On April 21, 2022, a small North Dakota law firm won a significant and unanimous Supreme Court victory against the IRS when the Court held that the 30-day filing deadline to petition the Tax Court for review of a Collection Due Process (CDP) determination is nonjurisdictional and is instead subject to equitable tolling. The Boechler v. Commissioner ruling obliterates the long-standing interpretation that Internal Revenue Code (IRC) §6330(d)(1)’s 30-day deadline to petition for review is a limitation on the Tax Court’s jurisdiction to hear only those petitions filed within that 30-day period.¹ Instead, the ruling clarifies that the Tax Court can toll the 30-day period for equitable reasons. Now, all taxpayers, including low-income and pro-se taxpayers, will have the opportunity to offer the Tax Court an explanation for a late petition for review of a CDP determination, and, if persuasive, the Tax Court may toll the 30-day period in equity.
The facts of Boechler v. Commissioner are straightforward. In 2015, the IRS notified Boechler, a small law firm in North Dakota, of a “discrepancy” in its tax filings. After no response from Boechler, the IRS assessed an “intentional disregard” penalty and issued notice of its intent to levy (or, seize and sell) Boechler’s property in order to satisfy the penalty. The IRS’s Independent Office of Appeals upheld the levy, and 31 days later Boechler petitioned for review by the Tax Court. The Tax Court dismissed the petition, holding that IRC §6330(d) required it to be filed within 30 days. The Eighth Circuit affirmed, opining that the filing deadline is jurisdictional and may not be equitably tolled.
In reaching its decision, the Court emphasized the importance of the distinction between jurisdictional and nonjurisdictional requirements. The Court explained that while nonjurisdictional requirements “promote the orderly progress of litigation” without restraining a court’s powers, “[j]urisdictional requirements cannot be waived or forfeited, must be raised by courts sua sponte, and, as relevant to this case, do not allow for equitable exceptions.”² With that distinction in mind, the Court stated that “we treat a procedural requirement as jurisdictional only if Congress ‘clearly states’ that it is.”³
The Court proceeded to review whether or not this high standard for Congress had been met in the Boechler case. In other words, the Court considered whether Congress had “clearly stated” that the IRC §6330(d)(1) 30-day deadline to petition for review of a CDP determination is jurisdictional. Accordingly, the Court parsed the relatively short, one-sentence code section at issue:
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).⁴
As the Court noted, the parenthetical contains the only jurisdictional language in the sentence, and all parties agreed that it grants the Tax Court jurisdiction over petitions for review of CDP determinations. However, the Court was unpersuaded by the IRS that the Tax Court’s jurisdiction is limited to review of only those petitions filed within the 30-day deadline. Rather, the Court determined that the meaning of “such matter” in the parenthetical lacks a clear antecedent—meaning it is unclear as to whether “such matter” refers to only the immediately preceding phrase pertaining to the petition itself, or if it refers to the entire first clause of the sentence implicating the 30-day deadline as well. Ultimately, the Court could not find the necessary clarity to support the notion that Congress had “clearly stated” that the IRC §6330(d)(1) 30-day deadline to petition for review of a CDP determination is jurisdictional.
The Court was careful to point out that “the nonjurisdictional nature of the filing dead-line does not help Boechler unless the deadline can be equitably tolled.”⁵ While the Court was satisfied that it saw nothing to rebut the presumption in this case that the nonjurisdictional limitations periods are subject to equitable tolling, the Court maintained that it was not opining that the facts of the case before it entitled Boechler to equitable tolling. Instead, the Court remanded the matter for further proceedings to make that determination.
This decision removes the 30-day deadline at issue here from the “jurisdictional” category (preventing a court from even hearing the matter) and places it among other rules which are directed at the taxpayer rather than the court. As a nonjurisdictional limitation period, the equitable tolling presumption arises, and the Tax Court may be persuaded to review even those late-filed petitions.
This ruling is undeniably significant for taxpayers as it better aligns the Tax Court with other courts of the United States in that the Tax Court is expected to operate more like those other courts in allowing for equitable tolling and other measures to ensure that taxpayers can have their day in court. However, even though Boechler indicates that it is possible to reach the Tax Court despite missing the 30-day deadline, it is always better to avoid the issue entirely by having tax professionals who are experienced with the entire CDP process and able to ensure timely filing of any necessary petition for review.