Supreme Court: 30-Day Deadline for Tax Court Petitions in CDP Cases Isn't Jurisdictional

(Parker Tax Publishing April 2022)

Reversing and remanding a decision of the Eighth Circuit, the Supreme Court unanimously held that the 30-day deadline in Code Sec. 6330(d)(1) to petition the Tax Court for review of a collections due process determination is not a jurisdictional deadline and is subject to equitable tolling. The Court found the text of Code Sec. 6330(d)(1) does not clearly mandate a jurisdictional reading and that non-jurisdictional time limits are presumptively subject to equitable tolling and nothing rebutted that presumption in this case. Boechler, P.C. v. Comm'r, 2022 PTC 112 (S. Ct. 2022).

Background

Boechler, P.C. is a law firm in Fargo, North Dakota. In 2015, the IRS notified Boechler of a discrepancy in its tax filings. When Boechler did not respond, the IRS assessed a 10 percent intentional disregard penalty and notified Boechler of its intent under Code Sec. 6330(a) to levy Boechler's property to satisfy the penalty. In an effort to prevent the levy, Boechler requested a collections due process (CDP) hearing before the IRS Independent Office of Appeals (Appeals). At the hearing, Boechler challenged the penalty, arguing both that there was no discrepancy in its tax filings and that the penalty was excessive. Appeals sustained the proposed levy.

Under Code Sec. 6330(d)(1), Boechler had 30 days to petition the Tax Court to review Appeals' CDP determination. But Boechler dropped the ball and filed its petition one day late. The Tax Court dismissed the petition for lack of jurisdiction and, in 2020 PTC 217 (8th Cir. 2020), the Eighth Circuit affirmed, agreeing that the 30-day filing deadline in Code Sec. 6330(d)(1) is jurisdictional and thus cannot be equitably tolled. Boechler appealed to the Supreme Court, which granted certiorari.

Code Sec. 6330(d)(1) provides that: "The person may, within 30 days of a determination under this section, petition the Tax Court for review of such determination (and the Tax Court shall have jurisdiction with respect to such matter)." Thus, the issue in this case was whether the statute confers jurisdiction on the Tax Court only if a petition is filed within the 30-day time limit. In Arbaugh v. Y & H Corp., 648 U.S. 500 (2006), the Supreme Court held that a procedural requirement will be treated as jurisdictional only if Congress "clearly states" that it is. Under U.S. v. Kwai Fun Wong, 575 U.S. 402 (2015), the "traditional tools of statutory construction must plainly show that Congress imbued a procedural bar with jurisdictional consequences."

According to the Supreme Court, the only jurisdictional language in Code Sec. 6330(d)(1) is the parenthetical at the end of the sentence, and thus the answer to the question of whether the statute limits the Tax Court's jurisdiction to petitions filed within 30 days depended on the meaning of the phrase "such matter" at the end of that parenthetical. Boechler contended that "such matter" refers only to the immediately preceding phrase - a petition to the Tax Court for review of the determination. The IRS, on the other hand, argued that the phrase refers to the entire first clause of the sentence, i.e., petitions filed within the 30-day timeframe. The IRS reasoned that a neighboring provision, Code Sec. 6330(e)(1), clarifies the jurisdictional effect of the filing deadline. Code Sec. 6330(e)(1) provides that if a CDP hearing is requested, then the levy actions which are the subject of the requested hearing must be suspended for the period during which such hearing and appeals therein are pending. In order to enforce that suspension, Code Sec. 6330(e)(1) says that the Tax Court may enjoin a levy or proceeding during the time the suspension is in force, but the Tax Court will not have jurisdiction to enjoin any action or proceeding unless a timely appeal has been filed under Code Sec. 6330(d)(1). Thus, Code Sec. 6330(e)(1) plainly conditions the Tax Court's jurisdiction to enjoin a levy on a timely filing under Code Sec. 6330(d)(1). The IRS argued that it did not make sense to treat the 30-day filing deadline as a jurisdictional requirement for a particular remedy (an injunction), but not for the underlying merits proceeding itself. If that were so, the IRS said, the Tax Court could accept late-filed petitions but would lack jurisdiction to enjoin collection in such cases. If the IRS disobeyed Code Sec. 6330(e)(1)'s instruction to suspend the levy during the hearing and any appeal, the taxpayer would have to initiate a new proceeding in district court to make the IRS stop.

On the issue of equitable tolling, the IRS invoked U.S. v. Brockamp, 519 U.S. 347 (1997), in which the Supreme Court held that equitable tolling did not apply to the deadline in Code Sec. 6511 for filing refund claims. The IRS also asserted that if equitable tolling is available, the IRS will not know whether it can proceed with a collection action after Code Sec. 6330(d)(1)'s deadline passes. The IRS acknowledged that the deadline is already subject to tolling provisions found elsewhere in the Code, such as for taxpayers located in a combat zone or disaster area. But the IRS said that it can easily account for these contingencies because it continuously monitors whether any taxpayer is in a combat zone or disaster. Tolling the Code Sec. 6330(d)(1) deadline outside these circumstances, the IRS insisted, would create much more uncertainty.

Supreme Court's Analysis

In a unanimous decision, the Supreme Court held that Code Sec. 6330(d)(1)'s 30-day time limit to file a petition for review of a CDP determination is not a jurisdictional deadline and is subject to equitable tolling.

In the Court's view, Code Sec. 6330(d)(1) does not clearly mandate a jurisdictional reading, given that the phrase "such matter" lacks a clear antecedent. Applying the last antecedent rule, which says that the correct antecedent is usually the nearest reasonable one, the Court found that "such matter" refers to a petition, rather than a petition filed within the 30-day deadline. In the Court's view this argument was "hardly a slam dunk" for Boechler but rather was one reason to prefer its reading over the IRS's. After discussing other possible interpretations, the Court concluded that nothing in the statute's text or structure advanced the case for jurisdictional clarity.

The Court further found that the broader statutory text confirmed the lack of any clear statement in Code Sec. 6330(d)(1). Other provisions enacted around the same time as Code Sec. 6330(d)(1), the Court found, much more clearly link their jurisdictional grants to a filing deadline. For example, Code Sec. 6404(g)(1) states that the Tax Court has "jurisdiction over any action...to determine whether the Secretary's failure to abate interest...was an abuse of discretion...if such action is brought within 180 days." In the Court's view these other provisions accentuated the lack of comparable clarity in Code Sec. 6330(d)(1). The Court rejected the IRS's argument that the Tax Court could end up with dual-track jurisdiction in a case where Code Sec. 6330(e)(1) deprived it of authority to issue an injunction but had jurisdiction over a late-filed petition for review on equitable tolling grounds. The Court said that if anything, Code Sec. 6330(e)(1)'s clear jurisdictional statement highlighted the lack of such clarity in Code Sec. 6330(d)(1).

Next, the Court found that under Irwin v. Dep't of Veterans Affairs, 498 U.S. 89 (1996), non-jurisdictional limitations periods are presumptively subject to equitable tolling, and the Court saw nothing to rebut the presumption here. The Court noted that Code Sec. 6330(d)(1) does not expressly prohibit equitable tolling and reasoned that its short 30-day time limit is directed at the taxpayer, not the Tax Court. The Court further noted that the deadline appears in a section of the Code that the Court found in Sibelius v. Auburn Regional Medical Center, 568 U.S. 145 (2013), to be unusually protective of taxpayers and a scheme in which laymen, unassisted by lawyers, often initiate the process. The Court also found that its decision in Brockamp rested on several distinctive features of the statutory deadline at issue in that case, including "unusually emphatic" language which explicitly lists six exceptions to the deadline and therefore could not easily be read to contain implicit exceptions. By contrast, the Court observed that Code Sec. 6330(d)(2) provides only one exception, which applies if a taxpayer is prohibited from filing a petition with the Tax Court because of a bankruptcy proceeding.

The Court was unpersuaded by the IRS's concerns regarding the uncertainty that would result if equitable tolling were allowed for the relatively small number of petitions at issue in this case. In the Court's view, such uncertainty already exists since petitions are considered filed when mailed. The Court explained that the 30-day deadline can come and go before a petition "filed" within that time frame comes to the IRS's attention, so it is not as if the IRS can confidently rush to seize property on day 31 anyway. The Court concluded that it was not deciding whether Boechler was entitled to equitable tolling; that had to be decided on remand. The Court simply held that Code Sec. 6330(d)(1)'s filing deadline, like most others, can be equitably tolled in appropriate circumstances.

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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