Does Judge Toro Misunderstand Guralnik?

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There’s a pro se deficiency case set for trial in San Francisco before Judge Toro in the week beginning February 3, 2020, Gebreyesus v. Commissioner, Docket No. 1883-19.  Although the IRS had not moved to dismiss the petition for lack of jurisdiction, Judge Toro, has essentially issued an order to show cause why he shouldn’t dismiss the case for lack of jurisdiction because of an untimely petition.  The Judge thinks the petition would be untimely if the notice of deficiency had been mailed to the taxpayer on the date shown on the notice of deficiency – October 22, 2018 – so the judge asks that proof of mailing be submitted to him by January 21, 2020.

This case gets into a particular issue of how the government shutdown interacts with (1) Guralnik v. Commissioner, 146 T.C. 230 (2016) (en banc), and (2) section 7502.  I think it pretty clear that the judge, who seems vaguely aware of Guralnik (but doesn’t cite the opinion), has the analysis wrong, and that there is no way this petition is untimely.  I hope the IRS lawyers in the case explain it to the judge, but just in case they don’t, I hope the judge gets to read this post before he rules.  No pro se taxpayer is likely to be able to explain about how Guralnik should work in this case.  Keith has blogged here, here, and here on the interaction of Guralnik and the recent government shutdown, but not on the facts of Gebreyesus.

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Gebreyesus Facts

Let’s assume that the IRS has documentary proof that it mailed the notice of deficiency on the date shown on the notice – October 22, 2018.  You would probably think the taxpayer has until January 20, 2019 (90 days) to file the petition in person, place it in the mails, or place it with a designated private delivery service.  But, January 20, 2019 was a Sunday, and the 21st was Martin Luther King Jr.’s Birthday – both of which under section 7503 can’t be the last date to file.  Interestingly, the notice of deficiency correctly stated that the last date to file was Tuesday, January 22, 2019.

But, then, the government (including the Tax Court) shut down in late December.  As a result, the Tax Court’s Clerk’s Office was not open again until Monday, January 28, 2019.

Judge Toro just noticed that on January 23, 2019, the petition was placed with a FedEx service that is a qualifying private delivery service under section 7502(f).  Had the government not shut down, the petition no doubt would have been delivered to the court overnight on Wednesday, January 24, 2019.  But, the petition arrived at the Tax Court instead on Monday, January 28, 2019 – the date the Clerk’s Office reopened – and was filed on that date.

Judge Toro’s Analysis

In his order, Judge Toro writes:

If the notice of deficiency was mailed on October 22, 2018 (that is, on the date shown on the notice of deficiency), then the 90-day period under section 6213(a) would have expired on January 22, 2019 (taking into account that January 20, 2019, was a Sunday and January 21, 2019, was a holiday in the District of Columbia).  Because the ship date reflected on the FedEx envelope – January 23, 2019 -is one day after January 22, 2019, the petition would be untimely under section 6213(a) and the rules of section 7502(a) and (f).
 
If, however, the notice was mailed after October 22, 2018, the 90-day period would have expired no earlier than January 23, 2019, and, since the petition was given to FedEx by January 23, 2019, under section 7502(a) and (f) the petition would be treated as having been timely filed. [footnote omitted]

What’s Wrong With This Analysis?

Section 7502 has no application unless the petition arrives after the last date to file.  But, that did not occur in this case.  Under Guralnik, if the Clerk’s Office is not open on what would ordinarily be the last date to file, then the last date to file becomes the date the Clerk’s office reopens – i.e., January 28, 2019 in this case. But, that’s the date the Tax Court physically received and filed the petition.  So, the petition did not arrive after the due date, taking into consideration Guralnik.  It arrived on the (revised) due date.  Effectively, the taxpayer here should be treated as if he personally walked into the Clerk’s Office on January 28, 2019 and handed in the petition for filing.  Clearly, that would be OK under Guralnik.  FedEx merely acted as the taxpayer’s agent in walking the petition in on that last date to file.

This result may strike some as odd – that the taxpayer could mail out the petition the day after the last date to file shown on the notice of deficiency, yet still get the benefit of filing a timely petition.  But, I don’t see how a court could rule any other way.

Carlton Smith 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.

Comments

  1. If not Judge Toro (sworn in October 18, 2019), then the IRS lawyers and the petitioner himself should see this post before his court date. There is a LinkedIn profile of a person in San Francisco with the same name as petitioner who is a CPA, MBA and tax analyst for a major utility – and also a VITA volunteer for four years.

    I see nothing in Judge Toro’s order that indicates he is aware of Guralnik. I also find it odd that he does not suggest petitioner can offer evidence (like a receipt) showing that FedEx had the package by January 22.

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