A Late-Filed Tax Court Petition Post-CDP May Still be Heard

A Late-Filed Tax Court Petition Post-CDP May Still be Heard

A Late-Filed Tax Court Petition Post-CDP May Still be Heard

One of the strictest deadlines in the area of US tax law and the Internal Revenue Service is when a Taxpayer wants to petition the tax court. One common scenario in which a taxpayer may want to petition a tax court is after they receive a notice of levy, timely filed for a collection due process hearing, and were not victorious at the hearing. The Taxpayer then has 30 days to petition the tax court in accordance with section 6330 (d)(1). The question then becomes what happens if the taxpayer misses that 30-day window. In the case of Boechler, the petition was filed one day late. The tax court refused to hear the case claiming that it was jurisdictional and the appellate court affirmed. Then, in a surprise ruling the Supreme Court overruled the appellate court findings and held that the 30-day time limit is not jurisdictional and the case may still possibly be heard. Let’s take a look at the Boechler case.

Here are a few key findings from the Sup Ct. Opinion

Here are a few key points from the Supreme Court’s ruling:

Procedural Background

      • Boechler is a law firm in Fargo, North Dakota. In 2015, the IRS notified Boechler of a discrepancy in its tax filings. When Boechler did not respond, the agency assessed an “intentional disregard” penalty and notified Boechler of its intent to levy—in other words, to seize and sell—Boechler’s property to satisfy the penalty. See 26 U. S. C. §§6330(a), 6721(a)(2), (e)(2)(A). That got Boechler’s attention, and in an effort to prevent the levy, it requested a hearing before the agency’s Independent Office of Appeals. §6330(b). This proceeding—known as a collection due process hearing— generally provides taxpayers with administrative review before the IRS takes their property. §6330(a)(1). At its hearing, Boechler challenged the penalty, arguing both that there was no discrepancy in its tax filings and that the penalty was excessive.

      • The Independent Office of Appeals sustained the proposed levy. Under §6330(d)(1), Boechler had 30 days to petition the Tax Court to review this collection due process determination. But Boechler dropped the ball and filed its petition a day late. The Tax Court dismissed the petition for lack of jurisdiction and the Eighth Circuit affirmed, agreeing that §6330(d)(1)’s 30-day filing deadline is jurisdictional and thus cannot be equitably tolled. 967 F. 3d 760 (2020).

What is a Jurisdictional Requirement

      • Jurisdictional requirements mark the bounds of a “court’s adjudicatory authority.” Kontrick v. Ryan, 540 U. S. 443, 455 (2004). Yet not all procedural requirements fit that bill. Many simply instruct “parties [to] take certain procedural steps at certain specified times” without conditioning a court’s authority to hear the case on compliance with those steps. Henderson v. Shinseki, 562 U. S. 428, 435 (2011). These nonjurisdictional rules “promote the orderly progress Cite as: 596 U. S. ____ (2022) 3 Opinion of the Court of litigation” but do not bear on a court’s power. Ibid

The basis for Court’s Ruling

      • To that end, we treat a procedural requirement as jurisdictional only if Congress “clearly states” that it is. Arbaugh v. Y & H Corp., 546 U. S. 500, 515 (2006). Congress need not “incant magic words,” Auburn, 568 U. S., at 153, but the “traditional tools of statutory construction must plainly show that Congress imbued a procedural bar with jurisdictional consequences,” United States v. Kwai Fun Wong, 575 U. S. 402, 410 (2015). This case therefore turns on whether Congress has clearly stated that §6330(d)(1)’s deadline to petition for review of a collection due process determination is jurisdictional. Section 6330(d)(1) provides:

      • As we see it, the text does not clearly mandate the jurisdictional reading. It is hard to see how it could, given that “such matter” lacks a clear antecedent. The word “matter” does not appear elsewhere in §6330(d)(1), and no other “‘noun or noun phrase’” serves as the obvious antecedent. A. Scalia & B. Garner, Reading Law: The Interpretation of Legal Texts 144 (2012). Both parties cope with this awkward structure by treating “petition” as a noun, even though it appears in the provision as a verb. Maybe the parties are right that the statute asks the single word “petition” to perform double duty. But relying on this grammatical sleight of hand does not exactly help the Commissioner’s argument that the text is clear. Moreover, even taking “petition” as a noun, Boechler’s interpretation has a small edge. The last-antecedent rule instructs that the correct antecedent is usually “the nearest reasonable” one. Ibid. And Boechler links “such matter” to the phrase immediately preceding the jurisdictional parenthetical, while the Commissioner stretches back one phrase more. This is hardly a slam dunk for Boechler, but it is one reason to prefer its reading—or at least to regard the Commissioner’s as not clearly right.

      • We are not convinced that the possibility of equitable tolling for the relatively small number of petitions at issue in this case will appreciably add to the uncertainty already present in the process. To take the most obvious example, petitions for review are considered filed when mailed. 26 U. S. C. §7502(a)(1). The 30-day deadline thus may come and go before a petition “filed” within that time comes to the IRS’s attention. Presumably, the IRS does not monitor when petitions for review are mailed. So it is not as if the IRS can confidently rush to seize property on day 31 anyway.

      • None of this is to say that Boechler is entitled to equitable tolling on the facts of this case. That should be determined on remand. We simply hold that §6330(d)(1)’s filing deadline, like most others, can be equitably tolled in appropriate cases. * * * Section 6330(d)(1)’s 30-day time limit to file a petition for review of a collection due process determination is an ordinary, nonjurisdictional deadline subject to equitable tolling. We reverse the contrary judgment of the Court of Appeals and remand the case for further proceedings consistent with this opinion.

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