Late filing of a motion does not preclude the jurisdiction of the Tax Court
The U.S. Supreme Court, reversing an Eighth Circuit decision, found that the time limit for filing a motion with the Tax Court was not a condition of the Tax Court’s jurisdiction, but rather a non-jurisdictional rule relating to contentious procedure for which a fair toll is available.
Facts: The IRS sent a letter to a law firm, Boechler PC, on June 5, 2015, indicating a discrepancy between the amount of wages it reported on W-2 forms, Salary and tax declarationand the amount shown on Form 941, Employer’s Quarterly Federal Income Tax Return, for its 2012 tax year. When Boechler failed to respond to the letter, the IRS assessed a penalty of $19,250 under Sec. 6721(e) for willful non-compliance with reporting requirements. The penalty was imposed in September 2015 and a notice of intent to levy was issued to Boechler in October 2016. Boechler timely requested a Collection Proceedings Hearing (CDP).
The hearing took place in May 2017, and on July 28, 2017, the IRS sent a Notice of Decision to Boechler confirming its intent to levy. The notice said Boechler had 30 days to ask the Tax Court to review the decision. Boechler posted the petition on August 29, 2017, one day after the 30-day period expired (30 days after the date of the notice was August 27, 2017, which was a Sunday, so the statutory period ended). ended this Monday, August 28).
The Tax Court dismissed the case for lack of jurisdiction (PC Boechler18578-17L (TC 2/15/19) (Order of Dismissal)), and Boechler appealed to the Eighth Circuit, which had no clear precedent on this issue. The Ninth Circuit had previously been held at Duggan, 879 F.3d 1029 (9th Cir. 2018), that the 30-day period of Sec. 6330(d)(1) is jurisdictional. In Myers, 928 F.3d 1025 (DC Cir. 2019), the DC Circuit held that Sec. 7623(b)(4), which allows whistleblowers to ask the Tax Court to review an attribution determination (and includes a parenthesis identical to that in section 6330(d)(1) ), is not jurisdictional. Citing Duggan, the Eighth Circuit upheld the Tax Court. Boechler appealed the case to the Supreme Court, which agreed to hear it.
Problems: Second. 6330 provides taxpayers with certain rights before the IRS can seize property in settlement of a tax liability. The IRS must provide notice of its intention, as well as the opportunity for a pre-collection hearing before an impartial officer of the IRS Independent Office of Appeals. After the hearing, the IRS must issue a Notice of Determination. Second. 6330(d)(1) provides that a taxpayer “may, within 30 days after a determination under this section, apply to the Tax Court for a review of that determination (and the Tax Court shall have jurisdiction with regard to this matter).” Boechler and the IRS agreed that Sec. 6330(d)(1) gives the Tax Court jurisdiction to review a decision following a CDP hearing and that a motion must be filed to trigger that jurisdiction. They disagreed, however, on whether speed of motion was a condition of the Tax Court’s jurisdiction.
Boechler argued that the phrase “such matter” in Sec. 6330(d)(1) refers only to the filing of a petition, which means that the Tax Court has jurisdiction even if the petition is filed late. Moreover, since the court has jurisdiction, it can fairly impose the 30-day period and review the IRS’ decision, Boechler argued.
The IRS, on the other hand, argued that jurisdiction was conditional on the petition being filed within the 30-day period, and because Boechler’s petition was late, the Tax Court lacked jurisdiction to examine it. The IRS also argued that even if the Tax Court has jurisdiction, it lacks the authority to apply the fair toll doctrine, under which a time limit can be suspended or extended when a party enforces its rights diligently, but an extraordinary circumstance beyond the ability of the person to control prevents timely compliance (see Menominee Indian Tribe of Wisconsin577 US 250 (2016)).
Holding: In a unanimous decision, the Supreme Court ruled Sec. The 30-day period provided in Section 6330(d)(1) to file a petition for review of a CDP determination is a non-jurisdictional period subject to an equitable toll.
As the Court explained, not all procedural requirements are jurisdictional. Many are non-jurisdictional and simply ask the “parties [to] take certain procedural measures at certain specified times without conditioning the authority of a court to hear the case on compliance with those measures” (quoting Henderson vs. Shinseki, 562 US 428, 435 (2011)). The distinction between jurisdictional and non-jurisdictional procedural requirements is important, the Court said, because jurisdictional requirements cannot be waived or set aside, must be raised by the courts without prompting by the parties, and do not allow for equitable exceptions. .
In Arbaugh vs. Y&H Corp., 546 US 500, 515 (2006), the Court stated that it will only treat a procedural requirement as jurisdictional if Congress “clearly declares” that it should be treated as such. The Court also noted in Regional Auburn568 US 145 (2013), that the mere proximity of a procedural requirement to a grant of jurisdiction does not render the procedural requirement jurisdictional.
Concurring with Boechler’s interpretation of the Code, the Court found that there was no clear indication in the statute that the 30-day period was intended to be a requirement of jurisdiction because the word “matter” does not appear not before the expression “such material”. Under the “last antecedent rule”, which states that the syntactically closest antecedent of a word or phrase is most likely the intended one, “this subject” refers to the phrase immediately before the parenthesis in which it appears, which mentions the filing of a petition.
Further, the Court noted that many interpretations of the language are plausible, making it “difficult to argue that the jurisdictional reading is clear”, and although the 30-day time limit appears in the same sentence as the award of jurisdiction, the court found no “clear connection” between the two. Accordingly, the Court held that the filing deadline provided for in Art. 6330(d)(1) is independent of the Tax Court’s grant of jurisdiction.
Furthermore, with regard to fair tolls, the Court, citing Irwin v. Department of Veterans Affairs, 498 US 89, 95-96 (1990), state that non-jurisdictional statutes of limitations are presumed to be subject to an equitable toll. Seeing nothing to rebut the presumption relating to s. 6330(d)(1), he held that the fair toll applied with respect to the 30-day period provided for in s. 6330(d)(1).
However, the Court did not determine whether the fair toll applied in Boechler’s case. Whether it should be made available to Boechler must be determined on remand, the court said.
- Boechler, CPNo. 20–1472 (US 4/21/22), rev’g 967 F.3d 760 (8th Cir. 2020)
— Laura Lee Mannino, CPA, JD, LL.M., is Associate Professor of Taxation, St. John’s University, Queens, NY