WebEx meeting ran into another snag.  There were still some potential problems with the WebEx servers, I think related to capacity, so Counsel came up with a workaround.  We used WebEx for video only and a telephone conference call for audio. 

I had already provided him with substantial advice by email Wednesday and Thursday nights, but we talked through the issues more.  I had concluded earlier that this CDP case would likely not settle; it seemed to be almost entirely based on strongly held but very different interpretations of tax law, rather than factual disputes.  When I’ve encountered such cases in the past, they never seem to settle.  Sure enough, on Friday there was some discussion but no settlement.  However, we did clarify some of the petitioner’s arguments and gained additional information.  I also communicated with the petitioner by email Friday night to answer some additional questions he had and clarify some aspects of court procedure.  It’s unfortunate when you’re unable to progress toward settlement in a Virtual Settlement Day, but perhaps the meeting at least contributed to resolution of the case.

I had a second appointment on Friday, but that petitioner did not show up.

Saturday, June 27:  This petitioner’s case was also for Lubbock, and he also sent me quite a few documents in advance.  And again, my schedule was busy so it wasn’t until late Friday night that I had an opportunity to review everything and email him with my preliminary evaluation.  The meeting proceeded similarly to the one the day before.  And this appeared also to be an instance of strongly held but very different interpretations of tax law. 

Although I understand that WebEx does have “breakout room” functionality, the original plan was for the IRS attorney to make the pro bono volunteer a co-host, and then leave the WebEx meeting to allow a private conversation.  But once again we were using WebEx for video only and an IRS conference call for audio.  There was no way for the IRS attorney to leave the conference call without terminating it.  So instead, the petitioner and I left the WebEx meeting and the IRS conference call; then I called the petitioner for a private conversation.  After that, we returned to WebEx and the conference call.

Although we weren’t able to reach a settlement, I was able to provide information to the petitioner about the strength of his case and answer some questions about court procedure.  Since there apparently was no dispute concerning the material facts, I suggested a submission without trial under Rule 122 would be appropriate and more convenient than appearing for trial.  I think both petitioner and the IRS attorney were satisfied with that approach and will cooperate in stipulating the facts, so this case seems headed toward resolution.

That was it for the Dallas event.  We had enough state bar volunteers, along with the clinics, for the Houston and Austin event, after some balancing between the two.  But the Austin event got a last-minute email from a petitioner on Wednesday asking for an appointment on Thursday, so I volunteered to take that one.

Thursday, July 23:  Another CDP case.  For the Dallas VSD, Counsel copied the applicable volunteer when emailing a petitioner with a link for the WebEx meeting.  I didn’t know who the petitioner was on this case until the virtual meeting began.  I’m not sure if that was a conscious decision by Austin Counsel to delay the communication of the petitioner’s name as long as possible or just a result of this being a last-minute appointment.  I don’t know if he was offered an opportunity to talk with me in advance, but if he was, he didn’t pursue it.

We were able to use WebEx for both video and audio this time, and I had an opportunity to experience sharing documents within WebEx.  The IRS Attorney showed us the Notice of Determination.  It’s a little bit awkward when someone else is at the controls (I’m gaining sympathy for what my students in a virtual class go through) and I didn’t capture in my notes all of the important information for reference later when we had a private conversation.  But the process works.

We ran into problems when transitioning to a private meeting between me and the petitioner.  The IRS attorney left the WebEx meeting, as planned, but that unexpectedly kicked all of us out the meeting and the IRS attorney had to schedule a new WebEx meeting and invite us.  None of us were absolutely sure if that would happen again, so the petitioner and I decided to have our private conversation outside of WebEx.  The IRS attorney kept the WebEx meeting going, the petitioner and I exited, and then he and I had a Zoom meeting.  (You’re probably wondering why I didn’t use Zoom for private conversations with petitioners during the Dallas VSDs.  So am I.  IRS Counsel only uses WebEx for videoconferencing but that restriction wouldn’t apply to a meeting that IRS Counsel does not attend.  It should have occurred to me earlier as it would have been easier than a cellphone call.)

After we returned to the WebEx meeting to discuss the case with the IRS attorney, there were a couple of times that the petitioner wanted to speak with me privately again.  The discussions were likely to be brief, so we came up with a workaround rather than returning to Zoom.  The IRS attorney left the WebEx meeting going but left his office so he couldn’t hear us, then came back in five minutes.  A little inconvenient for him but, unlike my other VSD cases, we were able to reach a settlement.  Hurray!


Compared to the in-person settlement days, there were some noticeable differences – some better, some worse.  Overall, I thought the VSDs went well.  Counsel is to be commended for their efforts in trying to make progress on the cases even under today’s difficult circumstances.  In reflecting over it, there were also some things to consider the next time around.

Choice of cases to invite.  Our Dallas in-person settlement days usually invited petitioners whose cases were scheduled for trial in the next 2-3 months, and sometimes Counsel limited the invitations to cases they considered good candidates for settlement.  For the VSDs, it seems as though the invitation list was crafted more broadly.  Of the four cases I assisted with, three were in the very early stages and had not yet been set for trial.  (The fourth had been set for trial in May, before the Tax Court cancelled those trial sessions.)  I was somewhat surprised by that, as often at that stage Appeals has jurisdiction.  But if we can settle cases earlier, bring them on.  It seemed to work well overall.

I think there’s an argument for only inviting cases for which Counsel thinks progress is likely.  I’ve heard in the past about in-person settlement days where that approach was taken but here it seems Counsel may have not focused as much on that.  Progress seemed unlikely for two of my four appointments.  I understand that Counsel may have difficulties with a case and hope that a volunteer will persuade a petitioner that a proposed resolution is reasonable.  And that happens sometimes even if the proposed settlement is a full concession by the petitioner; the petitioner may believe a volunteer who tells her that she should concede, but not trust Counsel who says the same thing.  Even though the petitioner isn’t any better off, the judicial process is.  The Court and Counsel both appreciate any intervention that results in resolution before trial. 

On the other hand, there are some cases for which it seems extremely unlikely from the very beginning that a volunteer will change either party’s point of view.  Is it worthwhile to invite those petitioners to a settlement day, whether in-person or virtual?  I didn’t think it would be in those two cases I assisted with, and I was surprised that they wound up at the VSD.  But in retrospect there was some movement (very slight) toward resolution, even if the cases would not settle.  And the petitioners hopefully got some useful information from me, even if not what they may have hoped for.  I wonder whether the petitioners and Counsel thought the VSD was beneficial for those cases.

Time:  Our Dallas settlement days were always held on Saturday mornings.  Several IRS attorneys and several pro bono volunteers would show up for the entire morning.  We could get through 10 – 15 meetings easily and typically no one was committed for more than four hours.  The VSDs were mostly held during the week and spread over several days.  That is probably more convenient for Counsel and LITCs, as this is part of their day job and most meetings were during our normal work hours.  The total time set aside was much more than the four hours for our Dallas in-person settlement days, but IRS attorneys and pro bono volunteers alike only had to be there for their meetings, rather than the whole time, so the total time commitment may have been similar.  It also seemed to be better for petitioners, at least if there was a Saturday option.  And no one had travel time to get there.

There is a possible downside for state bar pro bono volunteers, as most of the meetings were during the work week when they often have other commitments, rather than on the weekend.  Perhaps as a result, the volunteers may have been more likely to volunteer for only one or two appointments instead of handling four at an in-person settlement day.  Part of that may also be a result of more time set aside for VSD appointments and in-person, as the process can be a little bit slower. 

This is a balancing act and the plan for our VSDs may be the right one for VSDs going forward, but it’s something to think about.  Most importantly, the organizers for the pro bono volunteers may need to consider that more than the normal number of volunteers may be needed when moving from in-person to virtual.

Location:  This was a huge advantage of the VSDs.  The obvious advantage is eliminating travel time for everyone but there are two other aspects.  First, VSDs allowed Counsel to combine cases from more than one trial location.  We had done in-person settlement days for Dallas trial sessions.  But Dallas Counsel also handles Lubbock trial sessions.  Even if they organized an in-person Lubbock settlement day, travel costs for the Dallas IRS attorneys would have limited participation.  With a VSD, however, it was easy to invite petitioners with cases for both cities.  The second advantage of a VSD is that it facilitates getting pro bono volunteers.

Soliciting volunteers:  We had started to cast our net wider for the state bar volunteers even before COVID.  Last year, the Texas Tax Section started sending out blast emails to the entire membership inviting them to sign up as volunteers for calendar calls or settlement days or Adopt-a-Base training sessions.  (Rachael Rubenstein implemented this initiative for soliciting volunteers for us.)  It’s part of a balancing act between asking our “regulars” to stay involved and diversifying our volunteer base (expanding base, involving younger attorneys, etc.). 

When we switched from in-person settlement days to VSDs, though, that had an even greater reach.  Our Dallas VSD had eight state bar pro bono volunteers, of whom three were from Houston.  Our Houston and Austin VSDs in turn drew volunteers from Dallas.  We even got an out-of-state volunteer from D.C., who happened to be a member of the Texas bar.  (Thank you!)

We turned out to have more petitioners wanting to participant in the Dallas event than the volunteers could cover, and some never made it off the waitlist.  But that was primarily because we got a later start than for the Houston and Austin events.  The next time we do this, I think we’ll be able to get more volunteers.

It takes effort to solicit intrastate volunteers but the ability to serve more petitioners is worth it.  The program that Rachael started in Texas gave us a head start in that, although she also had to put in a lot of effort connecting the volunteers to the petitioners.  The time slots the volunteers asked for didn’t match exactly with the petitioner appointments.  I doubt if we would have had as many volunteers without that program already in place.  Other state bars may want to investigate something similar if they’re not doing it already. 

This advantage of a VSD in attracting volunteers who do not live in the area will also apply to calendar calls as the Tax Court starts its remote trial sessions.  We tend to need fewer volunteers at calendar calls then at settlement days, but the potential for interstate assistance can greatly help locations that do not have clinics or an established state bar program.  It will be more difficult to coordinate than intrastate volunteers, but Meg Newman at the ABA Tax Section is already doing some of this.  The Texas bar will be helping with a VSD, and possibly a calendar call, for Las Vegas later this year.

Technology:  We had some issues with WebEx during the Dallas VSD, although most of that may have been just temporary glitches rather than recurring problems.  However, I suspect many of the pro bono volunteers mostly use Zoom and are unfamiliar with WebEx; I know I was.  Even some of the individual IRS attorneys may not have been familiar with the full range of functionality used in a VSD – sharing documents, selecting a co-host, etc.  For that matter, petitioners might also struggle with sharing documents if they were unfamiliar with the technology.

We did get an instruction guide for signing in and a video tutorial in advance of the VSD.  That was helpful.  In retrospect, it might have been beneficial to have a live run-through to acclimate to the software.  But it’s hard to find time for this in everyone’s busy schedule.  This will get better over time, though, as everyone gains more familiarity.

Sharing information.  This is a disadvantage of VSDs, compared to in-person.  At the in-person events, petitioners and Counsel both often bring documents to the event and it’s easy to give them to the volunteers to look at those throughout the meeting with petitioners.  That’s harder to do through videoconferencing.  Petitioners may not have the documents in electronic format, for screen sharing, and holding a document up to the camera may not work well.  It can be awkward for the volunteer to refer back to documents during the discussion if petitioner or Counsel are sharing them through the screen.  And after Counsel leaves the meeting, any documents shared by them are – I assume – not available during the private conversation between volunteer and petitioner.

For the Dallas event, the invitation letter invited petitioners to send documents to Counsel in advance; a couple of days before the meeting, Counsel offered to put petitioner and volunteer in touch to discuss the case before the meeting.  I think there was little, if any, information shared ahead of time, though.  Maybe a more assertive approach, earlier in the process, would change that.  Perhaps when the petitioners respond to the invitation letter to schedule an appointment Counsel could: (a) explain the benefits of talking with the volunteer in advance; (b) strongly suggest that it would be beneficial to send documents to Counsel in advance and ask whether those could be shared with the volunteer; and (c) ask the petitioner if documents already filed with the court (e.g., petition/notice of deficiency, any pending motions, etc.) could be shared with the volunteer in advance.

At some VSDs, cases were “recalled” for later in the week or a subsequent week.  That can be a good solution for this issue and would likely work well for Counsel and clinic volunteers.  But it might be harder for state bar volunteers to squeeze a second meeting into an already busy schedule.  For clinic volunteers, there is also the option of entering an appearance in the case and continuing through resolution; state bar volunteers do that less rarely.  Of my three VSD cases that did not settle, I did that for one but chose not to for the other two.

This is certainly not a big issue.  We can get documents and information from the petitioner and Counsel during the virtual meeting, which is essentially what typically happens at an in-person settlement day or a calendar call.  But virtual seems slower than in-person and anything that helps speed up the process might help.

Parting thought

VSDs will take some getting used to, and they have some obvious challenges.  But they also offer significant advantages.  My experiences were definitely positive.  If you’ve been hesitant about participating in one, don’t be.  I think it would also make sense to continue offering at least some VSDs or virtual trial sessions even after COVID is long behind us.  Just like so many other things, the result of the pandemic may be a permanent and substantial change in how we work.

Charging Fees, Changing Rules and Providing Videos

Several electronic filing/electronic access items emerged last week and this post will talk about three of these items.  First, the Federal Circuit ruled on the PACER litigation which we have discussed before and which has a tangential impact on the fee structure at the Tax Court.  Second, the Tax Court issued a press release providing additional information regarding remote practice procedures.  Third, the Tax Court issued videos depicting the manner in which calendar calls and trials will proceed in the remote environment.



On June 2, 2020, I wrote a post about public access to Tax Court documents. That post was written in part to provide a link to a longer article on the subject I wrote with Maggie Goff and published in Tax Notes on May 4. It was also written to celebrate the new fee schedule adopted by the Tax Court for document requests. The article that Maggie and I wrote had its origins, at least in part, in litigation pending in the Federal Circuit on the amount charged for access to documents in the PACER system. The case in the Federal Circuit resulted from a decision by the Court of Federal Claims that some of the uses of the money the Administrative Office of the Courts made from PACER were appropriate and some were not. This left both parties unhappy as discussed in a post from The Hill here. On August 6, 2020, the Federal Circuit upheld the Court of Federal Claims determining that it got the decision just right. For those interested in understanding PACER and its history, understanding the Little Tucker Act and understanding the nuances of how the federal judiciary spends unappropriated money, the decision is worth reading.

Press Release

On August 6, 2020, the court issued a press release with links to several documents designed to guide practitioners as the Court shifts to remote practice. With all of the material in the links, there is a lot to read and digest as the Court makes this shift. Included in the links are a Practitioner’s Guide, a Petitioner’s Guide, a presentation of documentary evidence guide, a guide for subpoenaing witnesses and a revised Administrative Order.

In the past parties were required to exchange documents in advance of trial and the failure to do so provided a theoretical basis for excluding documents not properly and timely exchanged. Now, the Court wants these non-stipulated documents marked as trial exhibits with exhibit numbers. For a court with 70% pro se petitioners this presents an even greater challenge than the prior rule regarding exhibits. The guidance not only provides information about timing and labeling but also format and size. Practitioners need to be prepared well in advance of trial for these rules governing documents to which the parties cannot stipulate. Getting all documents into stipulations becomes even more important.

Tax Court Videos

Thanks to Amy Spivey the relatively new clinic director at the relatively new clinic at Hastings Law School in San Francisco, I learned that the Tax Court put new videos up on its web site. You can access the videos here. I was a bit disappointed when I saw the new Tax Court web site a couple weeks ago and noticed that the previous video it had for pro se taxpayers was missing. One of the first things I did back in 2007 as a new clinician at Villanova was to write the script for that video. If you listened closely to that video you learned that the fictional taxpayer lived in Villanova. So, I had a soft spot for it. The new videos take the viewers through the Tax Court’s virtual calendar call and trial. Unlike the prior video which was performed by professional actors, these are performed by Tax Court personnel. The videos are a little clunky but I expect the experience of virtual calendar calls and trials to be a little clunky. So, they seemed perfect to me.


The Federal Circuit’s decision upholds the lower court decision placing limits on the use of funds from PACER. The fact that the Administrative Office of the Courts spent some of the PACER funds on inappropriate items does not necessarily mean the fees are too high. PACER could be improved to allow for a better search function. Other permissible expenditures also exist. If the Administrative Office spends the money correctly, it need not lower the fees, though lowering the fees would be welcomed. The Tax Court’s press release provides needed guidance as we head into the fall trial sessions next month. We would welcome posts from readers who encounter the early electronic trial and calendar provisions. Adjusting to remote practice will take effort from all sides. Kudos to the Tax Court for putting up this video and giving us a chance to see what will happen when the Court starts trying cases again. It will be an interesting adventure.

The IRS Loves Ambiguity, Designated Orders May 4-8 and June 1-5, 2020

The orders designated during my weeks in May and June didn’t address anything we haven’t covered before, with the exception of an order (here) referencing the Tax Court’s opinion in Lacey v. Commissioner, 153 T.C. No. 8 (2019). I started digging into the opinion to include it as part of my post, but Patrick Thomas had the same idea and did an excellent job covering it (here).

The Lacey opinion reflects the Court’s displeasure with the IRS’s use of boilerplate, ambiguous correspondence. The IRS’s use of standardized notices in many cases is understandable, however, there are times when the IRS owes a taxpayer more than a vague list of possible reasons for why it is disregarding an issue.

read more…

The Court takes issue with IRS’s use of “and/or” in whistleblower determinations in Lacey and in CDP Notices of Determination in Alber v. Commissioner, T.C. Memo. 2020-20. I have also seen vague boilerplate responses sent in other cases (identity theft and offer in compromise examples come to mind) at a preliminary stage when IRS has decided the matter isn’t worth looking into further.

Not all cases are eligible for Tax Court review, but all taxpayers deserve to know why the IRS is not continuing to work on their case.

The IRS loves the “efficiency” of ambiguous correspondence. This is exemplified in its plan to send out notices with incorrect dates as a result of the Covid-19 shutdown (which Keith covered here). The IRS benefits from the confusion created by ambiguous correspondence because it delays or prevents taxpayers from responding in a timely or appropriate way.

The recent orders and decisions reflecting the Court’s view of ambiguous correspondence could prompt a change in IRS practices. We are at a time when everyone is imagining the ways things could be, looking at new and improved ways to operate, and resetting their expectations. The IRS desperately needs to upgrade its technology in response to Covid-19, and more generally, to finally join the rest of us in today’s world. As part of any upgrades or improvements, the IRS should consider ways that it can communicate more clearly in the responses it sends to taxpayers.

Other orders designated in May:

  • Docket No. 17614-13 and 17603-13 , Vincent J. Fumo v. CIR. Orders (here and here) granting the IRS’s motion in limine to preclude testimony from an Assistant U.S. Attorney and two revenue agents regarding the ‘manner and motives’ behind examination of petitioner’s income and excise tax liabilities.
  • Docket No. 9946-19L, Linnea Hall McManus & John McManus v. CIR. Order and decision (here) granting the IRS’s motion for summary judgement in a CDP case where petitioners did not provide requested information.

Other orders designated in June:

  • Docket No. 16492-18, Vishal Mishra and Ritu Mishra v. CIR. Order (here) granting the IRS’s motion for entry of decision in its favor, because petitioners are disputing already-conceded accuracy related penalties.
  • Docket No. 11152-18 L, Xavier Pittmon v. CIR. Order and decision (here) granting the IRS’s motion to dismiss, because the petitioner cannot contest his liability in his CDP case.  

Update on the Tax Court

At the ABA online Court Procedure Committee program on July 22, Chief Judge Foley provided some details concerning recent events at the Tax Court. He started by mentioning the hearings that had occurred the previous day in the Senate Finance Committee regarding the two individuals nominated to the Court. Those individuals are Alina Marshall who currently works as an attorney at the Tax Court and Christian Weiler, a tax lawyer practicing in New Orleans. At the end of this post you can find their opening statements to the Committee.


Judge Foley stated that the Tax Court cancelled 80 trial sessions this spring due to the virus, 44 regular sessions, 24 small case sessions and 12 special trial sessions. Starting on March 18, 2020, the Tax Court asked the post office to hold its mail which the post office did until the Clerk’s office reopened on July 10, 2020. At that point the postal service delivered 174 boxes of mail to the Clerk plus the Clerk’s office received mail from the private delivery services. During this 113-day period the court issued 83 opinions compared with 71 opinions issued during the 113-day period immediately preceding the Court’s building closure due to the virus.

As previously posted, the Tax Court updated its web site on July 17,2020. The new case management system that the Court previously announced would be implemented in July is now slated for implementation by the end of the year.

Judge Foley talked about the system for conducting trials online which is coming this fall. The pre-trial process will be modified. Limited entry of appearance may occur earlier. Electronic access will be available throughout the trial. The Court is going to put up mock electronic trial videos on its web site starting Monday, July 27. He described these as in the genre of home movies. He also spoke of Tax Court judges becoming more available to Zoom into classrooms and other settings.

Tax Court trials will be open to the public through an audio stream. The Court’s new online FAQ and example videos address this and many other aspects of Zoomgov trials.

Opening Statement of Alina I. Marshall
Nominee for Judge, United States Tax Court

United States Senate Committee on Finance
July 21, 2020

Chairman Grassley, Ranking Member Wyden, and members of the Finance Committee, thank you for holding this hearing to consider my nomination to serve as a Judge on the United States Tax Court. I am grateful to you and your staff for the opportunity to be here today.

My husband Sean, my daughter Elizabeth, and my son Luke are here with me this morning. Their love and support brighten my days and renew my enthusiasm. My parents Jackie and Florin Ionescu, and my inlaws Michele and George Hall and Barbara and David Marshall, are all supporting me remotely and I remain thankful for their patience and encouragement. I am grateful to Chief Judge Foley, the Judges of the Tax Court and the Tax Court family, who have allowed me to work with them on so many challenging and exciting opinions and projects. I also want to thank my generous and supportive friends and neighbors, especially the Walshes.

I am thankful to President Trump for nominating me to serve on the Tax Court. This chance to chase my dream is truly humbling and a reminder of the opportunities that are uniquely available in the United States. I remain amazed that an immigrant who learned to speak English in the public school system and from Sesame Street would have the chance to meet with you today and, if confirmed, to serve as a Judge. My family’s journey of coming from Romania and building a new life is a tale of the American dream, and the chances and resources given to us inspire me to give back, promote opportunity, and serve others. For much of the last decade, I have had the privilege of serving at the Tax Court.

I have been a member of the Tax Court family since 2010 and have served as Counsel to the Chief Judge since 2013. I have the honor of advising the Chief Judge in the exercise of his statutory duty to review opinions before public release. I also have the privilege of helping with and advising on administrative and policy matters, including as the Court has continued to serve its mission during this pandemic. The Court quickly changed its ways of conducting business, and it has been exhilarating to participate the Court’s adoption of new opinion review, case management, and trial procedures. Given my time at the Tax Court and my experience at both large and small law firms, I believe I would be well-equipped to try cases and dispose of pending motions carefully, accurately, and efficiently if I am confirmed.

The Tax Court is a special place, both because of its feeling of family and because of everyone’s commitment to the Court’s crucial role in supporting the United States’ system of voluntary self- assessment. Everyone works hard to meet the Court’s mission of being “a national forum for the expeditious resolution of disputes between taxpayers and the Internal Revenue Service; for careful consideration of the merits of each case; and to ensure a uniform interpretation of the Internal Revenue Code.” I already seek to serve the Court’s mission by reviewing opinions and advising the Chief Judge, and I believe I could further support the Court’s goals by carefully hearing cases and fairly applying the law to the facts of each case.

Thank you again for your consideration. I look forward to answering the Committee’s questions.

Opening Statement of Christian Weiler
Nominee to be a Judge of the United States Tax Court

Senate Committee on Finance
July 21, 2020

Chairman Grassley, Ranking Member Wyden and to the other Senators on the Finance Committee, thank you for holding this hearing.

I am honored to be nominated to serve as a judge of the United States Tax Court. I would like to also thank my beautiful wife and four children for their love and encouragement throughout my nomination process. I know that I would not be appearing before you without their support.

The role of the Tax Court, albeit limited in scope, is very important. The Tax Court provides a critical independent forum for the resolution of civil tax disputes with the IRS. The Court hears all types of tax cases, which can vary substantially in size and complexity depending on the taxpayer. If confirmed, I pledge to decide all matters in an impartial manner, by applying the facts before me to the relevant provisions of the Tax Code and by also looking to controlling precedent. I genuinely believe the Tax Court serves an important function in safeguarding the fairness of our nation’s tax system.

In my hometown of New Orleans, Louisiana, I have had the pleasure of working with my father and law partner, John Weiler for some fifteen (15) years at the law firm of Weiler & Rees. In working with my father, I have not only had the privilege of being mentored by a truly outstanding tax attorney with unparalleled knowledge and skills; I have also had the privilege of learning from a great human being. By my father’s example, he has shown me how to treat others with respect and kindness in all matters. My father has also shown me the importance of listening to my clients’ problems and how to work alongside them to help guide them to a resolution of their legal issue. In short, I believe the advocacy and personal skills I have acquired while working with my father will serve me well as a judge.

Formed by my strong Christian faith, I believe we are all children of God, and therefore not only do I pledge to serve as an impartial judge, I also pledge to treat all parties and attorneys who may appear before me with respect and kindness.

Also, while the Tax Court hears large and complex tax issues; it most often hears small tax matters filed by self-represented litigants. I am proud of my volunteer work as an attorney with the Southeast Louisiana Legal Services Pro Bono Tax Clinic, where I have gained valuable experience in matters commonly before the Tax Court, such as audits of the earned income tax credit, innocent spouse claims for relief and collection due process appeals. I believe my experience with these specific tax matters will serve me well as a judge.

Finally, if confirmed, I look forward to serving my Country.

Thank you for your time and consideration and I look forward to answering any questions that the committee might have.

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 and on USAJobs at 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.


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.


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.