469 U.S. 241 (1985), 83-1266, United States v. Boyle

Docket Nº:No. 83-1266
Citation:469 U.S. 241, 105 S.Ct. 687, 83 L.Ed.2d 622, 53 U.S.L.W. 4059
Party Name:United States v. Boyle
Case Date:January 09, 1985
Court:United States Supreme Court

Page 241

469 U.S. 241 (1985)

105 S.Ct. 687, 83 L.Ed.2d 622, 53 U.S.L.W. 4059

United States



No. 83-1266

United States Supreme Court

Jan. 9, 1985

Argued October 10, 1984




Respondent, executor of his mother's will, retained an attorney to handle the estate. Respondent provided the attorney with all relevant information and records [105 S.Ct. 688] for filing a federal estate tax return, which under § 6075(a) of the Internal Revenue Code was required to be filed within nine months of the decedent's death. Respondent inquired of the attorney from time to time as to the preparation of the return, and was assured that it would be filed on time. But the return was filed three months late, apparently because of a clerical oversight in omitting the filing date from the attorney's calendar. Acting pursuant to § 6651(a)(1) of the Code, which provides a penalty for failure to file a return when due "unless it is shown that such failure is due to reasonable cause and not due to willful neglect," the Internal Revenue Service assessed a penalty for the late filing. Respondent paid the penalty and filed a suit in Federal District Court for a refund, contending that the penalty was unjustified because his failure to file the return on time was "due to reasonable cause," i.e., reliance on his attorney. The District Court agreed and granted summary judgment for respondent. The Court of Appeals affirmed.

Held: The failure to make a timely filing of a tax return is not excused by the taxpayer's reliance on an agent, and such reliance is not "reasonable cause" for a late filing under § 6651(a)(1). While engaging an attorney to assist in probate proceedings is plainly an exercise of the "ordinary business care and prudence" that the relevant Treasury Regulation requires the taxpayer to demonstrate to excuse a late filing, this does not answer the question presented here. To say that it was "reasonable" for respondent to assume that the attorney would meet the statutory deadline may resolve the matter as between them, but not with respect to the respondent's obligation under that statute. It requires no special training or effort on the taxpayer's part to ascertain a deadline and ensure that it is met. That the attorney, as respondent's agent, was expected to attend to the matter does not relieve the principal of his duty to meet the deadline. Pp. 245-252.

10 F.2d 1251, reversed.

Page 242

BURGER, C.J., delivered the opinion for a unanimous Court. BRENNAN, J., filed a concurring opinion, in which MARSHALL, POWELL, and O'CONNOR, JJ., joined,post, p. 252.

BURGER, J., lead opinion

CHIEF JUSTICE BURGER delivered the opinion of the Court.

We granted certiorari to resolve a conflict among the Circuits on whether a taxpayer's reliance on an attorney to prepare and file a tax return constitutes "reasonable cause" under § 6651(a)(1) of the Internal Revenue Code, so as to defeat a statutory penalty incurred because of a late filing.



Respondent, Robert W. Boyle, was appointed executor of the will of his mother, Myra Boyle, who died on September 14, 1978; respondent retained Ronald Keyser to serve as attorney for the estate. Keyser informed respondent that the estate must file a federal estate tax return, but he did not mention the deadline for filing this return. Under 26 U.S.C. § 6075(a), the return was due within nine months of the decedent's death, i.e., not later than June 14, 1979.

Although a businessman, respondent was not experienced in the field of federal estate taxation, other than having been executor of his father's will 20 years earlier. It is undisputed that he relied on Keyser for instruction and guidance. He cooperated fully with his attorney and provided Keyser with all relevant information and records. Respondent and his wife contacted Keyser a number of times during the spring and summer of 1979 to inquire about the progress of

Page 243

the proceedings and the preparation of the tax return; they were assured that they would be notified when the return was due and that the return would be filed "in plenty of time." App. 39. When respondent called Keyser on September 6, 1979, he learned for the first time that the return was by then overdue. Apparently, Keyser had overlooked the matter because of a clerical oversight in omitting the filing date from Keyser's master calendar. Respondent met with Keyser on September 11, and the return was filed on September 13, three months late.


Acting pursuant to 26 U.S.C. § 6651(a)(1), the Internal Revenue Service assessed against the estate an additional tax of $17,124.45 as a penalty for the late filing, with $1,326.56 in interest. Section 6651(a)(1) reads in pertinent part:

In case of failure . . . to file any return . . . on the date prescribed therefor . . . unless it is shown that such failure is due to reasonable cause and not due to willful neglect, there shall be added to the amount required to be shown as tax on such return 5 percent of the amount of such tax if the failure is for not more than 1 month, with an additional 5 percent for each additional month or fraction thereof during which such failure continues, not exceeding 25 percent in the aggregate. . . .

(Emphasis added.) A Treasury Regulation provides that, to demonstrate "reasonable cause," a taxpayer filing a late return must show that he "exercised ordinary business care and prudence and was nevertheless unable to file the return within the prescribed time." 26 CFR § 301.6651-1(c)(1) (1984).1

Page 244

Respondent paid the penalty and filed a claim for a refund. He conceded that the assessment for interest was proper, but contended that the penalty was unjustified because his failure to file the return on time was "due to reasonable cause," i.e., reliance on his attorney. Respondent brought suit in the United States District Court, which concluded that the claim was controlled by the Court of Appeals' holding in Rohrabaugh v. United States, 611 F.2d 211 (CA7 1979). In Rohrabaugh, the United States Court of Appeals for the Seventh Circuit held that reliance upon counsel constitutes "reasonable cause" under § 6651(a)(1) when: (1) the taxpayer is unfamiliar with the tax law; (2) the taxpayer makes full disclosure of all relevant facts to the attorney that he relies upon, and maintains contact with the attorney from time to time during the administration of the estate; and (3) the taxpayer has otherwise exercised ordinary business care and prudence. 611 F.2d at 215, 219. The District Court held that, under Rohrabaugh, respondent had established "reasonable cause" for the late filing of his tax return; accordingly, it granted summary judgment for respondent and ordered refund of the penalty. A divided panel of the Seventh Circuit, with three opinions, affirmed. 710 F.2d 1251 (1983).

Page 245

We granted certiorari, 466 U.S. 903 (1984), and we reverse.



Congress' purpose in the prescribed civil penalty was to ensure timely filing of tax returns to the end that tax liability will be ascertained and paid promptly. The relevant statutory deadline provision is clear; it mandates that all federal estate tax returns be filed within nine months from the decedent's death, 26 U.S.C. 6075(a).2 Failure to comply incurs a penalty of 5 percent of the ultimately determined tax for each month the return is late, with a maximum of 25 percent of the base tax. To escape the penalty, the taxpayer bears the heavy [105 S.Ct. 690] burden of proving both (1) that the failure did not result from "willful neglect," and (2) that the failure was "due to reasonable cause." 26 U.S.C. § 6651(a)(1).

The meaning of these two standards has become clear over the near-70 years of their presence in the statutes.3 As used here, the term "willful neglect" may be read as meaning a conscious, intentional failure or reckless indifference. See

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Orient Investment & Finance Co. v. Commissioner, 83 U.S.App.D.C. 74, 75, 166 F.2d 601, 602 (1948); Hatfried, Inc. v. Commissioner, 162 F.2d 628, 634 (CA3 1947); Janice Leather Imports Ltd. v. United States, 391 F.Supp. 1235, 1237 (SDNY 1974); Gemological Institute of America, Inc. v. Riddell, 149 F.Supp. 128, 131-132 (SD Cal.1957). Like "willful neglect," the term "reasonable cause" is not defined in the Code, but the relevant Treasury...

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