The 8th Circuit Court of Appeals, which covers North Dakota, has ruled that the 30-day deadline for a taxpayer to appeal an IRS Notice of Determination to Tax Court is jurisdictional, meaning that if the taxpayer does not file with the Tax Court within 30 days, the Tax Court does not have jurisdiction to hear the tax appeal and must dismiss the federal tax court appeal.
In the case of Boechler, P.C. v. Commissioner of Internal Revenue,[1] the taxpayer was assessed additional tax and the IRS provided a final notice of intent to levy, which is required before the IRS may levy to collect outstanding tax liability. In this circumstance, the taxpayer is entitled to request a collection due process hearing (CDP Hearing) before the IRS Office of Independent Appeals to challenge the tax collection. IRS Appeals ruled against the taxpayer in the CDP Hearing and mailed the taxpayer a Notice of Determination that authorized taxpayer to challenge the determination within 30 days in US Tax Court.
However, the taxpayer was one day late in filing the Tax Court Petition. The Tax Court dismissed the case on grounds that by filing a day late, the Tax Court did not have jurisdiction to hear the case. In Boechler, the 8th Circuit Court of Appeals agreed, finding that Congress set a jurisdictional threshold of 30 days to petition Tax Court following a Notice of Determination: “While there might be alternative ways that Congress could have stated the jurisdictional nature of the statute more plainly, it has spoken clearly enough to establish that § 6330(d)(1)’s 30-day filing deadline is jurisdictional.”[2] Thus, the 8th Circuit Court of Appeals joined with the 9th Circuit to rule that the 30-day deadline was jurisdictional.
So what is the importance of Tax Court jurisdiction? If the 30-day deadline was not jurisdictional but rather a statute of limitations or something lesser, a taxpayer could possibly provide some reason for the 30-day filing deadline to be expanded. For example, equitable tolling of the deadline.[3] But if the tax court filing deadline is jurisdictional, there is no excuse permitted for a late filing because any filing beyond 30 days means the Tax Court does not have jurisdiction to hear the case. Lack of jurisdiction is a sure fire loser for the taxpayer.
The taxpayer also argued that calculating the 30-day deadline to file the Tax Court petition based upon the IRS’ mailing of the notice of determination, rather than on the taxpayer’s receipt of the notice, violated due process. But the Court made short work of that argument, ruling that since the issue was not one of a suspect classification or fundamental right, the government need only show a rational legislative purpose for calculating 30 days from mailing rather than receipt. Such purpose was found in promoting efficient tax enforcement so that the IRS would know when it could levy without looking at each receipt date and by ensuring the IRS a reasonable and workable timeframe and deadline.[4]
Boechler, v. Commissioner demonstrates yet again the critical importance of the taxpayer meeting deadlines in tax appeals. Even one day too late could deprive the taxpayer of the ability to challenge the tax in Tax Court.
Jared M. Le Fevre is a Partner in the Tax, Trusts and Estates Practice Group of Crowley Fleck PLLP. Mr. Le Fevre represents taxpayers before the IRS, IRS Independent Office of Appeals, Tax Court, Federal District Court and state tax agencies throughout Montana, Wyoming, North Dakota, Idaho, and Utah. Mr. Le Fevre is involved in federal and state and local tax audits, appeals, and tax resolution throughout these western states. Mr. Le Fevre also advises clients on the tax effects of business and real estate transactions.
[1] Boechler, P.C. v. Comm’r of Internal Revenue, —F.3d—, 2020 WL 4248469 (8th Cir. July 24, 2020).
[2] Boechler, 2020 WL 4248469, at *3.
[3] – According to the taxpayer, being jurisdictional deprives the taxpayer of “any possible exception, presumably including equitable tolling or any other remedial or “savings” doctrine, regardless of any conceivable attendant facts, whatsoever.” Boechler, P.C. v. Comm’r of Internal Revenue, 2019 WL 3384248, 8 (Appellant Petition).
[4] Boechler, 2020 WL 4248469, at *4.