Equitable tolling does not apply to excuse late filing of petition

The Tax Court held that a taxpayer had failed to meet the requirements for equitable tolling, so it did not apply to excuse the taxpayer’s late filing of its petition to the Tax Court for review of a Collection Due Process (CDP) hearing.

Background

Boechler PC (Boechler) is a solo practitioner law firm in Fargo, N.D., that is principally involved in asbestos litigation. Jeanette Boechler (Ms. Boechler) is the firm’s sole attorney.

In summer 2017, Boechler was embroiled in a dispute with the IRS. The Service, claiming that Boechler had failed to timely file certain information returns for 2012, assessed penalties under Sec. 6721 against the firm and began collection action. In October 2016, the IRS issued Boechler a notice of intent to levy related to the unpaid penalties.

Boechler requested a CDP hearing in response to the notice. After the hearing, the IRS issued the firm a notice of determination that sustained the notice of intent to levy. The notice of determination, which was dated July 28, 2017, stated that Boechler could dispute the determination in Tax Court if it filed a petition with the court within a 30–day period beginning the day after the date of the letter. In Boechler’s case, the 30–day period ended on Aug. 27, 2017, which was a Sunday, so under Sec. 7503, the filing period was extended one day to Aug. 28, 2017.

An attorney representing Boechler mailed a petition to the Tax Court on Aug. 29, 2017, 32 days after the date of the notice, which the court received on Sept. 1, 2017. The petition was signed by the attorney as counsel to Boechler and was sent to the Tax Court in an envelope bearing the address of the attorney’s law firm.

Ms. Boechler testified in Tax Court that the petition was mailed late because she miscalculated the date it was due. During the filing period for Boechler’s Tax Court petition, the firm had 25 active asbestos cases and, as the Tax Court noted, Ms. Boechler had “a busy schedule.” At trial, she produced evidence that during the 30–day period there were numerous filings in two of the firm’s cases, although she also testified that those filings were by the cases’ defendants and not by her, her firm, or her clients. The records Ms. Boechler produced also showed that for some of the active cases, other attorneys served as co–counsel.

During 2017, Ms. Boechler also had a personal life that the Tax Court said “could be considered hectic.” She lived with and was caring for her mother (who was in her late 90s), albeit with the help of her two sisters. She also was a single mother to her 17–year–old son, who was starting college in the fall of 2017, and between Aug. 17 and Aug. 22, 2017, she traveled to New York to help him move into his college dormitory.

Supreme Court ruling on equitable tolling

The IRS made a motion in October 2017 to dismiss Boechler’s Tax Court case, arguing that the court lacked jurisdiction because Boechler’s petition had not been timely filed. Boechler countered that the deadline in Sec. 6330(d)(1) to file a petition to review the IRS’s determination from a CDP hearing is not jurisdictional and that equitable tolling warranted extending the deadline in its case.

The Tax Court, agreeing with the IRS, held in an unpublished opinion that it lacked jurisdiction because Sec. 6330(d)(1)’s 30–day filing deadline for review of a CDP hearing is jurisdictional and therefore cannot be equitably tolled. Boechler appealed the Tax Court’s decision to the Eighth Circuit, which affirmed the Tax Court’s holding (Boechler, P.C., 967 F.3d 760 (8th Cir. 2020)). Boechler appealed the case to the Supreme Court, which agreed to hear it. This time the firm was successful, with the Court holding that the Sec. 6330(d)(1) deadline is not jurisdictional and is subject to equitable tolling (Boechler, P.C., 596 U.S. 199 (2022); see also Bonner, “Late–Filed Petition Does Not Deprive Tax Court of Jurisdiction Over Case,” 53 The Tax Adviser 48 (July 2022)). The Court accordingly reversed the Eighth Circuit decision and ordered that the issue of whether, based on the facts of the case, Boechler was entitled to equitable tolling should be decided on remand. The Eighth Circuit, in turn, remanded the case to the Tax Court to make the decision.

The Tax Court’s decision

On remand, the Tax Court held that Boechler was not entitled to equitable tolling of the deadline for its petition to the Tax Court for review of its CDP hearing because it had not met the requirements for equitable tolling to apply. Therefore, the petition was not timely filed, and the court did not have jurisdiction over Boechler’s case.

As the Tax Court explained, the Supreme Court has held that a taxpayer must meet two requirements for equitable tolling to apply. The taxpayer must establish that (1) it pursued its rights diligently and (2) extraordinary circumstances outside its control prevented it from filing on time (Menominee Indian Tribe of Wisconsin, 577 U.S. 250 (2016), quoting Holland v. Florida, 560 U.S. 631, 649 (2010)). The taxpayer bears the burden of establishing that equitable tolling applies (id. at 255). A failure by a taxpayer to meet either of the requirements is sufficient for a court to deny equitable tolling (id. at 256).

The first requirement is met if the taxpayer takes all reasonable steps to ensure the timeliness of its petition, including engaging with its attorney to ensure a petition is timely filed (Holland, 560 U.S. at 653). The second requirement is met only where the circumstances that caused a taxpayer’s delay are both extraordinary and beyond its control (Menominee, 577 U.S. at 257).

Boechler argued that equitable tolling was warranted in its case because the late filing of the Tax Court petition for review of its CDP hearing was due to the miscalculation of the Sec. 6330(d)(1) deadline to file the petition by its sole attorney, Ms. Boechler, and that the miscalculation occurred because of Ms. Boechler’s many responsibilities. The IRS argued that Ms. Boechler’s miscalculation of the deadline was not a circumstance that warranted equitable tolling for Boechler, contending that while her personal circumstances may have been difficult, they were not uncommon, were not beyond her control, and did not rise to the level of extraordinary.

Diligently pursued its rights: The Tax Court found that Boechler did not meet the first requirement for equitable tolling because it did not allege or establish any facts that indicated it had diligently pursued its rights. While Boechler had engaged an attorney to file the petition, there was no indication that it had followed up with its attorney to make sure the petition was timely filed. In addition, the record did not indicate what direction, if any, was given by or to Boechler’s attorney to ensure the timely filing of the petition. “In short,” the court stated, “the record is silent as to whether anyone diligently pursued Boechler’s rights.”

Extraordinary circumstances: Although it was not required to do so because Boechler failed to meet the first requirement for equitable tolling, the Tax Court also analyzed whether Boechler met the second requirement. It determined that Boechler had failed to meet the second requirement because it had not established any extraordinary circumstances outside its control that justified equitable tolling.

According to the Tax Court, the case law on equitable tolling did not support the claim that Ms. Boechler’s personal circumstances of being a single mother who was also caring for her elderly mother were extraordinary. As an example, the Tax Court cited the Second Circuit’s decision Gager v. Principi, 300 Fed. App’x 30, 31 (2d Cir. 2008), in which that court held that deaths in the petitioner’s family and her father’s illness that caused her to lose track of due dates in her case were not sufficient circumstances to warrant equitable tolling. The Tax Court found that, while Ms. Boechler’s mother needed assistance, Ms. Boechler’s sisters could and did help her in providing this assistance. Thus, Ms. Boechler’s personal circumstances did not rise to the level of extraordinary.

The Tax Court likewise found that the case law did not support the idea that an “oppressive workload” was an extraordinary circumstance, citing the Fifth Circuit’s opinion in Lookingbill v. Cockrell, 293 F.3d 256 (5th Cir. 2002). In that opinion, the Fifth Circuit refused to apply equitable tolling “just because a lawyer is busy.” The Tax Court observed that Ms. Boechler, as the sole attorney of her firm, controlled her own workload, and Boechler had co–counsel for some of its cases; thus, in the court’s view, Ms. Boechler’s workload was not an extraordinary circumstance outside her control that prevented Boechler from filing its petition on time.

In addition, the Tax Court noted that Ms. Boechler had testified that she miscalculated the deadline, not that any circumstance prevented Boechler from filing a timely petition. The Eighth Circuit has held that an attorney’s miscalculation of a deadline is not an extraordinary circumstance outside one’s control that warrants equitable tolling (Christeson v. Griffith, 860 F.3d 585, 588–89 (8th Cir. 2017); Rues v. Denny, 643 F.3d 618, 621–22 (8th Cir. 2011)). Accordingly, the court concluded that Ms. Boechler’s miscalculation was not an extraordinary circumstance that warranted equitable tolling for Boechler.

Reflections

As the Tax Court makes clear in its opinion, merely hiring an attorney to file a petition with the court will likely not be enough to satisfy the first equitable tolling requirement that the taxpayer has diligently pursued its rights. Rather, the taxpayer must also follow up with the attorney to ensure that the attorney or their staff have timely filed the petition.

Further, it is crucial that the taxpayer be able to prove what it did to diligently pursue its rights. In Boechler’s case, in the absence of anything in the record to establish that the firm had diligently pursued its rights by following up with its attorney, the court was forced to conclude that it had not done so.

Boechler, No. 18578–17L (T.C. 6/12/2025) (bench opinion)

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.