11 seconds late is not better than never

The Tax Court dismissed a taxpayer’s case because he electronically filed his Tax Court petition 11 seconds after the expiration of the Sec. 6213 deadline for filing a Tax Court petition in a deficiency case and, at the time relevant to his filing, the Tax Court’s electronic filing system was accessible and available to the general public.

Background

The IRS issued Antawn Sanders a notice of deficiency that was dated Sept. 12, 2022, and stated that if he wished to file a petition with the Tax Court in response to the notice, the last day to do so was Dec. 12, 2022.

Sanders decided to file a petition with the court, and in order to do so he set up an account to electronically file a petition through DAWSON, the court’s electronic filing system. On Dec. 12, 2022, Sanders began the process of electronically filing a petition at 9:59 p.m. EDT, by downloading the forms necessary for filing to his Android mobile phone. However, he found he could not fill out the forms on his phone.

Shortly after 11 p.m., Sanders tried to file his petition from his phone. At 11:03 p.m., he logged into DAWSON, and he logged in again at 11:42 p.m. Between 11:03 p.m., when Sanders first logged in on his phone, and 11:44 p.m., when he logged out of DAWSON on his phone for the rest of the evening, Sanders claimed he tried to upload the documents but DAWSON would not allow him to do so.

Having no luck with his phone, shortly before midnight, Sanders switched to his Windows computer. According to Sanders, he was slowed down by having to send the forms he had filled out on his phone to his email so he could download them to his computer. At 11:56 p.m., Sanders unsuccessfully attempted to log in to DAWSON on his computer. Within one second of this attempt, another Windows user successfully logged into DAWSON, and, at 11:57 p.m., Sanders was able to log in as well.

Sanders’s travails, alas, were not over. After logging in to DAWSON on his computer, Sanders testified he was slowed down by having “to do 3 other steps” before he could actually file his petition. Also, he had to refer to the instructions several times. However, DAWSON remained fully operational during this time.

Finally, at nine seconds after midnight on Dec. 13, 2022, he began the upload of his petition, and at 11 seconds after midnight, the petition was filed. DAWSON automatically applied a cover sheet to the petition that stated that the petition was electronically filed and received at “12/13/22 12:00 am.”

The IRS filed a motion to dismiss Sanders’s case, arguing that the Tax Court did not have jurisdiction because Sanders did not timely file his petition, which was required to be filed by 11:59 p.m. on Monday, Dec. 12, 2022. The IRS also argued that because Sanders initiated the upload of the petition after midnight on Dec. 13, the petition was not in the court’s possession and therefore could not be considered to have been filed until after the deadline.

Sanders objected to the IRS’s motion, stating that, although the upload of the petition did not finish until 12:00 a.m., “I am sure it can be proven that the system [DAWSON] had errors and that my upload was loading before cut off time.”

The court invited briefs from amici curiae on the issue. The Center for Taxpayer Rights, represented by the Tax Clinic at the Legal Services Center of Harvard Law School, submitted an amicus brief that presented two arguments. First, it argued that Sanders’s petition should be treated as filed at the time he relinquished control of it, urging the Tax Court to adopt a position similar to the Sec. 7502 timely mailing rule. Also, it urged the court to view the timeliness of an electronically filed petition “through the lens of equitable tolling.”

The Tax Court’s decision

The Tax Court granted the IRS’s motion to dismiss. Because DAWSON was not inaccessible or otherwise unavailable to the general public on Sanders’s last day to file his court petition and he filed it after the due date, the petition was untimely.

When the petition was received: The Tax Court explained that electronic filing of a petition is not accomplished merely by logging into the system or beginning the filing process. Instead, an electronic petition is filed when it is received by the court’s electronic filing system. Although Sanders began the filing process on Dec. 12, he did not begin his upload of the petition until nine seconds after midnight, and it was not received by DAWSON and filed until 11 seconds after midnight. Therefore, the court held that the petition was not received before the filing deadline and consequently was not timely.

Timely mailing rule: The Tax Court rejected the amicus brief ’s argument that filing occurred when Sanders relinquished control over his petition, for two reasons. First, it found that the timely mailing rule of Sec. 7502, while containing a provision related to electronic filing, does not apply to the electronic filing of Tax Court petitions. Second, even if it did, it would not save Sanders because he did not relinquish control of the petition until he began his upload at nine seconds past midnight — after the filing deadline had passed.

Additional time to file if filing location is inaccessible: Rule 6(a) of the Federal Rules of Civil Procedure provides that, “if the clerk’s office is inaccessible . . . on the last day for filing . . . , then the time for filing is extended to the first accessible day that is not a Saturday, Sunday, or legal holiday.” In Guralnik, 146 T.C. 230 (2016), the Tax Court, applying Rule 6(a), held that if the court clerk’s office is inaccessible on the last day for filing a petition, then the time for filing is extended to the first accessible day that is not a Saturday, Sunday, or legal holiday. In that case, the Tax Court, which was closed because of a winter storm on the taxpayer’s last day to file a petition, was held to be inaccessible, and therefore the taxpayer’s petition was timely.

In December 2020, the Tax Court introduced the DAWSON electronic filing and case management system, through which taxpayers may file Tax Court petitions. In 2021, Congress enacted Sec. 7451(b), which provides that “in any case . . . in which a filing location is inaccessible or otherwise unavailable to the general public on the date a petition is due,” the time period for filing the petition is tolled for the number of days within the inaccessibility period plus an additional 14 days. A filing location for these purposes includes “any on-line portal made available by the Tax Court for electronic filing of petitions.” Thus, the statute applies to cases of electronic inaccessibility of DAWSON.

Sanders and the IRS disagreed over whether DAWSON was inaccessible in Sanders’s case. The statute does not define “inaccessible or otherwise unavailable to the general public,” so the Tax Court looked to other courts and court rules to help define that phrase. With regard to Rule 6(a), when amendments were made to the rule in 2009, an advisory committee’s note specifically stated that a reference to “weather” in the rule had been deleted from the rule’s text “to underscore that inaccessibility can occur for reasons unrelated to weather, such as an outage of the electronic filing system.”

In addition, although inaccessibility can include an outage of an electronic filing system, the Tax Court found that federal courts have consistently held that inaccessibility does not include user error or technical difficulties on the user’s side (see, e.g., In re Beal, 616 B.R. 140 (Bankr. D. Utah 2020)). For Sec. 7451 purposes for DAWSON, the court found an outage that affects the public’s ability to file petitions renders DAWSON inaccessible or otherwise unavailable to the general public, whereas problems that an individual filer experiences while DAWSON is operational do not.

The Tax Court concluded that the difficulties Sanders complained of confirmed that DAWSON was accessible and available to the general public during the time he was working on filing his petition. In the court’s view, his inability to fill out PDF forms on his phone was irrelevant because the forms are completed separately and are not part of DAWSON’s filing portal. Also, although Sanders had to complete multiple steps to file his petition, the court observed these are realities of filing, whether filing electronically, by mail, or in person. Also, as the bankruptcy court stated in In re Beal, 616 B.R. at 154 n.74, “inaccessibility does not include ‘a lack of familiarity with [the electronic filing system] that causes a filer to make missteps in the filing process or simply to progress through it more slowly than anticipated.’ ”

In addition, the court found that Sanders’s failed login at 11:56 p.m., which occurred between successful logins, did not show a problem with DAWSON but rather showed a failed attempt by the user to log into an operational system. Moreover, the Tax Court’s records showed that the system was operational at all times relevant to Sanders’s filing attempts, and the system did not record any downtime on Dec. 12, 2022.

Equitable tolling: Finally, the court addressed the application of equitable tolling, which had been brought up by the amicus. Equitable tolling extends a statutory limitation period when a litigant has diligently pursued his or her rights but an extraordinary circumstance has prevented the litigant from meeting a filing deadline. However, where Congress has clearly stated in a statute that a filing deadline is jurisdictional (i.e., a court’s subject-matter jurisdiction depends on a timely pleading), the filing deadline cannot be equitably tolled. The Tax Court, based on its own precedent, found that the Sec. 6213 filing deadline for a Tax Court petition was jurisdictional, and thus it could not apply equitable tolling in Sanders’s case.

Reflections

As the Tax Court stated, “Sanders’s case exemplifies the risk in last-minute electronic filing.” As long as a court’s online electronic filing system is up and running properly, a taxpayer will not be forgiven for filing a petition even slightly late, regardless of whether electronically filing through the system is complicated or confusing to newcomers, the system runs slowly, or other problems that are unique to an individual crop up. Even if a person is experienced in filing a petition on a court’s electronic system, many problems with equipment and internet connections can unexpectedly occur, and a taxpayer or practitioner should always start the filing process for a petition well in advance of the Sec. 6213 filing deadline to ensure that any problems that do occur can be overcome in time to file a timely petition.

Sanders, 160 T.C. No. 16 (2023).

Contributor

James A. Beavers, CPA, CGMA, J.D., LL.M., is The Tax Adviser’s tax technical content manager. For more information about this column, contact thetaxadviser@aicpa.org.