Supreme Court holds Tax Court not bound by petition filing deadline

By Paul Bonner

The 30-day limit of Sec. 6330(d) for taxpayers to file a petition with the Tax Court to review an IRS determination is nonjurisdictional, the U.S. Supreme Court held, meaning it can be extended in certain instances.

The Court's unanimous opinion, written by Justice Amy Coney Barrett, was issued Thursday in the case of a North Dakota law firm, Boechler P.C. (Boechler, P.C., No. 20-1472 (U.S. 4/21/22), rev'g 967 F.3d 760 (8th Cir. 2020)).

The Supreme Court's opinion was limited to the general question of whether the time limitation is jurisdictional, not on Boechler's petition in particular, which it directed the Eighth Circuit to reconsider on remand, in light of the reversal of that court's holding.

Sec. 6330 concerns procedural requirements for IRS levies upon property to satisfy a tax debt. Generally, before making a levy, the IRS must properly notify taxpayers of their right to a fair hearing and provide that hearing upon request. A taxpayer may then file a petition with the Tax Court within 30 days to review the IRS's determination (Sec. 6330(d)).

In 2015, the IRS notified Boechler of a discrepancy in its tax filings, imposed a 10% penalty for intentional disregard of filing requirements, and notified Boechler of its intent to levy. Boechler requested and obtained a hearing by the IRS Independent Office of Appeals, which sustained the proposed levy. Boechler petitioned the Tax Court, but the petition was one day late, missing the Sec. 6330(d) deadline.

Because the petition was one day late, the Tax Court determined that it lacked jurisdiction to hear the petition. Boechler appealed to the Eighth Circuit, which affirmed the Tax Court's decision, holding that the 30-day limit is jurisdictional and therefore cannot be equitably tolled. 

Before the Supreme Court, the question was whether the 30-day limit in Sec. 6330(d) is jurisdictional, meaning that the Tax Court has jurisdiction only over petitions that meet the limit, and if it is not jurisdictional, whether the time limit can be equitably tolled. Equitable tolling is defined in Black's Law Dictionary (11th ed. 2019) as "a court's discretionary extension of a legal deadline as a result of extraordinary circumstances that prevented one from complying despite reasonable diligence throughout the period before the equitable tolling."

Sec. 6330(d)(1) states that after a hearing, a person "may, within 30 days of a determination under this section, petition the Tax Court for review of such determination (and the Tax Court shall have jurisdiction with respect to such matter)."

Before the Supreme Court, Boechler argued that "such matter" over which the Tax Court has jurisdiction refers to the petition before the Tax Court. The IRS urged a broader interpretation, that the matter includes the time limit, thus precluding the court from considering a late petition.

Noting that "such matter" lacks a clear grammatical antecedent in the statute, the Court found Boechler's reading the more plausible one.

The broader statutory context, moreover, also supports considering the limit nonjurisdictional, the Court said. Other, contemporaneously enacted and similar time limits make their jurisdictional intent much more explicit, the Court noted. For example, Sec. 6404(g)(1) and Sec. 6015(e)(i)(A) both couch the Tax Court's jurisdiction as conditional, the former stating "if such action is brought within 180 days" and the latter "if such petition is filed during the 90-day period."

"These provisions accentuate the lack of comparable clarity in §6330(d)(1)," the Court stated.

The Court also rejected the IRS's argument that a closely following provision's clearly jurisdictional language referring back to Sec. 6330(d)(1) means that jurisdictional intent also carries back. Sec. 6330(e)(1) generally provides that if a hearing is requested, any period of limitation on collection and other matters is suspended while the hearing and any appeals are pending. While the suspension is in force, a levy or proceeding may be enjoined by a proceeding in the Tax Court but not unless a timely appeal has been filed under Sec. 6330(d)(1).

Even if the provision were found to be nonjurisdictional, the IRS argued, equitable tolling should not follow. The Service cited Brockamp, 519 U.S. 347 (1997), in which the Court found the Sec. 6511 limitation period on filing claims for credit or refund does not allow for equitable tolling. But that deadline differs from Sec. 6330(d)(1)'s in both expression and scope, the Court said. The Sec. 6511 deadline is stated in "unusually emphatic form" and "detailed technical language" with numerous exceptions, none of which is present in the provision at issue in Boechler. And far fewer taxpayers are affected by Sec. 6330(d), which "serves a far more limited and ancillary role in the tax collection system," the Court said.

Finally, the Court rejected the IRS's arguments that equitable tolling of Sec. 6330(d)(1) would leave uncertainty as to whether the IRS could go ahead with collection after the deadline had passed. The Court pointed again to the relatively smaller number of taxpayers involved, plus the fact that the IRS has to allow some time in any case after the deadline for petitions mailed at or near the deadline to reach the Tax Court.

— To comment on this article or to suggest an idea for another article, contact Paul Bonner at Paul.Bonner@aicpa-cima.com.

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