We welcome Patrick Thomas at Notre Dame who brings us this week’s designated order post. Keith
I’ve complained before about “light” weeks in designated orders from the Tax Court. But this week was truly a nothingburger: two orders from Judge Jacobs in two separate consolidated cases, along with an order from Judge Gustafson dismissing a deficiency case because neither the petitioner nor an attorney for the petitioner showed up to calendar call. That’s it.
Docket No. 24347-17, Oliver v. C.I.R.
So, our duty of recording each designated order fulfilled, we’ve decided to hit an “undesignated” order today, as well as muse generally regarding the Tax Court’s procedures during the short-lived, though perhaps recurring, government shutdown. Bob Kamman identified an order from Chief Judge Marvel regarding an IRS motion to dismiss for lack of jurisdiction, due to the petitioner’s alleged failure to timely file. The Service argued that, based on the mailing address on the petition, and the time it takes to mail documentation from that address to the Tax Court in Washington, the petition must have arrived by June 30, 2017 for it to be timely.
However, the Court notes that the Service didn’t provide any information “with respect to the additional time required for the petition to undergo the irradiation process that is required for mail sent to the Tax Court.” I apparently showed my age in asking Keith just what an “irradiation process” was. This process derives from the anthrax attacks in 2001, which killed five people and injured 17. Currently, the Postal Service irradiates mail sent via certain mailing methods to certain government offices in the DC area—which, according to Chief Judge Marvel, includes the Tax Court. Apparently that process may delay the usual mail processing time.
That’s all well and good. However, the petition in this case was filed on December 7, 2017. Over five months after the Service calculated that the petition was due. Any seasoned practitioner would raise an eyebrow if the filing of a petition in the Tax Court was delayed by more than a couple weeks after mailing.
Is there any reason that the petition’s filing date could be so delayed, yet the petitioner still timely mailed the petition? If not, it appears that this litigant’s Tax Court case—like his petition—may end up irradiated as well.
Shutdown: Past, Present, and Future(?)
I was not quite yet in practice during the 2013 shutdown. As the specter of the 2018 shutdown approached on Friday, I caught myself realizing that (1) I hadn’t thought much about the consequences of a shutdown on my practice, it being the beginning of a new and hectic semester, and (2) I had some Tax Court petitions to file and other deadlines coming up this week.
I was heartened to see that the Tax Court has a separate funding allocation that allowed its continued operation for the shutdown’s relatively limited duration. So those cases continued apace. Though apparently, it’s not always been the case that such funding exists; Carl Smith tells me that, when he was a Tax Court clerk for Judge Nims in 1982, the court underwent a three-day shutdown because the government was closed and there was at that time no special funding for the court to continue operations. All employees of the court were told not to come in. But, the judges came in and limited their work to stamping the mail received (nothing else).
In researching the consequences of the 2013 shutdown, I noted some lessons for practitioners and petitioners in interfacing with both the Court and Service during these periods. Given that current funding lasts until February 8—and the still unresolved nature of the fundamental differences between the parties—practitioners may do well to prepare for another shutdown in the near future.
- Keith has a great piece on a calendar call that occurred immediately prior to and after the 2013 shutdown in Philadelphia. I suggest reading it in full for a sense of pressure it applies to litigants and Tax Court judges at calendar call.
- The shutdown may not automatically extend the jurisdictional deadline in which to file a petition. Taxpayers and practitioners should continue to mail petitions to the Court to meet their statutory deadlines—especially if the Tax Court instructs petitions to do so on their website.
In McCoy v. Commissioner, the taxpayer’s attorney first attempted to e-file a petition (then and now, impossible), and that having failed, sought to hand-deliver the petition to the Tax Court’s courthouse in Washington, D.C. on October 11, 2013—during the middle of the shutdown. I’m not sure whether the Court’s funding had run out entirely, or whether it had furloughed its public-facing employees. Regardless, the Court was closed, and the attorney was unable to deliver the petition.
Meanwhile, the 90 day period after issuance of the Notice of Deficiency expired on October 15. Once the government reopened, the attorney hand-delivered the petition to the Court on November 4 (though the shutdown ended on October 17).
The Tax Court dismissed the case for lack of jurisdiction. It noted that, though hand-delivery was impossible, the petitioner could have filed a petition like the majority of petitioners who neither reside nor have counsel in the Washington, D.C. area: by mailing the petition to the Tax Court. Indeed, the Tax Court instructed litigants to do just that. The Postal Service operates on revenue, and so is unaffected by a shutdown. Presumably, as long as USPS actually delivers a petition bearing an appropriate date, the petition would be timely. I wonder, though, what the process of delivering/collecting the mail at the Tax Court during a shutdown looks like now, and whether petitions could be lost in the mix. Do judges continue to come in to stamp the mail, as they did in 1982?
McCoy’s very belated delivery aside, taxpayers who run into shutdown-related snafus with their petition dates should look to Guralnik v. Commissioner, which was decided after McCoy. Guralnik holds that a “snow day,” during which the Tax Court was closed, rendered the Court “inaccessible” under Federal Rule of Civil Procedure 6(a)(3). Thus, the last date to file was extended to the next day the Court was open (and happily enough, the petition was received by the Court on that date).
Still, as noted above, the Court continues to operate from allocated funding during the initial stages of a shutdown. For those days that the Court is open, it is “accessible” under FRCP 6(a)(3). So, practitioners and petitioners shouldn’t assume that a shutdown automatically translates to additional time.
- Even if the Tax Court has reserve funding, your local counsel’s office, appeals office, and certainly the IRS campuses, do not. Monday was, thus, a rather lonely day at the Clinic.
Indeed, in 2013, the entirety of the Taxpayer Advocate Service, Automated Collection Systems, and other core functions of the Service were furloughed. As the National Taxpayer Advocate noted in the 2015 Objectives Report to Congress, however, automated collections actions continued apace—but there were no human beings to call—either in TAS or ACS—to request relief from that automated collection. During the two-week shutdown period, there were 3,902 Social Security levies, 5,455 levies on financial accounts, 7,025 wage levies, and 4,099 Notices of Federal Tax Liens filed. If any of these actions presented the kind of economic hardship that I routinely see in my Clinic (e.g., inability to pay rent, utilities, or other necessary living expenses), there was simply no immediate recourse for these taxpayers.
Given that, it’s probably a good idea to move quickly on cases where a levy can be proactively prevented—i.e., if a practitioner is sitting on a February 8 deadline to file a request for a Collection Due Process hearing (which would prevent a levy), it might be better to mail that request this week, rather than the deadline.
- Relatedly, it remains an open question whether the Commissioner has the authority to furlough the National Taxpayer Advocate or her staff. If not, this would certainly help with the problems identified above.
That’s all for this edition of Designated Orders. Here’s to another three weeks of a functioning government. And hopefully, in the meantime, a few more substantive orders from the Tax Court.