Collective v. Comm'r of Internal Revenue
| Decision Date | 29 November 2022 |
| Docket Number | 21284-21 |
| Parties | HALLMARK RESEARCH COLLECTIVE, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent |
| Court | U.S. Tax Court |
The Tax Court previously ordered dismissal of this deficiency case for lack of jurisdiction because P's Petition was filed late, for purposes of I.R.C. § 6213(a)-i.e., not 90 but 91 days after the IRS mailed its notice of deficiency. After the Supreme Court decided Boechler, P.C. v Commissioner, 142 S.Ct. 1493 (2022), P moved to vacate our dismissal on the grounds that the deadline to file a deficiency case is a non-jurisdictional statute of limitations subject to equitable tolling. P requests that this case be reopened to give P an opportunity to show cause for equitable tolling of the limitations period.
Held The "text, context, and relevant historical treatment", Reed Elsevier, Inc. v. Muchnick 559 U.S. 154, 166 (2010), of I.R.C. § 6213(a) confirm Congress's intention that the deadline to file a deficiency case be jurisdictional.
Held further, because the deadline of I.R.C. § 6213(a) is jurisdictional, it cannot be equitably tolled.
Held, further, this case was properly dismissed for lack of jurisdiction, and we will not vacate the dismissal.
Christopher Reed Haunschild and James Brooks Mann, for petitioner.
Yervant P. Hagopian, Whitney N. Moore Warren, and Michael K. Park, for respondent.
Before the Court is "Petitioner's Motion to Vacate Order of Dismissal for Lack of Jurisdiction", in which Hallmark Research Collective ("Hallmark") cites the Supreme Court's recent decision in Boechler, P.C. v. Commissioner, 142 S.Ct. 1493 (2022), and asks us to vacate our order of dismissal because it wrongly treats the 90-day[1] deadline of section 6213(a)[2] as jurisdictional. The issue for decision is whether section 6213(a) limits the Tax Court's jurisdiction to deficiency petitions filed on or before that deadline. We hold that the timely filing of a deficiency petition is a jurisdictional requirement, and we will accordingly deny Hallmark's motion to vacate.
Hallmark is evidently a corporation with its principal place of business in California.[3] Hallmark filed its 2015 return untimely, and it did not file its 2016 return. Pursuant to section 6020(b), the Internal Revenue Service ("IRS") prepared for 2016 a substitute for return.
Pursuant to section 6212, the IRS sent a statutory notice of deficiency ("NOD") to Hallmark's last known address, by certified mail, on June 3, 2021. The NOD determined deficiencies, additions to tax, and penalties against Hallmark for the years 2015 and 2016 and further advised Hallmark of the following:
If you disagree with the Notice of Deficiency
If you want to contest our final determination, you have 90 days from the date of this letter (150 days if addressed to you outside of the United States) to file a petition with the United States Tax Court.
How to file your petition
You can get a petition form and the rules for filing from the Tax Court's website at www.ustaxcourt.gov, by contacting the Office of the Clerk at the address below, or by calling 202-521-0700. Send your completed petition form, a copy of this letter, and copies of all statements and schedules you received with this letter to the address below.
Time limits on filing a petition
The court can't consider your case if you file the petition late.
If we don't hear from you
If you . . . don't file a timely petition with the Tax Court, we'll assess and bill you for the deficiency (and applicable penalties and interest) after 90 days from the date of this letter (150 days if this letter is addressed to you outside the United States).
The NOD included on its front page the caption:
Last day to file petition with U.S. tax court: SEP 01 2021
Hallmark's petition
Using the "e-filing" procedure provided on the Tax Court's website, Hallmark electronically filed its petition for redetermination of the deficiencies at 9:36 p.m. on September 2, 2021-one day late. In its petition Hallmark stated: "My CPA . . . contracted COVID/DELTA over the last 40 days and kindly requests additional time to respond." For purposes of this Opinion, we assume that Hallmark was not to blame for the late filing and that equitable considerations, if taken into account, might excuse the untimeliness.
Order to Show Cause and the parties' responses
On November 17, 2021, we issued an Order to Show Cause (Doc. 6), wherein we
ORDERED that, on or before December 15, 2021, petitioner and respondent each shall file a response to this Order, showing cause, in writing, why the Court, on its own motion, should not dismiss this case for lack of jurisdiction on the ground that the petition was not timely filed.
Hallmark filed its response, in which it requested that we defer ruling until the Supreme Court issued its decision in Boechler (). Hallmark argued that the deadline to file a deficiency petition in section 6213(a) "is functionally the same as the deadline[] in [section] 6330(d)(1) (at issue in Boechler . . .)". Hallmark further argued that its "circumstances are compelling and an objective review would clearly result in equitable tolling of the filing deadline for the single day required."
In his response the Commissioner asserted that "there is no cause as to why the Court should not, on its own motion, dismiss this case for lack of jurisdiction on the ground that the petition was not timely filed."
Order of dismissal for lack of jurisdiction
We did not defer ruling. On April 1, 2022, we entered an Order of Dismissal for Lack of Jurisdiction (Doc. 18), in which we followed longstanding precedent, held that the 90-day deadline of section 6213(a) for deficiency cases is jurisdictional, and dismissed Hallmark's deficiency petition for lack of jurisdiction.
On April 21, 2022, the Supreme Court issued its opinion in Boechler, holding that "[s]ection 6330(d)(1)'s 30-day time limit to file a petition for review of a collection due process determination is an ordinary, nonjurisdictional deadline subject to equitable tolling." Boechler, P.C. v. Commissioner, 142 S.Ct. at 1501.
Hallmark's motion to vacate our order of dismissal
The Commissioner filed his response (Doc. 29) on June 22, 2022, and Hallmark filed its reply (Doc. 31) on July 15, 2022.
As we and other courts have often held: "It is well settled that in order to maintain an action in this Court there must be [1] a valid notice of deficiency [issued by the Commissioner] and [2] a timely filed petition". Abeles v. Commissioner, 91 T.C. 1019, 1025 (1988).[4] Hallmark argues that two jurisdictional prerequisites[5] for a deficiency case are at least one too many. Hallmark contends we should not follow prior precedents holding the 90-day deadline to be jurisdictional, because "Boechler undercut the theory and reasoning underlying" those precedents, so that "[t]he cases are now clearly irreconcilable", and that "efficient and harmonious judicial administration here would seem to require this Court to review the Supreme Court's Boechler opinion and issue a new precedent on the section 6213(a) filing deadline." We now undertake such a review, and we conclude that the Supreme Court's reasoning in Boechler does not apply to the 90-day deadline of section 6213(a).
Where a federal court's subject-matter jurisdiction depends on a timely filing, "a litigant's failure to comply with the bar deprives a court of all authority to hear a case". United States v. Kwai Fun Wong, 575 U.S. 402, 408-09 (2015). Courts must enforce the deadline sua sponte; the deadline cannot be tolled or waived; and there is no room for equitable exceptions to be made on account of the specific facts of a case. Arbaugh v. Y & H Corp., 546 U.S. 500, 514 (2006). Late-filed cases in such instances must be dismissed for lack of jurisdiction. Id.
Claim-processing rules, on the other hand, are those...
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