Tax Court Rejects Petition Electronically Filed 11 Seconds After Midnight

(Parker Tax Publishing July 2023)

The Tax Court dismissed a taxpayer's petition for lack of jurisdiction after finding that the petition because it was filed electronically using the Tax Court's DAWSON system at 12:00:11 a.m. on the morning after it was due. The court found that the taxpayer's time for filing the petition was not extended by Code Sec. 7451 because the taxpayer's problems with filing his petition were unique to him and did not constitute inaccessibility or unavailability to the general public. Sanders v. Comm'r, 160 T.C. No. 16 (2023).

Background

The IRS mailed a notice of deficiency to Antawn Sanders on September 8, 2022. Notwithstanding the actual mailing date, the notice was dated September 12, 2022, and stated that the last day to file a petition with the Tax Court was December 12, 2022.

Sanders prepared to file his petition electronically. Before December 12, 2022, Sanders set up an account to electronically file a petition through DAWSON, the Tax Court's electronic filing system. On the evening of December 12, 2022, Sanders began the process of electronically filing his petition. At 9:59 p.m. EDT, he downloaded the necessary PDF forms to his Android mobile phone, but he was unable to fill out the forms on his phone.

Shortly after 11 p.m. on December 12, 2022, Sanders tried to file his petition from his phone. At 11:03 p.m., he logged into DAWSON. At 11:42 p.m., he logged in again. Between 11:03 p.m., when Sanders first logged in, and 11:44 p.m., he stated that he attempted to upload documents, but DAWSON "would not even allow [him] to click the button to upload the documents from [his] android device even after several times of login in and logging out." After trying to file the petition from his phone, Sanders switched to his Windows computer shortly before midnight. He was slowed down by "having to send the filled out forms" from his phone to his email to be downloaded to his computer. At 11:56 p.m., Sanders unsuccessfully attempted to log in to DAWSON on his computer. However, within one second, another Windows user successfully logged into DAWSON. Likewise at 11:57 p.m., Sanders successfully logged in as well. After he logged in and started the filing process, Sanders was slowed down by having "to do 3 other steps" before he could actually file his petition. Additionally, he had to refer to the instructions several times. Throughout this process and at all relevant times, DAWSON remained fully operational.

Sanders filed the petition from his computer after midnight on December 13, 2022. At 00:00:09.493, he began the upload of the petition, and at 00:00:11.693 (i.e., 11 seconds after midnight), it was filed. At the time of filing, DAWSON automatically applied a cover sheet to the petition that stated that the petition was electronically filed and received at "12/13/22 12:00 am."

The IRS filed a motion to dismiss the petition, arguing that Sanders's case had to be dismissed because his petition was not timely filed. According to the IRS, Sanders initiated upload of the petition after 12 a.m. on December 13, 2022, and therefore the petition was not in the Tax Court's possession and could not be considered to have been filed until after the deadline. Additionally, the IRS contended that DAWSON logs showed that DAWSON was accessible throughout the day on December 12, 2022, such that DAWSON, "as a filing location, cannot be considered as having been inaccessible or unavailable to the general public for purposes of Code Sec. 7451(b)."

Sanders responded that he attempted several times to upload documents well before midnight on December 12, 2022. He claimed that the system had errors and that his upload was loading before the cutoff time. In an amicus brief, the Center for Taxpayer Rights, represented by the Tax Clinic at the Legal Services Center of Harvard Law School, offered two arguments. First, the amicus argued that Sanders's petition should be treated as filed at the time that he relinquished control of it. In making this argument, the amicus urged the Tax Court to adopt a position akin to the timely mailing rule of Code Sec. 7502. Second, the amicus urged the court to view the timeliness of an electronically filed petition "through the lens of equitable tolling."

Under Code Sec. 6213, the Tax Court's jurisdiction is predicated on a valid notice of deficiency and a timely petition. Code Sec. 6213(a) generally provides that a Tax Court petition must be filed within 90 days after the notice of deficiency is mailed. If the notice of deficiency specifies a last day for filing that is later than the 90th day, then the deadline by which to file a petition is extended to the date specified. Tax Court Rule 22(d) provides that an electronically filed petition "will be considered timely filed if it is electronically filed at or before 11:59 p.m., eastern time, on the last day of the applicable period for filing." In Nutt v. Comm'r, 160 T.C. No. 10 (2023), the Tax Court held that an electronically filed Tax Court petition is filed with the Tax Court at the time it is received, and timely mailing rule of Code Sec. 7502 does not apply to an electronically filed petition.

Under Code Sec. 7451(b), in circumstances where the Clerk's office or a filing location is inaccessible or otherwise unavailable to the general public, a taxpayer may have additional time to file a petition. In such a case, the relevant time period for filing a petition is tolled for the number of days within the period of inaccessibility plus an additional 14 days.

Analysis

The Tax Court held that Sanders's petition was not timely filed under Code Sec. 6213(a) because it was not received by the Tax Court until 11 seconds after midnight. The court noted that, notwithstanding that the notice of deficiency was mailed on September 8, 2022, Sanders's last day to file his petition was Monday, December 12, 2022, because Code Sec. 6213(a) allowed him to rely on the last day for filing that was specified in the notice. Although he logged into DAWSON on December 12, 2022, the court found that Sanders did not file his petition until the next day. He initiated the upload of the petition 9 seconds after midnight on December 13, 2022, and his petition was received and filed at 11 seconds after midnight.

In response to the amicus's first argument, the court pointed to its holding in Nutt that Code Sec. 7502 does not apply to an electronically filed petition. The court noted that under Reg. Sec. 301.7502-1(d)(3)(ii) an electronically filed document is considered filed when the recipient receives the transmission of a taxpayer's document on its host system. However, the court found that the regulations under Code Sec. 7502 are inapplicable to the filing of a Tax Court petition. The court explained that the regulations require the use of an authorized electronic return transmitter, but none is involved in the filing of a Tax Court petition.

The court further found that Sander's petition would be untimely even if it applied the regulations or the amicus's "relinquished control" argument. According to the court, the regulations would deem an electronically filed document to be filed when the electronic record showed it was received. The electronic record showed that Sanders's petition was received 11 seconds after midnight. The petition was also untimely under the amicus's relinquished control argument, the court found, because Sanders did not relinquish control of his petition until he initiated the upload 9 seconds after midnight.

The court also found that Sanders was not entitled to additional time to file his petition under Code Sec. 7451(b) because DAWSON was not inaccessible or otherwise unavailable to the public on the last day for Sanders to file a petition. First, the court found that DAWSON is a "filing location" for purposes of Code Sec. 7451. To determine the meaning of "inaccessible," the court found that federal courts have consistently held that inaccessibility does not include user error or technical difficulties on the user's side. They do not render the system inaccessible or otherwise unavailable to the general public. Similarly, for purposes of Code Sec. 7451, the court said that a DAWSON outage that affects the public's ability to file petitions renders DAWSON inaccessible or otherwise unavailable to the general public, whereas problems that an individual filer experiences while DAWSON is operational do not. The court went on to find that DAWSON was operational at all relevant times. The system recorded no downtime on December 12, 2022, and the DAWSON logs showed that Sanders logged in multiple times in the final hour of the day. In the court's view, these successful logins showed that DAWSON was working properly.

The court further found that it could not apply the doctrine of equitable tolling to the deadline to file a petition in a deficiency case because Code Sec. 6213(a) provides that the deadline is jurisdictional. According to the court, if a federal court's subject-matter jurisdiction depends on a timely pleading, the filing deadline cannot be equitably tolled. Where Congress "clearly states" that a deadline is jurisdictional, the court must enforce it regardless of equitable consideration.

For a discussion of the rules for filing a petition with the Tax Court, see Parker Tax ¶263,510.

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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