Court rules unanimously that tax deadline is subject to equitable tolling
on Apr 21, 2022 at 5:35 pm
On Thursday, the Supreme Court decided Boechler v. Commissioner of Internal Revenue in a unanimous opinion authored by Justice Amy Coney Barrett. As expected, the court held that equitable tolling can apply to a statutory time limit in tax cases known as “collection due process,” or CDP, cases. That’s because the 30-day statutory deadline in such cases is not jurisdictional. If a taxpayer is late in seeking U.S. Tax Court review in a CDP case – and the taxpayer can provide an explanation persuasive in equity, which is a high bar – then the Tax Court can toll the 30-day period.
The case arose after the Internal Revenue Service notified Boechler, P.C., a law firm, of intent to levy on Boechler’s property to satisfy a tax penalty. After an appeals office within the IRS sustained the levy, Boechler sent a petition one day late to request review in the Tax Court. The time for filing such a petition for review is set forth in Section 6330(d)(1) of the Internal Revenue Code, which states that a “person may, within 30 days of a determination under this section, petition the Tax Court for review of such determination (and the Tax Court shall have jurisdiction with respect to such matter).”
At oral argument, the idea that Section 6330(d)(1) is jurisdictional because it includes the word “jurisdiction” did not persuade the justices, although Chief Justice John Roberts expressed some support for the government’s view. Rather, the justices agreed that the “such matter” over which the Tax Court had jurisdiction has an unclear antecedent and that the statutory language in general is a mess. The court’s opinion confirms this view.
The Boechler opinion requires that Congress make a “clear statement” to produce a jurisdictional statute. It found no persuasive “case for jurisdictional clarity” in this case. Because the statute is not jurisdictional, it is not exempt from equitable tolling, which by default applies to non-jurisdictional limitations periods under Irwin v. Department of Veterans Affairs.
Thus equity, at least with respect to this CDP limitations period, has the capacity to adjust the results of a complex statutory scheme. As the Boechler opinion explains, “equitable tolling is a traditional feature of American jurisprudence and a background principle against which Congress drafts limitations periods,” even “outside the realm of Article III courts.”
Check back soon for in-depth analysis of the opinion.