Eighth Circuit Holds 30-Day Deadline for Filing a Tax Court Petition Is Jurisdictional

(Parker Tax Publishing July 2020)

The Eighth Circuit affirmed a Tax Court ruling that the 30-day time period in Code Sec. 6330(d)(1) for filing a petition with the Tax Court after the IRS's determination to sustain a levy is jurisdictional and equitable tolling of the time period is therefore not available. The court held that the wording of Code Sec. 6330(d)(1) is a clear statement by Congress that the deadline is jurisdictional, and the court rejected the taxpayer's argument that counting the 30-day filing deadline from the date of determination rather than the date of receipt is a violation of due process and equal protection under the Fifth Amendment. Boechler, P.C. v. Comm'r, 2020 PTC 217 (8th Cir. 2020).

Background

On June 5, 2015, the IRS sent Boechler, P.C. a letter noting a discrepancy between prior tax document submissions. The IRS did not receive a response and imposed a 10 percent intentional disregard penalty. Boechler did not pay the penalty. The IRS mailed Boechler a notice of intent to levy. Boechler timely requested a Collection Due Process (CDP) hearing but failed to establish grounds for relief on the discrepancy or the unpaid penalty. On July 28, 2017, the IRS Office of Appeals mailed a determination sustaining the levy to Boechler's last known address in Fargo, North Dakota. The notice of determination, delivered on July 31, stated that Boechler had 30 days from the date of determination, i.e. until August 28, 2017, to submit a petition for a CDP hearing.

Boechler mailed a petition for a CDP hearing on August 29, 2017, one day after the 30-day filing deadline had expired. The Tax Court received Boechler's untimely petition and the IRS moved to dismiss for lack of jurisdiction. Boechler objected, arguing that the 30-day time limit in Code Sec. 6330(d)(1) is not jurisdictional, the time limit should be equitably tolled, and calculating the time limit from issuance rather than receipt violates due process. The Tax Court dismissed the petition for lack of jurisdiction, and Boechler appealed to the Eighth Circuit.

Code Sec 6330(d)(1) provides that when a taxpayer receives a notice of determination sustaining a levy, the taxpayer "may, within 30 days of a determination under this section, petition the Tax Court review of such determination (and the Tax Court shall have jurisdiction with respect to such matter." In Musacchio v. U.S., 136 S. Ct. 709 (2016), the Supreme Court held that in general, a statutory time limit is jurisdictional when Congress clearly states that it is. The Supreme Court held that Congress must do "something special" beyond setting an exception-free deadline to tag a time limit as jurisdictional and in doing so, prohibit a court from tolling it. In Duggan v. Comm'r, 2018 PTC 4 (9th Cir. 2018), a case in which a taxpayer also filed a Tax Court petition on the day after the filing deadline, the Ninth Circuit held that Code Sec. 6330(d)(1) is jurisdictional after finding that the statute expressly contemplates the Tax Court's jurisdiction. The Ninth Circuit explained that the test is whether Congress made a clear statement, not whether it made the clearest statement possible.

Eighth Circuit's Analysis

The Eighth Circuit agreed with the Ninth Circuit's analysis in Duggan and affirmed the Tax Court's dismissal for lack of jurisdiction. The Eighth Circuit found that Code Sec. 6330(d)(1) is a rare instance where Congress clearly expressed its intent to make the filing deadline jurisdictional. According to the court, the parenthetical "(and the Tax Court shall have jurisdiction with respect to such matter)" is clearly jurisdictional and renders the remainder of the sentence jurisdictional.

The court found that a plain reading of the statute demonstrates that the phrase "such matter" refers to a petition to the Tax Court that (1) arises from a determination under Code Sec. 6330 and (2) was filed within 30 days of that determination. According to the court, the use of "such matter" plainly shows that Congress intended to impose a procedural bar with jurisdictional consequences because the phrase provides a link between the filing deadline and the grant of jurisdiction that is lacking in other statutory provisions. The court said that, while there might be alternative ways that Congress could have stated the jurisdictional nature of the statute more plainly, it had spoken clearly enough to establish that the 30-day deadline is jurisdictional. The court noted that because it held that Code Sec. 6330(d)(1) is jurisdictional, Boechler was not entitled to equitable tolling.

The court rejected Boechler's due process and equal protection arguments because it found that Code Sec. 6330(d)(1) does not draw a suspect classification or violate a fundamental right and therefore, it required only a rational legislative purpose. The court found such a purpose in the statute's purpose of insuring a workable deadline and reasonable timeframe. The court was not persuaded by Boechler's contention that the 30-day filing deadline is arbitrary and irrational because, by referring to the date of determination rather than the date of receipt, the method of calculating the time period could result in discrepancies based on where a taxpayer lives in relation to an IRS mailer. The court responded that calculating the filing deadline from the date of determination streamlines and simplifies the complex undertaking of enforcing the tax code and guards against taxpayers refusing to accept delivery of the notice.

For a discussion of appealing a notice of determination in the Tax Court, see Parker Tax ¶260,540.

Disclaimer: This publication does not, and is not intended to, provide legal, tax or accounting advice, and readers should consult their tax advisors concerning the application of tax laws to their particular situations. This analysis is not tax advice and is not intended or written to be used, and cannot be used, for purposes of avoiding tax penalties that may be imposed on any taxpayer. The information contained herein is general in nature and based on authorities that are subject to change. Parker Tax Publishing guarantees neither the accuracy nor completeness of any information and is not responsible for any errors or omissions, or for results obtained by others as a result of reliance upon such information. Parker Tax Publishing assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect information contained herein.

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