D.C. Circuit Holds Tax Court Whistleblower Award Filing Deadline Not Jurisdictional and Subject to Equitable tolling
Many taxpayers ask their tax attorney whether various deadlines by which to take actions are fixed or can be extended. The general rule is that judicial filing deadlines in tax are jurisdictional and are not subject to equitable tolling under recent Supreme Court case law.
For example, pertaining CDP Tax Court jurisdiction, Internal Revenue Code section 6330(d) states:
The 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).
In addition, Internal Revenue Code section 6213(a) states:
Within 90 days, or 150 days if the notice is addressed to a person outside the United States, after the notice of deficiency authorized in section 6212 is mailed (not counting Saturday, Sunday, or a legal holiday in the District of Columbia as the last day), the taxpayer may file a petition with the Tax Court for a redetermination of the deficiency.
IRS Tax Court Mailbox Rule
Keep in mind that timely mailing generally constitutes timely filing.
Internal Revenue Code Section 7502 states:
“If any return, claim, statement, or other document required to be filed, or any payment required to be made, within a prescribed period or on or before a prescribed date under authority of any provision of the internal revenue laws is, after such period or such date, delivered by United States mail to the agency, officer, or office with which such return, claim, statement, or other document is required to be filed, or to which such payment is required to be made, the date of the United States postmark stamped on the cover in which such return, claim, statement, or other document, or payment, is mailed shall be deemed to be the date of delivery or the date of payment, as the case may be.”
For IRC section 7502 to apply, the following requirements are met:
- The return or payment is deposited in the mail in the United States on or before the due date for filing or paying.
- The envelope containing the return or payment is properly addressed.
- The envelope contains sufficient postage for delivery.
- The envelope was deposited with the United States Postal Service or a designated private delivery service. For a list of designated private delivery services see https://www.irs.gov/filing/private-delivery-services-pds.
In addition, if a deadline falls on a Saturday, Sunday, or legal holiday, it is deemed timely filed if it is postmarked the next business day. See IRC 7503. “Legal holiday” means any legal holiday in the District of Columbia, or any Statewide legal holiday of the State where the taxpayer files his returns.
What is Equitable Tolling and How Does it Apply to the Tax Court?
The legal doctrine called equitable tolling normally allows court filing deadlines to be waived when people miss them due to circumstances outside their control. However, the Tax Court has generally held, and federal appeals courts have often agreed, that equitable tolling is not available for filing deadlines in the Tax Court. According to those holdings, cases that are filed late (even by a day) must be thrown out, regardless of the circumstances.
In Guralnik v. Commissioner, 146 T.C. 230 (2016), an en banc Tax Court unanimously rejected an argument that the section 6330(d) 30-day deadline was subject to equitable tolling. Later, in another case, Duggan v. Commissioner, 879 F.3d 1029 (9th Cir. 2018), the Ninth Circuit also held the CDP filing deadline at section 6330(d) jurisdictional and not subject to equitable tolling (In Cunningham v. Commissioner, 716 Fed. Appx. 182 (4th Cir. 2018), the Fourth Circuit said there were no facts that would justify equitable tolling, so it passed on deciding whether the CDP filing deadline was jurisdictional).
The whistleblower award jurisdiction of the Tax Court contained in section 7623(b)(4) dates from 2006 and was copied almost word for word from the CDP filing deadline language. IRS section 7623(b)(4) states:
“Any determination regarding an award under paragraph (1), (2), or (3) may, within 30 days of such determination, be appealed to the Tax Court (and the Tax Court shall have jurisdiction with respect to such matter).”
Myer’s Court Holds Equitable Tolling Applies to Tax Court Jurisdiction In Limited Circumstances
David Myers applied to the IRS for a whistleblower award based on information that he had provided about alleged tax cheating by his former employer. After the IRS decided that he was not entitled to an award, he challenged the decision in the Tax Court. However, the Tax Court granted the IRS’s motion to dismiss the case because Myers missed the 30-day filing deadline, refusing to consider his claim that circumstances outside his control were responsible. Myers appealed to the DC Circuit.
In a 2-1 opinion in Myers v. Commmissioner, U.S. App. LEXIS 19757 (D.C. Cir. July 2, 2019), rev’g 148 T.C. 148 (2017), the D.C. Circuit has held that the whistleblower award petition filing deadline is not jurisdictional and is subject to equitable tolling. The D.C. Circuit reversed the Tax Court’s dismissal of the case for lack of jurisdiction. The Tax Court had so held because the whistleblower’s failure to timely file the petition within 30 days the Tax Court found were notices of determination deprived the Tax Court of jurisdiction. The D.C. Circuit remanded the Myers case to the Tax Court for the Tax Court to decide, in the first instance, whether the confusing nature of the determinations and their being sent by regular mail (and not even mentioning possible Tax Court review) justified equitable tolling in this case to make the Tax Court petition timely.
If you have a question about filing a Tax Court petition, contact a tax attorney. Equitable tolling does not apply to Tax Court filings as a general rule, but at least in the D.C. Circuit, it may apply in certain circumstances.