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January 16, 2007

U.S. Tax Court Petition Date is Absolute

Tax Litigation

Houston Tax Attorney

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Some dates are absolute. You miss them, you are out of luck. The deadline for filing a petition with the U.S. Tax Court is one of these dates. Today’s Austin v. Commissioner, T.C. Memo. 2007-11, case provides an example.

Facts & Procedural History

Austin failed to timely file federal tax returns. The IRS imposed failure to file and failure to pay penalties. The IRS mailed Austin a notice of deficiency (also known as a 90-day letter), which required Austin to file a tax court petition by May 7, 2006 – which was a Sunday.

The tax court received the tax court petition on May 10th, the handwritten FedEx label was marked May 8th, and the computer generated FedEx label was marked May 9th. The FedEx tracking information showed that the package was picked up on May 9, 2006 at 5:22 p.m. It was two days late.

The IRS Attorney’s Response

The IRS attorney responded by filing a Motion To Dismiss for Lack of Jurisdiction. The basis was that the petition was not filed with the court within the 90-day time frame prescribed by statute.

The taxpayer objected to the IRS motion, stating that:

[O]n May 4, 2006, she flew to Baltimore, Maryland, to attend a trade show; that she stayed at the Days Inn while in Baltimore; that she signed the petition on Sunday, May 7, 2006; that she completed the customer handwritten label at about 8 a.m. on Monday, May 8, 2006, and affixed it to the FedEx envelope; that she placed the petition in the FedEx envelope, which she then handed to the front desk clerk of the Days Inn with the understanding that the envelope would be picked up later that day by FedEx; that the front desk clerk placed the envelope in the hotel’s “pickup box”; and that, upon returning to the hotel after the trade show later that day, she inquired about the envelope and was told by a front desk clerk that the “pickup box” was empty. In sum, petitioner asserts that “There was no reason for me to think that my FEDEX package had not been picked up on the 8th.”

As required by law, the tax court dismissed the taxpayers tax court case. This denied the taxpayer the ability to have her day in court.

Why is this Date Absolute?

The U.S. Tax Court is a court of limited jurisdiction. This issue is set out in a statute.

Section 6213(a) provides that the taxpayer’s petition must be filed with the Court “[w]ithin 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).”

A petition that is timely mailed is treated as timely filed, if it is sent via United States mail, or a designated private delivery service. Sec. 7502(a), (f). This is known as the mail box rule.

There is also a rule that extends the due date if the IRS was not open. This exception can be found in Guralnik v. Commissioner, 146 T.C. 230
(2016).

None of these exceptions applied in this case. Thus, the IRS prevailed due to the taxpayer missing a filing deadline by two days.

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