I have written before about premature assessments which are one consequence of the closing of the Tax Court clerk’s office during the pandemic. A separate problem also exists with respect to the timing of appeals from the Tax Court. So, the pandemic creates problems for cases coming and going in the Tax Court.
Some problems could result from the closure of the clerk’s office during this period because of the way that appeals from Tax Court cases occur; however, when writing to the circuit courts to explain the problem and urge them not to dismiss appeals that fell due during the period in which IRS Notice 2020-23 extended the period. In the letter to the circuit courts, the Department of Justice Appellate Section relied on IRC 7508A and the authority of the IRS to extend time frames where an emergency exists to explain to the circuit courts when cases should not be dismissed without a careful review of the dates of filing and how they related to the extension of time granted because of the pandemic. A copy of the letter from the Tax Section of DOJ to the Second Circuit which was docketed in the appeal of Castillo v. Commission is here.
When a taxpayer loses all or part of a Tax Court case and seeks to appeal, the basics of the appeal process are found in IRC 7482 and the specific provision stating that the appeal must be filed in the Tax Court within 90 days of the adverse decision is found in IRC 7483. Not only does the taxpayer file the appeal with the Tax Court but the taxpayer also pays the filing fee to the Tax Court. (Unless you can qualify for a fee waive at the circuit court, which is a separate process from requesting a fee waiver with the Tax Court, the taxpayer must pay quite a bit more to appeal than to file the Tax Court case – $505 versus $60.)
The reopening of the Tax Court clerk’s office no doubt caused the clerks not only to find all of the Tax Court petitions filed during the period of the closure of the clerk’s office but also the appeals filed. The number of appeals filed is not a high number but just as the IRS assessed taxes presuming the taxpayer did not file a Tax Court petition, the circuit courts receiving a notice of appeal that the Tax Court logged in after the pandemic could conclude that the appeal was not timely filed and dismiss it. This caused the Appellate Section of the Department of Justice to send a letter to the Second Circuit and to the other circuits.
The letter notifies the Second Circuit of the issue created by the pandemic and of the specific grant of additional time to file the appeal created by Notice 2020-23. The letter notes that this process is specific to tax and that circuit courts would not be expected to know this nuanced issue regarding tax appeals.
Carl Smith suggested this post to me and provided me with some helpful things to say for which he deserves credit. He points out that there are many different statutes of limitation (SOLs) for bringing civil and criminal appeals. For example, the general civil appeals SOL may be found at 28 USC 2107. Subsection (a) provides the general rule that the appellant has 30 days. Subsection (b) allows 60 days to appeal when the government is a party. Subsection (c) allows district courts to extend the SOL under limited circumstances. In Bowles v. Russell, 551 U.S. 205 (2007), the Supreme Court held that, even though it would not treat the civil appeals filing deadline as jurisdictional if it were applying its current case law on a clean slate, the deadline was still treated as jurisdictional because there were over 100 years of Supreme Court cases holding the filing deadline jurisdictional (a stare decisis exception to the Court’s new rules generally treating filing deadlines as not jurisdictional).
By contrast, the period to file an appeal from the Tax Court is in IRC 7483, which generally provides 90 days from the entry of the Tax Court decision. Unlike 2107, 7483 does not list any exceptions or extensions. The Supreme Court has never held the 7483 filing deadline to be jurisdictional, and it is clear that the section’s language would not make it jurisdictional under current Supreme Court case law. There are some older Circuit court opinions holding the Tax Court appeal filing deadline to be jurisdictional and more recent unpublished Circuit court opinions stating the same, but none discusses the recent Supreme Court case law’s impact on the filing deadline.
There is a special FRAP rule applicable to Tax Court notices of appeal, Rule 13. FRAP 13(a)(1)(B) provides for a non-statutory extension of the filing deadline as follows: “If, under Tax Court rules, a party makes a timely motion to vacate or revise the Tax Court’s decision, the time to file a notice of appeal runs from the entry of the order disposing of the motion or from the entry of a new decision, whichever is later.” In Myers v. Commissioner, 928 F.3d 1025 (D.C. Cir. 2019), the appellate court, sua sponte, raised the question whether it had to dismiss the appeal for lack of jurisdiction because Myers waited to file until after the Tax Court ruled on a post-decision motion to reconsider findings or opinion — at a time beyond 90 days after the decision had been entered. The D.C. Cir. ultimately held that the appeal was timely because, following the reasoning of another Circuit, motions to reconsider should be deemed the same as motions to vacate for purposes of Rule 13(a)(1)(B). Had the court not found the filing timely under the rule, it would have had to face the issues (raised by Myers) whether the 90-day period to file the appeal was not jurisdictional, and the DOJ waived any objection as to untimeliness by not raising this issue itself. The D.C. Cir. deliberately declined to rule on the issue of whether the 90-day filing deadline in 7483 is jurisdictional under recent Supreme Court case law.
The recent Tax Court appeal dismissals for lack of jurisdiction have happened because some Circuits just assume that the filing deadline is jurisdictional and thus the court must independently raise the issue of timeliness. Since courts of appeals see few Tax Court appeals, they are likely not aware that other provisions of the IRC, such as section 7508A, can provide extensions of the 7483 period — i.e., to look elsewhere before simply assuming all extensions of the 7483 period are located within the statute or Rule 13.
Update on Tax Court from Court Procedure and Practice Committee meeting
As a side note Judge Buch stated on a panel at the ABA Tax Section that the members of the clerk’s office there were working 12 hour days in order to attack the backlog of correspondence waiting for them when they returned. I understood him to say that the clerk’s office at the Tax Court had worked its way through the backlog and was current. This is good because he introduced a session on the Tax Court’s new case management system, which will go live in a couple months. I hope the members of the clerk’s office at the Tax Court were well rested when they returned from the pandemic closure, because they are having to run pretty fast for the remainder of 2020 between catching up on the mail and working through a new management system.