Procedural Actions Following The Supreme Court Remand In Boechler

• Published date: 14 July 2022
• Subject Matter: Litigation, Mediation & Arbitration, Tax, Trials & Appeals & Compensation, Tax Authorities
• Law Firm: Miller, Canfield, Paddock and Stone P.L.C.
• Author: Loren M. Opper, Christie R. Galinski and Samuel L. Parks

Key Takeaways:

• In Boechler P.C., v. Commissioner¹ ("Boechler"), the Supreme Court held that the thirty-day period to petition the Tax Court for review of an adverse determination by the IRS Appeals Office in a collection due process hearing could be equitably tolled but not if it should be equitably tolled.
• It is likely that the Tax Court will toll the filing period if the taxpayer shows that it pursued its rights diligently and that extraordinary circumstances prevented it from filing timely.
• Now pending in Tax Court is Hallmark Research Cooperative v. Commissioner,² which will consider if Boechler applies to the ninety-day Tax Court filing period to contest a notice of deficiency.

Supreme Court Decision: In Boechler, the taxpayer petitioned the Tax Court for review of an adverse determination by the IRS Appeals Office in a collection due process hearing. The petition was filed one day after the thirty-day filing period expired. At risk for the taxpayer was the seizure of its property to collect payment of an intentional disregard penalty. The Supreme Court held that the filing period could be equitably tolled and remanded the case to determine if the filing period should be equitably tolled.

Holding Below: In the Eighth Circuit, the taxpayer argued that the thirty-day period for filing a petition to the Tax Court from an adverse IRS determination in a collection due process hearing should be equitably tolled.³ Treasury Regulations⁴ commence the thirty-day filing period from the day after the date of the IRS determination letter rather than from the date of the taxpayer's receipt of the determination letter. The IRS mailed the determination letter to the taxpayer. The taxpayer asked that the thirty-day period be tolled for the three days that it took the mail to reach it, arguing that it was inequitable to commence the filing period from the date of the determination letter because other taxpayers closer geographically to the mailing location are a preferred class and that counting from the day of mailing is arbitrary and capricious. The Eighth Circuit rejected the taxpayer's argument, finding that the statutory thirty-day filing period is jurisdictional, meaning that the Tax Court did not have jurisdiction to hear a late-filed case.⁵

Overruling the Eighth Circuit, the Supreme Court decided only that in proper circumstances the thirty-day filing period could be equitably tolled.

Circumstances Justifying Equitable Tolling: While the Supreme Court did...