I reported in a post on July 27, 2023 that the Tax Court temporarily suspended rulings on pending motions to dismiss late-filed deficiency cases for lack of jurisdiction. This suspension was no doubt a result of the Third Circuit’s July 19, 2023, opinion in Culp v. Commissioner, 2023 U.S. App. LEXIS 18287. Culp held that the deficiency petition filing deadline is not jurisdictional and is subject to equitable tolling. Culp conflicts with the Tax Court’s opinion in Hallmark Research Collection v. Commissioner, 159 T.C. No. 6 (2022), where the judges of the Tax Court unanimously held the same deadline jurisdictional. The last orders dismissing such petitions before the pause were issued the day after Culp was issued. The pause in new orders was no doubt so the Tax Court could decide whether it wanted to reconsider its position in Hallmark in light of Culp. Internal Tax Court procedures ordinarily would require a new en banc opinion to discuss whether or not the Tax Court will stick to its ruling in Hallmark.
This is to report that the pause on rulings on motions to dismiss for lack of jurisdiction lasted only 2 weeks. On August 10, 2023, Chief Judge Kerrigan issued orders dismissing late-filed deficiency case for lack of jurisdiction in 9 dockets. She did this even though there has not been a new opinion on the jurisdictional question after Culp. The 9 orders all cited Hallmark and made no mention of Culp. None of the taxpayers in those 9 dockets resided in the Third Circuit, so the Tax Court was not bound to follow Culp under Golsen.
It will no doubt take many months for the new en banc opinion to be drafted, voted on, and issued. So why end the pause now? Keith and I can only speculate that perhaps, in the last 2 weeks, the Chief Judge contacted a majority of the regular judges of the Tax Court for their views on whether they would change their minds in light of Culp, and a majority said they would not. So, there was no need to continue the pause.
What is unknown at this point is whether the Solicitor General will authorize a petition for certiorari in Culp or request en banc reconsideration. The position of the government to this point has been that all time periods in the Tax Court are jurisdictional. The government lost that argument 9-0 in Boechler regarding collection due process jurisdiction. Will it be willing to take a more difficult case based on the language of the deficiency statute back to the Supreme Court in light of the Supreme Court’s decision in Boechler and the Third Circuit’s 3-0 decision in Culp. There has been or will be a meeting in the Room of Lies to discuss what to do in Culp.
If the Solicitor General decides that it is time to stop arguing that all Tax Court time periods for filing are jurisdictional, that could influence the Tax Court’s view of its jurisdiction or maybe it would have no influence on the Tax Court. Whether or not the decision influences the Tax Court, it could influence what happens in the next circuit court case if the government no longer supports the position of the Tax Court. The decision of whether to seek cert, or a rehearing en banc, in Culp does not necessarily bind the government in what it will argue when another jurisdiction case involving deficiency proceedings reaches a circuit court, but the failure to seek cert or a rehearing would certainly indicate some discomfort in returning to the Supreme Court with this argument.
The government has until September 5, 2023, to file any petition for reconsideration of Culp by the full Third Circuit.
I still don’t have any information on the docket in which the new en banc opinion will be issued. I will pass that information along as soon as I learn it.