Eighth Circuit Holds Tax Court CDP Filing Deadline Jurisdictional Under SCOTUS Case Law

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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.

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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  In an unpublished order , the Tax Court, citing its opinion in Guralnik v. Commissioner, 146 T.C. 230, 237-238 (2016), held that the filing deadline is jurisdictional and thus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.

Observations

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.

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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