Some Filing Deadlines are Strict, Others are Not

When it comes to fixing tax problems, procedural footfaults can make solving the problem even more difficult. Filing deadlines are an example. The Duggan v. Commissioner, No. 15-73819 (9th Cir. 2018), case provides an example.

Facts & Procedural History

In Duggan, the taxpayer was contesting the IRS’s decision to proceed with collections. He requested a collection due process hearing with the IRS Office of Appeals. The IRS issued a determination letter, saying that the taxpayer could file a petition in U.S. Tax Court to challenge the IRS’s decision. The petition had to be filed within 30 days. The taxpayer filed a petition with the tax court, but it counted the first day as 0 and thereby filed the petition on the 31st day–one day late. The U.S. Tax Court concluded that the petition was filed late. The appeals court affirmed.

Not the Typical Timely Filing Case

The dispute in this case is different than the typical timely mailing case. The timely mailing rule in Sec. 7502 provides an exception if the petition is filed timely, but received by the court late. The court cases involving the tiemly mailing rule often turn on whether the taxpayer can provide proof that the document was timely filed (we addressed the timely mailing rule here).

This case didn’t involve the timely-filing rule, but the rule is relevant in showing that there is leeway as to when the court actually receives the petition. The court cannot act on the petition until it is received.

Not a Case Involving an Exception to Timely Filing

It should be noted that there are a number of exceptions to timely filing when it comes to tax matters.

For example, the U.S. Tax Court’s E-File rules allow filing by 6 PM EST the day after the due date. E-Filing is required for most tax court filings, but it is not available for petitions. Also, taxpayers are given ten extra days (from the date of rejection) for filing tax returns if the original tax return was eFiled and rejected by the IRS.

Again, these rules were not at issue in this case. They just show other examples of when filing deadlines are not absolute.

Filing a Tax Court Petition is Jurisdictional

Why are these exceptions acceptable when the deadline in the current case is not?

The timely mailing rule is in the Code; it is part of our tax laws.

The other rules cited above are not jurisdictional, menaing, they do not impact the U.S. Tax Court’s ability to hear the case. This is a feature of the U.S. Tax Court as a court of limited jurisdiction. As a court of limited jurisdiction, the court is only aurhotirzed to hear certain matters as defined in the Code. Sec. 6330 grants the U.S. Tax Court the ability to hear appeals from collection due process hearings. The appeals court considered Sec. 6330, which provides the U.S. Tax Court with jurisdiction to hear appeals from collection due process hearings, concluding that timely filing under Sec. 6330 is jurisdictional.

This rule may be particularly harsh if the taxpayer is challenging the amount of the underlying tax liability in the collection due process hearing. The U.S. Tax Court will consider these challenges if the taxpayer has not had a prior opportunity to dispute the tax liability. This late filing could foreclose on the ability to challenge the tax liablity absent paying the tax and suing the government for a refund.