Supreme Court Urged to Review Tax Court Filing Deadline Decision

Northern California Small Business Assistants, Inc.,
Petitioner,
v.
Commissioner of Internal Revenue,
Respondent.

In the
Supreme Court of the United States

On Petition for a Writ of Certiorari to
the United States Court of Appeals
for the Ninth Circuit

REPLY BRIEF TO OPPOSITION TO PETITION FOR A WRIT OF CERTIORARI

Douglas L. Youmans
Counsel of Record
Wagner Kirkman Blaine Klomparens & Youmans LLP
10640 Mather Blvd., Suite 200
Mather, CA 95655
(916) 920-5286
dyoumans@wkblaw.com

Robin L. Klomparens
Wagner Kirkman Blaine Klomparens & Youmans LLP
10640 Mather Blvd., Suite 200
Mather, CA 95655
(916) 920-5286
rklomparens@wkblaw.com

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TABLE OF CONTENTS

The 90-day deadline for filing a petition with the Tax Court set forth in Internal Revenue Code § 6213(a) (the “Filing Deadline”) is not jurisdictional

CONCLUSION

TABLE OF AUTHORITIES

Cases

Flight Attendants Against UAL Offset v. Commissioner, 165 F.3d 572, 577 (7th Cir. 1999)

Fort Bend County v. Davis, 139 S. Ct. 1843, 1849 (2019)

Holland v. Florida, 560 U.S. 631, 646 (2010)

Merck & Co. v. Reynolds, 559 U.S. 633, 646-648 (2010)

Myers v. Comm'r, 928 F.3d 1025, 1036-1037 (D.C. Cir. 2019)

Tilden v. Commissioner, 846 F.3d 882, 886 (7th Cir. 2017)

United States v. Brockamp, 519 U.S. 347, 349-354 (1997)

United States v. Kwai Fun Wong, 575 U.S. 402, 410 (2015)

Volpicelli v. United States, 777 F.3d 1042, 1046 (9th Cir. 2015)

Young v. United States, 535 U.S. 43, 49 (2002)

Statutes

28 U.S.C. § 1658(b)(1)

Internal Revenue Code § 6213(a)

Internal Revenue Code § 6511

Internal Revenue Code § 6532(c)

Internal Revenue Code § 7476

Internal Revenue Code § 7502

Internal Revenue Code § 7508(a)

Internal Revenue Code § 7623(b)(4)

Internal Revenue Service § 7459(d)

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REPLY BRIEF TO OPPOSITION TO PETITION FOR A WRIT OF CERTIORARI

The question presented is whether the 90-day deadline for filing a petition with the Tax Court set forth in Internal Revenue Code¹ § 6213(a) (the “Filing Deadline”)² is jurisdictional, a question of national significance concerning the ability of taxpayers to contest proposed, potentially erroneous deficiencies in the Tax Court.

Notwithstanding this Court's current approach to distinguishing jurisdictional limits from claim-processing rules, and its holdings that statutory deadlines are presumptively nonjurisdictional and subject to equitable tolling unless Congress has made a clear statement that a deadline is jurisdictional, the Ninth Circuit held that the Filing Deadline is jurisdictional, not subject to equitable tolling. Pet. App. 19-26; Br. in Opp. 14.

A. Congress Did Not Make a Clear Statement That the Filing Deadline Is Jurisdictional.

Claiming the Ninth Circuit properly applied "traditional tools of statutory construction . . . [to] plainly show that Congress imbued . . . [the Filing Deadline] with jurisdictional consequences" as required by United States v. Kwai Fun Wong, 575 U.S. 402, 410 (2015), Respondent points to the word “jurisdiction”, “. . . in a provision [§ 6213(a)] that expressly conditions the Tax Court's 'jurisdiction' to grant specified relief . . . on the filing of 'a timely petition for a redetermination of the deficiency.'” Respondent then asserts, “[i]t would be incongruous for Congress to make the filing of a timely petition a jurisdictional prerequisite to those particular remedies, but not a jurisdictional prerequisite to the proceeding itself.” Br. in Opp. 15. Pet. App. 23 (citing Tilden v. Commissioner, 846 F.3d 882, 886 (7th Cir. 2017)). However, conditioning the Tax Court's power to enjoin certain actions and order refunds on the “timely” filing of a petition does not logically lead to the conclusion that the Filing Deadline is jurisdictional. There is nothing to indicate that, approximately sixty years after enactment of the first sentence of § 6213(a), authorizing the Tax Court to redetermine deficiencies, Congress intended to restrict that power when it added a totally new provision in a separate sentence, authorizing the Tax Court to enjoin certain actions and order refunds if a “timely petition” was filed. There is nothing in that new provision that refers to the Filing Deadline.

Seemingly, if Congress had intended to make the filing of a petition by the Filing Deadline a jurisdictional prerequisite to the Tax Court redetermining a deficiency, it would have done so more clearly and directly than by conditioning the Tax Court's jurisdiction to enjoin collections or order refunds on the timely filing of a petition. Hence, contrary to Respondent's assertion, § 6213(a) does not, “plainly show that Congress imbued . . . [the Filing Deadline] with jurisdictional consequences" as required by Kwai Fun Wong, 575 U.S. at 410.

B. There Is No “Discontinuity.”

Respondent argues that, if § 6213(a) is not jurisdictional, the no-collection prohibition provided in the second sentence would lapse, subject to revival if the Tax Court accepts a late-filed petition, a “discontinuity” the Ninth Circuit says the statute does not contemplate. Br. in Opp. 16.

For the reasons set forth in the original petition, Petitioners believe there would be no “discontinuity.” Pet. 14.

C. If § 6213(A)'s Deadline Is Non-Jurisdictional, Dismissal of an Untimely Petition for Redetermination Would Not Necessarily Have a Preclusive Effect.

Respondent argues that, if the Filing deadline is non-jurisdictional, a dismissal of a petition for redetermination as untimely would have a preclusive effect which a dismissal "for lack of jurisdiction" would not possess under the Code. Br. in Opp. 16. That approach "could potentially have the perverse effect of barring the taxpayer from later challenging the amount in a refund suit . . . yielding precisely the sort of 'harsh consequences' that [this] Court's recent 'jurisdictional' jurisprudence has sought to avoid." Br. in Opp. 16; Pet. App. 25 (quoting Kwai Fun Wong, 575 U.S. at 409) (brackets omitted).

While § 7459(d) provides that, “[i]f a petition for a redetermination of a deficiency has been filed . . ., a decision of the Tax Court dismissing the proceeding shall be considered as its decision that the deficiency is the amount determined by the Secretary,” it goes on to say, “[a]n order specifying the amount shall be entered in the records of the Tax Court unless the Tax Court cannot determine such amount from the record in the proceeding, or unless the dismissal is for lack of jurisdiction.” (Emphasis added). As dismissal of a petition as untimely could leave the court in a situation where it could not determine the amount of the deficiency from the record (such that an order specifying the amount could not be entered), the dismissal would not have a preclusive effect, in which case there would be none of the “'harsh consequences' that this Court's recent 'jurisdictional jurisprudence has sought to avoid.'” Kwai Fun Wong, 575 U.S. at 409.

D. The Stare Decisis Exception Does Not Apply to Circuit Court Rulings.

Respondent's contention that lower court precedent should be considered in this case (Br. in Opp. 19) disregards the distinction between appellate court and Supreme Court precedent clarified in Fort Bend County v. Davis, 139 S. Ct. 1843, 1849 (2019), where this Court “stated it would treat a requirement as 'jurisdictional' when 'a long line of [Supreme] Court decisions left undisturbed by Congress' attached a jurisdictional label to the prescription.” (Brackets and citations omitted, emphasis added).

As this Court has never ruled on the jurisdictional nature of the Filing Deadline, and Respondent cannot point to a single decision from this Court as support for its assertion that the Filing Deadline is jurisdictional, the stare decisis exception does not apply.

Respondent cites Merck & Co. v. Reynolds, 559 U.S. 633, 646-648 (2010) to argue that it would be “particularly appropriate” for this Court, in determining whether the Filing Deadline is jurisdictional, to consider uniform lower-court interpretations Congress was aware of when it granted the Tax Court jurisdiction to grant certain relief if a petition has been timely filed. Br. in Opp. 19. However, Merck was related to “discovery” under 28 U.S.C. § 1658(b)(1) (involving fraud and securities laws), and the determination of the period for filing an action for securities fraud. The statute at issue in Merck repeated “critical language” from an earlier Supreme Court case.

Merck, 559 U.S. at 648). The circumstances here are substantially different—as the “new” sentence added to § 6213(a), authorizing the Tax Court to enjoin certain actions and order refunds if a “timely petition” was filed, was not derived from an earlier Supreme Court case, there is no reason to create an exception to this Court's numerous holdings that stare decisis is only applicable to this Court's decisions.

E. The Tax Court Has Ruled that Filing Deadlines Can Be Subject to Equitable Tolling.

Respondent's suggestion that the Tax Court is “interpreting,” not equitably tolling, the Filing Deadline when it permits late filings of petitions is a distinction without a difference. Br. in Opp. 20.

As nothing in the Tax Court rules or the Code specifically states the Tax Court can extend filing deadlines, to do so the Tax Court looked to Federal Rule of Civil Procedure 6(a), which is the equivalent of equitable tolling.

F. Brockamp Was a Very Narrow Statute-Specific Holding Which Does Not Generally Preclude Equitable Tolling in Tax Cases.

Respondent claims United States v. Brockamp, 519 U.S. 347, 349-354 (1997) generally excludes equitable tolling from the Code. Br. in Opp. 22-23. Yet, Brockamp was a statute-specific analysis. Quoting Brockamp, § 6511 “sets forth its time limitations in unusually emphatic form,” using “highly detailed technical” language that “cannot easily be read as containing implicit exceptions” and by “reiterate[ing] its limitations several times in several different ways . . . For these reasons, we conclude that Congress did not intend the 'equitable tolling' doctrine to apply to § 6511's time limitations.” Brockamp, 519 U.S. at 350-351, 354.

Lower courts have refused to stretch Brockamp beyond § 6511. In Flight Attendants Against UAL Offset v. Commissioner, 165 F.3d 572, 577 (7th Cir. 1999) (involving the time period to file a § 7476 declaratory judgment petition in the Tax Court), Judge Posner, in dicta, asserted that the government was asking him to broaden the statute-specific conclusion reached by Brockamp to exclude all time periods in the Code from equitable tolling. Flight Attendants Against UAL Offset, 165 F.3d at 577. His response was that “[t]he argument that the Tax Court cannot apply the doctrines of equitable tolling and equitable estoppel because it is a court of limited jurisdiction is fatuous.” Flight Attendants Against UAL Offset, 165 F.3d at 577.

In Volpicelli v. United States, 777 F.3d 1042, 1046 (9th Cir. 2015) (involving the time period in which to file a wrongful levy action in district court under § 6532(c)), the Ninth Circuit rejected the government's argument that there is no equitable tolling in the Code:

In Myers v. Comm'r, 928 F.3d 1025, 1036-1037 (D.C. Cir. 2019), the D.C. Circuit held that the § 7623(b)(4) whistleblower award filing deadline was nonjurisdictional and subject to equitable tolling. Citing Young v. United States, 535 U.S. 43, 49 (2002), the court noted “It is hornbook law that limitations periods are customarily subject to equitable tolling.” Myers v. Comm'r, 928 F.3d at 1037.

Based on Brockamp's observation that § 6511 “set forth several explicit exceptions to its basic time limits, and those very specific exceptions do not include 'equitable tolling.'” Br. in Opp. 22, Respondent attempts to analogize § 6213(a) to § 6511 by claiming multiple statutory exceptions from the Filing Deadline exist in the form of extensions under § 7502 (mailbox rule), § 7508(a) (filing period suspended for individuals serving in combat zones or hospitalized because of service in combat zones), and § 7508(A) (authorizing Secretary of the Treasury to extend deadlines for taxpayers affected by federally declared disasters, acts of terrorism, or military action). Br. in Opp. 23-24. With the exception of § 7508(A), those statutory exceptions, which apply broadly to many deadlines in the Code, not just to filing deadlines, existed at the time of Brockamp and were not mentioned as relevant in that opinion. To argue, as Respondent does, that those extensions are exceptions that must be considered like the exceptions considered in Brockcamp would essentially be saying that their existence negates the existence of equitable tolling for any Code filing deadline.

G. Plenary Review is Warranted to Preserve Taxpayer Ability to Contest Proposed Assessments in the Only Pre-Payment Forum Other than Bankruptcy Court — the Tax Court

Tax Court review was put in place so that taxpayers would not have to full pay proposed deficiencies, with penalties and interest, to obtain judicial review. This has practical significance in situations where the amount of the proposed deficiency is hundreds of thousands or millions of dollars. Respondent's assertion that Petitioner can seek relief in a refund suit is contrary to Congressional intent in establishing the Tax Court.

CONCLUSION

For the foregoing reasons, the Court should grant Northern California Small Business Assistants, Inc.'s Petition for Writ of Certiorari to Review the Judgment of the United States Court of Appeals for the Ninth Circuit.

Respectfully submitted,

DOUGLAS L. YOUMANS
Counsel of Record
WAGNER KIRKMAN BLAINE
KLOMPARNES & YOUMANS LLP
10640 Mather Blvd., Suite 200
Mather, CA 95655
(916) 920-5286
dyoumans@wkblaw.com

Counsel for Petitioner,
Northern California Business
Assistants, Inc.