We have discussed with some frequency on the blog the sad tale of taxpayers and practitioners filing petitions beyond the 30 or 90-day period. We have also discussed the Tax Court’s willingness to accept petitions not perfectly formed or signed when the taxpayer has made a good faith effort to reach out to the Court. What about when a taxpayer jumps the gun and files the petition during the exam before the IRS issues a stat notice? If the notice of deficiency is the “ticket” to Tax Court, what happens to petitioners who file before the IRS issues the ticket? Cases get filed in Tax Court with some frequency from IRS correspondence that does not provide the proper basis for Tax Court jurisdiction. Figuring out whether the Court has jurisdiction based on these filings can be very challenging and was one of the reasons Chief Counsel sought in its request for rule changes last fall that the Court require parties to attach the correspondence to the petition giving the Court jurisdiction.
read more...I came across an order the other day Weiss v Commissioner that raised this issue. The Weisses filed a petition to Tax Court in January of 2016, but the IRS did not issue its notice of deficiency until February. IRS filed a motion to dismiss the petition for lack of jurisdiction in March; the taxpayer, a couple of weeks later, filed a response to the IRS’s motion. Luckily, the taxpayer’s response to the IRS motion was within the 90 days of the statutory notice. That filing within that 90-day period was enough to confer jurisdiction:
Because the notice of deficiency for petitioners’ tax years 2012 and 2013 was issued after the petition in this case was filed, the Court does not have jurisdiction over petitioners’ 2012 and 2013 tax years under the petition was filed. I.R.C. sec. 6213(a). However, inasmuch as petitioners’ Opposition to Motion To Dismiss for Lack of Jurisdiction was received within 90 days of February 12, 2016, the date the notice of deficiency for tax years 2012 and 2013 was sent to petitioners, a copy of the Opposition shall be filed as a petition at Docket No. 7399-16 to commence a separate case regarding petitioners’ 2012 and 2013 tax years.
To perfect the filing, the Tax Court ordered the Weisses to file an amended petition (with no separate filing fee). I suspect the problem of early filing may be fairly common, as there are multiple variations on pre-stat notice correspondence and many types of stat notices. Many are dense. Add to the mix that the high numbers of pro se taxpayers, and you have a recipe for confusion. While the Tax Court is quite permissive on what it will treat as a petition, the Weisses were lucky that they responded to the IRS motion to dismiss quickly, and that the IRS filed its motion to dismiss close in time to when the IRS issued its notice of deficiency. The case demonstrates that the Tax Court seeks to open its doors to petitioners when possible and also that luck sometimes plays a part in whether someone gets into the Court to argue for relief. We are still waiting to see if the unlucky Mr. Guralnik will have the door opened for him. For discussions of the Guralnik case readers can look here and here.
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“I suspect the problem of early filing may be fairly common, as there are multiple variations on pre-stat notice correspondence and many types of stat notices.”
Yes, for more reasons than that. Persons living outside the US have no way of knowing if the IRS did or didn’t mail a stat notice during the past 30 days. Even when receiving a stat notice, persons who have never received a notice of deficiency or notice of determination cannot easily find out if the stat notice is a notice of deficiency or notice of determination or other.
I filed early, IRS moved to dismiss, IRS sent a letter which I couldn’t figure out if it was a notice of determination or not, Tax Court said “send it to us” and I did but while it was in transit Tax Court granted the motion to dismiss. When Tax Court received my affidavit with IRS letter, Tax Court made a ruling somewhat like the one discussed in this posting, but Tax Court altered my affidavit to treat it as a petition and subsequently did not allow it to be replaced by my attempt to make it a real petition. Furthermore Tax Court and the IRS both knew that the IRS’s letter wasn’t a notice of determination, but I didn’t learn that until after the trial. When I learned the IRS’s letter wasn’t a notice of determination, there was still time for me to move to dismiss my own case, but I didn’t learn about that possibility until after it was too late to do so.
Another time an IRS letter closed a timely requested CDP hearing, the IRS and Tax Court dismissed for lack of jurisdiction because the IRS’s letter wasn’t a notice of determination.
So yes Tax Court can make this kind of ruling, but I don’t see a way to predict whether they will or won’t in any particular case.
Meanwhile, so far in 2016 three IRS letters, in envelopes with no dates in postal meters of the UK’s Royal Mail, were deliered in Japan more than 30 days after the dates printed in the letters. Fortunately these aren’t stat notices. (They pertain to inquiries allegedly from me or my authorized representative, but I did not make the inquiries that the letters pertain to, and despite my best efforts I don’t have an authorized representative.)