Posted by: Robert Horwitz | March 6, 2018

Ninth Circuit Holds Time Limit for Filing Challenge to Collection Due Process Determination Is Jurisdictional; Does that Mean Time Limit for Seeking Redetermination of a Deficiency Is Not? by Robert S. Horwitz

In recent years, the United States Supreme Court has wrestled with the issue of whether time limits for bringing administrative and judicial actions against the Federal Government jurisdictional. In Sebelius v Auburn Regional Medical Center, 568 U.S. __, Justice Ginsburg, writing for the majority, stated:

Characterizing a rule as jurisdictional renders it unique in our adversarial system. Objections to a tribunal’s jurisdiction can be raised at any time, even by a party that once conceded the tribunal’s subject-matter jurisdiction over the controversy. Tardy jurisdictional objections can therefore result in a waste of adjudicatory resources and can disturbingly disarm litigants. See Henderson v. Shinseki, 562 U. S. ___, ___ (2011) (slip op., at 5); Arbaugh v. Y & H Corp., 546 U. S. 500, 514 (2006). With these untoward consequences in mind, “we have tried in recent cases to bring some discipline to the use” of the term “jurisdiction.” Henderson, 562 U. S., at ___ (slip op., at 5); see also Steel Co. v. Citizens for Better Environment523 U. S. 83, 90 (1998) (jurisdiction has been a “word of many, too many, meanings” (internal quotation marks omitted).

In Duggan v Commissioner, No. 15-73819 (9th Cir. Jan. 12, 2018), the taxpayer received two CDP determination notices, both dated January 7, 2015. The notices stated that the taxpayer could “file a petition with the United States Tax Court within a 30-day period beginning the date after the date of this letter.”  Interpreting this as meaning that the 30-day period began to run on January 8, 2015, the taxpayer filed his petition on February 7, 2015.  The Tax Court dismissed on the ground that the petition was untimely.

The Ninth Circuit affirmed. The question before it was whether the thirty-day time limit contained in 26 U.S.C. sec. 6330(d)(1) is jurisdictional. If it is, there can be no waiver or equitable tolling and the failure to comply deprives the Tax Court of jurisdiction.

Because of the severity attached to making a filing deadline jurisdictional, the Ninth Circuit noted that the Supreme Court has emphasized that the statute must clearly state that the time limit is jurisdictional. No special words are required.  If, under traditional rules of statutory construction it is clear that Congress “imbued a procedural bar with jurisdictional consequences” then the time limit is jurisdictional.   Additionally, stare decisis may “counsel against overturning a well-settled law interpreting a deadline as jurisdictional, especially where Congress has acquiesced in the interpretation.”  Section 6330(d)(1) provides:

(1) Petition for review by Tax Court — The 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).

After discussing a Second Circuit case holding that similar language in the innocent spouse statute made timely filing jurisdictional, the Ninth Circuit held that since sec. 6330(d)(1) “expressly contemplates” the filing deadline “in the same breath as the grant of jurisdiction” it makes timely filing a condition of jurisdiction. Therefore the taxpayer’s petition was one day late and the Tax Court lacked jurisdiction to consider the case.

The reason why this blog has the heading it does is the language of sec. 6213, which allows a taxpayer to petition the Tax Court for redetermination of the deficiency. It states:

  1. Time for filing petition and restriction on assessment — Within 90 days, or 150 days if the notice is addressed to a person outside the United States, after the notice of deficiency authorized in section 6212 is mailed (not counting Saturday, Sunday, or a legal holiday in the District of Columbia as the last day), the taxpayer may file a petition with the Tax Court for a redetermination of the deficiency. Except as otherwise provided in section 6851, 6852, or 6861 no assessment of a deficiency in respect of any tax imposed by subtitle A, or B, chapter 41, 42, 43, or 44 and no levy or proceeding in court for its collection shall be made, begun, or prosecuted until such notice has been mailed to the taxpayer, nor until the expiration of such 90-day or 150-day period, as the case may be, nor, if a petition has been filed with the Tax Court, until the decision of the Tax Court has become final. Notwithstanding the provisions of section 7421(a), the making of such assessment or the beginning of such proceeding or levy during the time such prohibition is in force may be enjoined by a proceeding in the proper court, including the Tax Court, and a refund may be ordered by such court of any amount collected within the period during which the Secretary is prohibited from collecting by levy or through a proceeding in court under the provisions of this subsection. The Tax Court shall have no jurisdiction to enjoin any action or proceeding or order any refund under this subsection unless a timely petition for a redetermination of the deficiency has been filed and then only in respect of the deficiency that is the subject of such petition. Any petition filed with the Tax Court on or before the last date specified for filing such petition by the Secretary in the notice of deficiency shall be treated as timely filed.

Note that the only mention of Tax Court jurisdiction in this statute relates to an action to enjoin assessment or collection where a timely petition is filed. There is nothing in the statute that makes the ninety-day period jurisdictional.   Section 6214 gives the Tax Court jurisdiction to redetermine tax, but there is nothing in that section conditioning the grant of jurisdiction on the filing of a timely petition.  Thus the question:  is the 90-day period for petitioning the Tax Court in a deficiency case jurisdictional?  A court may look to stare decisis to answer that the 90-day period is jurisdictional, but the outcome is not certain.

ROBERT S. HORWITZ – For more information please contact Robert S. Horwitz – horwitz@taxlitigator.com or 310.281.3200   Mr. Horwitz is a principal at Hochman, Salkin, Rettig, Toscher & Perez, P.C., a former Department of Justice Trial Attorney and former Assistant United States Attorney in the Tax Division of the U.S. Attorney Office in Los Angeles. He represents clients throughout the United States and elsewhere involving federal and state administrative civil tax disputes and tax litigation as well as defending clients in criminal tax investigations and prosecutions. Additional information is available at http://www.taxlitigator.com


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