D.C. Cir. Myers Whistleblower Opinion Status Affecting Some Other Tax Court Cases

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Just a short update post.  We blogged here last summer when the D.C. Circuit in Myers v. Commissioner, 928 F.3d 1025 (D.C. Cir. 2019), reversed the Tax Court and held that the petition filing deadline at section 7623(b)(4) for a whistleblower award review proceeding is not jurisdictional and is subject to equitable tolling under recent non-tax Supreme Court case law.  We also reported here when the D.C. Circuit rejected a DOJ petition and refused to rehear the case en banc.  The Solicitor General has not yet decided whether to file a petition for cert. in Myers.  He must do so, if at all, by January 2, 2020.  In the meantime, the Tax Court has put all whistleblower cases involving late filing on hold.

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As a result of Myers, the Tax Court has been put in a bit of a quandary as to what to do with late-filed whistleblower award cases (whether or not the petitioners therein have any argument for equitable tolling).  There are currently five whistleblower cases pending in which the IRS has moved to dismiss the case for lack of jurisdiction for being late filed.  Since all whistleblower cases are appealable to the D.C. Circuit under section 7482(b)(1)(flush language), the Tax Court under Golsen will have to follow whatever happens ultimately in Myers.  If the SG does not seek cert. and the petitioners filed late and do not make any successful equitable tolling argument, then the Tax Court will have to dismiss the cases on the merits, not for lack of jurisdiction.  Given that there is no other court in which such petitioners can litigate such awards (or lack thereof), a loss in the Tax Court on the merits or for lack of jurisdiction is probably of no practical difference to the petitioners.  But, the Tax Court cares about whether it has jurisdiction to rule or not.

So, in each of the five cases, the Tax Court has decided simply not to rule on the IRS motions at this time, but to order the IRS to provide status reports on the progress of the Myers opinion becoming final.  See Tax Court orders in Aghadjanian v. Commissioner, Docket No. 9339-18W (dated 9/4/19 and 12/9/19); McCrory v. Commissioner, Docket No. 3443-18W (dated 9/4/19 and 12/6/19); Bond v. Commissioner, Docket No. 5690-19W (dated 10/8/19); Bond v. Commissioner, Docket No. 6267-19W (dated 10/30/19); Bond v. Commissioner, Docket No. 6982-19W (dated 11/5/19).

Although arguably the language in section 7623(b)(4) is virtually identical to that in the Collection Due Process (CDP) provision at section 6330(d)(1), the Tax Court has not been holding up rulings on similar CDP case motions to dismiss – still following its holding in Guralnik v. Commissioner, 146 T.C. 230, 235-238 (2016), that the CDP filing deadline is jurisdictional and not subject to equitable tolling under recent Supreme Court case law.  The Ninth Circuit agreed with Guralnik in Duggan v. Commissioner, 879 F.3d (9th Cir. 2018).  A case on the CDP filing deadline is currently pending before the Eighth Circuit, where briefing is complete, and the case is awaiting oral argument (not yet scheduled).  Boechler, P.C. v. Commissioner, 8th Cir. Docket No. 19-2003.  In Boechler, the taxpayer asks the court to follow Myers and not Duggan.  Here are links to the briefs filed in the Boechler case:  the brief for the appellant, an amicus brief filed by the Harvard clinic, the brief for the appellee, and the reply brief for the appellant.  No doubt, the existence of the Boechler case will be one of the things that the SG will consider in deciding whether to seek cert. in Myers

Whatever the SG does about Myers, the arguments therein are not going away anytime soon with respect to at least some other Tax Court jurisdictions.

At least one other practitioner has contacted Keith and me and is considering raising the Myers arguments in pending Tax Court CDP cases appealable to a Circuit that hasn’t spoken yet on the arguments.  Further, as we have blogged before, there are two late-filed deficiency jurisdiction cases that were argued to the Ninth Circuit on October 22, 2019 in which the Myers arguments were raised.  Organic Cannabis Foundation LLC v. Commissioner, 9th Cir. Docket No. 17-72874, and Northern California Small Business Assistants, Inc. v. Commissioner, 9th Cir. Docket No. 17-72877.  A ruling in those cases could come any day now.

About Carlton Smith

Carlton M. Smith worked (as an associate and partner) at Roberts & Holland LLP in Manhattan from 1983-1999. From 2003 to 2013, he was the Director of the Cardozo School of Law tax clinic. In his retirement, he volunteers with the tax clinic at Harvard, where he was Acting Director from January to June 2019.

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