The U.S. Supreme Court, reversing an Eighth Circuit decision, found that the time limit to file a petition with the Tax Court was not a condition of the Tax Court's jurisdiction but rather a nonjurisdictional rule relating to litigation procedure for which equitable tolling is available.
Facts: The IRS issued a letter to a law firm, Boechler P.C., on June 5, 2015, indicating a discrepancy between the amount of wages it reported on Forms W-2, Wage and Tax Statement, and the amount shown on Form 941, Employer's Quarterly Federal Tax Return, for its 2012 tax year. When Boechler did not respond to the letter, the IRS assessed a penalty of $19,250 under Sec. 6721(e) for intentional disregard of the reporting requirements. The penalty was assessed in September 2015, and a notice of intent to levy was issued to Boechler in October 2016. Boechler made a timely request for a Collection Due Process (CDP) hearing.
The hearing was held in May 2017, and on July 28, 2017, the IRS mailed a notice of determination to Boechler that sustained its intent to levy. The notice indicated that Boechler had 30 days to petition the Tax Court for review of the determination. Boechler mailed the petition on Aug. 29, 2017, one day after the 30-day period had expired (30 days after the notice date was Aug. 27, 2017, which was a Sunday, so the statutory period ended on that Monday, Aug. 28).
The Tax Court dismissed the case for lack of jurisdiction (Boechler P.C., No. 18578-17L (T.C. 2/15/19) (order of dismissal)), and Boechler appealed to the Eighth Circuit, which had no clear precedent on this issue. The Ninth Circuit had previously held in Duggan, 879 F.3d 1029 (9th Cir. 2018), that the 30-day time limit in Sec. 6330(d)(1) is jurisdictional. In Myers, 928 F.3d 1025 (D.C. Cir. 2019), the D.C. Circuit held that Sec. 7623(b)(4), which allows whistleblowers to petition the Tax Court for review of an award determination (and includes a parenthetical identical to the one in Sec. 6330(d)(1)), is not jurisdictional. Citing Duggan, the Eighth Circuit affirmed the Tax Court. Boechler appealed the case to the Supreme Court, which agreed to hear it.
Issues: Sec. 6330 provides taxpayers with certain rights before the IRS can seize property in satisfaction of a tax liability. The IRS must provide notice of its intent, as well as an opportunity for a pre-levy CDP hearing before an impartial officer in the IRS Independent Office of Appeals. Following the hearing, the IRS must issue a notice of determination. Sec. 6330(d)(1) provides that a taxpayer "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)." Boechler and the IRS agreed that Sec. 6330(d)(1) grants jurisdiction to the Tax Court to review a determination following a CDP hearing and that a petition must be filed to trigger that jurisdiction. They disagreed, however, as to whether the timeliness of the petition was a condition of the Tax Court's jurisdiction.
Boechler argued that the phrase "such matter" in Sec. 6330(d)(1) refers solely to the filing of a petition, meaning the Tax Court has jurisdiction even if the petition is filed late. Further, since the court has jurisdiction, it can equitably toll the 30-day period and review the IRS's determination, Boechler argued.
The IRS, on the other hand, argued that jurisdiction is conditioned on the petition's being filed within the 30-day period, and since Boechler's petition was late, the Tax Court did not have jurisdiction to review it. The IRS also argued that even if the Tax Court has jurisdiction, it does not have the authority to apply the doctrine of equitable tolling, under which a deadline can be suspended or extended where a party pursues its rights diligently but an extraordinary circumstance beyond the person's control prevents timely compliance (see Menominee Indian Tribe of Wisconsin, 577 U.S. 250 (2016)).
Holding: In a unanimous decision, the Supreme Court held Sec. 6330(d)(1)'s 30-day time limit to file a petition for review of a CDP determination is a nonjurisdictional deadline subject to equitable tolling.
As the Court explained, not all procedural requirements are jurisdictional. Many are nonjurisdictional and simply instruct "parties [to] take certain procedural steps at certain specified times without conditioning a court's authority to hear the case on compliance with those steps" (citing Henderson v. Shinseki, 562 U.S. 428, 435 (2011)). The distinction between jurisdictional and nonjurisdictional procedural requirements is important, the Court stated, because jurisdictional requirements cannot be waived or forfeited, must be raised by courts without prompting by the parties, and do not allow for equitable exceptions.
In Arbaugh v. Y&H Corp., 546 U.S. 500, 515 (2006), the Court said it will treat a procedural requirement as jurisdictional only if Congress "clearly states" it should be treated as such. The Court also noted in Auburn Regional, 568 U.S. 145 (2013), that the mere proximity of a procedural requirement to a grant of jurisdiction does not make the procedural requirement jurisdictional.
Agreeing with Boechler's reading of the Code, the Court found there was no clear indication in the statute that the 30-day period was intended to be a condition of jurisdiction because the word "matter" does not appear before the phrase "such matter." Under the "last-antecedent rule," which provides that the syntactically closest antecedent to a word or phrase is most likely the intended one, "such matter" refers to the phrase immediately before the parenthetical in which it appears, which mentions the filing of a petition.
Further, the Court noted, many interpretations of the language are plausible, making it "difficult to make the case that the jurisdictional reading is clear," and although the 30-day time limit appears in the same sentence as the grant of jurisdiction, the Court found no "clear tie" between the two. Accordingly, the Court held that the filing deadline in Sec. 6330(d)(1) is independent of the grant of jurisdiction to the Tax Court.
Further, with regard to equitable tolling, the Court, citing Irwin v. Department of Veterans Affairs, 498 U.S. 89, 95-96 (1990), stated nonjurisdictional limitation periods are presumptively subject to equitable tolling. Seeing nothing that rebutted the presumption with respect to Sec. 6330(d)(1), it held that equitable tolling applied with regard to the 30-day time limit in Sec. 6330(d)(1).
However, the Court did not determine whether equitable tolling applied in Boechler's case. Whether it should be made available to Boechler should be determined on remand, the Court stated.
- Boechler, P.C., No. 20-1472 (U.S. 4/21/22), rev'g 967 F.3d 760 (8th Cir. 2020)
— Laura Lee Mannino, CPA, J.D., LL.M., is an associate professor of taxation, St. John's University, Queens, N.Y.
