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1159In legislation, much more than in comedy, timing will be essential.  In comedy you simply lose amusing.  In legislation, you lose a case.  In Roy A. Nutt and Bonnie W. Nutt v. Commissioner, 160 T.C. No. 10 (Might 2, 2023) (Decide Buch), we be taught why a petition seemingly submitted on time can be rejected as late.  There, the Nutts electronically submitted their Petition to the Tax Court docket on the final day they might file.  Now everyone knows you actually do not need to ever do this.  However generally it simply occurs.  And the final day to file is simply as well timed as the primary day to file.  The Nutts submitted their Petition at 11:05 p.m.  So that they appeared to be on time.

The issue was that they have been submitting from Alabama (Central Time) and the Tax Court docket’s Clerk’s workplace is in Washington D.C. (Japanese Time).  Thus, regardless that they submitted on time, Decide Buch holds that their Petition was filed late, as a result of 11:05 p.m. in Alabama was 5 minutes after midnight in Washington D.C.  Thus, sticking to its more and more archaic view that the timing guidelines for submitting a Petition are jurisdictional, the Tax Court docket dismissed the Petition.

Word that is one other precedential opinion issued in a case with unrepresented taxpayers.  Right here, the IRS moved to dismiss and briefed the difficulty, however there was no responding temporary to counter the federal government’s view.  These pro-se taxpayers most likely didn’t find out about all of the Tax Court docket precedent making use of equitable rules to rescue seemingly late-filed petitions.  I give an in depth evaluate of these circumstances in Bryan Camp, Equitable Doctrines and Jurisdictional Time Intervals, Half 2, 159 Tax Notes 1581 (June 11, 2018).

To his nice credit score, Decide Buch has, in an analogous case, requested for amicus briefs on the difficulty.  I hope the Tax Court docket there involves a distinct conclusion.  It’s at all times a balancing act: weighing the necessity for taxpayer entry to judicial evaluate with the necessity to obey statutory limits. Maybe the Tax Court docket would possibly rethink how that steadiness ought to work for electronically filed paperwork.  Nonetheless, as Professor Guide places it in this submit over at Procedurally Taxing, after this case taxpayers now have a steeper hill to climb. You will see the unhappy particulars beneath the fold, together with my modest ideas on find out how to strike a greater steadiness. 

Legislation: When Is a Petition “Filed” in Tax Court docket For SOL Functions?
When the IRS sends a taxpayer a Discover of Deficiency (NOD), §6213(a) says that “the taxpayer could file a petition with the Tax Court docket for a redetermination of the deficiency” as long as the taxpayer does so “[w]ithin 90 days, or 150 days if the discover is addressed to an individual exterior america,” after the NOD is mailed.  There’s a safe-harbor rule Congress just lately added on the very finish of the subsection.  The IRS is meant to inform taxpayers within the NOD when that deadline is.  So the final sentence in §6213(a) says {that a} petition filed “on or earlier than the final date specified for submitting…within the discover of deficiency shall be handled as well timed filed.”

The tax statutes don’t outline what it means to “file” a petition.  That query has been relegated to the Tax Court docket to reply by means of each case legislation and its Guidelines.  These sources have lengthy utilized the bodily supply rule: a doc shouldn’t be filed till it’s obtained within the correct workplace, right here the Tax Court docket Clerk’s workplace.  See Bongam v. Commissioner, 146 T.C. 52 (2016).  Below the outdated model of Tax Court docket Rule 22, petitions needed to be bodily delivered to the Tax Court docket.  The overall rule was that petitions have been filed solely when really obtained within the Tax Court docket Clerk’s workplace.

The tax statutes do, nonetheless, suggest this bodily supply rule due to the statutory safe-harbor exception for well timed mailed paperwork in §7502.  That statute gives {that a} doc bodily obtained after a deadline can be deemed well timed filed if the get together well timed mailed it.  See Lesson From The Tax Court docket: Utilizing § 7502 To Beat The Statute Of Limitations, TaxProf Weblog (Dec. 11, 2017).

Look fastidiously at §7502(a).  It’s plain wording applies to Tax Court docket petitions, no matter what the Tax Court docket places within the Tax Court docket Guidelines.  Discover that it covers any return, declare, assertion, or different doc required to be filed…inside a prescribed interval or on or earlier than a prescribed date underneath authority of any provision of the interior income legal guidelines.”  Properly, gosh, §6213 is actually a kind of inside income legal guidelines that prescribe a interval for submitting a doc, a doc we name a petition.

Look extra fastidiously at §7502(a), nonetheless.  It solely kicks in when a doc “is mailed.”  And whereas there are every kind of gnarly guidelines about that in each the statute, the laws, and the case legislation, the underside line is, as Decide Buch reminds us on this case, “the well timed mailing rule doesn’t apply to an electronically filed petition.”  Op. at 4.

Lastly, observe that §7502 is a statutory mailbox rule.  However United State courts have since without end created, expanded, and utilized a widespread legislation mailbox rule.  And the Tax Court docket has not hesitated previously to make use of that widespread legislation.  See Lesson From The Tax Court docket: The Widespread Legislation Mailbox Rule Lives!, TaxProf Weblog (Feb. 3, 2020).

The present Tax Court docket Guidelines now typically require digital submitting of Tax Court docket petitions when taxpayers are represented, however allow pro-se taxpayers to file the old style means.  Tax Court docket Rule 26.  Present Tax Court docket Rule 22(a) says that non-electronic filings have to be obtained “throughout enterprise hours” however don’t be concerned: the §7502 safe-harbor exception nonetheless applies in these conditions (once more, whether or not or not the Tax Court docket Guidelines say so).  I have no idea whether or not the Tax Court docket nonetheless has a drop-box or, if that’s the case, the way it treats petitions recovered from the drop field the next day.  I welcome any feedback from those that know.

What I do know is that Tax Court docket Rule 22(a)’s common rule now doesn’t apply to electronically filed petitions.  It says so proper in Rule 22(a) (“Apart from a paper filed electronically in accordance with digital submitting procedures established by the Court docket…”).  The rule for electronically filed petitions is present in 22(d), which says a petition “can be thought-about well timed filed whether it is electronically filed at or earlier than 11:59 p.m., japanese time, on the final day of the relevant interval.”

That’s the language at situation in right now’s case.  Does that language create a secure harbor or a tough cut-off?  That’s, it solely says {that a} petition submitted earlier than midnight east coast time is per se well timed (“can be thought-about well timed filed”).  It does not say a petition submitted after midnight east coast time is per se late.  If learn as a secure harbor, a taxpayer’s time zone might be related simply because the mailing date of a hard-copy petition is related for the mailbox rule.  If learn as a tough cut-off, nonetheless, a taxpayer’s time zone could also be irrelevant.

Right now we be taught that the Tax Court docket reads the Rule as a tough cut-off; the Rule simply extends the Clerk’s “workplace hours” for electronically filed petitions to the top of the east coast day.  The taxpayer’s time zone is irrelevant.

Let’s take a more in-depth look.

Details and Lesson: Your Final Day To File Ends at 11:59 pm East Coast Time
The IRS mailed the Nutts an NOD on Thursday, April 14, 2022.  Below the overall rule in §6213(a) that gave the Nutts till Wednesday, July fifteenth.  Nonetheless, the NOD informed the Nutts they’d till Monday, July 18, 2022 to file their petition and so §6213(a)’s final sentence made that the final day to file.

The Nutts lived in Alabama.  At 11:05 p.m. their time on July 18th, they uploaded their petition to the Tax Court docket utilizing the superior DAWSON system (Hello Lewis!).  Superior DAWSON recorded the submitting as obtained at 12:05 pm on July nineteenth.  The IRS moved to dismiss.

Decide Buch held that as a result of the petition was obtained by Superior Dawson at 12:05 on July nineteenth East Coast time, the Tax Court docket lacked jurisdiction to listen to the deserves of the case (if any).

Decide Buch says Rule 122 is a tough cut-off.  He causes by analogy to Rule 6(a)(4) of the Federal Guidelines of Civil Process (FRCP).  That provision defines the time period “final day” as it’s used within the FRCP.  It says that that “final day ends: (A) for digital submitting, at midnight within the courtroom’s time zone; and (B) for submitting by different means, when the clerk’s workplace is scheduled to shut.”

Decide Buch notes that federal courts have learn that language within the FRCP as a tough cut-off, citing primarily to Justice v. City of Cicero, 682 F.3d 662 (seventh Cir. 2012).  There, a celebration who had twice filed go well with and twice misplaced on the deserves had filed a movement for the trial courtroom to rethink.  He submitted his movement at 4 a.m. on the day after the deadline.  It doesn’t seem he lived in a distinct time zone.  Nonetheless, the district courtroom choose allowed the submitting after which dominated in opposition to him on the deserves for but a 3rd time.  On enchantment Decide Easterbrook stated the trial choose didn’t have the ability to increase the submitting deadline as a result of FRCP 6(a)(4) was a tough cut-off.  Easterbrook writes: “Digital submitting programs do prolong the variety of hours out there for submitting. As a substitute of getting till the clerk’s workplace closes, litigants have till 11:59 PM. However e-filing doesn’t enhance the variety of days out there for submitting.” Id. at 664.  [FWIW, I note that this guy had multiple bites at judicial review.  Notice that the Nutts, and almost every other taxpayer seeking Tax Court review, are just trying for their first bite.]

Decide Buch takes Easterbrook’s concept and runs with it, writing: “The digital submitting system stands within the Clerk’s place; it follows that if the “final day” has ended the place the Clerk’s workplace is standing, the final day for digital submitting has ended as nicely.” Op. at 5.  Thus, “The Nutts’ Petition was premature as a result of it was filed in Washington, D.C., after the final day for submitting prescribed by part 6213(a). The interval inside which to file a petition can’t be prolonged by the Court docket….” Id.

This isn’t the primary time the Tax Court docket has taken this place.  Professor Keith Fogg has a superb submit about what he calls East Coast Bias over at Procedurally Taxing.  Nonetheless, that is the primary precedential opinion the Court docket has issued, though I observe this isn’t a reviewed opinion.

Remark: It Doesn’t Have To Be This Manner: Discovering the Proper Stability
Decide Buch didn’t take pleasure in a presentation from the taxpayers and so didn’t clarify his choice in any extra element.  Notably complicated to me is his reliance on an FRCP to outline a time period within the Tax Court docket guidelines.  The FRCP doesn’t management Tax Court docket process and federal courts are merely not the identical sort of courtroom because the Tax Court docket.  Additionally complicated to me is the circularity of his assertion that as a result of the digital submitting system “stands within the Clerk’s place; it follows that if the “final day” has ended the place the Clerk’s workplace is standing, the final day for digital submitting has ended as nicely.  That sentence assumes its conclusion.  Superior Dawson doesn’t “stand” anyplace.  It’s simply electrons.  It doesn’t sleep.  It by no means goes residence.  It has no residence, no bodily presence.  Is Decide Buch critically suggesting that the final day ends where-ever the bodily machines that run the Superior Dawson software program are situated?  They would possibly be within the Tax Court docket’s buildings.  However they could even be in Romania or the Individuals’s Republic of California.  Who is aware of the place Superior Dawson actually “stands”?

It’s not that Decide Buch’s studying is flawed; it’s simply that the studying shouldn’t be foreordained or constrained by the textual content of Rule 22.

Let’s see what another studying of Rule 22 would possibly appear like.  The choice studying would learn the rule as a Secure Harbor.

Rule 22 provides the rule for when an digital doc can be thought-about “filed” on the final day.  It says {that a} doc is obtained by 12:59 a.m. East Coast time on the final day can be deemed to have been filed that day.  Thus, for instance, if a taxpayer residing in Halifax (1 hour forward) or Bermuda (1 hour forward) is dealing with a June 1st deadline and submits their petition at 12:30 a.m. on June 2nd their time, Rule 22 will deem the doc to have been filed June 1st as a result of Superior Dawson will put a canopy sheet on it that reads 11:30 p.m, June 1st. That is studying Rule 22 as a safe-harbor rule.

So learn, the rule merely wouldn’t apply to a taxpayer who submits a petition on the final day in their time zone.  Say you had the identical taxpayer with the identical June 1st deadline however the taxpayer lives in California and submits their petition at 10:00 p.m. on their final day.  Right here Tax Court docket Rule 22 merely wouldn’t be wanted as a result of for these taxpayers, their “final day” has not ended.  The important thing transfer is figuring out when the ninetieth day (the related “final day”) has ended after which asking whether or not the taxpayer has acted to file their petition earlier than that day ends.

Learn as a secure harbor, Rule 22 would broaden the “final day” for taxpayers residing east of the Washington D.C. time zone however wouldn’t shorten the “final day” for taxpayers residing west.

So which is the higher studying?  Properly, the Tax Court docket has historically approached decoding its jurisdictional statutes by fastidiously balancing the necessity for taxpayers—particularly the big variety of unrepresented taxpayers—to have entry to Judicial evaluate and the necessity for the Court docket to obey the constrains imposed by Congress. As Decide Lauber defined in Bongam, supra, “this Court docket and the Courts of Appeals have given our jurisdictional provisions a broad, sensible development fairly than a slim, technical one. When a statutory provision is able to two interpretations, we’re inclined to undertake a development which can allow us to retain jurisdiction with out doing violence to the statutory language.” 146 T.C. at 55 (citations and inside quotes omitted).

Right here, the statutory constraint imposed by Congress is §6213’s rule {that a} Petition have to be filed on or earlier than the ninetieth day after the later of the NOD’s mailing date or the date given within the NOD itself.

Nothing within the statute says how the Tax Court docket is to find out when that ninetieth day ends.

So it’s actually as much as the Tax Court docket to determine find out how to depend the related intervals.  That features deciding when the related interval begins and when it ends.  The Tax Court docket has repeatedly asserted its energy to just do that as I clarify in  Equitable Doctrines and Jurisdictional Time Intervals, Half 2.  There, I present how the Tax Court docket makes use of fairness when potential to resolve what date to begin the 90 day interval.  For instance, it often makes use of the postmark date on an NOD, but it surely generally makes use of the date showing on the NOD, and generally makes use of the date the taxpayer really receives the NOD even when later than each the primary two dates.

The Tax Court docket’s constant reasoning in all these circumstances is to stick to the statute but in addition “to keep away from irritating the statutory provisions designed to afford taxpayers a possibility to prepayment evaluate of the Commissioner’s deficiency dedication.”  Lundy v. Commissioner T.C. Memo 1997-14-172.

I believe the Court docket may nicely take the identical strategy for figuring out the top date of the 90 day interval.  Since (1) there is no such thing as a statutory definition of “final day,” and (2) FRCP 6(a)(4) is NOT a Tax Court docket rule, and (3) the Court docket has the ability to create a standard legislation counting rule (aka mailbox rule), the Court docket may nicely take the identical strategy right here because it did in Guralnik v. Commissioner, 146 T.C. 230 (2016) the place it determined to not depend as “final day” a day the place the Tax Court docket Clerk’s workplace was inaccessible.  That concept is now present in Tax Court docket Rule 25(a)(2) however in 2016 the Court docket needed to simply … nicely … make it up!  In explaining it’s holding the Court docket there emphasised that “such guidelines of process do nothing greater than present the courtroom and the events with a method of figuring out the start and finish of a statute of limitations prescribed elsewhere within the legislation.” Id. at ___.  Sure, there are completely different concerns in decoding Tax Court docket Rule 22 however there ought to nonetheless be a balancing.  IMHO studying Tax Court docket Rule 22 as a secure harbor will increase equity with little or no, if any, lack of administrability.

Backside Line: It is best to at all times act in loads of time and by no means let a deadline chew you within the behind; however if you’re within the unlucky place the place hours depend, Rule 22(d) tells you that the ONLY hours that depend are the East Coast hours in Washington D.C.  That is our lesson for right now.

[Editor’s Note:  If you would like to receive a daily email with links to each Lesson From The Tax Court and other tax posts on TaxProf Blog, email here.]

https://taxprof.typepad.com/taxprof_blog/2023/05/lesson-from-the-tax-court-on-time-is-late.html



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