It has been six months since Boechler was decided. Where are we?
In my last post of August 1, 2022, giving an update onlitigation over whether the 90-day deadline in IRC 6213(a) in which to file a Tax Court deficiency petition is, after Boechler, still jurisdictional or is subject to equitable tolling, I noted two principal test cases: First, the Tax Court is considering the issue in Hallmark Research Collective v. Commissioner, Tax Ct. Docket No. 21284-21, and I expect a ruling from the Tax Court therein probably around Christmas. Second, the Third Circuit is considering the issue in Culp v. Commissioner, 3d Cir. Docket No. 22-1789, where I expect a ruling next spring.
Since my last post, another appellate case under IRC 6213(a) has surfaced, Allen v. Commissioner, 11th Cir. Docket No. 22-12537.
And in Frutiger v. Commissioner, Tax Court Docket No. 31153-21 – a case mentioned by Chief Special Trial Judge Carluzzo at the recent ABA Tax Section meeting – the Tax Court will likely decide whether, after Boechler, the 90-day deadline in IRC 6015(e)(1)(A) to file a stand-alone innocent spouse petition is still jurisdictional and not subject to equitable tolling.
Allen, like the Culps, is a semi-retired non-tax attorney. Under the IRC 7508A(a) COVID extension set out in Notice 2020-23, the due date for Allen to file his Tax Court deficiency petition was July 15, 2020. On the due date, he went late in the day to the post office, but the line was unusually long (including 6-foot spacing) and stretched outside the building. As he waited in line, a post office employee walked up and down it trying to triage the most important filings. The employee spoke to Allen, who explained that he needed to send the envelope containing the notice certified mail so that it would be postmarked July 15, 2020. The employee thought the post office might close before Allen got up to the window, and the employee persuaded Allen to simply drop the envelope into a slot for regular mail, assuring Allen that the envelope would be postmarked July 15, 2020. Naturally, the envelope arrived at the Tax Court postmarked July 16, 2020.
The IRS moved to dismiss Allen’s petition for lack of jurisdiction. In an order dated April 29, 2022, the Tax Court granted the motion. The dismissal for lack of jurisdiction occurred eight days after the Supreme Court decided Boechler and seven days before the Tax Court suspended ruling on these kinds of motions in deficiency cases, pending the Hallmark ruling. Allen appealed pro se to the Eleventh Circuit, arguing that, after Boechler, the deficiency petition filing deadline is no longer jurisdictional and is subject to equitable tolling. Allen argues that both the unusual COVID situation and the actions of the USPS employee caused the late filing.
In the Culp case, the DOJ moved for summary affirmance, but the Third Circuit denied that motion. In my August 1, 2022 post, I linked to the taxpayers’ subsequent opening brief in Culp. Since then, the DOJ has filed its Culp opening brief, which you can find here.
In Allen, the DOJ also moved for summary affirmance. All of the filings are in on that motion since October 6, 2022, and we are awaiting the Eleventh Circuit’s ruling on that motion.
Just as it had done in Culp, the Center for Taxpayer Rights, represented by the Tax Clinic at the Legal Services of Harvard Law School, hopes to file an amicus brief in Allen if the case survives the motion for summary affirmance.
The third biggest jurisdiction of the Tax Court by volume is stand-alone innocent spouse cases. That jurisdiction now has its own test case pending on whether the IRC 6015(e)(1)(A) 90-day filing deadline is still jurisdictional after Boechler. The case is Frutiger v. Commissioner, Tax Court Docket No. 31153-21, involving relief for only about $4,000 of liability under subsection (f). The case was on the eve of trial – indeed, the IRS had already filed its pretrial memo – when Judge Buch noticed that the pro se taxpayer’s petition appeared to be mailed to the Tax Court two days late. In an order dated September 7, 2022, Judge Buch continued the trial and asked the IRS to submit proof of mailing and explain (1) whether the Tax Court’s precedent at Pollock v. Commissioner, 132 T.C 21 (2009) (holding that the filing deadline is jurisdictional and not subject to equitable tolling) is still good law after Boechler and (2) “what would be the consequence of filing an untimely petition” if the deadline is jurisdictional or not. The IRS response was filed on October 4, 2022. That response provided proof of mailing showing that the taxpayer filed late and argued that Pollock is still good law after Boechler because the Collection Due Process and innocent spouse statutes are not identically phrased. On October 21, 2022, the IRS moved to allow the filing of a first supplement to its response that more fully attempted to distinguish Boechler, stating, “Respondent recognizes his original response lacked information warranted for consideration regarding the issues raised in the Court’s Order.” I expect the motion to be granted. You can find the first supplemental response here.
After Pollock was issued, three Circuit courts had ruled that the IRC 6015(e)(1)(A) filing deadline is jurisdictional and is not subject to equitable tolling. Rubel v. Commissioner, 856 F.3d 301 (3d Cir. 2017); Matuszak v. Commissioner, 862 F.3d 192 (2d Cir. 2017); Nauflett v. Commissioner, 892 F.3d 649 (4th Cir. 2017). No other Circuit has any precedent on whether this filing deadline is jurisdictional or subject to equitable tolling. Frutiger lives in the Ninth Circuit.
Under IRC 7459(d), a dismissal that is not jurisdictional upholds the deficiency set out in the notice, which would possibly preclude the taxpayer by res judicata from later paying and suing for a refund. While there is no similar provision to IRC 7459(d) in IRC 6015, there is a special res judicata provisions for innocent spouse cases at IRC 6015(g)(2) that may prove problematic. There is also conflicting case law over whether district courts (except in one rare situation described in IRC 6015(e)(3)) ever have jurisdiction to consider refund suits seeking IRC 6015 relief. See the post on the Hockin opinion here.
Judge Buch instructed Frutiger to file a response to the IRS filing by November 18, 2022.
Recognizing that a pro se taxpayer was probably not likely to be able to present adequate arguments on the legal issues, in his order, the judge invited the submission of motions for leave to file amicus briefs in the case (accompanied by the proposed amicus brief), also by November 18, 2022. Judge Buch’s action inviting a brief is laudable and consistent with the Tax Court’s March 23, 2022, proposed new Rule 152 on amicus briefs. You can find a link to an article calling for amicus briefs in certain pro se Tax Court cases within a post of Keith’s on pro se petitions in the Tax Court. The Tax Court’s proposed new Rule 152 on amicus briefs is linked within another of Keith’s posts.
The Center for Taxpayer Rights, represented by the Tax Clinic at the Legal Services of Harvard Law School, hopes to file an amicus brief in Fruitger. The parties have told the Center that they would not object to a motion by the Center for leave to file such an amicus brief. Perhaps Keith’s request to the IRS attorney in the case for the IRS position on a motion for leave to file an amicus brief triggered the IRS to file its fuller, supplemental response?
I would not call it a test case, but Judge Choi may not be aware that in a case before her, Cabral v. Commissioner, Tax Ct. Docket No. 12078-20S, she is facing the same issue as in Frutiger. Cabral concerns an IRC 6015(e) notice of determination and a petition that was filed about three weeks beyond the 90-day deadline. On October 13,2022, Judge Choi issued an order to show cause why the court should not dismiss the petition for lack of jurisdiction for late filing. Judge Choi may want to hold off ruling on her order until after Judge Buch issues his opinion in Frutiger. The taxpayer in Cabral lives in the Third Circuit, which, of course, has the above-cited Rubel opinion as current precedent.
On a related topic, it appears that, as I expected, the IRS will now try to dispose of at least some late-filed CDP cases by summary judgment motion (see Sherman v. Commissioner, Tax Ct. Docket No. 11951-20L (order dated Oct. 6, 2022), directing the IRS to file the summary judgment motion that it said in a status report that it intended to file). However, there is, as yet, no ruling on such a motion that I could find – whether or not the taxpayer has also sought equitable tolling. It may be too early to see orders on such summary judgment motions, but, so far, the IRS-predicted flood of late-filed CDP petitions seeking equitable tolling seems not to have materialized.
At the most recent ABA Tax Section meeting, Judge Carluzzo said that the court would not likely have to rule on equitable tolling in very many cases. In Christine’s post of October 21, 2022, on that meeting, she reports that he also told the audience what PT has been saying – that in CDP cases, the IRS should now assert late petition filing as a statute of limitations defense in answers, and that taxpayers should assert equitable tolling defenses in replies in such case. That appears to be what Rule 39 requires for pleading special matter.