Tax Court’s 2024 Budget Justification 

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As it does each year the Tax Court submitted a budget justification to Congress.  It did so on February 1, 2023, and placed a link to the document on its website.  Like any self-respecting arm of the government it seeks more money for the coming year, 14% more, primarily to cover the increased salary costs resulting from the cost of living adjustments triggered by the recent period of high inflation but also in anticipation of new judges to fill current vacancies and other court needs. 

These budget justification requests contain a lot of data about the Court.  This post seeks to highlight the data I found most interesting.

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The Mission and Expeditious Resolution of Disputes

The report starts off with a statement about its mission:

The mission of the United States Tax Court is to provide 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. The Court is committed to providing taxpayers, most of whom are self-represented, with a reasonable opportunity to appear before the Court, with as little inconvenience and expense as is practicable. The Court is also committed to providing an accessible judicial forum with simplified procedures for disputes involving $50,000 or less. (emphasis added)

It’s a good mission and one the Court has generally done well in meeting except for the expeditious resolution part. 

As we posted last October, those of us at PT do not believe the Court has done a good job of expeditiously resolving its cases.  Based on non-empirical observation of the length of time it takes for the Court to resolve cases such as the discussion in this post, it moves way too slowly, though that statement is not true of all judges.  The report provides no information regarding the timeliness of the outcomes in its cases though it does say on page 21 that “[w]hen a case is tried, the judge generally issues a written opinion within one year.”  Working with my RA, I hope over the coming months to provide a more data based view at the timeliness of outcomes resulting from decisions.  I welcome the assistance of anyone who wants to engage in a data dive into the timeliness of Tax Court outcomes.  Perhaps such an effort will assist the Court in future reports regarding its mission.

One More Special Trial Judge

The report indicates that the Court seeks to add one more Special Trial Judge.  Doing so would raise the number to six still four less than the Court had in the 1980s.  The hiring of a Special Trial Judge is done by the Court and does not require a Presidential appointment.  For this reason I expect this will happen unless Congress completely guts the Court’s budget, something unlikely to happen.

Access to Court Records

There is a section in the report on “Electronic Filing and Case Management System.”  This section describes the Court’s fix to its case sealing problems as though fixing a problem was an enhancement.  It also describes sending letters to pro se petitioners alerting them to Low Income Taxpayer Clinics in their area as though this was a new feature in 2022 and not something the court had done for a decade.

Nonetheless the last sentence of this section provides a small glimmer of hope that the Court might consider its practice of making public documents difficult to access:

After DAWSON’s first full year in production, the Court reviewed technological demands and was able to consolidate the application’s cloud hosting environments, resulting in significant savings. DAWSON is integral to Court operations and there is continual evaluation of how to make engaging with the Court for the public as easy and straightforward as possible, while protecting the data stored in DAWSON. (emphasis added)

I don’t have any great hope for greater electronic access based on this statement but hope springs eternal.  There are ways to make this happen if the Court becomes truly interested.

 Filing Fee

The report, like the report from the previous year, suggests that the Court seeks to raise the filing fee from $60 to $100.  Doing so would make the Tax Court only slightly less a fantastic bargain than it is now.  The Court’s filing fee has been fixed at $60 for decades.  It is one of the greatest bargains around.  The low fee and the Court’s willingness to waive the fee for qualified applicants demonstrates its desire to be available to all petitioners.  Raising the fee, if it happens, makes sense to me.

Practice Fee

The Court explains why it has no plans to impose a periodic practice fee for those authorized to practice before it.

Judicial Conference

The report indicates that it will not have a judicial conference this year.  It has not had one since 2018 due in large part to Covid.  I anticipate it will do something big in 2024 to celebrate its 100th anniversary.  One of the best parts of the 2018 conference occurred for me when Les and I were told that we were considered by the Court to be part of the press.  I don’t really think of myself that way but it was fun to hear that the Court did.

Caseload information

The report provides the following charts on the Court’s cases.  The first chart shows the number of cases filed in each of the most recent years:

The second chart shows the types of cases filed in FY 2022:

The third chart shows the number of electronic versus paper petitions filed in FY 2022:

The fourth chart shows the number of trial calendars and type – remote version in person.  Note that for FY 2022 remote sessions outnumber those held in person.  It will be interesting to see if that trend holds in FY 2023 or if the Tax Court goes back on the road more.  Remote motions sessions, probably not counted here, remain a terrific innovation.

The fifth chart shows the continued decline in number of cases tried and opinions issued.  This may be the lowest number of opinions ever issued by the Tax Court.  There is a chart in an article by Caitlin Hird and me, linked through the last sentence of this post, showing the number of trials in prior years.

This is just an overview of the report.  These annual reports provide a rich source of data about the Court and are worth reading if you want to better understand how it works.

One Computer in Tax Court Record Room

Prior to the pandemic I stopped by the Tax Court record room a few times a year to research cases.  As noted in prior blog posts, here, here (with links to additional posts on the subject) and here, the public records created in Tax Court cases are available to the public only by traveling to Washington, DC or by calling the Tax Court record section and ordering the documents.  The exception to this rule is access to Court orders and decisions which are available for free through the Court’s electronic docket.

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Prior to the pandemic, if you were able to visit the record section of the Tax Court located on the ground floor of the court building, in a small public room a table existed with two computer terminals that could access all of the unsealed documents in Tax Court cases.  As discussed in one of the blog posts linked above, for long stretches of time during the pandemic, access to this room was unavailable because the Tax Court was closed to the public leaving phone requests as the only way to access the public records in Tax Court cases.  Post pandemic the room still exists, but it now contains only one computer instead of two.

I wonder why the Tax Court decided to further limit access to its documents by removing one of the two computers available in the records room.  In my recent visit, I was the only person in the room during the two hours I spent looking at the case files of recently dismissed deficiency cases.  No one else sought to use the computer which was good from my perspective since I would not have wanted to make someone sit for up to two hours to access the computer while I monopolized it, but I also would not have wanted to relinquish my limited time with this computer to someone else.

Looking at the log book the court maintains for the computer, I noticed that basically everyone signing in on the same page with me was a reporter in the tax press.  In the past when I have visited the computers in the record room, I have sometimes used one at the same time as someone else used the other and sometimes used them alone.  I have not done a study of how much those computers are used but I know that when I go there I am usually on a tight schedule and would not like to wait for someone else to finish their research.

I write this post for two reasons.  First, I continue to hope that the Tax Court will open up electronic access to the public records in its cases.  For the reasons discussed in the blog posts linked above, I think it is possible to make the information truly public while protecting the information of individual taxpayers that needs to be kept private.  I continue to wonder what reason exists for not making the unsealed documents in entity cases completely available since privacy of individual identity information cannot possibly be the basis for keeping these records so difficult to access.

Second, I write to alert others that even going to the Tax Court to look at documents is now more difficult than prior to the pandemic.  If someone reaches the sole computer before you do, you must wait an unlimited amount of time to access that computer. 

I reread the Tax Court’s Congressional Budget Justification for Fiscal Year 2023 to see if it contained any reason for the reduction in the number of computers available to access court records.  It did not.  It does provide the following statement lauding increased access to the Court’s docket as a result of DAWSON.  I can only say I do not know what the Court defines as increased access since the access to documents under the DAWSON system seems identical to the system that existed prior to DAWSON.  Here is the Court’s statement:

The Court marked the first year of DAWSON (Docket Access Within a Secure Online Network),13 which was launched on December 28, 2020. DAWSON is an open-source, cloud-based application that is mobile-friendly. The system’s implementation included a new feature to electronically file a petition to start a new case, which has proved particularly beneficial during the pandemic.
During the first year in operation, over 750 features were added and over 450 bugs were addressed. The system now permits the public to search and view Court orders and opinions without a fee. [It did so prior to the existence of DAWSON as well.] The Court recognizes the importance of access to case records and has prioritized the programming issues related to sealed documents and sealed cases. As functionality is added the Court will continue to realize greater efficiencies (e.g., related to consolidated cases, minute orders, and calendars). Overall, DAWSON continues to make the Court more accessible for taxpayers, practitioners, and the public. (emphasis added)

This annual report was issued on February 28, 2022.  The report focused on activity at the Court during 2021.  I anticipate a new report will be issued at the end of this month.  Perhaps it will provide additional guidance regarding access to the Court’s records remotely or in the building.

Tax Court Trial Procedures: Guidelines from Judge Jones

Last week I attended my first Washington, D.C. calendar call, over which Judge Jones presided. This post describes the trial procedures announced at calendar call. While the procedures may be especially helpful in cases conducted by legally unsophisticated pro se petitioners, they offer excellent advice for attorneys appearing before any Tax Court judge.


Before getting to the trial procedures I want to mention one curious difference between the calendar call in D.C. and the calendar calls in Philadelphia which I’ve attended for the last four years.

Three women in suits stand in front of a gray wall. On the wall is "United States Tax Court" in white. It is a cloudy and windy day.

When I arrived last Monday the trial clerk informed me that the docket was down to 7 cases, all with self-represented petitioners. I did not expect much “action” knowing that attorneys and students from American University (photo at left), UDC, Catholic University, and Legal Services of Northern Virginia were planning to attend and offer assistance. Frankly it seemed like overkill to bring everyone to court.

I was astonished when 6 of the 7 petitioners stood up at calendar call. Soon every clinic was busy advising a petitioner. According to the other clinic directors this is usual in D.C.

Unfortunately it is not the norm in Philadelphia. We have very low attendance, sometimes with zero petitioners attending. If we are lucky, one person out of ten will show up. I do not know why attendance from self-represented taxpayers would be so much higher in D.C. than in Philadelphia. It would be an interesting study if anyone would like to conduct it.

General Trial Procedures and Courtroom Rules

Judge Jones has helpfully compiled Instructions to the Parties Regarding Trials and Courtroom Rules Governing Conduct During Proceedings of the U.S. Tax Court, which are available as a single stapled packet during calendar call.

Anyone who has taken a trial advocacy course should be familiar with the guidelines (e.g., address all remarks to the Judge; keep your face neutral during witness testimony). The packet helpfully sets out the guidelines logically and succinctly. The Trial Instructions cover

  1. Opening Statements and Examining Witnesses
  2. Objections To Questions
  3. General Decorum
  4. Promptness of Counsel And Witnesses
  5. Exhibits
  6. Advance Notice of Difficult Questions
  7. Briefing Schedule
  8. Other Rules

The general Courtroom Rules document attached to the trial instructions also applies to conduct during calendar call. It addresses these topics:

  1. Courtroom Decorum
  2. Security
  3. Broadcasting and Photographs
  4. Sanctions
  5. Additional Orders  

Keep in mind that Judges may have different preferences in a few areas covered by the packet, and it is always wise to know your judge. If you don’t know your judge, Judge Jones’s instructions will guide you to make safe choices, but don’t be surprised if your judge expresses different preferences. For example, Judge Jones’s procedures direct the parties to keep opening statements under ten minutes. In contrast the late Judge Ruwe preferred that the parties waive opening and closing arguments, but he would permit them if a party insisted. As another example, it is always best to ask the Court’s permission to approach a witness as required by Judge Jones’s instructions. But, some judges will advise that you do not need to keep asking each time during an examination.

Framework for Trying Business Expense Disputes

Sole proprietorship trade or business expenses were the number one issue petitioned to the Tax Court by business taxpayers in FY 2022, according to the National Taxpayer Advocate’s 2022 Annual Report to Congress. It wasn’t even close:

2022 NTA ARC p. 177

Many of these cases will be settled by Calendar Call, but the Court still must regularly handle disputes over business expenses. For low-income taxpayers these usually involve Schedule C expense substantiation. When we consult with taxpayers in this situation two challenges often arise – lack of preparation and organization makes it challenging to prove expenses on a granular level; and lack of understanding about the legal context. Self-represented petitioners often do not understand when Respondent is making a legal argument about their expenses (e.g. clothes suitable for everyday wear are not deductible) versus when Respondent is making a substantiation argument (e.g. the receipt does not show what was purchased). And when the underlying documents are not organized for trial, it can be a frustrating exercise for everyone. Even when receipts were kept organized, they are often voluminous, and unfortunately cheap register tape fades over time.

Given the regularity with which these problems occur, Judge Jones wisely imposes order on the process and requires detailed preparation on both sides. Before trial begins, Judge Jones requires each party to complete a worksheet provided by the court.

The worksheet includes this example of a correctly completed form:

Petitioner is the owner of a sports bar and restaurant and claims a $5,000 advertising expense deduction on his Schedule C, Profit or Loss From Business, attached to his 2009 Federal income tax return. Petitioner’s advertising expense consists of: (1) A $3,000 advertisement placed in a national newspaper; (2) a $ 1,000 advertisement placed in a local newspaper; and (3) a $1,000 advertisement on a billboard. Respondent concedes that $ 1,000 of the $5,000 advertising expense is deductible, but disallows the remaining $4,000 for lack of substantiation.

Judge Jones also explained that she tries substantiation cases year by year, and item by item within each year. For example, a two-issue case covering two tax years might proceed like this: evidence on 2018 car and truck expenses, then 2018 office expenses, then 2019 car and truck expenses, then 2019 office expenses.


The substantiation worksheet and the trial guidelines are useful preparation documents for attorneys. But more importantly, both of these documents should help a self-represented petitioner present their best possible case to the Court, so that the case can be decided on its merits and the petitioner can truly be heard.

Be Careful What You Ask For

In Showalter v Commissioner, T.C. Memo 2022-114, the pro se petitioner went to the Tax Court to contest the deficiency resulting from the IRS preparing a substitute return (SFR) following his failure to fulfill his return filing obligation.  He found out that going to Tax Court is not a one way street when the Chief Counsel attorneys uncovered income the IRS had not found in computing his tax liability using the substitute for return procedures.

I end the post with a suggestion for taxpayers like Mr. Showalter to reduce his exposure but also for a suggestion regarding the penalty regime for taxpayers who force the IRS into preparing an SFR.


I don’t know the statistics on how many people fail to file returns each year who should.  The number is huge.  My sympathy for this group of individuals is low.  They put a lot of pressure on the tax system.  Some have a good excuse for not filing, at least for one year, but many lack what I consider to be a good excuse.

The failure to file causes the IRS, in many instances, to prepare a return for the non-compliant taxpayer using the substitute for return procedures set out in IRC 6020.  My experience is that most of the time the IRS prepares returns under this procedure it overstates the taxpayer’s liability because it does not make elections the taxpayer might make in order to reduce the liability; however, the IRS also misses income when it uses this system to prepare a return because it relies exclusively on third party reporting information which will not always capture all of a taxpayer’s income.

Because the IRS needs some form of taxpayer or statutory consent in order to assess, it ends up sending a notice of deficiency (SNOD) to taxpayers who do not agree with its calculation of income in the substitute for return process.  Taxpayers who engage with the IRS in this process can usually file their own return during the process or provide deduction information to the IRS to reduce tax computed by the IRS.  Taxpayers who do not engage in the process need to file a petition in Tax Court or use audit reconsideration at a later point in order to reduce the amount computed by the IRS.

Mr. Showalter appears not to have engaged with the IRS during the process of its preparation of the SFR but the Court does not explicitly say that and I may be drawing an incorrect inference.  He did, however, respond to the SNOD by filing a timely petition with the Tax Court.  He contended that the IRS overstated his income by failing to allow him certain business deductions.  In the Tax Court case he worked with the IRS to determine his business expenses and Schedule A deduction.  In the course of determining his expenses, the parties gathered bank records the IRS would not have reviewed in preparing the SFR.  Those records showed that the SNOD understated his income by $102,885.

The IRS sought summary judgment on this additional amount.  The Court goes through the requirements for obtaining summary judgment relief noting that the petitioner failed to respond to the Motion for Partial Summary Judgment and that it could have granted the motion on that basis alone.  The Court, however, decides to put the IRS through its paces even though the Petitioner did not engage with this process.

First, the Court notes that the IRS has the burden of proof on this additional amount of income because it was not included in the SNOD.  To do so it must establish a “minimal evidentiary showing” connecting the taxpayer and the income producing activity.  The Court finds that the bank account records attached to the motion accomplish this purpose.

Here, the IRS used the bank deposits method to establish the additional income.  The IRS needs to show that funds deposited into a taxpayer’s bank account are income and not non-taxable amounts.  The Petitioner had raised a concern about some of the money deposited into the account and the IRS addressed that concern.  Based on the information before it, the Court granted the IRS motion sustaining the determination that Petitioner had the additional income alleged by the IRS.

At the conclusion the Court orders a Rule 155 computation.  Based on the business and personal deductions allowed, the Petitioner in this case may end up with a reduced liability from the amount in the SNOD even with the inclusion of an additional $100,000+ of income.  So, the decision to go to Tax Court in this case may provide the taxpayer with a net benefit.

The case, however, points out that going to Tax Court opens the door for the IRS to allege additional liabilities and does not just provide the taxpayer with the opportunity to reduce the amount initially determined by the IRS.  Each taxpayer making the decision to go to Tax Court needs to carefully consider the downside of the petition as well as the upside.  A taxpayer in Mr. Showalter’s position may have obtained a more favorable result, though not a more correct result, by seeking audit reconsideration rather than petitioning the Tax Court. 

Suggestion for Taxpayers with exposure not reflected in the SNOD

Audit reconsideration involves asking the IRS to look at an assessed liability to abate it because the IRS assessed too much after an audit.  The provision is described in IRM 4.13.1.  We have mentioned the process in many prior blog posts, but I could not find one explicitly addressing the process.  I have mostly written about it in the context of prior opportunity in Collection Due Process cases.  A taxpayer seeking audit reconsideration goes into a black hole by sending in the request because the IRS does not acknowledge receipt.  The process can take months or, in pandemic time, more than one year.  The case goes back to the source asking the office that originated the assessment process to consider new evidence the taxpayer failed to present during the audit and, on the basis of that new information, reduce or eliminate the tax assessment.  This is an entirely administrative process with administrative appeal rights but no right to judicial review.  Yet, the IRS is generous with its time by giving assessments a second look even though it is not required to do so and even though I wish it was more communicative in the process.

Audit reconsideration sends the case back to auditors and not into the hands of attorneys.  The chances that the auditors would pick up on the additional income using a bank deposits method are low.  The individuals looking at the audit reconsideration request are much more likely to focus on the basis for the request than the whole picture.  While audit reconsideration does not bring the same safeguards as judicial review, it also does not bring the same scrutiny.  Someone in Mr. Showalter’s position might have achieved a net benefit from going the audit reconsideration route rather than exposing himself to having additional income found. 

Suggestion for Penalizing Taxpayers Who Force the IRS to Prepare SFRs

As a taxpayer who wants others to pay their rightful amount of tax, I am glad Mr. Showalter went to Tax Court and glad that the Chief Counsel attorneys found the additional income that the IRS did not pick up during the SFR stage.  Trying to get someone’s income right through the SFR process puts a lot of pressure on the IRS as well as a lot of additional costs on the system that is unnecessary if people comply with their return filing obligations.  I would put more of a late filing penalty on non-filers who force the IRS to go this route and be more generous to late filers with a good excuse.  Our current one size fits all penalty probably doesn’t capture the true cost of the taxpayers who force the IRS into the SFR process and is not always generous enough to taxpayers who miss the filing deadline for an excusable reason.  Maybe the IRS has data on its costs of chasing after people who do not comply.  That information would be useful in determining if my suggestion is a reasonable one.

What’s Wrong With The Tax Court’s Hallmark Opinion: Part 8

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

On page 15 of the slip opinion, Hallmark observes that IRC 6213(a) also contains a requirement that there be a notice of deficiency:

The requirement of a valid NOD and the 90-day deadline are inseparably linked in that sentence.  If, as Hallmark contends, the 90-day deadline were not jurisdictional, then we do not see how the requirement of a valid NOD could (as the Supreme Court has held) be jurisdictional.  Rather, both prerequisites would then have to be treated as mere claim-processing rules, which might be waived and which, if invoked, would result in dismissal not for lack of jurisdiction but for failure to state a claim—i.e., a merits determination.  But that is a thought experiment.  No court has ever denied (and Hallmark does not dispute) that the Tax Court’s jurisdiction over a deficiency case depends on the issuance of the NOD.

How do I respond?  Well, the Tax Court is right that IRC 6213(a) (which contains both a notice of deficiency and a petition requirement) arguably sets out two more claim-processing rules than just the filing deadline.  However, the Hallmark opinion in fact solves the issue by, on the same page, citing Laing v. United States, 423 U.S. 161 (1976), which states:  “A deficiency notice is of import primarily because it is a jurisdictional prerequisite to a taxpayer’s suit in the Tax Court for redetermination of his tax liability.” Id. at 165 n.4.  My solution is stare decisis:  That statement from Laing has existed for almost 50 years, so I think the Supreme Court will follow the statement if the issue is ever presented to the Court.

IRC 6213(a) would not be unique in having a filing deadline that is not jurisdictional but having other predicate requirements in the same sentence that are jurisdictional.  (By the way, I have never argued that because IRC 6214(a) is the primary basis of the Tax Court’s deficiency jurisdiction, no other provision of the Code could provide additional jurisdictional requirements.)


There have been other Supreme Court opinions involving statutes containing a filing deadline in a sentence that also contains procedural requirements that certain administrative steps be taken before a petition or complaint may be filed.  In these cases, the Supreme Court has treated the administrative steps as jurisdictional, but treated the filing deadline not jurisdictional. 

In Weinberger v. Salfi, 422 U. S. 749, 763-764 (1975), the Court interpreted 42 U.S.C. § 405(g), the first sentence of which provides:

Any individual, after any final decision of the Commissioner of Social Security made after a hearing to which he was a party, irrespective of the amount in controversy, may obtain a review of such decision by a civil action commenced within sixty days after the mailing to him of notice of such decision or within such further time as the Commissioner of Social Security may allow. 

The Supreme Court in Salfi wrote:

Section 405(g) specifies the following requirements for judicial review:  (1) a final decision of the Secretary made after a hearing; (2) commencement of a civil action within 60 days after the mailing of notice of such decision (or within such further time as the Secretary may allow); and (3) filing of the action in an appropriate district court, in general that of the plaintiff’s residence or principal place of business.  The second and third of these requirements specify, respectively, a statute of limitations and appropriate venue.  As such, they are waivable by the parties [read: not jurisdictional], and not having been timely raised below, see Fed. Rules Civ. Proc. 8(c), 12(h)(1), need not be considered here.  We interpret the first requirement, however, to be central to the requisite grant of subject-matter jurisdiction – the statute empowers district courts to review a particular type of decision by the Secretary, that type being those which are “final” and “made after a hearing.”

Id. at 763-764.  (In Boechler, the Supreme Court cited this passage from SalfiSee 142 S. Ct. at 1499.)

A similar case is Sebelius v. Auburn Regional Med. Cntr., 568 U.S. 145 (2013) (interpreting 42 U.S.C. § 1395oo(a)), also cited by the Supreme Court in Boechler, 142 S. Ct. at 1499.  I quote from Auburn:

Amicus urges that the three requirements in [the single sentence of] § 1395oo(a) are specifications that together define the limits of the PRRB’s jurisdiction.  Subsection (a)(1) specifies the claims providers may bring to the Board, and subsection (a)(2) sets forth an amount-in-controversy requirement.  These are jurisdictional requirements, amicus asserts, so we should read the third specification, subsection (a)(3)’s 180-day limitation, as also setting a jurisdictional requirement.

Last Term, we rejected a similar proximity-based argument.

568 U.S. at 155. 

In Auburn, the Court did not contest the amicus’ argument that the conditions in subsections (a)(1) and (a)(2) are jurisdictional.

Further, if you think about Boechler, IRC 6330(d)(1) contains a jurisdictional grant, “(and the Tax Court shall have jurisdiction with respect to such matter)” that is preceded both by the apparent claim-processing requirements that there have been a notice of determination and a Tax Court petition.  The opinion is about whether the jurisdictional grant refers to (1) the notice of determination, (2) the petition, and (3) the filing deadline.  The Court opts for the holding that the jurisdictional grant does not clearly state that the filing deadline is jurisdictional.  The court thereby lets one conclude that it thinks the issuance of a notice of determination and the filing of a Tax Court petition are the jurisdictional prerequisites – though it does not say this explicitly.

There is nothing incongruous about a sentence containing multiple claim-processing rules, some of which are still going to be held jurisdictional.

What’s Wrong With The Tax Court’s Hallmark Opinion: Part 7

This is the seventh 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 the sixth part of this post, I had bemoaned the Hallmark court’s failure to consider information that I dug up (and which Hallmark provided to the court).  The information was research that led me to estimate that 600 Tax Court deficiency cases would be dismissed for lack of jurisdiction for late filing in a typical year.  I also found that if the deficiency filing deadline was held not jurisdictional, then about 150 of such cases would continue in the court undismissed each year because the Tax Court would cease policing the issue of late filing and the IRS would miss late filing in those cases.  I estimated that only 30 cases a year would involve taxpayers who would plead equitable tolling in their deficiency cases.  It is hard to say how many of those 30 taxpayers would actually get equitable tolling (either from IRS attorneys who did not raise or raised, but later conceded, a late filing merits statute of limitations defense or through court rulings), but let’s assume for now that half would – i.e., 15 taxpayers’ cases continuing in the court via equitable tolling.  So, I can estimate that if the filing deadline is considered not jurisdictional and subject to equitable tolling, roughly 165 of the 600 taxpayers each year will benefit in that their Tax Court cases will not be dismissed.

In my research, conversely, I also attempted to estimate how many taxpayers each year are helped by a ruling that the deficiency filing deadline is jurisdictional.  In theory, every one of the 600 taxpayers who will have their Tax Court case dismissed for late filing for lack of jurisdiction faces no res judicata problem under current law that might precluded them from, after dismissal, paying and suing for a refund in the district court or Court of Federal Claims (CFC).  However, only 188 refund suits were brought, under any circumstances, in the CFC and the district courts, combined, in the fiscal year ended September 30, 2020.   IRS Data Book 2020 at 67 (Table 29) – a figure typical of pre-COVID-19 pandemic years. Obviously, not all those 188 refund suits were brought by taxpayers who previously filed late deficiency petitions in the Tax Court.  Looking at refund suit opinions all issued in 2021 that I found using the LEXIS search terms “refund and (Tax Court) and dismiss!”, there were 44 total district court and CFC opinions to read.  It turned out that none of them set forth a fact pattern of the taxpayer, after having been dismissed from the Tax Court for late filing a deficiency case, later paying in full and suing for a refund. 

In a prior post, Keith mentioned how we found one case, Jolly v. United States, 2021 U.S. Claims LEXIS 930, that nearly met my criteria with respect to the 2017 taxable year involved therein because the taxpayer’s prior 2017-year case had been dismissed by the Tax Court for late filing, but Jolly probably won’t fully meet my criteria in the end.  The CFC in that case, for the moment, denied a DOJ motion to dismiss the 2017 year from the refund suit for lack of jurisdiction for failure to comply with the Flora full payment rule.  The court’s denial stated that, perhaps the Flora rule could be met by moving payments in accounts of other tax years to the 2017 year, and the court later asked for further briefing.  Further briefing in the case is still ongoing.

If my interpretation of the filing deadline as not jurisdictional would be upheld, such a dismissed taxpayer might end up with a res judicata problem precluding a subsequent refund suit because of IRC 7459(d).  That subsection provides that all dismissals of Tax Court deficiency suits uphold the deficiency, but exempts jurisdictional dismissals.  My research, in effect, shows that none of the 600 deficiency case taxpayers dismissed from the Tax Court for late filing in a typical year will ever actually later file a jurisdictionally-sufficient refund suit – i.e., attempt a second chance to litigate the merits of the deficiency.

I questioned why the courts should be so worried about the theoretical application of IRC 7459(d) under my non-jurisdictional position that might preclude a second chance at litigating the merits in refund courts.  Instead, I argued that the courts should consider the harsh and drastic consequences of the jurisdictional interpretation of the filing deadline that regularly precludes about 165 taxpayers from getting their first chance (in the Tax Court) to litigate the merits of the deficiency.  After all, it is the harsh and drastic consequences to plaintiffs of finding deadlines jurisdictional that has triggered the Supreme Court to restrict the use of the word “jurisdictional”.

What did the Hallmark court do with my research?  Nothing.  It did not mention my research in the opinion.  However, the court went into an extensive discussion of the theory of how Hallmark’s interpretation could hurt taxpayers under IRC 7459(d) and contended that Congress designed IRC 7459(d) to preclude the result for which Hallmark was contending, and this shows that Congress intended that the filing deadline in IRC 6213(a) is jurisdictional.  The rest of this post summarizes the Hallmark opinion’s discussion of IRC 7459(d) and how the Tax Court concluded that IRC 7459(d) provides legislative context for holding the IRC 6213(a) filing deadline jurisdictional.


IRC 7459(d) provides:

If a petition for a redetermination of a deficiency has been filed by the taxpayer, a decision of the Tax Court dismissing the proceeding shall be considered as its decision that the deficiency is the amount determined by the Secretary.  An order specifying such amount shall be entered in the records of the Tax Court unless the Tax Court cannot determine such amount from the record in the proceeding, or unless the dismissal is for lack of jurisdiction.

The Hallmark opinion concludes that, for two reasons, the existence of IRC 7459(d) requires the court to reject a reading of the IRC 6213(a) filing deadline as not jurisdictional.

First, “[n]on-jurisdictional dismissals of cases with untimely petitions would produce incongruous results.”  Slip opinion at p. 20. 

This surprising [res judicata] outcome [prohibiting subsequent refund suits] counsels against the non-jurisdictional construction of section 6213(a) not because it provokes sympathy for a taxpayer for whom this would be an unfavorable result but because it puts section 6213(a) and section 7459(d) at odds with each other and with the manifest purpose of the statutory regime. . . .

It is no answer to this anomaly to point out (as Hallmark does) that “if this unfortunate res judicata result were to happen, it would be a matter for Congress to consider altering by legislation”.  It is certainly correct that courts must not choose an interpretation because it brings about a desired outcome, and it is true that defects in a statute are for Congress to fix, not the courts.  But choosing desired outcomes is not the same thing as following the principles of statutory construction that counsel against choosing an interpretation that creates a conflict in the legislative regime (and that therefore would require Congress to then address the conflict by corrective legislation).

Id. at 21-22 (footnote and citation omitted).  (By the way, the Supreme Court’s recent precedent actually pushes courts to choose the outcome that filing deadlines are not jurisdictional – in an exception to the usual rule that courts should not favor either side’s interpretation.)

Second, “[a]pplying section 7459(d) only to dismissals other than those called for by section 6213(a) would contradict the actual history and intent of section 7459(d).”  Id. at 23.  The Hallmark opinion notes that the original predecessor of this provision did not appear in the Revenue Act of 1924 that created the Board of Tax Appeals, but that a version of this provision first appeared in § 906(c) of the Revenue Act of 1926, without accompanying legislative explanation.  The 1926 provision lacked the final phrase “or unless the dismissal is for lack of jurisdiction”.  The court agreed with Hallmark that there is also no committee report that explains why this jurisdictional exception was added in 1928.  Hallmark pointed out that there are a number of reasons that a Tax Court petition could be dismissed for lack of jurisdiction beyond late filing.  For example, a petition may be dismissed because the notice of deficiency was invalid because not sent to the taxpayer’s last known address or because the taxes had already been paid before the notice of deficiency was issued or because the taxpayer was in bankruptcy, so the bankruptcy stay prohibited a Board proceeding.   Excluding dismissals for late filing of the petition from jurisdictional dismissals would not render the jurisdictional dismissal exception of IRC 7459(d) superfluous.

But, the Hallmark opinion responded as follows:

What “jurisdiction[al]” circumstances did Congress address in making this amendment in 1928?  The obvious answer is that Congress addressed the very circumstance that the BTA had described in United Paper—i.e., “the Board determines that it has no jurisdiction” because “[t]he petition [was] not . . . filed within the time prescribed”.  We find no BTA opinion discussing the issue of sustaining a deficiency in a jurisdictional dismissal in connection with any jurisdictional issue other than the untimeliness of a petition (as in United Paper).  With reasonable confidence we also impute to Congress the knowledge that, as the BTA had reported since 1924, it was dismissing for “want of jurisdiction” where there was no valid NOD.  We see no reason to suppose that Congress ignored the actual activity of the BTA, left unsolved the timeliness-related conundrum described in United Paper, and instead amended the statute to address as-yet-unrealized difficulties in future cases that might involve lack of corporate capacity.  We do see, in the BTA’s appendices, dismissals for lack of jurisdiction because of pending bankruptcies and because taxes not assigned to the BTA were petitioned, and those dismissals, too, would fall within the “lack of jurisdiction” exception of section 906(c).  That these, too, involve “lack of jurisdiction” does not at all undermine the obvious congressional intent to address, as cases involving “lack of jurisdiction”, those that were being dismissed because they lacked the prerequisites of section 274(c) (sic; should be (a)) (now section 6213(a)), i.e., a valid NOD and – as in United Paper – a timely petition.

Id. at 27-28.

What’s this United Paper case about?  It is a 1926 opinion (4 B.T.A. 257) decided after Congress enacted § 906(c) of the Revenue Act of 1926 – the original predecessor of IRC 7459(d), but without the jurisdictional dismissal exception.  The taxpayer (!) in that case had filed a late deficiency petition and argued that under § 906(c), the Board was required to enter a decision upholding the deficiency set out in the notice.  The Board, however, refused, noting that, since 1924 it had been entering orders dismissing late-filed cases for lack of jurisdiction and it planned to continue that practice even during the years to which § 906(c) applied.

It seems to me, however, that United Paper undermines the Hallmark opinion’s conclusion that Congress intended in 1928 to fix a problem (inserting jurisdictional dismissal exceptions into the 1926 version of § 906(c)), when the Board had already concluded that § 906(c)’s requirement to enter a decision upholding the deficiency did not apply in the case of late-filed petitions, where the Board had been instead dismissing such cases (and planned to continue dismissing them) for lack of jurisdiction.  The Hallmark opinion basically argues that the 1928 amendment’s purpose was to fix a problem that the Board had already fixed with respect to late-filed petitions in United Paper in 1926.  Does that make the 1928 amendment superfluous to late-filed deficiency petition cases? 

However, in my view, even accepting for purposes of discussion that the Hallmark court has the better of this argument, the real question is whether the enactment of IRC 7459(d) a provision that would possibly provide a strange result under the non-jurisdictional filing deadline interpretation – contributes enough statutory context to require a court to find that Congress made a clear statement in IRC 6213(a) that the filing deadline is jurisdictional.  This strikes me as an argument that cannot be maintained after Boechler.  Below is what Boechler said about the SG’s argument that the language in the injunctive provision of the CDP legislation (first enacted in 2000 at IRC 6330(e)(1)) could produce a strange result if the IRC 6330(d)(1) deadline to file a CDP petition (enacted in 1998) were not jurisdictional.  The Court found that the strange result was probably a point in favor of the SG’s interpretation of the filing deadline, but not enough to meet the clear statement exception. 

The Commissioner contends that a neighboring provision clarifies the jurisdictional effect of the filing deadlineSection 6330(e)(1) provides that “if a [collection due process] hearing is requested . . . the levy actions which are the subject of the requested hearing . . . shall be suspended for the period during which such hearing, and appeals therein, are pending.”  To enforce that suspension, a “proper court, including the Tax Court,” may “enjoi[n]” a “levy or proceeding during the time the suspension . . . is in force,” but “[t]he Tax Court shall have no jurisdiction under this paragraph to enjoin any action or proceeding unless a timely appeal has been filed undern subsection (d)(1).”  § 6330(e)(1).

Section 6330(e)(1) thus plainly conditions the Tax Court’s jurisdiction to enjoin a levy on a timely filing under § 6330(d)(1).  According to the Commissioner, this suggests that § 6330(d)(1)’s filing deadline is also jurisdictional.  It would be strange, the Commissioner says, to make the deadline a jurisdictional requirement for a particular remedy (an injunction), but not for the underlying merits proceeding itself.  If that were so, the Tax Court could accept late-filed petitions but would lack jurisdiction to enjoin collection in such cases.  So if the IRS disobeyed § 6330(e)(1)’s instruction to suspend the levy during the hearing and any appeal, the taxpayer would have to initiate a new proceeding in district court to make the IRS stop.

We are unmoved—and not only because the scenario the Commissioner posits would arise from the IRS’s own recalcitrance.  The possibility of dual-track jurisdiction might strengthen the Commissioner’s argument that his interpretation is superior to Boechler’s.  Yet as we have already explained, the Commissioner’s interpretation must be not only better, but also clear.  And the prospect that § 6330(e)(1) deprives the Tax Court of authority to issue an injunction in a subset of appeals (where a petition for review is both filed late and accepted on equitable tolling grounds) does not carry the Commissioner over that line.  

142 S. Ct. at 1499.

I think that this passage from Boechler applies equally to the possible strange res judicata result that would be produced by IRC 7459(d) if the deficiency filing deadline is held not jurisdictional.  It’s a point in favor of a jurisdictional interpretation of the deficiency petition filing deadline, but the point does not carry the Hallmark court over the line of proving the application of the clear statement exception.

What’s Wrong With The Tax Court’s Hallmark Opinion: Part 6

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

Since 2004, the Supreme Court has attempted to reduce the number of jurisdictional claim-processing rules, including jurisdictional filing deadlines, because of the Court’s concern that holding a rule jurisdictional results in unduly “harsh” and “drastic” consequences to litigants and the courts.

Perhaps my biggest disappointment with the Hallmark opinion is its complete apparent indifference to those harsh and drastic consequences to taxpayers and the Tax Court’s own judges.  Hallmark attempted to quantify for the court the number of taxpayers who would likely be adversely affected each year by a holding that the deficiency petition filing deadline is jurisdictional.  In its opinion, the court wouldn’t discuss this research. 

And, of course, if, say, 30,000 deficiency petitions are filed in the court this year, the judges will have to spend considerable time policing the filing deadline as jurisdictional in every single one of those deficiency cases.  (Thankfully, after Myers and Boechler, the judges don’t have to police the filing deadlines for whistleblower award and Collection Due Process (CDP) petitions.)

The judges must compare every deficiency petition filing date (usually by looking at the envelope in which the petition was mailed) to the last date to file shown in the notice of deficiency, since the court is not allowed to leave to the IRS the raising of jurisdictional defects.  Parties are not allowed to forfeit or waive jurisdictional defects.

Further, the Tax Court regularly finds late filing when the parties have submitted stipulated decision documents settling a case.  If the filing deadline were not jurisdictional, then late filing would be a merits defense that would automatically be forfeited or waived if the IRS signed a decision document settling a case.  What a waste it is for the court to have to dismiss a settled case after making its own investigation as to the petition’s timeliness (one including issuing an order to show cause why the case shouldn’t be dismissed for lack of jurisdiction for late filing).  Clearly, the IRS will give the taxpayer the agreed settlement administratively if the court refuses to enter a Tax Court decision setting forth the agreed deficiency.  Keith has done a post on this stipulated decision jurisdictional problem, which, in my experience typically seems to happen once or twice a month.

In this post, I will remind readers of the information that I dug up, uncredited and pro bono, for Hallmark (and that Hallmark showed to the court) as to how many petitioners are hurt by the Tax Court’s position that the deficiency filing deadline is jurisdictional.  For the most detail on this information and how I found it, see the tables of cases listing docket numbers, names, and the dates of dismissal orders or orders to show cause in Hallmark’s memorandum of law in support of its motion to vacate the Tax Court’s April Fool’s Day dismissal in its case.  For a less detailed summary (without the tables and missing some information), see an earlier post Keith did here.  In this post, I will condense even more the information revealed in Keith’s prior post, but I will supplement the information a bit from the Hallmark case filing.


To show that the Tax Court should have agonized about the harsh and drastic consequences of finding the filing deadline jurisdictional, I first quote from Henderson v. Shinseki, 563 U.S. 428 (2011):

In this case, as in others that have come before us in recent years, we must decide whether a procedural rule is “jurisdictional.”  This question is not merely semantic but one of considerable practical importance for judges and litigants.  Branding a rule as going to a court’s subject-matter jurisdiction alters the normal operation of our adversarial system.  Under that system, Courts are generally limited to addressing the claims and arguments advanced by the parties.  Courts do not usually raise claims or arguments on their own.  But federal courts have an independent obligation to ensure that they do not exceed the scope of their jurisdiction, and therefore they must raise and decide jurisdictional questions that the parties either overlook or elect not to press.

Jurisdictional rules may also result in the waste of judicial resources and may unfairly prejudice litigants.  For purposes of efficiency and fairness, our legal system is replete with rules requiring that certain matters be raised at particular times.  Objections to subject-matter jurisdiction, however, may be raised at any time.  Thus, a party, after losing at trial, may move to dismiss the case because the trial court lacked subject-matter jurisdiction.  Indeed, a party may raise such an objection even if the party had previously acknowledged the trial court’s jurisdiction.  And if the trial court lacked jurisdiction, many months of work on the part of the attorneys and the court may be wasted.

Because the consequences that attach to the jurisdictional label may be so drastic, we have tried in recent cases to bring some discipline to the use of this term.  We have urged that a rule should not be referred to as jurisdictional unless it governs a court’s adjudicatory capacity, that is, its subject-matter or personal jurisdiction.  Other rules, even if important and mandatory, we have said, should not be given the jurisdictional brand. 

Id. at 434-435 (citations omitted).  Accord United States v. Kwai Fun Wong, 575 U.S. 402, 409 (2015) (“Given those harsh consequences, the Government must clear a high bar to establish that a statute of limitations is jurisdictional.”).

I looked at all orders of dismissal in late-filed deficiency cases during the pre-Boechler months of February and March of this year.  (I can’t look at most later months, since, after May 6, the Tax Court put a hold on the dismissal of all late-filed deficiency cases until it issued the Hallmark opinion.)  I found about 100 dismissals over those two months.  Annualizing that figure (multiplying by 6) gives about 600 people whose cases would be dismissed for lack of jurisdiction for late filing in a typical year.

I then found that about a quarter of dismissals are the result of Tax Court judges issuing orders to show cause why the case should not be dismissed for lack of jurisdiction for late filing.  Tax Court judges actually issue orders to show cause in about a third more cases than actually get dismissed after such orders, since, in a substantial minority of cases, the IRS eventually satisfies the Tax Court that, in fact, the petition was timely filed.  So, that means that the IRS misses about 150 taxpayers each year (600 x 1/4) who have filed late deficiency petitions, and the Tax Court needlessly issues about 50 orders to show cause where the IRS usually already knows the petition was timely filed.  If the filing deadline were not jurisdictional, all of these 150 taxpayers whose cases would otherwise have been dismissed for lack of jurisdiction for late filing would benefit by having the opportunity to litigate their cases on the merits.  I have no reason to think that the IRS will ever get better at finding late-filed deficiency petitions, so this number of taxpayers who would benefit from the IRS missing late filing should probably continue in 2023 and thereafter.

I reviewed the 100 or so dismissals from February or March to get a sense of how many cases might also benefit from equitable tolling of the filing deadline if the deadline could be equitably tolled.  The vast majority of taxpayers who are asked by the Tax Court to explain their late filing never file responses or file responses that do not address the late filing but just argue the merits of the proposed deficiency.  My sense is that only 5% of taxpayers, or about 30 per year (5% of 600), will file responses in which they set forth facts that would plausibly justify making an equitable tolling argument.  Of course, not all of these taxpayers would win such an argument if litigated.  But, the IRS might simply have its attorneys concede equitable tolling in particularly egregious cases justifying tolling and only contest the cases of the few other people who articulate a plausible, but not wining, equitable tolling argument.

That the IRS lawyers may actually grant equitable tolling themselves, without the court’s ruling, is buttressed by what happened in the Castillo case, which Keith discussed in a post on April 29, 2022, and which I later discussed in a post on August 3, 2022.  In Castillo, the taxpayer belatedly filed a CDP petition after her new attorney learned (only from an IRS transcript) that 8 months earlier the IRS had issued a notice of determination.  USPS records show that the notice was never delivered to the taxpayer; the notice is still listed as in transit.  Castillo’s lawyer argued to the Tax Court that the CDP petition filing deadline is not jurisdictional and is subject to equitable tolling and that non-receipt of the “ticket to the Tax Court” is a proper ground for equitable tolling of the petition filing deadline.  When the Tax Court dismissed the case for lack of jurisdiction, Ms. Castillo appealed her case to the Second Circuit, where the parties fully briefed the case.  The appeal, though, was then put on hold, awaiting the Supreme Court’s ruling in Boechler.  After Boechler held the CDP petition filing deadline not jurisdictional and subject to equitable tolling, the Second Circuit remanded Ms. Castillo’s case to the Tax Court for an inquiry into whether the facts justified equitable tolling.

All along, Ms. Castillo had also argued that the deficiency was clearly incorrect and that she owed no taxes.  I have been told that in the remand, the IRS attorneys have simply conceded her case.  That means that the IRS attorneys both conceded that the petition was timely filed and that there is no deficiency.  A stipulation of settled issues in Castillo was entered by the Tax Court on November 8, 2022 (Docket No. 18336-19).  I have not seen it.  Presumably, a stipulated decision will follow shortly.  I am not sure why no stipulated decision has yet been entered.

On April 17, 2020, I did a post in which I also discussed how IRS attorneys made pointless three ideal test cases that Keith and I had found for challenging whether the deficiency filing deadline is jurisdictional or subject to equitable tolling.  In one case, the IRS reissued the notice of deficiency, and the taxpayers timely filed a new petition, so it made no sense to further dispute that the filing deadline in the earlier case should be equitably tolled.  In the two other cases, the IRS attorneys looked at the merits of the underlying liability and concluded that the taxpayers had no deficiencies.  The IRS was willing to give the taxpayers administratively “no deficiency”, so it made no sense to continue litigating whether their Tax Court cases should be dismissed for lack of jurisdiction.  If the deficiency petition filing deadline is ultimately held not jurisdictional, I suspect that these resolutions without court intervention may become a regular practice of IRS attorneys where the arguments for equitable tolling are compelling.

After Hallmark was decided, Anna Gooch of the Center for Taxpayer Rights and I again began monitoring newly-issued orders of dismissal for lack of jurisdiction for late filing in deficiency cases.  A considerable number or orders will be issued over the next month or two in what I estimate will be about 350 cases in which the Tax Court had suspended rulings on motions to dismiss and orders to show cause pending the Hallmark ruling.  I get to the 350 figure by multiplying the typical figure for annual dismissals of late-filed deficiency cases (600) by 7/12 to account for the roughly 7 months during which the Tax Court suspended issuing dismissal order pending the outcome in Hallmark.  In the first six business days after Hallmark was issued, Anna and I found about over 100 dismissals of deficiency cases for lack of jurisdiction for late filing and only one case in which it seemed that a taxpayer had probably-good arguments for equitable tolling.  That accords pretty well with my estimate that only about 5% of late-filed deficiency cases would ever argue for equitable tolling.  It appears that the Tax Court is primarily first dismissing those cases where taxpayers never responded to the IRS’ motion to dismiss or the Court’s order to show cause.  (Orders where a taxpayer responded usually take a page or two more to write.)

So, despite the fears I have heard from tax lawyers that equitable tolling of the deficiency filing deadline would overwhelm the Tax Court in equitable tolling disputes, I think the Tax Court judges each year will have to decide few equitable tolling disputes, perhaps through hearings or motions for summary judgment on the issue filed by the IRS.  Offsetting this small extra work where equitable tolling will be alleged in a few cases each year (perhaps 30) is the saving of Tax Court judges’ time in not having to police the timely filing of all 30,000 deficiency petitions that will likely be filed each year.

In summary, each year probably 150 taxpayers would benefit if the deficiency filing deadline is held not jurisdictional (in cases where the IRS simply misses the late filing), and fewer than 30 taxpayers would actually get equitable tolling in their cases either by judicial ruling or from IRS attorneys not wanting to litigate the equitable tolling issue. I simply can’t understand why the Tax Court, when presented with this information in Hallmark about the drastic and harsh impact on the court and litigants of holding the filing deadline jurisdictional, did not mention this data at all in the opinion.

What’s Wrong With The Tax Court’s Hallmark Opinion: Part 5

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

As I noted in the last part of this post, the Supreme Court has created a stare decisis exception to the rule that claim-processing rules (including filing deadlines) are no longer jurisdictional.  In that part, I gave the citations to nine opinions of the Supreme Court (including Boechler) stating that the exception applies where there is Supreme Court precedent that had previously held the claim-processing rule jurisdictional, even though the claim-processing rule would not meet today’s exception for a “clear statement” from Congress.  In the only two opinions since the Supreme Court announced its new thinking no jurisdiction where the Supreme Court applied the stare decisis exception, Bowles v. Russell, 551 U.S. 205 (2007), and John R. Sand & Gravel Co. v. United States, 552 U.S. 130 (2008), there were multiple Supreme Court precedents going back over 100 years that made the Court feel it should not overturn such precedents because no doubt Congress relied on those precedents in legislating.  One might call this a legislative reenactment concern when a long line of Supreme Court opinions are involved.

However, the primary reason that the Tax Court in Hallmark held the deficiency petition filing deadline jurisdictional is not the language of that deadline meeting the “clear statement” exception, but the existence of a 98-year-long string of opinions from courts below the Supreme Court that have uniformly held the filing deadline jurisdictional.

But, that string of opinions is irrelevant under the Supreme Court’s articulated stare decisis exception that applies for purposes of the jurisdictional test.  Moreover, the Hallmark opinion fails to seriously confront the Boechler opinion’s disparagement of that deficiency precedent.

In this part of my post, I will discuss (1) how the Hallmark opinion misapplied the stare decisis exception and (2) how the Hallmark opinion misconstrued the Boechler opinion’s disparagement of the very deficiency opinions on which the Hallmark court relied into a comment going to the lack of a long line of precedent under IRC 6330(d)(1).


I begin with the Hallmark court’s conflating the jurisdictional stare decisis exception with the legislative reenactment doctrine that can sometimes be applied where there exists a long line of opinions from courts below the Supreme Court consistently interpreting the statute. 

The Hallmark court wrote:

According to the Supreme Court, “[w]hen ‘a long line of this Court’s decisions left undisturbed by Congress,’ . . . has treated a similar requirement as ‘jurisdictional,’ we will presume that Congress intended to follow that course.”  Henderson [v. Shinseki], 562 U.S. [428 (2011)] at 436 (quoting Union Pac. R.R. Co. v. Brotherhood of Locomotive Eng’rs & Trainmen Gen. Comm. of Adjustment, Cent. Region, 558 U.S. 67, 82 (2009)).  This statement describes the traditional tool of statutory construction known as the “prior-construction canon.”  If a statute is reenacted using words or phrases that have already received authoritative construction by the highest court in a jurisdiction, or have been uniformly construed by inferior courts or the responsible agency, then the later version of that statute preserving the wording is presumed to carry forward that interpretation, and they are to be understood according to that construction.  See, e.g., Bragdon v. Abbott, 524 U.S. 624, 645 (1998) (citing an “unwavering line of administrative and judicial interpretation” that included no Supreme Court opinions, and holding, “[w]hen administrative and judicial interpretations have settled the meaning of an existing statutory provision, repetition of the same language in a new statute indicates, as a general matter, the intent to incorporate its administrative and judicial interpretations as well”). . . .

Slip opinion at pp. 28-29 (footnote omitted; one citation omitted).

After this quote, the Hallmark opinion went on to establish that, since 1924, the Board of Tax Appeals has treated the deficiency petition filing deadline as jurisdictional and, since 1928, beginning with a D.C. Circuit opinion, 10 of the 12 Courts of Appeals that hear appeals from the Tax Court have issued precedential opinions holding the filing deadline jurisdictional.  (The First and Fourth Circuits have no published opinions on this issue, but have agreed with the other Circuits in unpublished opinions.)  The Tax Court has also consistently treated the filing deadline as jurisdictional. 

The Hallmark court then points out that Congress amended the sentence in Revenue Act of 1924 section 274(a) that contains the filing deadline (currently the first sentence in IRC 6213(a)) many times, beginning in 1926 and all the way up to 1969.  Those amendments each lengthened the filing deadline.  Then in 1998, Congress amended IRC 6213(a) to add a new final sentence allowing taxpayers to rely on any incorrect date shown on the notice of deficiency as the last date to file.  The Hallmark opinion quotes from the “present law” Ways and Means and Conference Committee reports’ discussion of the 1998 amendment where those reports observe that the filing deadline is jurisdictional.  However, those quotes are the only instances over the past 98 years where the Congress has even acknowledged the issue of whether the filing deadline is jurisdictional, and the 1998 amendment has the same effect whether or not the filing deadline is jurisdictional.  Indeed, each of the amendments over the years that lengthened the deficiency petition filing deadline would have the same effect whether the filing deadline is jurisdictional or not. 

I don’t think the Supreme Court would give much attention to those 1998 committee report sentences.  Just like judicial statements from the period that the Supreme Court now calls “drive-by jurisdictional rulings” entitled to no weight because the court making the statement had no reason to consider whether a deadline should be jurisdictional or not because it made no difference in the case; See Steel Co. v. Citizens for a Better Environment, 523 U.S. 83, 91 (1998); the committee report statements should be considered “drive-by” statements, also entitled to no weight. 

The jurisdictional stare decisis exception is clearly a reluctant exception to the Supreme Court’s preferred rule that filing deadlines are no longer jurisdictional because jurisdictional deadlines produce “harsh consequences” to the parties and the courts.  United States v. Kwai Fun Wong, 575 U.S. 402, 409 (2015).  While it is true that in Kwai Fun Wong, the Court said that “traditional tools of statutory construction must plainly show that Congress imbued a procedural bar with jurisdictional consequences”; id. at 410 – which sounds like an invitation to apply the legislative reenactment doctrine, perhaps relying on lower court opinions – no post-Kontrick Supreme Court opinion involving a jurisdictional question concerning a claim-processing rule cites opinions from courts below the Supreme Court as relevant to the Court’s decision. 

You can read each of the nine Supreme Court opinions cited by me in the last part of this post, and, in every case, the Court refers to a long line of opinions of the Supreme Court or “this Court” as the ones relevant for the stare decisis exception.  See, e.g., Union Pacific R. Co. v. Locomotive Engineers, 558 U.S. 67, 82 (2009) (“this Court’s decisions”) (the first Supreme Court jurisdiction opinion after Bowles and John R. Sand created the exception).  Indeed, to emphasize the point, note that in the next indented quote below from Boechler, the Court quoted from Fort Bend County v. Davis, 139 S. Ct. 1843, 1849 (2019), where the Court, in quoting from Union Pacific, deliberately modified Union Pacific’s reference to “this Court’s decisions” to “[Supreme] Cour[t] decisions”.  Justice Ginsburg, who wrote for a unanimous Court in Davis, made that change as a point of emphasis.  In the prior part of this post, I quoted from a Justice Ginsburg concurring opinion in Reed Elsevier v. Muchnick, 559 U.S. 154, 173-174 (2010), where she objected to an amicus citing to the Court over 200 opinions from courts below the Supreme Court.

In my view, the Tax Court in Hallmark gives lip service to the jurisdictional stare decisis exception as articulated by the Supreme Court, but instead unjustifiably applies a legislative reenactment doctrine that allows a court to consider a long line of opinions only from courts below the Supreme Court. 

Next, what does Boechler tell us about this long history of lower court opinions holding the deficiency filing deadline jurisdictional (relied on by Hallmark) and whether such long history can qualify for the stare decisis exception?  Here’s from Boechler:

The Commissioner’s weakest argument is his last:  He insists that § 6330(d)(1)’s filing deadline is jurisdictional because at the time that deadline was enacted, lower courts had held that an analogous tax provision regarding IRS deficiency determinations is jurisdictional.  (That provision says that “[w]ithin 90 days . . . the taxpayer may file a petition with the Tax Court for a redetermination of the deficiency.”  26 U.S.C. § 6213(a).)  According to the Commissioner, Congress was aware of these lower court cases and expected § 6330(d)(1)’s time limit to have the same effect.  So, he says, the statutory backdrop resolves any doubt that might linger in the text. The Commissioner’s argument misses the mark.  The cases he cites almost all predate this Court’s effort to “bring some discipline” to the use of the term “jurisdictional.”  Henderson, 562 U.S., at 435.  And while this Court has been willing to treat “‘a long line of [Supreme] Cour[t] decisions left undisturbed by Congress’” as a clear indication that a requirement is jurisdictional, Fort Bend County v. Davis, 587 U.S. __, __, 139 S. Ct. 1843 (2019), no such “long line” of authority exists here

142 S. Ct. at 1500. 

In other words, the Supreme Court doesn’t think much of the deficiency precedent from the lower courts of which the Solicitor General made the Supreme Court aware in Boechler, and the Supreme Court seems only willing to apply the stare decisis exception to its new jurisdictional rules if someone can show it that it has held the same claim-processing rule jurisdictional in the past.  But, no one can for the filing deadline in IRC 6213(a).

Here’s the Hallmark court’s response to this passage from Boechler:

We set out in detail (in Part II.E above and in the attached Appendix) the impressive history—almost a century long—of judicial construction of the 90-day deadline as jurisdictional and of Congress’s repeated perpetuation of that construction by its amendments, reenactments, and codifications.  No such history can be mustered for the asserted jurisdictional character of the 30-day deadline in section 6330(d)(1) (a provision which has existed in the Code only since 1998, see Internal Revenue Service Restructuring and Reform Act of 1998, § 3401(b), 112 Stat. at 749).  As the Supreme Court said, “no such ‘long line’ of authority exists here” in connection with section 6330(d)(1).  Boechler, P.C. v. Commissioner, 142 S. Ct. at 1500.

Slip opinion at p. 41. 

I don’t think that is much of a response to the Supreme Court’s disparagement of that lower court deficiency precedent.  And while there is some ambiguity in the above quote from Boechler concerning whether, when the Supreme Court was noting the absence of a long line of Supreme Court authority, it was referring to IRC 6330(d)(1) and/or 6213(a), even Hallmark concedes that there is no Supreme Court authority on whether the deficiency filing deadline is jurisdictional, either.

In Hallmark, the opinion also notes that on five occasions the Supreme Court has declined cert. on cases that could have presented the issue of whether the deficiency petition filing deadline is jurisdictional; see slip opinion at p. 37 n. 31; but every lawyer knows that there is nothing precedential in a Supreme Court denial of cert.