Every year the National Taxpayer Advocate prepares an objectives report to Congress and submits it at the end of June. This year’s report contains a discussion of the impact of the longest government shutdown in history on the Taxpayer Advocate Service. We will never really know what happened to everyone trying to petition the Tax Court during the shutdown but it would be interesting to see a report on that as well. We have experienced a significant “climate” change in the government over the past couple of decades and that change has resulted in increased shutdowns with all of the issues resulting therefrom.
We have written about the government shutdown and the Tax Court previously on many occasions. Professor Bryan Camp provided us with a four part series back in January speculating on the impact of the shutdown. See the posts here, here, here and here. The first post directly addresses the impact of the Tax Court’s decision in Guralnik v. Commissioner on government shutdown days. Les wrote a post about the shutdown and the guidance available. On New Year’s Eve I wrote a post reminding readers not to forget Guralnik and Parker during the shutdown. I also wrote a post in May about the shutdown and the odyssey of the petition filed in one case and how that odyssey impacted the court’s jurisdiction.
Now we have a live case involving the shutdown with a motion to dismiss for lack of jurisdiction for late filing a petition during the shutdown, a court order issued two days after the filing of the motion and a government response. I am unsure if this will result in an opinion that anyone can cite to in the future but knowing about the order and the response may assist others with this situation stemming from the most recent shutdown or future shutdowns. It would be nice if Chief Counsel’s office put up a Notice setting out its position on government shutdowns and time frames. Chief Counsel signaled its position in an earlier case which we blogged here. As I suggested in the first paragraph, the last government shutdown has probably not yet occurred.
Angela Marie Henderson wants to receive innocent spouse status. On October 25, 2018, the IRS sent her a notice of determination denying her the requested status. She sent a petition to the Tax Court which it filed on February 4, 2019 in an envelope bearing a postmark of January 25, 2019. January 25, 2019 was a Friday. That date is 92 days after the mailing of the notice of determination. The 90th day, Wednesday, January 23, 2019, was not a Saturday, Sunday or holiday, but both January 23 and January 25 were days when the United States government, including the Tax Court, was shut down because of the impasse over the budget. The shutdown began on December 22, 2018 and ended on Monday, January 28, 2019. The Tax Court reopened on January 28 with the rest of the federal government. (The Tax Court was shutdown for 31 days and the IRS for 35 days. Because the Tax Court has some non-appropriated funds that it obtains through the collection of fees, it has the ability to remain open for a short period of time during a shutdown when agencies like the IRS must close.)
On June 12, 2019, the IRS filed a motion to dismiss for lack of jurisdiction because Ms. Henderson filed her petition more than 90 days after the issuance of the notice of determination denying her innocent spouse request. On June 14, 2019, Chief Judge Foley, known for his brevity, issued a slightly more than one page order directing Respondent to “discuss fully his position as to the application, if any, of Guralnick to this case.” The swiftness with which the court issued this order surprises me somewhat and suggests that the court had its antenna up for motions to dismiss filed during the shutdown. The citation to the Guralnick case immediately drew my attention given the discussion of that case and its possible impact on the Tax Court’s jurisdiction in our prior posts.
The case also brings back memories of the 16-0 opinion by the Tax Court regarding the argument by the tax clinic at Harvard that the court had jurisdiction to hear a late filed CDP petition. For those who do not remember the Guralnik case, it involved a situation in which petitioner’s counsel went to FedEx on Friday the 13th and purchased the most expense delivery service that FedEx offered, next day-first thing in the morning. The petition in a CDP case was due on Sunday, February 15. Monday the 16th was a federal holiday for President’s Day and on the 17th the Tax Court closed because it snowed in the District of Columbia. As a result the petition arrived at the Court on Wednesday, February 18th. The IRS moved to dismiss because the petition was late. The Tax Court rejected petitioner’s argument regarding timely mailing because the FedEx delivery service chosen by petitioner did not appear on the IRS list of approved delivery services because the IRS had not updated the list in 11 years (it did so while the case was pending in an interesting twist of fate.) The Tax Court rejected the determination of the Special Trial Judge who initially heard the case that a snow day equated to a holiday allowing the filing on the day after the “holiday.” As mentioned above the Tax Court rejected the argument of my clinic that the 30 day time period for filing a CDP petition was not a jurisdictional time period thus allowing the court to accept the case if it determined equitable tolling was appropriate (but see our post on the recent decision of the D.C. Circuit accepting that argument with respect to the identical language of the whistleblower statute.) Finally, after going through all of the reasons it could not accept the case, the Tax Court allowed the Guralnik case to proceed under the reasoning that since it did not have a rule it could look to the federal rules of civil procedure. When the clerk’s office is closed, the rules of civil procedure allow the act to be performed on the next day. Bryan Camp wrote an excellent post explaining the holding in Guralnik. Now Chief Judge Foley wants the IRS to tell the court what the IRS, which did not appeal Guralnik, thinks of the application of that opinion to the closing of the clerk’s office due to the shutdown.
Although Chief Judge Foley’s order gave the IRS until July 8, 2019 to file a response, it did so on June 26, 2019. Ms. Henderson requested place of trial in Boston. So, the original motion and the response were filed by the Chief Counsel’s office in Boston. They made an eight-page response containing 15 numbered paragraphs. The first 14 paragraphs contain a recitation of the facts and the law with minor references to the Guralnik case. Reading those paragraphs I drew the conclusion that the IRS continued to believe the Tax Court lacked jurisdiction in this case despite the position it took in Parker.
Then, in paragraph 15, the IRS stated the following:
As a result, in this case, the deadline for timely mailing the petition to the Court was the first day in which the clerk’s office became accessible following the government shutdown, Monday, January 28, 2019. Because the petition in this case was postmarked before that date, petitioner benefits from the ‘timely mailed, timely file’ rule in section 7502 and her petition was timely.
Now we have an interesting case. This is the first case of which I am aware in which the IRS has acknowledged the impact of Guralnik on filing deadlines covered by a government shutdown although it had signaled this result to those who read the case of Parker v. Commissioner which we discussed in the blog post cited earlier. Reading the response one almost leaps to the conclusion that the author was directed to create an ending different than the one he wanted or planned to create. Either that or the author is a fan of novels with a twist as the ending. As I mentioned before, the position taken by the IRS here should go into a notice so that the world, and all the attorneys in Chief Counsel’s office, know the position of that Chief Counsel’s office will take in situations when a petitioner files a petition during a time the Tax Court clerk’s office is closed. Not all representatives or Chief Counsel attorneys read court orders or this blog.
I do not know how many other petitioners might occupy the same position as Ms. Henderson. If she is the only person who late filed a petition during the government shutdown, I am surprised. More than 2,500 dockets preceded hers in 2019. Although the Tax Court quickly issued the order requesting the views of the IRS in this case, more than two weeks have passed since the IRS responded and the Court has not acted further on this case. Ms. Henderson is now ably represented by my fellow clinician in Boston, Luz Arévalo of Greater Boston Legal Services. This is a case to watch. I hope it will result in pronunciations from the court and the IRS that will make it easy for others to know the impact of a closure of the clerk’s office on their ability to obtain jurisdiction in the Tax Court.