Couple Can't File Successive Motions to Extend Deadline to Appeal Tax Court Case

(Parker Tax Publishing March 2018)

The Fifth Circuit, in an issue of first impression, held that a couple could not file successive motions to vacate or revise a Tax Court decision with the effect of extending the 90-day window to appeal the decision into perpetuity. The court concluded that successive motions to vacate or revise a Tax Court decision, raising substantially the same grounds as the first motion, will not affect the time period in which a party may appeal a Tax Court decision. Annamalai v. Comm'r, 2018 PTC 61 (5th Cir. 2018).

The IRS determined that Annamalai Annamalai and his wife, Parvathi Siva Annamalai, were jointly liable for tax deficiencies and mailed a notice of deficiency to each of them. The couple petitioned the Tax Court for a redetermination of their tax liability. After nearly three years of litigation, the Tax Court entered its final decision on June 23, 2016. On July 13, 2016, the couple filed separate motions with the Tax Court to vacate its June 23 decision. On November 18, the Tax Court denied those motions. Instead of filing a notice of appeal of the Tax Court's decision with the Tax Court clerk, the couple, on December 12, jointly filed a second motion with the Tax Court to vacate the Tax Court's decision. That second motion did not raise any substantially new grounds or arguments. After the Tax Court denied that second motion on December 22, the couple filed a notice of appeal to the Fifth Circuit with the Tax Court clerk on March 15, 2017. In summary, the couple appealed to the Fifth Circuit 265 days after the Tax Court's initial decision, 117 days after the Tax Court ruled on their first motions to vacate, and 83 days after the Tax Court ruled on their second joint motion to vacate.

Under Federal Rule of Appellate Procedure 13, there is a 90-day window to appeal a Tax Court decision to the Fifth Circuit and the 90-day window runs from either: (1) the entry of the Tax Court decision being appealed, or (2) if a party moves to vacate or revise the Tax Court's decision, from the entry of the Tax Court's ruling on that motion to vacate or revise the decision. The question before the Fifth Circuit was whether a party may file successive motions to vacate or revise with the effect of extending the time to appeal into perpetuity.

Noting that this was an issue of first impression, the Fifth Circuit held that successive motions to vacate or revise a Tax Court decision, raising substantially the same grounds as the first motion, will not affect the time period in which a party may appeal a Tax Court decision. Where successive post-decision motions are filed in the Tax Court, the court said, the statutory 90-day window to appeal the Tax Court decision runs from the Tax Court's ruling on the first motion to vacate or revise filed. The court concluded that the notice of the Annamalais appeal to the Fifth Circuit, which was filed more than 90 days after the Tax Court disposed of the first motion to vacate, was untimely. Thus, the couple's appeal was dismissed for lack of jurisdiction.

For a discussion of the rules for appealing court decisions, see Parker Tax ¶263,500.

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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