In Boechler, the Supreme Court held that the 30-day deadline in IRC 6330(d)(1) in which to file a Tax Court petition after the IRS issues a post-CDP-hearing notice of determination is not jurisdictional and is subject to equitable tolling. There is another 30-day deadline in CDP – the deadline in IRC 6330(a)(3)(B) in which to file a Form 12153 requesting a CDP hearing at Appeals. PT readers know that the regulations provide that if a taxpayer files a Form 12153 beyond that 30-day deadline, but within a year, Appeals will give the taxpayer an equivalent hearing and, at the end, issue a “Decision Letter on Equivalent Hearing”, which is not appealable to the Tax Court. However, the Tax Court has held that it may deem a decision letter to be treated as a notice of determination grounding Tax Court jurisdiction if the court finds that, in fact, the taxpayer had not filed a late Form 12153, and so should have been given a CDP hearing and notice of determination. Craig v. Commissioner, 119 T.C. 252 (2002).
In two cases before Judge Goeke, the taxpayer is trying to use a decision letter to ground the Tax Court’s jurisdiction under Craig:
- Organic Cannabis Foundation, Docket No. 381-22L (not to be confused with the Organic Cannabis deficiency case in which the Ninth Circuit, pre-Boechler, held that the Tax Court petition filing deadline is jurisdictional and not subject to equitable tolling – issues being reconsidered by the Tax Court currently in the Hallmark Research Collective case, on which I last blogged here).
- Assure Healthcare Providers, Inc./Daughters of Esther Fellowship, Docket No. 10409-22L – a case assigned by the Chief Judge to Judge Goeke on November 3, 2022, presumably after Judge Goeke had made the Chief Judge aware of his already possessing a case involving the IRC 6330(a)(3)(B) deadline.
In both cases, the parties have made filings on motions to dismiss, but the Judge was unhappy because the cases involved a late filing of a Form 12153, and the parties had not discussed Boechler at all or sufficiently for him to decide whether the IRC 6330(a)(3)(B) filing deadline is jurisdictional or subject to equitable tolling. If it is not jurisdictional and is subject to equitable tolling and the taxpayers had a sufficiently good excuse for late filing, the judge assumes (rightly, I think) that, under Craig, the Tax Court should consider the decision letter as a notice of determination after what should have been a CDP hearing.
IRC 6330(a)(3)(B) requires that the notice of intention to levy include a statement of “the right of the person to request a hearing during the 30-day period under paragraph (2)”.
IRC 6330(b)(1) states: “If the person requests a hearing in writing under subsection (a)(3)(B) and states the grounds for the requested hearing, such hearing shall be held by the Internal Revenue Service Independent Office of Appeals.”
I don’t see that this language contains any “clear statement” from Congress that excepts this deadline from the current rule that filing deadlines are no longer jurisdictional. Nor do I see anything in the language that rebuts the presumption that filing deadlines are subject to equitable tolling.
This is not the first time that the issue of whether the IRC 6330(a)(3)(B) filing deadline is subject to equitable tolling has arisen in a Tax Court case. There have been a few cases involving whether a Form 12153 was timely filed when it was mailed to the wrong IRS office within the 30-day deadline, but was received in the right office (by internal IRS forwarding) after the 30-day deadline passed. In a 2018 post, I noted several cases in which Tax Court judges appeared to take inconsistent positions regarding these situations and a case before Judge Gale in which he indicated that he might have to ask for briefing on the issue of whether the filing deadline is jurisdictional or subject to equitable tolling under recent Supreme Court case law. Judge Gale never had to ask for the additional briefing because the parties reached a settlement, and the taxpayer successfully moved to voluntarily dismiss the case – something one can do in a CDP case, but not in a deficiency case.
In my post, I also noted that the Internal Revenue Manual also sometimes treats timely mailing or delivery to the wrong IRS office as giving rise to a CDP hearing, even though the right office does not receive the request in the 30-day period. Current IRM 188.8.131.52.2(8) (12-17-19) states:
If the CDP hearing request is not addressed to the correct office as indicated in the CDP notice, the date to determine timeliness is the date the request is received by the IRS office to which the request should have been sent. However, if the address does not appear on the notice, or if it is determined that the taxpayer received erroneous instructions from an IRS employee resulting in the request being sent to the wrong office, use the postmark date to that office to determine timeliness.
Note: A request that is hand-carried to a local Taxpayer Assistance Center will be timely if delivered within the 30-day period during which taxpayers may request a hearing.
To take advantage of the IRC 7502(a) timely-mailing-is-timely-filing statutory extension, the mailing must be to the correct address. This may not be the case for equitable tolling, where timely filing in the wrong forum is a common equitable tolling ground – a ground that the IRS seems to be using for a CDP request erroneously filed in a Taxpayer Assistance Center. Another common equitable tolling ground is where the defendant misled the plaintiff into late filing, which is another situation discussed in the above-quoted Manual section. These IRS-accepted excuses are, it seems to me, not compatible with the IRS arguing that the filing deadline is jurisdictional.
Judge Goeke issued an order on November 7, 2022, in the Assure Healthcare case directing that “each party . . . on or before January 17, 2023, . . . file with the Court a memorandum as to their position regarding the application of Boechler to the facts of this case and to address whether ‘determination’ under section 6330(d)(1) includes an alternative hearing result when equitable tolling would have required respondent to apply the hearing procedures for a timely administrative hearing request.”
The Judge also issued an order on November 14, 2022, in the Organic Cannabis case directing the taxpayer “on or before January 10, 2023, to file with the Court a memorandum regarding the application of Boechler to the facts of this case and to address whether ‘determination’ includes the result of an equivalent hearing when the doctrine of equitable tolling would have required respondent to apply the CDP hearing procedures for a timely administrative hearing request” and the IRS “on or before February 1, 2023, to file with the Court a reply to petitioner’s memorandum”.
We will keep you posted on additional developments in these cases.