Amicus Curiae Brief — Boechler, P.C., Petitioner v. Commissioner of Internal Revenue
Supreme Court briefNov 22, 2021
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No. 20-1472
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In The
Supreme Court of the United States
---------------------------------♦--------------------------------BOECHLER, P.C.,
Petitioner,
v.
COMMISSIONER OF INTERNAL REVENUE,
Respondent.
---------------------------------♦--------------------------------On Writ Of Certiorari To The
United States Court Of Appeals
For The Eighth Circuit
---------------------------------♦--------------------------------BRIEF OF THE CENTER FOR TAXPAYER RIGHTS
AND THE NATIONAL CONSUMER LAW CENTER
AS AMICI CURIAE IN SUPPORT OF PETITIONER
---------------------------------♦--------------------------------T. KEITH FOGG
TAX CLINIC AT THE LEGAL
SERVICES CENTER OF
HARVARD LAW SCHOOL
122 Boylston Street
Jamaica Plain, MA 02130
617.390.2532
kfogg@law.harvard.edu
CARLTON M. SMITH
Counsel of Record
255 W. 23rd Street,
Apt. 4AW
New York, NY 10011
646.230.1776
carltonsmth@aol.com
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COCKLE LEGAL BRIEFS (800) 225-6964
WWW.COCKLELEGALBRIEFS.COM
i
TABLE OF CONTENTS
Page
INTEREST OF AMICI CURIAE .........................
1
SUMMARY OF ARGUMENT ..............................
2
ARGUMENT ........................................................
4
I.
UNDER THIS COURT’S PRECEDENTS,
SECTION 6330(d)(1)’S DEADLINE IS
SUBJECT TO EQUITABLE TOLLING ....
6
A. Section 6330(d)(1)’s Text Supports the
Availability of Equitable Tolling .........
7
B. Section 6330(d)(1)’s Context Supports
the Availability of Equitable Tolling ..... 11
1. Section 6330(d)(1) Is Not an Internal Appeal Deadline and Impacts
Mostly Pro Se Litigants .................. 11
2. Section 6330’s Subject Matter Is
Equitable ........................................ 13
3. The Fact That Section 6330(d)(1) Is
Contained in the Tax Code Does
Not Preclude the Equitable Tolling
of Its Deadline ................................ 15
II. THERE ARE TYPICAL LATE FILINGS
IN THE TAX COURT AS TO WHICH EQUITABLE TOLLING COULD EXPECT
TO APPLY .................................................. 23
A. The IRS Sometimes Actively Misleads
Taxpayers About Tax Court Filing
Deadlines ............................................. 24
ii
TABLE OF CONTENTS – Continued
Page
B. Extraordinary Circumstances Sometimes Prevent Taxpayers From Meeting Tax Court Filing Deadlines ........... 27
C. Pro Se Taxpayers Sometimes Timely
File Tax Court Petitions in the Wrong
Forum .................................................. 31
CONCLUSION..................................................... 35
iii
TABLE OF AUTHORITIES
Page
CASES
Atuke v. Commissioner, T.C. Docket No. 3168015SL (order dated Apr. 15, 2016) ............................28
Bailey v. Principi, 351 F.3d 1381 (Fed. Cir. 2003)........31
Baldwin Cty. Welcome Center v. Brown, 466 U.S.
147 (1984) ................................................................29
Bull v. United States, 295 U.S. 247 (1935) .................16
Carnahan v. Commissioner, T.C. Memo. 1994163 ...........................................................................18
Castillo v. Commissioner, T.C. Docket No. 1833619L (order dated Mar. 25, 2020) .............................28
Cunningham v. Commissioner, 716 F. App’x 182
(4th Cir. 2018).................................................... 26, 27
Doe v. United States, 398 F.3d 686 (5th Cir. 2005) .......15
Duggan v. Commissioner, 879 F.3d 1029 (9th Cir.
2018) .................................................................. 26, 27
Dunlap v. Commissioner, T.C. Docket No. 81618L (order dated Mar. 15, 2018) .............................29
Enochs v. Williams Packing & Navigation Co.,
370 U.S. 1 (1962) .....................................................16
Flight Attendants Against UAL Offset v. Commissioner, 165 F.3d 572 (7th Cir. 1999) ..................15
Gitman v. Commissioner, T.C. Docket No. 580419 (order dated Aug. 8, 2019) ..................................31
Haitsuka v. Commissioner, T.C. Docket No.
14495-15L (order dated Oct. 9, 2015) .....................31
iv
TABLE OF AUTHORITIES – Continued
Page
Hecht Co. v. Bowles, 321 U.S. 321 (1944) ....................13
Holland v. Florida, 560 U.S. 631 (2010) ............. passim
Integrated Event Management, Inc. v. Commissioner, T.C. Docket No. 27674-16SL (order
dated May 31, 2017) ................................................27
Irwin v. Dep’t of Veterans Affairs, 498 U.S. 89
(1990) ............................................................... passim
Islam v. Commissioner, T.C. Docket No. 1409919S (order dated Feb. 28, 2020) ..............................32
Jones v. Commissioner, T.C. Memo. 2003-29 ..............26
Mannella v. Commissioner, 631 F.3d 115 (3d Cir.
2011) .................................................................. 24, 30
Matuszak v. Commissioner, 862 F.3d 192 (2d Cir.
2017) ........................................................................25
Menominee Indian Tribe of Wis. v. United States,
577 U.S. 250 (2016) .................................................31
Meyer v. Commissioner, T.C. Memo. 2003-12 .............18
Myers v. Commissioner, 928 F.3d 1025 (D.C. Cir.
2019) .................................................................. 13, 15
Nauflett v. Commissioner, 892 F.3d 649 (4th Cir.
2018) ........................................................................25
Pottgen v. Commissioner, T.C. Docket No. 141015L (order dated Mar. 4, 2016) ...............................27
Protter v. Commissioner, T.C. Docket No. 2297515SL (order dated Sept. 26, 2017) ..........................27
v
TABLE OF AUTHORITIES – Continued
Page
Rosenthal v. Commissioner, T.C. Docket No.
18392-19S (order dated Dec. 26, 2019) ...................32
Rubel v. Commissioner, 856 F.3d 301 (3d Cir.
2017) ........................................................................25
Santana-Venegas v. Principi, 314 F.3d 1293 (Fed.
Cir. 2002) .................................................................31
Saporito v. Commissioner, T.C. Docket No. 847117L (order dated May 31, 2017) .............................27
Sarrell v. Commissioner, 117 T.C. 122 (2001) ............28
Sebelius v. Auburn Regional Med. Cntr., 568 U.S.
145 (2013) .................................................... 11, 12, 13
Shaffer v. Commissioner, T.C. Memo. 1994-618 .........18
Stone v. White, 301 U.S. 532 (1937) ............................16
Swanson v. Commissioner, T.C. Docket No.
14406-15S (order dated Jan. 14, 2016) ............. 26, 27
United States v. Beggerly, 524 U.S. 38 (1998) .......... 6, 8
United States v. Boyle, 469 U.S. 241 (1985) ......... 18, 30
United States v. Brockamp, 519 U.S. 347 (1997) ... passim
United States v. Kwai Fun Wong, 575 U.S. 402
(2015) ................................................................... 6, 12
United States v. Rodgers, 461 U.S. 677 (1983) ...........17
Volpicelli v. United States, 777 F.3d 1042 (9th
Cir. 2015) ........................................................... 11, 15
Wallaesa v. Commissioner, T.C. Docket No. 117917L (order dated Apr. 20, 2017) ..............................27
vi
TABLE OF AUTHORITIES – Continued
Page
Webber v. Commissioner, T.C. Docket No. 1430718L (order dated June 7, 2019) ...............................34
Young v. United States, 535 U.S. 43 (2002) .............. 6, 9
STATUTES AND REGULATIONS
26 U.S.C. (I.R.C.):
Section 408(d)(3)(I)..................................................23
Section 6013(e) ........................................................20
Former Section 6013(e)(1)(C)..................................17
Section 6015 ............................................................14
Section 6015(b) .................................................. 14, 20
Section 6015(b)(1)(D) ..............................................20
Section 6015(e)(1)(A) ...............................................21
Section 6015(f ) ........................................................20
Section 6081(a) ........................................................19
Section 6213(a) .................................................. 21, 32
Section 6214(b) ........................................................23
Section 6330 ............................................................13
Section 6330(a) .................................................. 33, 34
Section 6330(c)(2)(A) ...............................................13
Section 6330(c)(2)(A)(i) ...........................................14
Section 6330(c)(2)(A)(iii) .........................................14
Section 6330(c)(3)(C) ........................................... 5, 14
vii
TABLE OF AUTHORITIES – Continued
Page
Section 6330(d) ..........................................................9
Section 6330(d)(1) .....................................................2
Section 6404 ............................................................18
Section 6501 ............................................................15
Section 6511 .............................................. 7, 9, 16, 20
Section 6511(b) ..........................................................7
Section 6511(c) ..........................................................7
Section 6511(d)(1) .....................................................7
Section 6511(d)(2) .....................................................7
Section 6511(d)(3) .....................................................7
Section 6511(d)(4) .....................................................7
Section 6511(d)(5) .....................................................7
Section 6511(d)(6) .....................................................7
Section 6511(d)(7) .....................................................7
Section 6511(d)(8) .....................................................7
Section 6532(c) ........................................................11
Section 6651(a) ........................................................18
Section 6654(e)(3)(A) ...............................................17
Section 6673(a)(1)(A) ..............................................35
Section 7421(a) ........................................................16
Section 7122 ............................................................21
Section 7426 ............................................................11
Section 7441 ............................................................12
viii
TABLE OF AUTHORITIES – Continued
Page
Section 7476 ............................................................15
Section 7502 ............................................................33
Section 7502(a)(2)(B) ..............................................33
Section 7623(b)(4) ...................................................13
Section 7803(a)(3) .....................................................4
Section 7803(c)(1)(B) .................................................1
26 C.F.R. Section 301.7122-1(b)(3) .............................14
26 C.F.R. Section 301.7122-1(b)(3)(ii) ........................22
26 C.F.R. Section 301.9100-2(a)(2) .............................19
26 C.F.R. Section 301.9100-3(b)(1)(ii) ........................19
Sec. 301(a)(2), Pub. L. 104-168, 110 Stat. 1457..........18
Sec. 411, Pub. L. 98-369, 98 Stat. 790 ........................17
Sec. 644, Pub. L. 107-16, 115 Stat. 123 ......................23
Sec. 858, Pub. L. 109-280, 120 Stat. 1020 ..................23
Sec. 1563(a), Pub. L. 99-514, 100 Stat. 2762 ..............18
Sec. 3201(a), Pub. L. 105-206, 112 Stat. 734-40 .........20
Sec. 3202(a), Pub. L. 105-206, 112 Stat. 740-41 .........20
Sec. 3401, Pub. L. 105-206, 112 Stat. 746-50 .............22
Sec. 3462, Pub. L. 105-206, 112 Stat. 764-67 .............21
OTHER AUTHORITIES
H. Dubroff & B. Hellwig, “The United States Tax
Court – An Historical Analysis” (2d ed. 2014) .......21
ix
TABLE OF AUTHORITIES – Continued
Page
H.R. Rep. No. 105-599........................................... 20, 21
Internal Revenue Manual Section 4.8.9.25.1
(July 9, 2013) ...........................................................32
Internal Revenue Manual Section 8.22.5.3.1
(Aug. 31, 2020) .........................................................34
IRS Data Book, 2020 ..................................................22
IRS Memorandum for Director, Campus Collection and Director, Field Collection, Control No.
SBSE-05-0920-0063 (Sept. 3, 2020) ........................25
Nat’l Taxpayer Advocate 2005 Annual Report to
Congress (2005) .......................................................21
Nat’l Taxpayer Advocate 2017 Annual Report to
Congress (2017) .........................................................4
Nat’l Taxpayer Advocate 2020 Annual Report to
Congress (2020) ........................................... 10, 13, 25
Nat’l Taxpayer Advocate 2021 Purple Book
(2021) .........................................................................4
Press Release, U.S. Rep. Bill Pascrell, Jr., Pascrell Probes Mail Delay Impact on IRS and
Tax Refunds (Oct. 26, 2021) ....................................29
S. Rep. 99-313 .............................................................18
Supreme Court Rule 37 ................................................1
U.S. Tax Court Congressional Budget Justification Fiscal Year 2021 (Feb. 10, 2020) ......................13
1
INTEREST OF AMICI CURIAE1
The Center for Taxpayer Rights is a Section
501(c)(3) non-profit organization that promotes taxpayer rights in the United States and abroad. The
Center also seeks to educate the public and government officials about the role that taxpayer rights play
in promoting trust in systems of taxation.
The Center’s Executive Director is Nina E. Olson.
She was appointed under Section 7803(c)(1)(B)2 as the
IRS National Taxpayer Advocate and served in that position from 2001 to 2019. As National Taxpayer Advocate, Ms. Olson represented taxpayers’ interests and
perspectives within the IRS and before Congress.
The National Consumer Law Center is a Section
501(c)(3) non-profit legal research and advocacy organization whose mission is to protect the rights of lowincome, financially distressed, and elderly consumers
nationwide, including the right to access to the courts.
For over fifty years, NCLC has been a leading source of
legal and public policy expertise on consumer issues
1
Both parties have consented in writing to the filing of this
brief. Pursuant to Supreme Court Rule 37.6, no party’s counsel
authored this brief in whole or in part and no party or party’s
counsel contributed money intended to fund the preparation or
submission of this brief. Aside from amici, the only person that
contributed to the preparation or submission of this brief was
Harvard University, of which the Tax Clinic is a part. Harvard
University paid the costs of printing this brief.
2
Unless otherwise indicated, all section references in this
brief are to the Internal Revenue Code, codified in Title 26 of the
U.S. Code.
2
for Congress, state legislatures, agencies, courts, and
consumer advocates.
Because low-income taxpayers frequently miss
filing deadlines, even when acting in good faith and
with adequate due diligence, amici believe that the
low-income taxpayer community would benefit were
this Court to rule that Section 6330(d)(1) is nonjurisdictional and subject to equitable tolling.
---------------------------------♦---------------------------------
SUMMARY OF ARGUMENT
Amici have read Boechler’s opening brief. Amici
fully agree with the brief ’s conclusion that the filing
deadline in Section 6330(d)(1) is nonjurisdictional.
Amici’s brief focuses on equitable tolling. This
brief concludes with common examples of situations
where equitable tolling could apply in Tax Court cases
(under its collection due process (“CDP”), deficiency,
and innocent spouse jurisdictions).
This Court’s case law makes clear that Section
6330(d)(1) is not the kind of exceptional statute for
which equitable tolling is unavailable. Equitable tolling provides a necessary prerequisite for justice when
low-income taxpayers – often representing themselves
pro se – miss Tax Court filing deadlines through no
fault of their own.
As this Court has previously explained, federal
statutes of limitations are presumptively subject to
equitable tolling. Nothing in the text, structure, or
3
purpose of Section 6330(d)(1) rebuts that presumption.
Rather, there are “good reasons to believe” that Congress would have “want[ed] the equitable tolling doctrine to apply” in Section 6330(d)(1) cases. Cf. United
States v. Brockamp, 519 U.S. 347, 350 (1997) (emphasis
added).
The Tax Court, a judicial tribunal with a majority
of pro se filers, exemplifies the kind of judicial tribunal
where equitable tolling has traditionally been applied.
A comparison of the statute construed by this
Court in Brockamp to that construed in Holland v.
Florida, 560 U.S. 631 (2010), shows that Section
6330(d)(1)’s filing deadline acts far more like the deadline found in Holland to be subject to equitable tolling
than the deadline found in Brockamp not to be subject
to equitable tolling. CDP is an equitable area of the Tax
Code, and it was enacted after this Court’s creation of
the presumption in favor of tolling. Therefore, under
Holland, 560 U.S. at 646, the presumption in favor of
tolling is doubly-“reinforced.”
Despite regular government arguments to the contrary, a sentence from dicta in the Brockamp opinion
does not require this Court to bar equitable tolling
from any part of the Tax Code. Collection of tax liability under the Code regularly occurs with equity explicitly in mind.
---------------------------------♦---------------------------------
4
ARGUMENT
The last two IRS National Taxpayer Advocates
have for some time argued that Section 6330(d)(1) and
related statutes are or should be subject to equitable
tolling. As then-National Taxpayer Advocate Olson explained in her 2017 Annual Report to Congress:
Unrepresented taxpayers in particular may
be less likely to anticipate the severe consequences of filing a Tax Court petition even one
day late, and most Tax Court petitioners do
not have representation. . . . [T]he right to a
fair and just tax system requires that [equitable] doctrines be available to taxpayers in the
rare cases they would apply.
1 Nat’l Taxpayer Advocate 2017 Annual Report to Congress 291 (2017).3 The current National Taxpayer Advocate has similarly explained that “[t]reating the
[Internal Revenue Code’s] time limits for bringing suit
as . . . not subject to equitable doctrines[ ] leads to unfair outcomes.” Nat’l Taxpayer Advocate 2021 Purple
Book 101 (2021).
3
This quote derives from the portion of the annual report
proposing legislative changes and entitled Legislative Recommendation #3 (“Make the Time Limits for Bringing Tax Litigation
Subject to the Judicial Doctrines of Forfeiture, Waiver, Estoppel,
and Equitable Tolling. . . .”), at 283-92. In her recommendation (at
287), she relied, in part, on what is known as the “Taxpayer Bill
of Rights,” enacted in 2015, at Section 7803(a)(3), which promises
taxpayers “the right to appeal a decision of the Internal Revenue
Service in an independent forum” (subparagraph (E)) and “the
right to a fair and just tax system” (subparagraph (J)).
5
These unfair outcomes are not required by – indeed, they are incompatible with – existing law. This
Court’s equitable tolling precedents make clear that
Section 6330(d)(1) is the kind of statute that is subject
to equitable tolling.
Access to the Tax Court in CDP matters a lot – because the Tax Court is the only place where a court reviews the IRS’s proposed levies before the actual harm
occurs – a vital issue for low-income taxpayers, small
businesses, etc.
Congress requires IRS Independent Office of Appeals employees in CDP to take into consideration
“whether any proposed collection action balances the
need for the efficient collection of taxes with the legitimate concern of the person that any collection action be no more intrusive than necessary.” Section
6330(c)(3)(C). In CDP hearings, taxpayers are requested to submit financial income and asset disclosure forms so that the Appeals Officers can evaluate
how each possible collection alternative might apply on
the individual facts of the case. Thus, CDP is an equitable area of the Internal Revenue Code. It would be
perverse to think that Congress wanted the Tax Court
CDP filing deadline – a deadline in an equitable area
– to prohibit equitable tolling. The Tax Court’s and
Eighth Circuit’s jurisdictional holdings in this case undermine the congressional intent to expand taxpayer
protections.
6
I.
UNDER THIS COURT’S PRECEDENTS,
SECTION 6330(d)(1)’S DEADLINE IS SUBJECT TO EQUITABLE TOLLING.
“It is hornbook law that limitations periods are
‘customarily subject to equitable tolling’ unless tolling
would be ‘inconsistent with the text of the relevant
statute.’ ” Young v. United States, 535 U.S. 43, 49 (2002)
(quoting Irwin v. Dep’t of Veterans Affairs, 498 U.S. 89,
95 (1990), and United States v. Beggerly, 524 U.S. 38,
48 (1998)). This “rebuttable presumption” applies in
“suits against the United States” as well as against private parties. Irwin, 498 U.S. at 95-96. This Court “presume[s]” that Congress drafts limitations periods “in
light of [the] background principle” that tolling is generally available. Young, 535 U.S. at 49.
Congress can rebut Irwin’s presumption of equitable tolling in one of two ways.
First, when Congress makes a time bar “jurisdictional,” a court must enforce that bar “even if equitable
considerations would support extending the prescribed
time period.” United States v. Kwai Fun Wong, 575
U.S. 402, 408-09 (2015). Boechler correctly argues in
its brief that Congress did not make the Section
6330(d)(1) deadline jurisdictional.
Second, even when a time bar is not jurisdictional,
a statute’s text and context may collectively make clear
that equitable tolling is not available. That is not the
case here.
7
A. Section 6330(d)(1)’s Text Supports the
Availability of Equitable Tolling.
Statutory text can rebut the presumption in favor
of equitable tolling. But, it does not do so here.
In Brockamp, this Court faced the issue of whether
the 3-year time limit for filing an administrative tax
refund claim in Section 6511 was subject to equitable
tolling. Without discussing whether the time period
was jurisdictional (and apparently assuming that it
was not), this Court held that, even if the Irwin presumption applied to this time period, a combination of
factors would rebut any presumption that equitable
tolling could apply: (1) the time limits were set forth in
an “unusually emphatic form”; (2) the statute set forth
the limitations in a “highly detailed technical manner,”
by reiterating the limitations period in multiple subsections; (3) the statute specified numerous exceptions
to the filing deadline, which did not include equitable
tolling;4 (4) the granting of equitable tolling would require tolling substantive limitations on the amount of
recovery, for which there was no direct precedent (see
Section 6511(b) lookback amount limitations); and
(5) granting equitable tolling could create serious administrative problems by forcing the IRS to respond to
4
The exceptions are laid out at Sections 6511(c) (for extensions signed by the parties), (d)(1) (for bad debts and worthless
securities), (d)(2) (for net operating loss or capital loss carrybacks),
(d)(3) (for foreign tax credits), (d)(4) (for certain other credit carrybacks), (d)(5) and (d)(7) (for certain self-employment taxes),
(d)(6) (for certain income recaptured under qualified plan terminations), and (d)(8) (when uniformed services retired pay is reduced as a result of award of disability compensation).
8
large numbers of late claims. Brockamp, 519 U.S. at
350-53.
In Holland, this Court revisited Brockamp when
addressing whether the 1-year statute of limitations
for asking a federal district court to engage in habeas
review of a state death penalty conviction was subject
to equitable tolling. Holland, 560 U.S. at 634. In distinguishing the habeas statute from the one in Brockamp,
this Court found that the presumption in favor of equitable tolling was not rebutted because: (1) the language of the limitations provision was not unusually
emphatic; (2) the statute did not “reiterate” its time
limitation; (3) the one exception the statute enunciated
(tolling during state collateral review proceedings) was
a necessary procedural measure to account for exhaustion of state remedies; (4) the application of equitable
tolling would not affect the substance of a habeas petitioner’s claim; and (5) the subject matter at issue, habeas corpus, pertains to an area in which equitable
considerations often factor (which “reinforced” the presumption in favor of tolling), unlike the area of refund
claim administration. Holland, 560 U.S. at 635, 646-47.
This Court also noted that, although generous limitations periods may factor in overcoming the Irwin presumption, see Beggerly, 524 U.S. at 48 (12-year period),
the period of one year was not particularly long. Holland, 560 U.S. at 647. This Court also established that
a statute enacted post-Irwin was subject to a “reinforced” Irwin presumption, since Congress was likely
aware at enactment that courts would apply the Irwin
presumption when interpreting the statute. Id. at 646.
9
Here, the language of Section 6330(d)(1) does not
rebut the presumption of equitable tolling.
First, Section 6330(d)(1)’s text is not “unusually
emphatic.” Holland, 560 U.S. at 646. Section 6330(d)(1)
provides only that a taxpayer “may, within 30 days of
a determination under [Section 6330], petition the Tax
Court for review of such determination (and the Tax
Court shall have jurisdiction with respect to such matter).” Section 6330(d)(1). That is no more “emphatic”
than AEDPA’s description of a “1-year period of limitation” applicable to habeas petitions. Cf. Holland, 560
U.S. at 643.
Second, Section 6330(d)(1) is not written in “highly
technical” language that does not easily admit of “implicit exceptions.” Cf. Holland, 560 U.S. at 646. Rather,
Section 6330(d)(1) uses the ordinary language of statutes of limitations everywhere: if a taxpayer wishes to
file a tax court petition, he must do so “within 30 days
of a determination.” Although Section 6330(d) does
provide for one statutory exception to its general rule
(as does the statute involved in Holland) – tolling the
statute of limitations with respect to persons who are
“prohibited by reason of a case under [the Bankruptcy
Code] from filing” for CDP petitions – that one exception is a far cry from the comprehensive list of statutory exceptions set forth by Section 6511 in Brockamp.
See Brockamp, 519 U.S. at 351-52. This Court has already allowed a bankruptcy deadline that has a single
statutory exception to be equitably tolled. Young v.
United States, supra.
10
Third, Section 6330(d)(1) does not repeat its statute of limitations again and again. Holland, 560 U.S.
at 646. Rather, like the AEDPA statute of limitations,
it is contained in one subsection spanning a mere two
lines of the U.S. Code. Cf. id.
Fourth, Section 6330(d)(1) is part of an equitable
area of the Tax Code, CDP, and was enacted subsequent to the Irwin presumption. Thus, as in Holland,
Section 6330(d)(1)’s deadline is subject to a doublyreinforced presumption in favor of equitable tolling.
Fifth, there is nothing in Section 6330(d)(1) that,
like Section 6511(b), provides a substantive limit on
the amount of taxes involved in a CDP suit.
Finally, the Brockamp court emphasized that, because the IRS issues “more than 90 million refunds”
every year, reading an equitable tolling requirement
into Section 6511 would have created “serious administrative problems by forcing the IRS to respond to, and
perhaps litigate, large numbers of late claims.” 519 U.S.
at 352. By contrast, though, the total number of CDP
cases filed in the Tax Court is orders of magnitude
smaller – i.e., in the 12-month period ended May 31,
2020, there were 1,185 CDP petitions filed in the Tax
Court. Nat’l Taxpayer Advocate 2020 Annual Report to
Congress 185 (2020). As set forth in an analysis of the
101 CDP cases filed in the month of January 2018 (set
forth in the Center for Taxpayer Rights’ amicus brief
at the certiorari stage at page 9), only five of those petitions were filed late (or a year included in the petition
involved a late filing). Only one of those petitions
11
involved facts that might give rise to an argument for
equitable tolling. Thus, even if the allowance of equitable tolling of the CDP petition filing deadline encouraged each month a few more late-filed petitions
arguing for equitable tolling, the administrative impact on the IRS would be de minimis.
In Volpicelli v. United States, 777 F.3d 1042, 104446 (9th Cir. 2015), the Ninth Circuit conducted a similar statutory comparison to Brockamp’s statute when
it held that the filing deadline in Section 6532(c) for
Section 7426 wrongful levy suits brought in district
court is entitled to equitable tolling.
Section 6630(d)(1)’s text thus strongly supports
the availability of equitable tolling for its filing deadline.
B. Section 6330(d)(1)’s Context Supports
the Availability of Equitable Tolling.
1. Section 6330(d)(1) Is Not an Internal
Appeal Deadline and Impacts Mostly
Pro Se Litigants.
In Sebelius v. Auburn Regional Med. Cntr., 568
U.S. 145 (2013), this Court held that the Irwin presumption does not apply in all tribunals. In Auburn,
the Court found the 180-day statutory deadline for
Medicare providers to file for an administrative hearing is not subject to equitable tolling. Auburn, 568 U.S.
at 158-59. The Court noted that it generally applied
the Irwin presumption in favor of equitable tolling to
filing deadlines in Federal courts and had never before
12
applied the Irwin presumption to an agency’s internal appeal deadline. Id. The Court distinguished the
statute at issue from the types of “remedial” statutory schemes where the Irwin presumption had been
applied, including schemes which were “ ‘unusually
protective of claimants’ ” and schemes where “ ‘laymen,
unassisted by trained lawyers, initiate the process.’ ”
Id. at 159-60 (citations omitted). Instead, the Court
pointed out that the statutory scheme in question involved “ ‘sophisticated’ institutional providers assisted
by legal counsel” that were “repeat players who elect to
participate in the Medicare system. . . .” Id. (citation
omitted). The Court thus found that the Irwin presumption did not apply to “administrative appeals of
the kind here considered.” Id.
It would be a mistake to interpret Auburn too
broadly. The Court did not hold that Irwin never applied in non-Article III entities. That this Court did not
intend to create a broad rule is evident from Kwai Fun
Wong, 575 U.S. at 408-09, where this Court subsequently held that under the Federal Tort Claim Act,
the 2-year period in which to file an administrative tort
claim with a Federal agency was subject to the Irwin
presumption.
Section 6330(d)(1) does not set an “internal appeal
deadline.” Cf. 568 U.S. at 158. The Tax Court is not an
adjudicatory body within an agency, but is a court of
record under Article I of the Constitution. Section
7441.
13
Moreover, Section 6330 – unlike the statute at issue in Auburn – does not involve sophisticated, repeatplayer litigants who have “elect[ed] to participate” in a
government program. Most taxpayers who file CDP petitions in the Tax Court do so pro se. See, e.g., Nat’l Taxpayer Advocate 2020 Annual Report to Congress 188
(2020) (reporting that in the year ended May 31, 2020,
68% of the CDP cases that were litigated were pro se).
“Over 75 percent of the petitioners who file with the
Court are self-represented (pro se).” U.S. Tax Court
Congressional Budget Justification Fiscal Year 2021
(Feb. 10, 2020) at 22.
Addressing this issue in Myers v. Commissioner,
928 F.3d 1025, 1037 (D.C. Cir. 2019) (involving the filing deadline under Section 7623(b)(4) for Tax Court
whistleblower award petitions), the D.C. Circuit
agreed that the Tax Court was not the kind of tribunal
in which equitable tolling would be barred.
2. Section 6330’s Subject Matter Is Equitable.
Independently, Section 6330’s subject matter – unlike that of the statute at issue in Brockamp – is equitable. CDP is suffused with equitable determinations.
The central purpose of CDP is to allow taxpayers a forum to “raise any relevant issue” as to why the IRS
should forbear from levying – an essentially equitable
inquiry. Section 6330(c)(2)(A) (emphasis added); cf.
Hecht Co. v. Bowles, 321 U.S. 321, 329 (1944) (“The
essence of equity jurisdiction has been the power of
14
the Chancellor to do equity and to mould each decree
to the necessities of the particular case.”). And as a result, CDP requires the IRS to ask multiple distinctively equitable questions:
•
In a CDP hearing, an IRS Appeals Officer
must consider “whether any proposed collection action balances the need for the efficient
collection of taxes with the legitimate concern of the person that any collection action
be no more intrusive than necessary.” Section
6330(c)(3)(C). This balancing test is essentially an equitable determination.
•
A taxpayer in CDP may raise, inter alia, “appropriate spousal defenses” to liability. Section 6330(c)(2)(A)(i). These spousal defenses
typically implicate the so-called “innocentspouse” provisions of Section 6015, which provide for innocent-spouse relief only if it would
be “inequitable” not to relieve a spouse from
joint and several liability. Section 6015(b) and
(f ).
•
A taxpayer in CDP may offer the IRS a “collection alternative.” Section 6330(c)(2)(A)(iii).
Those collection alternatives can include offers-in-compromise, some of which are based
on a taxpayer’s inability to make full payment
and others of which are grounded in equity
and public policy as applied to the particular
assessed taxes. 26 C.F.R. Section 301.71221(b)(3).
15
3. The Fact That Section 6330(d)(1) Is
Contained in the Tax Code Does Not
Preclude the Equitable Tolling of Its
Deadline.
After noting that the subject matter of refund
claims involved “tax collection,” this Court in Brockamp
observed, in passing dicta, that “[t]ax law . . . is not normally characterized by case-specific exceptions reflecting individualized equities.” 519 U.S. at 352.
First, the government has tried to take this
Brockamp sentence and expand it to ask lower courts
to hold that there can be no equitable tolling anywhere
in the Tax Code. To date, the government has been unsuccessful in this argument. In Volpicelli, the Ninth
Circuit wrote: “The Court may in time decide that Congress did not intend equitable tolling to be available
with respect to any tax-related statute of limitations.
But that’s not what the Court held in Brockamp.” 777
F.3d at 1046. Accord Flight Attendants Against UAL
Offset v. Commissioner, 165 F.3d 572, 577 (7th Cir.
1999) (dicta; case involved Tax Court pension plan
declaratory judgment jurisdiction at Section 7476).
Myers also allowed the equitable tolling of the Section
7623(b)(4) Tax Court filing deadline.
Second, the government has not been consistent in
its argument. In Doe v. United States, 398 F.3d 686 (5th
Cir. 2005), the Fifth Circuit rejected a government attempt to subject the assessment statute of limitations
at Section 6501 – one that runs against the government – to equitable tolling.
16
Third, while this Court’s Brockamp dicta appears
intended to indicate that there are many exceptions,
the dicta allows a person with a casual understanding
of tax law to miss its equitable aspects. Congress has
kept adding equitable provisions to the Tax Code after
the Brockamp decision.
The following shows how much equity there was
in tax collection before Brockamp:
1.
Under the doctrine of “equitable recoupment”
– available in the district court and the Court
of Federal Claims – overpayments of taxes
that are time-barred from refund under Section 6511 can be applied to reduce timely tax
assessments where the taxpayer would be
otherwise taxed inconsistently on the same
transaction. Stone v. White, 301 U.S. 532
(1937); Bull v. United States, 295 U.S. 247
(1935).
2.
In Enochs v. Williams Packing & Navigation Co., 370 U.S. 1 (1962), this Court recognized a judicial equitable exception to the
anti-injunction act of Section 7421(a). In Williams Packing, this Court stated that, despite
the words of the act, “if it is clear that under
no circumstances could the Government ultimately prevail, the central purpose of the
Act is inapplicable, and under the [Miller v.
Standard] Nut Margarine [Co., 294 U.S. 498
(1932),] case, the attempted collection may be
enjoined if equity jurisdiction otherwise exists.” Id. at 7.
17
3.
In United States v. Rodgers, 461 U.S. 677
(1983), this Court considered whether Section
7403 empowered a district court to order the
sale of a family home in which a delinquent
taxpayer had an interest at the time he incurred his tax indebtedness. The taxpayer’s
spouse (who did not owe any of that indebtedness) also had a Texas “homestead” right. This
Court held that “district courts may exercise
a degree of equitable discretion in § 7403 proceedings.” Id. at 709.
4.
In 1971, Congress enacted an “innocent
spouse” provision at Section 6013(e) to mandate relief from joint and several income tax
liability in the case of certain large omissions
of unreported income. Sec. 411, Pub. L. 98-369,
98 Stat. 790. The statute directed relief for an
innocent spouse if a number of conditions
were met, including that “taking into account
all . . . facts and circumstances, it is inequitable to hold the other spouse liable for the deficiency in tax.” Former Section 6013(e)(1)(C) as
originally adopted, before later amendment.
(Emphasis added.)
5.
In 1984, Congress amended the estimated tax
penalty provision to provide for a waiver “with
respect to any underpayment to the extent the
Secretary determines that by reason of casualty, disaster, or other unusual circumstance
the imposition of such addition to tax would
be against equity and good conscience.” Section 6654(e)(3)(A). (Emphasis added.) The Tax
Court has granted the waiver in equitable
cases of serious illness (AIDS) and/or mental
18
disability. Meyer v. Commissioner, T.C. Memo.
2003-12; Shaffer v. Commissioner, T.C. Memo.
1994-618; Carnahan v. Commissioner, T.C.
Memo. 1994-163.
6.
The late-filing and late-payment penalties at
paragraphs (1), (2), and (3) of Section 6651(a)
have long had “reasonable cause and not willful neglect” exceptions. This Court, in United
States v. Boyle, 469 U.S. 241 (1985), indicated
that these exceptions are likely met in equitable situations. In Boyle, this Court noted that
the IRS, in most cases, did not impose the penalties when the circumstances that caused the
taxpayer to file or pay late were beyond the
taxpayer’s control. Id. at 248 n.6.
7.
In 1986, Congress amended Section 6404 by
adding a subsection (e) that allowed the IRS
to abate interest attributable to an error or
delay of an IRS officer or employee in performing a “ministerial” act. Sec. 1563(a), Pub. L.
99-514, 100 Stat. 2762. Congress said it did
“not intend that this provision be used routinely to avoid payment of interest.” S. Rep.
99-313 at 208. Rather, Congress intended the
section to be used in instances in which an error or delay in performing a ministerial act resulted in the imposition of interest, and the
failure to abate the interest “would be widely
perceived as grossly unfair”; id. – i.e., where it
would be perceived as inequitable. In 1996,
Congress expanded the interest abatement
authority to include an error or delay in performing a “managerial” act. Sec. 301(a)(2),
Pub. L. 104-168, 110 Stat. 1457.
19
8.
The IRS has had long-standing power to provide taxpayers with extensions to file their tax
returns; see Section 6081(a); and with extensions to meet election deadlines – deadlines
that can either be in the area of tax collection
or in the substantive calculation of the assessable amount of tax. One of the current regulations at 26 C.F.R. Section 301.9100-1 et seq.
governing requesting such so-called “9100
relief ” lists acceptable excuses, including:
“Failed to make the election because of intervening events beyond the taxpayer’s control.” 26 C.F.R. Section 301.9100-3(b)(1)(ii).
This sentence essentially acts as a blanket equitable exception. Moreover, the regulations
even provide for certain automatic extensions
that affect substantive tax liability – including extending (1) the 15-month time limit in
which to file an exemption application for a
Section 501(c)(3) organization under Section
508, (2) the time limit in which to elect to be
treated as a homeowner’s association under
Section 528, and (3) the time limit in which to
elect to adjust basis on partnership transfers
and distributions under Section 754. 26 C.F.R.
Section 301.9100-2(a)(2).
One of the provisions described above, waiving the
estimated tax penalty, and one described below, waiving the IRA rollover, contain explicit directions to the
IRS to apply equity to time deadlines. In sum, even before this Court’s 1997 Brockamp opinion, both through
explicit Congressional authorization and judicial and
regulatory exceptions, the collection and even imposition of taxes often involved equitable determinations.
20
Since 1997, Congress has increasingly called on
the IRS and the courts to make equitable determinations in tax collection and liability matters.
1.
In 1998, Congress implemented a partial overruling of Brockamp, amending Section 6511 to
add a new subsection (h) providing for a suspension of its deadlines “during the period of
such individual’s life that such individual is
financially disabled.” Subsection (h) defines
“financially disabled” as arising from a medically-determinable physical or mental impairment meeting certain requirements. Sec.
3202(a), Pub. L. 105-206, 112 Stat. 740-41.
Congress, in the Conference Committee Report, called this provision a form of “equitable
tolling.” H.R. Rep. No. 105-599, at 255 (“The
[provision] permits equitable tolling of the
statute of limitations. . . .”).
2.
In 1998, Congress repealed Section 6013(e)
and implemented a greatly-expanded “innocent spouse” provision at Section 6015. Sec.
3201(a), Pub. L. 105-206, 112 Stat. 734-40.
Section 6015(b) retained the condition of the
former Section 6013(e) that, “taking into account all the facts and circumstances, it is inequitable to hold the other individual liable for
the deficiency in tax.” Section 6015(b)(1)(D).
Congress provided for even broader relief by
adopting Section 6015(f ). Subsection (f ) provides that “if – (1) taking into account all the
facts and circumstances, it is inequitable to
hold the individual liable for any unpaid tax
or deficiency . . . ; and (2) relief is not available
to such individual under subsections (b) or (c),
21
the Secretary may relieve such individual of
such liability.” In 2005, the National Taxpayer
Advocate (Ms. Olson) reported to Congress
that the IRS was receiving approximately
50,000 requests for relief under Section 6015
a year. Nat’l Taxpayer Advocate 2005 Annual
Report to Congress (2005) at 329. This is a significant amount of equitable tax collection determinations being made annually – indeed,
more than all petitions filed in the Tax Court
under all of its jurisdictions annually. For
comparison, for the fiscal year ended 2005
(which was typical of pre-COVID years), taxpayers filed 23,551 Tax Court deficiency petitions under Section 6213(a), 700 Tax Court
CDP petitions under Section 6330(d)(1), and
587 Tax Court innocent spouse petitions under Section 6015(e)(1)(A). H. Dubroff & B.
Hellwig, “The United States Tax Court – An
Historical Analysis” (2d ed. 2014) at 907.
3.
In 1998, Congress enacted new standards and
procedures for offers-in-compromise under
Section 7122 by which taxpayers and the IRS
can compromise assessed liabilities with finality. Sec. 3462, Pub. L. 105-206, 112 Stat.
764-67. Language in the Conference Committee Report encouraged the IRS to consider
“factors such as equity, hardship, and public
policy where a compromise of an individual
taxpayer’s income tax liability would promote
effective tax administration.” H.R. Rep. No.
105-599, at 289 (emphasis added). The IRS
later adopted regulations providing that, even
when an individual taxpayer could pay his
or her income taxes in full, “the IRS may
22
compromise to promote effective tax administration where compelling public policy or equity considerations identified by the taxpayer
provide a sufficient basis for compromising
the liability. Compromise will be justified only
where, due to exceptional circumstances, collection of the full liability would undermine
public confidence that the tax laws are being
administered in a fair and equitable manner.”
26 C.F.R. Section 301.7122-1(b)(3)(ii) (emphasis added). In the fiscal year ended September
30, 2020, taxpayers submitted 44,809 offersin-compromise to the IRS; in the same period,
the IRS accepted 14,288 offers. IRS Data
Book, 2020 at 57, available at www.irs.gov.
4.
In 1998, Congress also created CDP, which, as
noted above, is really a place where the IRS is
expected to do equity with individual taxpayers, looking at each person’s ability to pay
and various collection alternatives. Sec. 3401,
Pub. L. 105-206, 112 Stat. 746-50. In the fiscal
year ended September 30, 2020, the Independent Office of Appeals received 25,334
taxpayer requests for CDP hearings. IRS
Data Book, 2020 at 62 (Table 27).
5.
In a provision actually affecting the computation of assessable tax – not tax collection –
in 2001, Congress amended the IRA provisions to allow the IRS to waive the 60-day
window in which to roll over an IRA distribution “where the failure to waive such requirement would be against equity or good
conscience, including casualty, disaster, or
other events beyond the reasonable control of
23
the individual subject to such requirement.”
Section 408(d)(3)(I), added by sec. 644, Pub. L.
107-16, 115 Stat. 123 (emphasis added).
6.
In 2014, Congress further expanded judicial
equity in tax collection when it resolved a Circuit split by amending Section 6214(b) to provide that “the Tax Court may apply the
doctrine of equitable recoupment to the same
extent that it is available in civil tax cases before the district courts of the United States
and the United States Court of Federal
Claims.” Sec. 858, Pub. L. 109-280, 120 Stat.
1020.
Amici hope that this Court will indicate in its
opinion that, notwithstanding the above-quoted dicta
in Brockamp, there is no per se prohibition against consideration of equitable considerations in appropriate
provisions in the Tax Code.
For these reasons, Section 6630(d)(1)’s context also
supports the availability of equitable tolling in CDP
cases before the Tax Court.
II.
THERE ARE TYPICAL LATE FILINGS IN
THE TAX COURT AS TO WHICH EQUITABLE TOLLING COULD EXPECT TO APPLY.
The Tax Court did not entertain any evidence on
what circumstances in this case might give rise to equitable tolling, given the Tax Court’s view that the
CDP petition filing deadline is jurisdictional. This
section discusses typical situations where equitable
24
tolling would be expected to apply if Tax Court filing
deadlines could be tolled. Since there are only a modest
number of CDP cases where tolling would apply, the
section includes cases that arise under the Tax Court’s
deficiency and innocent spouse provisions, as well.
There are three common grounds for equitable
tolling:
There may be equitable tolling (1) where the
defendant has actively misled the plaintiff
respecting the plaintiff ’s cause of action; (2)
where the plaintiff in some extraordinary way
has been prevented from asserting his or her
rights; or (3) where the plaintiff has timely asserted his or her rights mistakenly in the
wrong forum.
Mannella v. Commissioner, 631 F.3d 115, 125 (3d Cir.
2011) (cleaned up).
All of these grounds periodically occur in the case
of Tax Court filing deadlines.
A. The IRS Sometimes Actively Misleads
Taxpayers About Tax Court Filing
Deadlines.
The IRS sometimes makes mistakes, and these
mistakes can actively mislead taxpayers into filing Tax
Court petitions on the wrong dates.
Sometimes, the IRS misleads taxpayers by sending notices with the wrong dates. For example, because
of COVID-19 interruptions to IRS operations, the IRS
25
belatedly sent out millions of notices in 2020 without
changing dates thereon. See Nat’l Taxpayer Advocate
2020 Annual Report to Congress v (2020) (“Millions of
taxpayers received late notices bearing dates that had
passed and, in many cases, response deadlines that
also had passed.”). These included notices giving taxpayers the right to request a CDP hearing. See IRS
Memorandum for Director, Campus Collection and
Director, Field Collection, Control No. SBSE-05-09200063 (Sept. 3, 2020). Although it is not known whether
any of these misdated notices specifically caused a taxpayer to miss a Tax Court filing deadline under Section
6330(d)(1), the possibility for confusion is obvious.
In other cases, an IRS employee instructs a taxpayer to file a petition on the wrong date. For example,
in Rubel v. Commissioner, 856 F.3d 301 (3d Cir. 2017),
the IRS gave a taxpayer an incorrect deadline for filing
a Tax Court petition in written correspondence. Id. at
303-04. Likewise, in Matuszak v. Commissioner, 862
F.3d 192 (2d Cir. 2017), an IRS employee orally gave an
unrepresented taxpayer the wrong last date to file a
petition. Id. at 193-94. In Nauflett v. Commissioner, 892
F.3d 649 (4th Cir. 2018), an employee of the IRS’s
Taxpayer Advocate Service orally gave another unrepresented taxpayer an incorrect final filing date. Id.
at 650-51. Although these cases arose in the innocent
spouse context, rather than under Section 6330, they
illustrate the contexts in which a failure to allow for
equitable tolling can be outcome-determinative for litigants.
26
The IRS sometimes sends letters to taxpayers
with misleading or confusing language – language
that at least arguably could support an equitable
tolling claim. CDP provides a particularly apt example. Section 6330(d)(1) allows petitions to the Tax
Court “within 30 days of a determination under this
section”; i.e., within 30 days after a notice of determination has been issued. For some time after the 1998
enactment of CDP, the IRS notice of determination (the
“ticket to the Tax Court”) closely tracked the statutory
language, stating: “If you want to dispute this determination in court, you must file a petition with the United
States Tax Court for a redetermination within 30 days
from the date of this letter.” See Jones v. Commissioner,
T.C. Memo. 2003-29 at *3 (language from notice issued
in 2001; emphasis added). But at some point, the IRS
changed the language in its model notice of determination to suggest that taxpayers had 31 days, rather than
30 days, to file a petition: “if you want to dispute [your]
determination in court,” this language read, “you must
file a petition with the United States Tax Court within
a 30-day period beginning the day after the date of this
letter.” See, e.g., Duggan v. Commissioner, 879 F.3d
1029, 1034 (9th Cir. 2018) (reprinting the language;
emphasis added). At least eight pro se taxpayers, confused by this language, mailed petitions to the Tax
Court on the 31st rather than the 30th day after the
notice was mailed.5
5
Along with the petitioner in Duggan, the relevant cases are:
Cunningham v. Commissioner, 716 F. App’x 182 (4th Cir. 2018);
Swanson v. Commissioner, T.C. Docket No. 14406-15S (order
27
To be clear, none of these cases are ones in which
individual taxpayers are definitely entitled to equitable tolling if that doctrine was available. In one of the
Section 6330(d)(1) cases described above, for example,
the Fourth Circuit found that the IRS language was
not confusing enough to justify equitable tolling. Cunningham v. Commissioner, 716 F. App’x 182 (4th Cir.
2018). But the Ninth Circuit declined to even consider
the taxpayer’s equitable-tolling arguments, reasoning
that Section 6330(d)(1)’s deadline was jurisdictional.
Duggan, 879 F.3d at 1034.
B. Extraordinary Circumstances Sometimes Prevent Taxpayers From Meeting
Tax Court Filing Deadlines.
In other cases, taxpayers experience extraordinary circumstances that prevent them from timely filing petitions with the Tax Court. Such cases present
another set of scenarios in which a taxpayer might be
deserving of equitable tolling.
dated Jan. 14, 2016); Pottgen v. Commissioner, T.C. Docket No.
1410-15L (order dated Mar. 4, 2016); Wallaesa v. Commissioner,
T.C. Docket No. 1179-17L (order dated Apr. 20, 2017); Saporito v.
Commissioner, T.C. Docket No. 8471-17L (order dated May 31,
2017); Integrated Event Management, Inc. v. Commissioner, T.C.
Docket No. 27674-16SL (order dated May 31, 2017); Protter v.
Commissioner, T.C. Docket No. 22975-15SL (order dated Sept. 26,
2017). In Swanson, the Tax Court did not mention the argument
that the taxpayer was misled by his notice’s language. But an examination of the notice contained in the Tax Court’s files shows
that Mr. Swanson, in explanation of his late filing, quadruple-underlined the words “day after” in his notice of determination.
28
Sometimes, taxpayers cannot file timely petitions
with the Tax Court because they do not timely receive
mail from the IRS. For example:
•
In Atuke v. Commissioner, T.C. Docket No.
31680-15SL (order dated Apr. 15, 2016), a notice of determination under Section 6330(d)(1)
was mailed to a taxpayer residing in Nairobi,
Kenya. The notice did not arrive in Kenya until after the taxpayer’s 30-day window to petition the Tax Court had passed. The Tax Court
dismissed the taxpayer’s case for lack of jurisdiction without considering arguments for or
against equitable tolling.
•
In Castillo v. Commissioner, T.C. Docket No.
18336-19L (order dated Mar. 25, 2020), the
IRS mailed a notice of determination to a taxpayer’s last known address. The USPS lost the
notice and never delivered it. The Tax Court
dismissed the taxpayer’s case for lack of jurisdiction. Castillo is currently pending in the
Second Circuit, on hold pending the outcome
in Boechler.
•
In Sarrell v. Commissioner, 117 T.C. 122
(2001), Appeals issued a CDP notice of determination on March 30, 2001, addressed to a
taxpayer in Israel. The taxpayer asserted that
because of intervening Jewish holidays, including Passover and Holocaust Memorial
Day, and slow rural mail delivery in Israel, he
did not receive the notice until April 24, 2001.
He also asserted additional holidays including
Israeli Memorial Day and Israeli Independence Day further delayed the mailing of the
29
petition to the Court. He furnished the Court
with a copy of what appeared to be an Israel
Postal Authority receipt indicating that he
mailed his petition to the Court on Monday,
April 30, 2001 (the 30th day, after applying
the extension rule of Section 7503 for weekends and holidays). The Court received and
filed his petition on May 7, 2001. The Tax
Court dismissed the proceeding for lack of jurisdiction because the Section 7502 timely mailing rules do not apply to a foreign postmark.6
These are paradigmatic cases of “inadequate notice” where equitable tolling is at least possibly appropriate. Baldwin Cty. Welcome Center v. Brown, 466 U.S.
147, 151 (1984) (per curiam).
In other cases, taxpayers experience serious illnesses or other life events that reasonably prevent
them from filing petitions within Section 6330(d)(1)’s
30-day filing window. For example, in Dunlap v. Commissioner, T.C. Docket No. 816-18L (order dated Mar.
15, 2018), a taxpayer claimed that a “severe family illness” caused her to file a late Tax Court CDP petition.
The Tax Court did not investigate the taxpayer’s allegation, since it maintained that Section 6330(d)(1)’s
6
Given the mail delays currently occurring in the United
States, it is not just taxpayers overseas who face the problem.
U.S. Rep. Bill Pascrell, Jr. (D-NJ-09), the Chairman of the House
Ways and Means Subcommittee on Oversight, has asked the IRS
for information to assess how systemic mail delays at the USPS
may impact IRS operations, tax filings and refunds for Americans.
See Press Release, U.S. Rep. Bill Pascrell, Jr., Pascrell Probes Mail
Delay Impact on IRS and Tax Refunds (Oct. 26, 2021), https://
pascrell.house.gov/news/documentsingle.aspx?DocumentID=4904.
30
deadline was jurisdictional. If the taxpayer had in fact
experienced a severe family illness, this illness could
have given the Tax Court good cause to toll Section
6330(d)(1)’s statute of limitations. Cf. Boyle, 469 U.S. at
243 n.1 (1985) (explaining that “death or serious illness of the taxpayer or a member of his immediate
family” can amount to reasonable cause for exclusion
from a late filing penalty).
Other extraordinary circumstances prevent taxpayers from timely filing necessary documents with
the IRS or the Tax Court. Consider Mannella v. Commissioner, 631 F.3d 115 (3d Cir. 2011). In Mannella, a
taxpayer filed with the IRS a request for innocent
spouse relief four to six months out of time set by an
IRS regulation. Id. at 119. She filed out of time because
her husband had hidden from her IRS mail arriving in
the house, which prevented her from becoming aware
of the outstanding joint debt. See id. Although Mannella is not itself an equitable tolling case involving the
filing of a Tax Court petition, its facts illustrate the
kind of scenarios that might give rise to equitable tolling. See id.
The ongoing COVID-19 pandemic offers many additional examples of circumstances in which equitable
tolling might potentially be appropriate. For example,
a person hospitalized and intubated due to COVID-19
for more than 30 days could not plausibly be expected
to file a Tax Court petition while in the ICU. Mutatis
mutandis for a taxpayer caring for a very sick child or
relative.
31
In short: equitable tolling is at least arguably
appropriate when “extraordinary circumstances . . .
[stand] in the way of timely filing.” Menominee Indian
Tribe of Wis. v. United States, 577 U.S. 250, 251 (2016).
A significant number of these cases arise in the context
of Section 6330(d)(1).
C. Pro Se Taxpayers Sometimes Timely
File Tax Court Petitions in the Wrong
Forum.
Pro se taxpayers not infrequently timely mail
their Tax Court petitions to the IRS office that issued
their notice of deficiency or determination. In the case
of veterans benefits denials that should be appealed to
the Article I Court of Appeals for Veterans Claims, the
courts allow equitable tolling under similar circumstances. See, e.g., Bailey v. Principi, 351 F.3d 1381, 1382
(Fed. Cir. 2003); Santana-Venegas v. Principi, 314 F.3d
1293, 1298 (Fed. Cir. 2002).
For example:
•
In Haitsuka v. Commissioner, T.C. Docket No.
14495-15L (order dated Oct. 9, 2015), a taxpayer with limited English proficiency timely
mailed a CDP petition to the IRS. The IRS
sent the petition back to him, and he mailed it
to the Tax Court.
•
In Gitman v. Commissioner, T.C. Docket No.
5804-19 (order dated Aug. 8, 2019), the taxpayer timely mailed a deficiency petition to
the Tax Court’s New York City courtroom
32
instead of the Clerk in Washington, D.C., and
it did not get to the Clerk’s Office within the
90-day period of Section 6213(a).
•
In Islam v. Commissioner, T.C. Docket No.
14099-19S (order dated Feb. 28, 2020), the
taxpayers – who speak English as a second
language – timely mailed a deficiency petition
to the IRS, but it was not received by the Tax
Court within the 90-day period of Section
6213(a).
•
In Rosenthal v. Commissioner, T.C. Docket No.
18392-19S (order dated Dec. 26, 2019), the
taxpayers erroneously but timely mailed their
deficiency petition to the IRS Laguna Nigel office that issued their notice. Weeks later, the
office forwarded their petition to the Tax
Court.
In each case, the Tax Court dismissed the petition for
lack of jurisdiction. Cases like Rosenthal are common
enough that the IRS has formally instructed its employees to quickly forward timely petitions erroneously
sent to the IRS onwards to the Tax Court. See Internal
Revenue Manual Section 4.8.9.25.1 (July 9, 2013).
Finally, another provision in the Internal Revenue
Manual, which provides guidance to IRS employees,
relating to timely filing in the wrong forum in CDP, undermines the government’s argument that the IRS
would have severe administrative problems dealing
with equitable tolling of the Section 6330(d)(1) filing
deadline.
33
In her opposition to the petition for certiorari in
this case (at page 27), the Solicitor General wrote:
Allowing equitable tolling for Section 6330(d)(1)
petitions would significantly delay the IRS’s
collection of taxes. Without equitable tolling, a
clear end date exists for the period during
which the IRS is prohibited from collecting by
levy: the date when the 30-day filing period in
Section 6330(d)(1) expires. If equitable tolling
were allowed, a delinquent taxpayer might be
able to prolong the suspension period by filing
a tardy petition in the Tax Court and then
seeking to excuse that failure to file a timely
petition on equitable-tolling grounds.
Section 6330(a) provides a different 30-day period in
which the taxpayer can request a CDP hearing at the
IRS Independent Office of Appeals. Section 7502 provides that a timely mailed document is considered
timely filed if received after the due date, but only if
the envelope bearing the filing is “properly addressed
to the agency, officer, or office with which the return,
claim, statement, or other document is required to be
filed.” Section 7502(a)(2)(B).
Notices of Intent to Levy (“NOILs”) – one of the
two “tickets” to CDP hearings – are issued either by
individual IRS Revenue Officers assigned to collect
taxes from the taxpayer or by the IRS computers.
NOILs typically show addresses (1) of the office issuing
the NOIL, (2) where Forms 12153 hearing requests
should be mailed, and (3) where the taxpayer may send
payments. These multiple addresses are confusing,
34
and taxpayers frequently mail the Form 12153 to one
of the wrong addresses. See Webber v. Commissioner,
T.C. Docket No. 14307-18L (order dated June 7, 2019),
where the IRS moved to dismiss a Tax Court case because the taxpayer timely mailed his CDP request erroneously to the payment address.
The judge complained of the confusion created by
the NOIL having multiple addresses. The IRS withdrew its motion to dismiss and subsequently, the IRS
amended the Internal Revenue Manual to provide that
if the taxpayer timely mailed the Form 12153 to any
address shown in the NOIL or timely mailed the form
to the Revenue Officer handling the taxpayer’s case it
would accept the form as timely. Internal Revenue
Manual Section 8.22.5.3.1 (Aug. 31, 2020).
IRS computers may be programmed to start levying shortly after the 30-day period in Section 6330(a)
expires without receipt of a Form 12153 at the correct
address, and IRS employees may take time notifying
the Office of Appeals of a timely filing in the wrong
place. Because the IRS can easily deal with this by
retroactively treating the request as timely, stopping
collection, and recalculating the collection statute of
limitations, the IRS should not be heard in this case
when it argues that there would be serious administrative problems with allowing equitable tolling of the
Section 6330(d)(1) Tax Court filing deadline or in general allowing equitable tolling anywhere in the Tax
Code.
35
And, of course the Tax Court has ample power to
deter the filing of late petitions containing frivolous assertions of equitable tolling. See Section 6673(a)(1)(A)
(authorizing the Tax Court to impose penalties of up to
$25,000 for petitions filed “primarily for delay”).
As shown by the cases in Section II, petitioners
present the Tax Court with a small but steady number
of cases that merit equitable tolling.
---------------------------------♦---------------------------------
CONCLUSION
For these reasons, this Court should hold that
Section 6330(d)(1)’s filing deadline is both not jurisdictional and subject to equitable tolling in appropriate
cases.
Respectfully submitted,
T. KEITH FOGG
TAX CLINIC AT THE LEGAL
SERVICES CENTER OF
HARVARD LAW SCHOOL
122 Boylston Street
Jamaica Plain, MA 02130
617.390.2532
kfogg@law.harvard.edu
November 2021
CARLTON M. SMITH
Counsel of Record
255 W. 23rd Street,
Apt. 4AW
New York, NY 10011
646.230.1776
carltonsmth@aol.com
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.