In Boechler, the Supreme Court parsed the language of IRC 6330 looking for a clear statement from Congress that Congress intended to make into a jurisdictional limit the 30-day deadline to file a Tax Court petition after a Collection Due Process (CDP) notice of determination. It did not find that clear statement.
The next big fight will be interpreting IRC 6213(a) to determine if Congress made a clear statement in that provision. In today’s blog post and in the posts in this series that will follow, I will examine the arguments the IRS will make based on the arguments it has made previously. The posts will focus on the clear statement rule since the Supreme Court has held on numerous occasions that two tests apply in determining if a statute provides a jurisdictional time frame. Carl Smith blogged about the jurisdictional nature of the time period in IRC 6213(a) two years ago when the Tax Clinic at the Legal Services Center filed motions for reconsideration in three cases with strong equitable facts and favorable merits arguments.
In addition to the clear statement rule, the second test – whether controlling Supreme Court jurisprudence exists to create a stare decisis exception to the general rule that filing deadlines are not jurisdictional – clearly does not apply to IRC 6213(a), since the question of whether the time period for filing a petition in Tax Court is jurisdictional has never resulted in a Supreme Court decision. The Tax Court (in Guralnik) and the IRS have pointed to a long list of lower court opinions holding the IRC 6213(a) filing deadline jurisdictional. Those cases do not qualify for the stare decisis exception.
In Boechler, the IRS also cited that IRC 6213(a) precedent to the Supreme Court when arguing that Congress in 1998 intended to make the CDP filing deadline jurisdictional. The Court not only rejected this argument, but also dismissed giving any deference to the IRC 6213(a) authority as follows:
The Commissioner’s weakest argument is his last: He insists that § 6330(d)(1)’s filing deadline is jurisdictional because at the time that deadline was enacted, lower courts had held that an analogous tax provision regarding IRS deficiency determinations is jurisdictional. (That provision says that “[w]ithin 90 days . . . the taxpayer may file a petition with the Tax Court for a redetermination of the deficiency.” 26 U.S.C. § 6213(a).) According to the Commissioner, Congress was aware of these lower court cases and expected § 6330(d)(1)’s time limit to have the same effect. So, he says, the statutory backdrop resolves any doubt that might linger in the text.
The Commissioner’s argument misses the mark. The cases he cites almost all predate this Court’s effort to “bring some discipline” to the use of the term “jurisdictional.” Henderson, 562 U.S., at 435. And while this Court has been willing to treat “‘a long line of [Supreme] Cour[t] decisions left undisturbed by Congress’” as a clear indication that a requirement is jurisdictional, Fort Bend County v. Davis, 587 U.S. ___, ___, 139 S. Ct. 1843 (2019), no such “long line” of authority exists here.
So, I will spend no further time on the second test and focus exclusively on the clear statement rule. I assume the IRS will do the same.
read more...The IRS will argue that Congress created IRC 6330 as a benefit for taxpayers uniquely crafted to play a highly protective role by a Congress seeking to remedy perceived IRS abuses. This makes IRC 6330 special and the outcome in Boechler limited.
Looking back almost 100 years, you can find that the deficiency procedure created in 1924 also resulted from a Congress that sought to protect taxpayers from having to pay the relatively new income and estate taxes before contesting IRS adjustments. The legislative history has statements about allowing taxpayers to avoid the need to go into bankruptcy because of an inability to pay and an inability to contest the additional taxes in court without first paying. While the general perception sees the CDP provisions as taxpayer friendly ones and perceives, at this point in time, the deficiency procedures simply as the way the code is structured, both provisions arose out of a desire to protect taxpayer rights. CDP provisions arrived later after Congress began enacting assessable penalties that skirted the deficiency procedures and after it broadened the scope of citizens impacted by taxes from the narrow band of high income individuals taxed in 1924 to the entire populace by 1998. So, we shouldn’t dismiss Boechler as unique because it pertains to a provision designed to protect taxpayers.
Parsing IRC 6213(a) looking for a link between the grant of jurisdiction and the time period for filing presents an even greater challenge for the IRS than IRC 6330. IRC 6213(a) just doesn’t link the time period for filing the petition with the grant of jurisdiction. Bryan Camp’s article New Thinking About Jurisdictional Time Periods in the Tax Code (January 21, 2019), 73 The Tax Lawyer 1 (2019) parses several Tax Court jurisdictional provisions and determines that IRC 6213 does not link the time period to the grant of jurisdiction. In getting to the parsing of the current language, Bryan takes a long walk through the history of IRC 6213(a) and how it arrived at its current language. He then walks through the current language of this section of the Code:
The text of sentence (1) is not the kind of text that the Supreme Court has ever held to speak in jurisdictional terms. It contains no mandatory language, such as “the taxpayer must file . . . .” Even if it had mandatory language, the Court has repeatedly said that “Congress must do something special, beyond setting an exception-free deadline, to tag a statute of limitations as jurisdictional and so prohibit a court from tolling it.” 101 And there is nothing special about the text in sentence (1) of section 6213(a). It says nothing about what powers the Tax Court has. It says only what a taxpayer must do: petition for redetermination.
Sentence (4) does contain the magic word “jurisdiction.” The new thinking teaches that even the magic word “jurisdiction” appearing somewhere in the statute is not the kind of “clear statement” needed to overcome the presumption unless it hooks up to the limitations period tightly. At first glance, sentence (4) appears to contain the requisite connection because it references the need for a “timely petition.”
A closer look at what sentence (4) does dispels the appearance. The sentence removes power from the Tax Court in the face of an untimely petition. What power? Why, the power granted the Tax Court in sentence (3), the power to enjoin the Service. Sentence (4) does not say that the Tax Court shall have no powers at all in the face of an untimely petition, just that it will not have jurisdiction to enjoin or order a refund. The word jurisdiction in sentence (4) thus quite reasonably links to the Tax Court’s power to enjoin given in sentence (3). But nothing in sentence (4) hooks the timing requirements in sentence (1) to the jurisdictional grant in section 6214 to redetermine a deficiency.
Bryan discusses the link between IRC 6213 and 6214. He finds that each provision contains a separate grant of jurisdiction. Section 6213 creates jurisdiction to prohibit assessment with an injunction while section 6214 gives jurisdiction to redetermine a deficiency. The injunction power, another taxpayer friendly provision, was added to the Code in 1988 as part of the first Taxpayer Bill of Rights. Bryan points out that the word jurisdiction refers to the Tax Court’s power to enjoin and to issue a refund and not time limitations. Even the title of the provision supports this reading – “Restrictions Applicable to Deficiencies: Petition to Tax Court.”
The Supreme Court’s precedent on jurisdiction does not turn on whether a statute seeks to assist or other factors that might make certain provisions unique. Instead, it starts with a presumption that a time period is not jurisdictional. It moves from that presumption to examining the statute to determine whether Congress has made a clear statement. Making the determination requires carefully examining the text of the statute. As described above in the language quoted from Bryan’s article, the text does not lead to the conclusion that IRC 6213(a) links the 90-day period to filing a petition to the grant of jurisdiction.
Not only is the text important but context is as well. How does the time period relate to the statutory scheme surrounding the provision? Bryan’s article looks at legislative context, judicial context and statutory context in explaining why, in none of these contexts, IRC 6213 provides the type of language or history that suggests the 90-day period for filing of petition creates a jurisdictional rule.
The main reason why the courts of appeal in Tilden v. Commissioner, 846 F.3d 882 (7th Cir. 2017), and Organic Cannabis Foundation v. Commissioner, 962 F.3d 1082 (9th Cir. 2020), held the IRC 6213(a) filing deadline jurisdictional under the “clear statement” exception – despite the first sentence of that section not even containing the word “jurisdiction” – is the word “jurisdiction” in the fourth sentence of IRC 6213(a), which limits the Tax Court’s injunctive jurisdiction to cases in which the petition in the main Tax Court action under the first sentence is “timely filed”. But, that logic can no longer be relied on after Boechler. IRC 6330(e)(1) contains copycat language giving the Tax Court jurisdiction to enjoin the IRS from improper levying during a CDP case in the Tax Court only if there was a “timely petition” in the main CDP action under IRC 6330(d). Boechler’s demolition of the argument that IRC 6330(e)(1) language can cause the IRC 6330(d)(1) filing deadline to be jurisdictional should fully undermine the argument that similar language in the fourth sentence of IRC 6213(a) makes the filing deadline in the first sentence of that subsection jurisdictional. Here’s what the Court wrote about this in Boechler:
The Commissioner contends that a neighboring provision clarifies the jurisdictional effect of the filing deadline. Section 6330(e)(1) provides that “if a [collection due process] hearing is requested . . . the levy actions which are the subject of the requested hearing . . . shall be suspended for the period during which such hearing, and appeals therein, are pending.” To enforce that suspension, a “proper court, including the Tax Court,” may “enjoi[n]” a “levy or proceeding during the time the suspension . . . is in force,” but “[t]he 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).” § 6330(e)(1).
Section 6330(e)(1) thus plainly conditions the Tax Court’s jurisdiction to enjoin a levy on a timely filing under § 6330(d)(1). According to the Commissioner, this suggests that § 6330(d)(1)’s filing deadline is also jurisdictional. It would be strange, the Commissioner says, to make the deadline a jurisdictional requirement for a particular remedy (an injunction), but not for the underlying merits proceeding itself. If that were so, the Tax Court could accept late-filed petitions but would lack jurisdiction to enjoin collection in such cases. So if the IRS disobeyed § 6330(e)(1)’s instruction to suspend the levy during the hearing and any appeal, the taxpayer would have to initiate a new proceeding in district court to make the IRS stop.
We are unmoved—and not only because the scenario the Commissioner posits would arise from the IRS’s own recalcitrance. The possibility of dual-track jurisdiction might strengthen the Commissioner’s argument that his interpretation is superior to Boechler’s. Yet as we have already explained, the Commissioner’s interpretation must be not only better, but also clear. And the prospect that § 6330(e)(1) deprives the Tax Court of authority to issue an injunction in a subset of appeals (where a petition for review is both filed late and accepted on equitable tolling grounds) does not carry the Commissioner over that line. If anything, § 6330(e)(1)’s clear statement—that “[t]he Tax Court shall have no jurisdiction . . . to enjoin any action or proceeding unless a timely appeal has been filed”—highlights the lack of such clarity in § 6330(d)(1).
Think of IRC 6213(a) when you read the quote.
Avoid thinking about IRC 6330 as somehow a unique tax statute creating a time period for filing a Tax Court petition that is not jurisdictional. Instead, focus on the purpose and the language of IRC 6213(a) in recognizing that for the same reason, though parsing though different statutory language, that the CDP provision does not create a jurisdictional time period for filing a petition, neither does the deficiency statute.
Does it matter on the jurisdiction issue that there are collateral consequences to timely filing a petition that should be considered if a petition filed outside the 90/150 day period is considered timely by equitable tolling? For example,
1. Can the IRS assess after the 90/150 day period when there is a possibility of equitable tolling? Reg. § 301.6213(c) seems to require assessment if the petition is not filed “within the period prescribed in section 6213(a).”
2. Does the assessment statute of limitations pick up under § 6502(a)(1) if there is a possibility of asserting equitable tolling on the original 90/150 day period?
3. Under Chevron, could the IRS provide the clear statement in a regulation? I guess this would apply to any limitations period.
And, in terms of clear statement, how does § 6213(a) differ from § 6511(a) which the Court held in Brockamp was not subject to equitable tolling, thus requiring Congress to enact § 6511(h) to permit limited equitable tolling for claims for refund?
Finally, does it matter if there are other paths to judicial review (e.g., CDP) that may be available?
Jack,
I can answer one of your questions only two of your questions:
The IRS cannot by regulation create a jurisdictional time limit for a Tax Court filing. Only Congress can. Parties (here, the IRS) can’t do anything to alter a court’s jurisdiction.
Section 6213(a) does not differ from section 6511 in that both are claim processing rules that should be nonjurisdictional under current Supreme Court precedent that Congress must make a clear statement in the statue to render a filing deadline jurisdictional.
There is also a stare decisis exception from the current rules where there has been a long line of Supreme Court opinion treating a filing deadline consistently as jurisdiction (though it would otherwise fail being jurisdictional under the clear statement exception).
In Brockamp (S. Ct. 1997), the Supreme Court implicitly (and inconsistently with Dalm (S. Ct. 1990)) assumed that section 6511 was not jurisdictional, else the opinion could have been a sentence long stating, “Since in Dalm we called the 6511 filing deadline jurisdictional, and jurisdictional filing deadlines can never be equitably tolled, 6511 can never be equitably tolled.”
The Supreme Court has not thought through 6511 and 7422(a) requirements fully and has made inconsistent statements over the years that need a reexamination under the new thinking that nonjurisdictional claim processing rules, such as administrative exhaustion requirements and filing deadline, are not jurisdicitional absent a clear statement from Congress to that effect. In Flora (S. Ct. 1960), the Court called the 19th Century predecessor to 7422(a) clearly not jurisdictional (“But § 3226 was not a jurisdictional statute at all; it simply specified that suits for recovery of taxes, penalties, or sums could not be maintained until after a claim for refund had been submitted to the Commissioner.”). Yet, in Dalm, the Supreme Court later called the 6511 and 7422(a) requirements jurisdictional. Then, still later in Brockamp, the Supreme Court did not even mention Dalm and implicitly concluded that 6511 was not jurisdictional before going at length into how the presumption in favor of equitable tolling of nonjurisdictional deadlines was rebutted in the case of 6511. Remember that it is a separate question whether a nonjurisdictional filing deadline is subject to equitable tolling. See Sebelius v. Auburn Regional Medical Center (S. Ct. 2013), which held a Medicare reimbursement board’s filing deadline not jurisdictional, but still not subject to equitable tolling.
Two Circuit courts have recognized that either 6511 or 7422(a) or both statutes are likely not jurisdictional under the new Supreme Court thinking. See my blog posts on the Walby case (Fed. Cir. 2020) and Gillespie case (7th Cir. 2016) (“These [Supreme Court jurisdictional-limiting] developments may cast doubt on the line of cases suggesting that § 7422(a) is jurisdictional. See, e.g., United States v. Dalm”). See also Keith’s post on the non-precedential ruling in Morton (3d Cir. 2021) (“The Virgin Islands’ arguments to the contrary — that Morton did not file a tax return before suing and does not belong to a protected class — bear on the merits of Morton’s claims, rather than whether he had standing to bring them.”).
Carl, thank you for your reply. I think the analysis is good.
Questions:
1. Do the jurisdictional/nonjurisdictional categories exhaust the question? Is there a separate question as to whether a nonjurisdictional timeline must permit equitable tolling? In other words, can a time limit be nonjurisdictional but with some indication in text or context that Congress did not mean to permit filing out of time? I think there are some echoes of that possibility in the Boechler opinion. Of course, for the usually encountered tax deadlines, I doubt that there are such text or context clues that would override the presumption that nonujurisdictional time limits must be strictly applied.
2. If jurisdictional and nonjurisdictional is potentially a different question as to whether the statute requires timely filing, then would the notion that an agency cannot interpret the statute with Chevron deference even apply?
3. Finally, is it clear that Chevron deference to a notice and comment regulation is foreclosed for statutory timelines if considered nonjurisdictional? I cite no authority for that now, but the scope of implied authority to interpret is a classic Chevron issue, capable of testing for the reasonableness of the interpretation. Under Chevron, the agency can adopt a controlling interpretation that is less persuasive than the court’s best interpretation. (Indeed, that is the only context in which Chevron deference is outcome determinative, for if the agency interpretation is the best or the court cannot determine whether it is the best (think equipoise), then adopting the agency interpretation does not involve deference to a less reasonable agency interpretation.)
Probably not worth engaging further, but if you have any comments, I would appreciate them because I find your musings on tax procedure and related issues educational.
“CDP provisions arrived later after Congress began enacting assessable penalties that skirted the deficiency procedures […]”
CDP provisions haven’t fully arrived yet. When the IRS refuses to issue a Notice of Mathematical or Clerical Error, refuses to issue a Notice of Deficiency, refuses to issue a Notice of Filing of Federal Penalty Lien (oops I mean Tax Lien even though the tax overpayment remains in place), and refuses to issue a Notice of Intent to Levy, no court at all has jurisdiction and the IRS can keep collecting by offset forever.