Less Than Meets the Eye: SCOTUS Holds Tax Court Petition Deadline Not Jurisdictional

May 4, 2022

By Michael S. Raum and David B. Tibbals

Hour glass and calendarUnder IRC § 6330, a taxpayer is entitled to a “collection due process” (CDP) hearing before the IRS Appeals Office can take any enforced collection action. A taxpayer who is not satisfied after the hearing can seek U.S. Tax Court review of that decision. IRC § 6330(d)(1) imposes a 30-day deadline to seek review.

On April 21, 2022, the U.S. Supreme Court held in Boechler, P.C., v. Commissioner, that the 30-day deadline to petition the U.S. Tax Court for review of a CDP hearing is not a jurisdictional limit, meaning that in rare circumstances, a taxpayer may proceed even if the petition is tardy. However, as explained below, there is less here than meets the eye.

At issue in the case was a U.S. Tax Court petition filed by Boechler, P.C., a law firm in Fargo, N.D. Boechler received a levy notice and requested a CDP hearing. However, Boechler did not get what it wanted in that hearing, and the levy was sustained. Boechler then had 30 days to petition the Tax Court for review, but it filed its petition on the 31st day. The Tax Court dismissed the petition for lack of jurisdiction. The Eighth Circuit affirmed.

On appeal, Boechler argued that the 30-day deadline was a procedural requirement independent of the grant of jurisdiction to the Tax Court to review CDP determinations. That would mean that the case, though filed late, was not automatically and permanently barred as being outside the Tax Court’s jurisdiction. The Court agreed.

In an opinion written by Justice Barrett, the Court continued a trend by which it has sought “‘to bring some discipline’ to use of the jurisdictional label.”  Precisely analyzing the grammatical structure of IRC § 6330(d)(1), the Court found that “the text does not clearly mandate the jurisdictional reading.”  Moreover, the Court noted that Congress in other comparable tax statutes “much more clearly link[ed] their jurisdictional grants to a filing deadline.”

The Court’s holding means that the 30-day requirement is not jurisdictional. Thus, a petition could theoretically be filed late and still continue. Still, it is difficult to envision Boechler succeeding in its protest of the IRS’ proposed levy or the case helping many tardy taxpayers. The Court remanded the case for further proceedings—not to hear the merits of Boechler’s Tax Court petition but rather to determine whether Boechler was entitled to “equitable tolling” of the 30-day deadline.  Equitable tolling is only appropriate when some unusual circumstances justify allowing a party to proceed late. It is a hard burden to meet. While the issue will be decided by the Tax Court, the Court’s observation that “Boechler dropped the ball and filed its petition a day late” doesn’t exactly inspire confidence that it had a compelling reason for being late so as to justify equitable tolling.

It will be interesting to see whether the Court’s holding in Boechler has any impact on state law.  In Minnesota, for example, the Minnesota Tax Court and the Minnesota Supreme Court have long tied deadlines to file an appeal to the Minnesota Tax Court’s jurisdiction.  But, interestingly, the statute conferring jurisdiction upon the Minnesota Tax Court (Minn. Stat. § 271.01, subd. 5) does not reference the procedural requirements to file an appeal within 60 days of the notice date of a Commissioner’s Order (Minn. Stat. § 271.06, subd. 2). Nor do the procedural requirements reference the Minnesota Tax Court’s jurisdiction.

Similarly, the North Dakota Supreme Court has interpreted a statute that requires a taxpayer serve an additional notice on the state tax commissioner when appealing a county board’s property tax abatement determination to district court (N.D.C.C. § 11-11-41) as a jurisdictional requirement, even though it does not itself include a deadline, makes no reference to the statute conferring jurisdiction to district courts in appeals from county board decisions (N.D.C.C. § 11-11-39), and appears in an entirely different title of the North Dakota Century Code from the statute describing the procedural requirements of appeals from local governing body decisions (N.D.C.C. § 28-34-01).

Ultimately, the U.S. Supreme Court describes the import of its decision best: “We simply hold that §6330(d)(1)’s filing deadline, like most others, can be equitably tolled in appropriate cases.”  Therefore, taxpayers in all cases—federal and state—should treat filing deadlines as mandatory, since they will remain in effect in the vast majority of cases.

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