Growing up all of us loved a “snow day”—school was closed and we had the day off. Our general affinity to snow days played out in a recent U.S. Tax Court order in Guralnik v. Commissioner, Tax Court Docket No. 4358-15 (August 24, 2015), which held that a petition seeking redetermination on a notice of determination regarding the filing of a tax lien was timely because the last day for filing the petition fell on a“snow day”—that is a day when the U.S. Tax Court was closed because the District of Columbia was officially closed on February 17, 2015 because of Winter Storm Octavia.
The opinion is an order issued by a special trial judge under Tax Court Rule 183 and has not been adopted by the Tax Court and is not yet precedential—but we will watch with interest as to whether the Tax Court adopts the order as its opinion. Given IRS Counsel’s strong opposition to finding the petition was timely, we can expect to hear more on the issue.
The issue is important but the case is also a cautionary reminder as to when and how to file a petition with the Tax Court—which I will close with.
No Ifs, Ands or Buts…The issue is an important one—petitions for redeterminations in the Tax Court—whether related to a lien determination, a collection due process request or a notice of deficiency for income tax — are jurisdictional—if they are not timely—the Tax Court does not have jurisdiction.
Timely Mailing, Timely Fling. Tax Court petitions can be deemed filed when mailed—and proof of mailing can be established by the post mark on the envelope under Section 7502 of the Code. Certified mail is the tried and true way to establish proof of mailing—you get your certified receipt that the petition has been place in the U.S. mail—and you are done—the petition is filed. Express delivery services such as Federal Express changed things—sort of—and certain types of express services as designated by the IRS qualify for the timely mailing rule—but not all express services qualify and this is where the Petitioners ran into trouble.
Qualified “Private Delivery Service.” Mr. Guralnik sent in his petition by a version of Federal Express service which was not yet designated by the IRS as a qualified “private delivery service” within the meaning of Code section 7502(f) and IRS Notice 2004-83, 2004-2 C.B. 1030. The IRS subsequently updated the qualified “private delivery service” list in Notice 2015-38, 2015-21 I.R.B. 984, which was effective May 6, 2015.
He sent his petition on Friday the 13th (not the best day to mail a petition). The 14th and the 15th was Saturday and Sunday and Monday the 15th was Washington’s birthday a legal holiday. If the petition was delivered on Tuesday the 16th—it would have been timely under Section 7503 of the Code which provides your filing is timely if the last day falls on a Saturday, Sunday or Legal Holiday.
Snow Storm Octavia. The problem was the Tax Court was closed on the 16th because of Snow Storm Octavia—the petition could not be delivered. IRS—jealously guarding the jurisdiction of the Court—because it limits the IRS unbridled authority to do what it wants—said too bad—you are too late and have no remedy in the Tax Court.
If the Court is Closed . . . The Tax Court does not maintain an after-hours “drop-box” and therefore does not accept papers when the Court is not open for business. Further, the Court does not presently allow petitions to be filed electronically.
The Special Trial Judge held that because the Tax Court rules do not expressly address the situation of when the Court is closed for “snow days,” the Court should look to the Federal Rules of Civil and Appellate Procedure which do address court closings and provide that if the court is closed—the next open day filing will be considered timely. Accordingly, the Special Trial Judge concluded that Mr. Guralnik’s petition was timely filed in accordance with Code section 7503.
While I understand the IRS argument—that a “snow day” is not a legal holiday and Section 7503 does not make the petition timely for jurisdictional purposes, the Tax Court’s own rules—recognizing that not every circumstance is covered by their rules– suggests it look to guidance from the Federal Rules of Civil Procedure in situations like this. Thus, while a snow day may not be a “legal holiday,” the petition was timely because the Tax Court was closed the following day by Octavia.
As noted above the debate may not be over—the Commissioner does not want to give up jurisdiction where it does not have to. But the real moral to the story is (1) mail your petition to the Tax Court by certified mail and (2) mail them early—don’t wait for the last minute.
STEVEN TOSCHER – For more information please contact Steven Toscher – email@example.com Mr. Toscher is a principal at Hochman, Salkin, Rettig, Toscher & Perez, P.C., specializing in civil and criminal tax litigation. Mr. Toscher is a Certified Tax Specialist in Taxation, the State Bar of California Board of Legal Specialization and represents clients throughout the United States and elsewhere involving federal and state, civil and criminal tax controversies and tax litigation. Additional information is available at www.taxlitigator.com