Time Stands Still for Snow – Expanding Section 7503 on the Last Day to Timely Complete a Task

0 Flares Filament.io 0 Flares ×

We have all prayed for snow days since entering kindergarten. Now, we have another reason to continue those prayers. The Tax Court is posed to turn a snow day from day creating terrible results for those trying to get in its doors to another legal holiday extending the time upon which to act. Let’s hope it succeeds.

Special Trial Judge Armen has issued an extraordinary order in Guralnik v. Commissioner pursuant to Tax Court Rules 182(e) and 183. Depending on what happens to this order in the Tax Court and, on appeal if the Government goes that route, a new basis for getting a petition into the Court on time may have just come into being. The facts in the case cry out for relief. Judge Armen found two possible routes to relief. Perhaps a third exists. The private carrier list update in May 2015 also gets attention in the order and deserves your attention as you read about this case.


The Order

Perhaps the first matter to address is the order itself. Petitioner filed a petition seeking relief in a collection due process case (CDP) following the issuance of a determination letter. The letter was issued on January 16, 2015. The determination letter itself is not at issue. It seems to have been properly mailed and addressed. The last date to file a Tax Court petition in a CDP case runs 30 days after the mailing of a determination letter. In this case it would ordinarily have run on February 15, 2015. That date was a Sunday. The following date was a federal holiday, President’s Day, and the following day was a snow day in Washington, D.C., when all Federal and District offices, including the Tax Court were closed. So, the first day the Tax Court was open after February 15 was Wednesday February 18 and the petition arrived in the Tax Court early that morning.

Unfortunately, petitioner mailed the petition to the Tax Court on Friday, February 13 (an appropriate day for what he has gone through in this case) using FedEx “First Overnight” service – the most expedited and expensive service that FedEx offers. You might be thinking FedEx is an approved private carrier and you would be right; however, not every FedEx delivery service is approved. The “First Overnight” service did not exist in 2004 when the IRS had last published its list of approved private delivery services and so was not on the list. In May 2015, when the IRS next updated the list, this service did make it on the list as it logically should since it is better than all of the other FedEx services already on the list. Now you are starting to get a sense of why you should not send important documents on Friday the 13th. You are also getting a sense of why the Court might want to find a way to help Mr. Guralnik in this situation since he seems to have tried to do the right thing only to have not one but two odd things prevent him from reaching his goal.

The IRS filed a motion to dismiss the petition as untimely. Judge Armen’s order, an order ordinarily issued following such a motion, resolves the motion but in an extraordinary way. This past May 28, the Chief Judge assigned this case to Special Trial Judge Armen “for disposition”. Under 7443A(b)(4) and (c), Special Trial Judges are authorized to enter the decision of the Tax Court in CDP cases. It would appear that Judge Armen could rule on this motion without any further review.  However, he issued a “recommended” ruling that is attached to his order.  The recommended ruling is in the format of a T.C. Opinion (complete with proposed headnote).  The accompanying order says that this is governed by Rules 182 and 183, and that the parties can submit comments on the recommended ruling — the procedure the Tax Court adopted in response to Ballard v. Commissioner. The order itself gives you some sense of the importance of the decision in this case. If the proposed order stands, it may well get issued as a fully reviewed opinion of the Court because of the new ground that it stakes out in the last date to perform an act area. Since the Court started putting up designated orders on its website in 2011, this may be the first order that attached a recommended opinion.

Oddly, this issue of a snow day has apparently not come up before in deficiency cases.  Based on (1) the legislative history of 7503, (2) the Federal Rule of Civil Procedure rule governing this circumstance, and (3) a belief that Congress would want this result, Judge Armen recommends finding that the Court has jurisdiction over the case. Therefore, his proposed order restores the case to the general docket for eventual trial.

The Statute

The timely mailing rule of IRC 7502 provides that if a document is mailed timely it may be treated as timely filed. Section 7503 provides that “When the last day prescribed under authority of the internal revenue laws for performing any act falls on Saturday, Sunday, or a legal holiday, the performance of such act shall be considered timely if it is performed on the next succeeding day which is not a Saturday, Sunday, or a legal holiday.” The term legal holiday refers to legal holidays in the District of Columbia. Thus, a petition received by the Tax Court “after the expiration of the statutory filing period … is nevertheless deemed to be timely filed if the date of the U.S. Postal Service postmark stamped on the envelope in which the petition was mailed is within the time prescribed for filing.” Reg 301.7502-1.

If the petition comes to the court through a “designated delivery service”, it may also meet the timely mailing requirement as if it was mailed through the USPS. See 26 U.S.C. § 7502(f)(1). The IRS says what meets the requirements of a designated delivery service and here, for the reasons discussed above, petitioner did not meet that requirement. No dispute exists, however, concerning the date petitioner gave the petition to FedEx and the fact that the petition was delivered to the Court on the first day it was open after petitioner gave the petition to FedEx. Agreeing with the IRS that the delivery service did not meet the statutory requirements, Judge Armen nevertheless found that “we hold that the petition was timely filed and that the Court has jurisdiction to hear petitioner’s case… because section 7503 served to extend the filing deadline to Wednesday, February 18, 2015, thereby making the receipt of the petition on that date timely.” To reach this conclusion, he found that the “official closing of both District and Federal government offices, specifically including the Tax Court, on Tuesday, February 17, 2015, because of a winter snowstorm as a legal holiday in the District of Columbia for purposes of section 7503.”

How did Judge Armen work his way past many decades of the Tax Court not recognizing snow days as legal holidays for purposes of the timeliness of petitions in the Tax Court? He did it by looking back at the long history and purpose of the statute which came into existence as a result of the position that if the last day for performing an act fell on a Sunday and the taxpayer had not performed the act by that date the taxpayer had missed the deadline. See Section 274(a) of the Revenue Act of 1926, ch.27, 44 Stat at 55. See also Satovsky v. Commissioner, 1 B.T.A. 22 (1924). The Sunday rule was changed about a decade later to include legal holidays in the District of Columbia. See Section 272(a), Rev Act of 1934, ch.277, 48 Stat at 741. See also S. Rept No. 558 (1034), 1939-1 C.B. (Part 2) 586. See also S.Cal. Loan Ass’n v. Commissioner, 4 B.T.A. at 237-238. The rule was changed again after another decade to include Saturdays. See Pub. L. No. 79-291, sec. 203, 59 Stat. at 673 (1945). The change in 1945 to add Saturdays to the list of days not counted as the last day to perform an act resulted because the Tax Court closed its docket room on Saturdays after September 8, 1945 to comply with the Federal Employees Pact Act of 1945. See Pub. L. No. 79-106, 59 Stat. at 303. See also Pleasant Valley Wine Co. v. Commissioner 14 T.C. 519 (1950).

In reviewing the changes to the law regarding the days that would no longer count as the last day to perform an act, Judge Armen determined that the reasons for the changes resulted from the fact that the Tax Court was closed for business on those days. He then reasoned that the same basis for not allowing the last day to fall on a day when the Tax Court was not opened because it was not a federal work day also applied when the office was closed due to weather. In some ways it is even more logical to extend the rule to weather related closings because taxpayers cannot predict them. Before the changes to the law concerning the counting of weekend days or federal holidays, taxpayers at least knew that if the last day to perform an act fell on a day the Court would not be open it was incumbent upon them to perform the act on the last day the Court was open before the deadline passed. It is not possible to predict, at least not with certainty, when a weather related closing will occur. Allowing a weather related closing, or any externally created closing, to serve as a day not counted as the last date for filing, gives taxpayers a result that places them in a position to know when to act and does not punish them for a failure caused by an external source.

The Rule

Having worked through the legal basis for interpreting section 7503 to allow a weather closing to push forward the last date to perform an act, Judge Armen circled back to the Tax Court rules. There is no Tax Court rule dealing with this situation, though there is an FRCP that would extend the filing date in these circumstances.  Rule 6(a)(3)(A) of the FRCP addresses the issue of computing and extending time when the clerk’s office is inaccessible. Judge Armen cites In re Swine Flu Immunization Prod. Liab. Litig., where the court held that the last day to file an administrative claim under the Federal Tort Claims Act excluded both Sunday and the following Monday which was a snow day when government offices were closed. The decision looked to the FRCP.

Similarly, Rule 26(a)(3)(A) of the Federal Rules of Appellate Procedure extend the filing time when the clerk’s office is inaccessible. Tax Court Rule 25 is silent regarding inaccessibility of the Tax Court; however, that silence implicates Tax Court Rule 1(b) which provides “Where in any instance there is not applicable rule of procedure, the Court or the Judge before whom the matter is pending may prescribe the procedure, giving particular weight to the Federal Rule of Civil Procedure to the extent that they are suitably adaptable to govern the matter at hand.”

Equitable Tolling

If the IRS appeals this decision, petitioner may have another avenue for arguing that the time period should be held open for the filing of this petition – equitable tolling. We have written on equitable tolling many times and will probably write on it many more times. I credit Carl Smith with keeping this issue in our thinking and for many of the thoughts expressed here. Mr. Guralnik’s facts certainly present the type of situation in which one would want to raise equitable tolling. Denying him the opportunity to have his petition heard under these circumstances would not seem equitable. The IRS in its response in this case to the Court’s order to address the impact of the official closing of the Court due to snow acknowledged that dismissal of petitioner’s case “may seem harsh.” With a concession like that how could equitable tolling not apply?

This discussion needs to start by acknowledging that the Tax Court held that section 6330(d)(1)’s 30-day filing deadline is jurisdictional and not subject to extension in Boyd v. Commissioner, 124 T.C. 296, 303 (2005), aff’d 451 F.3d 8 (1st Cir. 2006).  The Tax Court made that ruling based on the since-rejected view of “jurisdictional” as any mandatory deadline.  Since the recent narrowing of the use of the word “jurisdictional” by the Supreme Court, the Tax Court has not revisited that Boyd holding.  Yet, Judge Armen has called the 30-day period jurisdictional in the recommended ruling. Even including the 1st Cir. in Boyd, no Circuit has ruled on the 6330(d)(1) period’s jurisdictional status one way or the other.  See Carlton M. Smith, “Equitably Tolling Innocent Spouse and Collection Due Process Periods”, Tax Notes Today, 2010 TNT 41-8 (Mar. 3, 2010) and several prior posts for a detailed discussion of equitable tolling issues as they might apply to this situation.

Within the last year, the Tax Court in Lippolis v. Commissioner has cited Supreme Court case law for the proposition that proximity of a dollar-amount requirement in whistleblower cases to the jurisdictional grant does not make that other requirement jurisdictional. Raising the equitable tolling argument here may provide another path to success even though it would require overturning the Tax Court’s decision in Boyd.    Since section 7503 does not literally mention snow days or other non-holidays when the federal government in D.C. is closed down, it is possible that the IRS will appeal this decision and seek to limit the scope of section 7503. Opening up another pathway for possible success could not hurt Mr. Guralnik’s chances to ultimately have his CDP argument heard on the merits.

Under recent case law, “filing deadlines ordinarily are not jurisdictional.”  Sebelius v. Auburn Regional Med. Center, 133 S. Ct. 817, 825 (2013). The Supreme Court in Auburn wrote:  “”We inquire whether Congress has ‘clearly state[d]’ that the rule is jurisdictional; absent such a clear statement, we have cautioned, ‘courts should treat the restriction as nonjurisdictional in character.’” Id. at 824. In a number of recent cases, the Supreme Court has found filing deadlines not to be jurisdictional. See Henderson v. Shinseki, 131 S. Ct. 1197 (2011) (time to file in Art. I Veterans Appeals Ct.); Auburn (time to file in a Medicare reimbursement contest forum); United States v. Wong, 135 S. Ct. 1625 (4-22-15) (FTCA times to file administrative claims and court suits under 28 usc 2401(b)).


This is an important case changing a long held position on the last day for performing an act. The procedural aspect of the case is interesting as well. Watch closely to see what the Tax Court does and how the IRS reacts. I suspect this is not the last time we write about Mr. Guralnik.






  1. I must comment in two parts on Guralnik. In this Part I, I will address the root cause of Mr. Guralnik’s problem–he is the latest in a too long list of recent clients who has had to suffer from the results of his attorney’s incompetence.

    How many orders or opinions have issued recently that involved an attorney who failed to follow simple filing rules, often with unpleasant results? I would guess enough by now to cause all to always proceed with an extreme abundance of caution. Not so with Mr. Guralnik’s attorney.

    To my esteemed colleagues:

    When the IRS issues a notice of accepted private delivery service…please pay attention to and abide by it. For instance, don’t “logically” assume that FedEx “First Overnight” service is an authorized PDS because “it is better than all of the other FedEx services already on the list.” In fact, don’t assume at all. Don’t assume the court will receive your package by the due date. Don’t assume the court will be open to receive your package on the due date. Better yet, send your filing through the Post Office and obtain a certified mail receipt. If you take that simple precaution, then no court can ever spotlight your lack of diligence in a published order or opinion that makes all of us look bad. And that’s only half the benefit.

    You also won’t have to “explain” to your client how you, a well-compensated professional, couldn’t even correctly mail a package. How embarrassing would it be for you to explain that “mistake” to even the most uninformed layman? What would your client think should he hear such an explanation from his attorney? How about this: “If my attorney can’t even mail a package right, then how can he possibly litigate my case right?” Don’t be the attorney who has to explain to his client why you must rack up (billable??) hours fighting a motion to dismiss that your ineptitude caused.

    I’ve always been disappointed in how those who operate, and those others who comment on, this blog treat cases such as Guralnik. They will dissect and attempt to treat only the symptom, but never the disease. Their discussions center on the legal issue(s), never the attorney.

    I have never know anyone else association with this blog who will chastise even a colleague (such as our Guralnik friend) who richly deserves the chastisement. In fact, some have chastised me for my having done so. Yet I cannot be the only one whose cares and concerns (a) include the tax Bar’s professional reputation and (b) extend to our clients’ best interests. So where is the outrage?

    I cannot join in a hope that our colleague’s inexcusable miscue will produce a result that “will succeed.” In the simple matter of how to correctly mail a package to a court, I’d rather hope that neither of us will fail.

    Unfortunately for Mr. Guralnik, his attorney failed him. More unfortunately, as I will explain in Part II of my comment, STJ Armen’s opinion cannot save him.

    • Part II

      STJ Armen’s Guralnik opinion on the legal effect of snow days is merely a snow job. His opinion lacks any support in either law or rule of law.

      Unfortunately for Mr. Guralnik, the Tax Court’s doors remain closed to him. His attorney did not timely file his petition. The Notice of Federal Tax Lien filed against him must therefore remain.

      First, Mr. Guralnik’s attorney did not use an approved Private Delivery Service to deliver his client’s petition. The “timely mailed is timely filed” rule in I.R.C. § 7502 therefore never arose to protect him.

      Second, I.R.C. § 7503 is not only plain, but it also contains definitions of the terms “last day” and “legal holiday.” That statute does not say that the term “legal holiday” includes a “snow day” or an “inaccessibility day.”

      Third, the Winkler case STJ Armen cited and quoted is inapposite. In fact, STJ Armen quotes the section of Winkler that refers only to the last day for filing as a day (i.e. Washington’s Birthday) that the Tax Court “would” be closed. Yet the last day for filing Mr. Guralnik’s petition was not a day that the Tax Court “would” be closed.

      Fourth, STJ Armen erroneously relied on Fed. R. Civ. P. 6(a). Tax Court Rule 1(b) allows the Tax Court to recur to the Federal Rules of Civil Procedure only when “there is no applicable [Tax Court] rule of procedure” that governs the matter. But the Tax Court had a rule that governed the Guralnik petition. Actually, it had several rules:

      a. Tax Court Rule 13(c) (“In all cases, the jurisdiction of the Court also depends on the timely filing of a petition. See Code sections 6213 and 7502…[W]ith respect to lien and levy actions, see Code sections 6320 and 6330”);

      b. Tax Court Rule 25(a) (“for the period within which to file a petition for a lien or levy action, see Code sections 6320 and 6330”);

      c. Tax Court Rule 25(b) (listing each recognized “legal holiday”);

      d. Tax Court Rule 25(c) (“The period fixed by statute, within which to file a petition with the Court, cannot be extended by the Court.”); and

      e. Tax Court Rule 330(b) (“The Court shall have jurisdiction of a lien or levy action under this Title when the conditions of Code section 6320(c) or 6330(d), as applicable, have been satisfied.”);

      5. STJ Armen’s reliance on the Swine Flu D.C. Circuit case is also erroneous. That case addressed the time in which to file a tort claim with an administrative agency. As Carl Smith has often told us, those time periods are not jurisdictional. I’m sure Carl would say that the 30 day period to file a lien action with the Tax Court is also not jurisdictional. Yet Mr. Guralnik did not raise that issue. Even still, Swine Flu relied on a statute, 28 U.S.C. § 2401, which contains language far more favorable to Carl’s position than that found in 26 U.S.C. § 7503. Regardless, the D.C. Circuit in Swine Flu also relied on Fed. R. Civ. P. 6(a), which, as I’ve already noted, is inapplicable to Guralnik.

      It’s a shame that Mr. Guralnik finds his case in such a tenuous procedural posture through the fault of a Bar member. Perhaps he could be thankful that his case does not involve a Final Notice of Intent to Levy. But he still must suffer, as the Commissioner said accurately, “a harsh result.”

      Mr. Guralnik’s petition was untimely. If the Tax Court should uphold STJ Armen’s opinion, then public respect for the law will again diminish. What if, in the next case, the Tax Court opens after noon because of an ice storm and the (unrecognized) FedEx service attempts to deliver in the morning a petition due that day? Would the Tax Court then recognize a legal ice half-day holiday? Let’s hope no Bar member’s mailing miscues lead us down that slippery slope.

  2. Jason T. points out why some may question Judge Armen’s holding. I think the better way to resolve this issue is through equitable tolling of the 30-day period because of circumstances beyond the petitioner’s control when the petitioner was not dilatory. Unlike Jason T., I don’t think that it matters if (I assume) Mr. Guralnik’s lawyer has not yet made this argument. Since both parties are now invited to comment on the recommended opinion, I am sure that this argument can be raised now and be considered timely. The Rule 183 procedures allow each party to reply to the other party’s comments on the recommended opinion, so the IRS will have ample time to respond to any new equitable tolling argument.

    Jason T. is correct to note that I think it probable (though wouldn’t guarantee) that the 30-day period to file is not jurisdictional and that, applying the Irwin presumption in favor of equitably tolling non-jurisdictional SOLs, 6330(d)(1)’s 30-day period is subject to tolling. 6330(d)(1) reads: “The person may, within 30 days of a determination under this section, appeal such determination to the Tax Court (and the Tax Court shall have jurisdiction with respect to such matter).” Indeed, all of the factors that led the Supreme Court in Brockamp to hold the 6511 SOL not tollable are absent from the 30-day period: By contrast to 6511, the 30-day period is very short, has no exceptions, and does not contain a provision like 6511(b) that affects the amount of a refund. Unlike in Brockamp, it is hard to argue that there would be an administrative nightmare if the Tax Court had to listen to arguments that a few of the 2,000 to 3,000 CDP petitions that are filed each year might have been late-filed for good reasons justifying tolling. (By contrast, in Brockamp, the Supreme Court was concerned with over 90 million refund claims made on returns filed annually.) Further, in Holland v. Florida (Sup. Ct. 2010), the Court said that any statute written after the 1990 opinion in Irwin (which includes 6330(d)(1)) gets an enhanced presumption in favor of being tollable, since Congress by then should have known of the Supreme Court’s Irwin presumption in statutory interpretation.

    In prior posts for comments, I have pointed out that these days (since about 2004), the Supreme Court has rarely found any time period to be jurisdictional. Though, the Court allows Congress to override the general rule that filing periods are not jurisdictional, to do so, Congress must make a “clear statement” to that effect. And in recent years, the Court has repeated that mere proximity of a jurisdictional grant to a time period does not turn that time period into being jurisdictional. The ambiguity of 6330(d)(1)’s phrasing leads me to think that there has been no clear statement of Congress wishing to override the general rule in this case.

    There is a problem in that 6330(d)(1) places the jurisdictional grant in a parenthetical in the single sentence that gives the time to file. In a 2009 Pollock opinion of the Tax Court, Judge Holmes held that having the word jurisdictional in the same sentence as the time period rendered the time period also jurisdictional. Pollock dealt with the 90-day period in which to file a stand-alone innocent spouse petition at 6015(e)(1), which is in all respects similar in language to section 6330(d)(1)’s sentence (with the jurisdictional grant in a parenthesis within a sentence giving the period to file). In light of more recent Supreme Court case law about the “clear statement” rule and the fact that mere adjacency to a jurisdictional grant does not turn a time period jurisdictional, I would hold that the 30-day CDP period is not jurisdictional. Pollock is now wrong and should be revisited. Unfortunately, the Supreme Court has not yet had a case of a statute phrased like 6015(e)(1) or 6330(d)(1), so I could not guarantee how the Supreme Court would come out on this one. However, for a contrast of how Congress could have phrased a Tax Court jurisdictional statute to make it clear that the time limit was jurisdictional, see 6404(h), which reads: “The Tax Court shall have jurisdiction . . . to determine whether the Secretary’s failure to abate interest under this section was an abuse of discretion, and may order an abatement, if such action brought within 180 days after the date of the mailing of the Secretary’s final determination not to abate such interest.”

    • This is a classic case of the Tax Court trying to expand its jurisdiction through dubious legal reasoning. Not a big surprise. And no, the Court shouldn’t use equitable tolling either. Instead, what the court should have done was look to see what FedEx overnight delivery is. On the approved list at the time was priority overnight which guarantees delivery the next morning by 10:30. Probably wanting to make more money by nearly doubling the price, FedEx created first overnight. The only difference between the damn services besides the price, is that first overnight arrives by 8:00, a few hours earlier. It’s the same service Judge Armen, just a different guaranteed delivery time. And shame on Chief Counsel too for filing this motion. I wonder what the Court (and Chief Counsel) would have done had FedEx merely renamed an IRS approved delivery service. An approved service no longer approved because of a name change?

Comment Policy: While we all have years of experience as practitioners and attorneys, and while Keith and Les have taught for many years, we think our work is better when we generate input from others. That is one of the reasons we solicit guest posts (and also because of the time it takes to write what we think are high quality posts). Involvement from others makes our site better. That is why we have kept our site open to comments.

If you want to make a public comment, you must identify yourself (using your first and last name) and register by including your email. If you do not, we will remove your comment. In a comment, if you disagree with or intend to criticize someone (such as the poster, another commenter, a party or counsel in a case), you must do so in a respectful manner. We reserve the right to delete comments. If your comment is obnoxious, mean-spirited or violates our sense of decency we will remove the comment. While you have the right to say what you want, you do not have the right to say what you want on our blog.

Speak Your Mind