Tax Court in Reviewed Opinion Holds TEFRA Litigation Time Limits Jurisdictional (10/25/25)

I am late to post on North Wall Holdings, LLC v. Commissioner, 165 T.C. ___, No. 9 (10/21/25) (reviewed opinion, T.C. Case No. 27773-21, here, at # 50 and  GS here). North Wall is the latest on the tax saga starting with Boechler, P.C. v. Commissioner, 596 U.S. 199 (2022), holding that the time limit for instituting CDP Tax Court proceedings is not jurisdictional, meaning that equitable tolling for late filing may apply. In recent Supreme Court jurisprudence, many time limits have been held to be not jurisdictional. The key tax exception is United States v. Brockamp, 519 U.S. 347 (1997), holding that the refund time limits are jurisdictional.

Notwithstanding the general trend, the Tax Court has held § 6213(a)'s time limits for petitions for redeterminations of deficiencies are jurisdictional. Hallmark Research Collective v. Commissioner, 159 T.C. 126 (2022) (unanimous reviewed opinion). Three Courts of Appeals have now held the § 6213(a) time limits are not jurisdictional, thus permitting equitable tolling. See 6th Circuit Joins 2nd and 3rd Circuits in Holding § 6213(a)’s 90--day Petition-Filing Deadline is Not Jurisdictional (8/25/25; 9/8/25), here.

In North Wall, the opinion for the Court finds the TEFRA time limits jurisdictional. The opinion’s detailed discussion of the TEFRA interrelated time frames is quite excellent. I highly recommend. For purposes of this blog entry, the headnotes are sufficient:

          R mailed a Notice of Final Partnership Administrative Adjustment (FPAA) to the tax matters partner (TMP) of PS, a limited liability company treated as a partnership for federal income tax purposes and subject to the TEFRA unified audit and litigation procedures. P, a notice partner, filed a Petition for readjustment of partnership items 168 days after R mailed the FPAA to the TMP. R moved to dismiss P’s Petition for lack of jurisdiction. P objects.

          A TMP may file a petition for readjustment within 90 days of R’s mailing of an FPAA to the TMP. I.R.C. § 6226(a). A partner or group of partners entitled to notice may file a petition within 60 days after the close of the 90- day TMP petition period. I.R.C. § 6226(b)(1); see also I.R.C. § 6231(a)(8) (defining “notice partner”), (11) (defining “5-percent group”).

          The text, context, and relevant historical treatment of the TEFRA petition period establish that the period within which to file a petition is a jurisdictional limit. The text places the petition period within the jurisdictional grant. I.R.C. § 6226(b)(1), (f). In the context of the broader TEFRA provisions, allowing equitable tolling would render [*2] the TEFRA statutory scheme unworkable. Historically, courts have treated the TEFRA petition deadlines as jurisdictional, and Congress has amended TEFRA to specifically account for the effect of the petition deadlines’ being jurisdictional.

          Even setting aside the jurisdictional question, the complex TEFRA statutory scheme indicates that Congress did not intend for the equitable tolling doctrine to apply to untimely TEFRA petitions.

          Held: P’s Petition was untimely.

          Held, further, equitable tolling does not apply to hold open the prescribed periods set forth in I.R.C. § 6226(a) or (b) for filing a TEFRA petition.

6th Circuit Joins 2nd and 3rd Circuits in Holding § 6213(a)’s 90--day Petition-Filing Deadline is Not Jurisdictional (8/25/25; 11/28/25)

In Oquendo v. Commissioner, ___ F.4th ___ (6th Cir. 8/25/25) (CA6 here, TN here, and GS here), the panel held unanimously that § 6213(a)’s 90-day petition-filing deadline was not jurisdictional and is thus subject to equitable tolling; so finding the panel remanded to the Tax Court to consider Oquendo’s entitlement to equitable tolling. The holding is consistent with prior decisions by the Second Circuit and the Third Circuit. Buller v. Commissioner, ___ F.4th ___ (2d Cir. 8/13/25); and Culp v. Commissioner,  75 F.4th 196 (3rd Cir. 2023), cert. den. ___ U.S. ___, ___ S.Ct. ___, 2024 U.S. LEXIS 2725 (2024). See Second Circuit Allows Possible Equitable Tolling for 90-day Petition for Redetermination of Deficiency (Federal Tax Procedure Blog 8/14/25), here (discussing Buller and Culp). The Supreme Court denied the Commissioner’s petition for cert in Culp; as I said in the blog on Buller, I doubt that the Government would file a petition for cert with two losses and no wins in the Courts of Appeals; now there is three losses and no wins.

JAT Comments: 

1. I suspect that the issue will not go to the Supreme Court before an actual conflict develops in the Courts of Appeals and then, of course, it would be the taxpayer petitioning for cert.

2. More likely, now with three losses, I suspect that the Tax Court will reconsider its position that § 6213(a)’s 90-day petition-filing deadline is jurisdictional. There should be cases in the pipeline that will permit the Tax Court to do that expeditiously if it wants to act expeditiously.

3. Moreover, I suspect that the Tax Court may relax its sparing approach to finding a taxpayer can satisfy the requirements for equitable tolling; if the Tax Court does not, the Courts of Appeals may intervene as these cases are appealed. On the Tax Court’s sparing approach to finding equitable tolling, see the blog cited above, quoting from the Federal Tax Procedure Book Editions.

4. (Added 9/8/25 @ 2:15pm): I note to readers an excellent article on the Buller and Oquendo appellate decisions. Robert S. Horwitz, With Strikes in the Third and Now the Second and Sixth Circuits, Will the Commissioner Admit He Is Out on the Claim that the 90-Day Deadline for Filing a Tax Court Petition Is Jurisdictional? (Tax Litigator 9/8/25), here. (Note that there are references to §6713(a) that should be to §6713(a), but readers can quickly adjust to that and read the excellent article.)

5. (Added 11/28/25 2:00pm.) On 11/26/25, the Second Circuit denied the Commissioner's petition for rehearing and issued an amended opinion. The Tax Notes version of the amended opinion is here; the denial of the petition for rehearing is here. For those interested in a Word compare document red-lining the changes, see here. The changes are not material. Nothing has happened after Buller that makes the comments above need changing. I will update the F.4th citation when it comes out.

Second Circuit Allows Possible Equitable Tolling for 90-day Petition for Redetermination of Deficiency (8/14/25; 11/28/25)

Tax procedure enthusiasts already know that, starting with Boechler P.C. v. Commissioner, 596 U. S. 199 (2022), courts have steadily eroded time limits for procedural relief in tax matters as jurisdictional, a category that required compliance without equitable relief (tolling) for late filing, and moved them to the category of nonjurisdictional, claims processing rules, which allow for equitable relief (tolling). Even as that process of erosion continued to involve other time requirements, the Tax Court held fast to its historic view that petitions for redeterminations of deficiencies in § 6213(a) were jurisdictional, thus not permitting equitable relief for out-of-time filing of the petitions. Hallmark Research Collective v. Commissioner, 159 T.C. 126 (2022) (unanimous reviewed opinion); See Tax Court Holds that § 6213(a) Time Deadline for Petitions for Redetermination Is Jurisdictional, Thus Not Subject to Equitable Relief (Federal Tax Procedure Blog 12/13/22), here.

Yesterday, in Buller v. Commissioner, ___ F.4th ___ (2d Cir. 8/13/25), CA2 here and TN here, the Court held that the § 6213(a) petition 90-day period is not jurisdictional and therefore is subject to equitable tolling. The Court remanded to the Tax Court to determine whether the requirements for equitable tolling were met. In Culp v. Commissioner,  75 F.4th 196 (3rd Cir. 2023), cert. den. ___ U.S. ___, ___ S.Ct. ___, 2024 U.S. LEXIS 2725 (2024), the Court held that the § 6213(a) time period is not jurisdictional and thus subject to equitable tolling. The Government petitioned for writ of certiorari but the Supreme Court denied the petition. See Government Files Petition for Cert on Issue of Whether 90-day Period for Tax Court Petitions is Jurisdictional (Federal Tax Procedure Blog 3/26/24) (discussing issues presented in the petition), here.

Added 11/28/25 2:00pm. On 11/26/25, the Second Circuit denied the Commissioner's petition for rehearing and issued an amended opinion. The Tax Notes version of the amended opinion is here; the denial of the petition for rehearing is here. For those interested in a Word compare document red-lining the changes, see here. Nothing has happened after Buller that makes the comments below to change. The changes are not material. I will update the F.4th citation when it comes out.

I have no special insight into whether the Government will petition for writ of certiorari in Buller, but since there is no conflict among the Circuits, I suspect that the Court would not grant the petition. Moreover, with the Circuit breakdown is now 2-0, perhaps the Tax Court will at the next opportunity reconsider its prior holdings and get in line with the trend in the cases.

Government Files Petition for Cert on Issue of Whether 90-day Period for Tax Court Petitions is Jurisdictional (3/26/24; 6/26/24)

Update 6/26/24 1:30 pm: The Court denied the petition for certiorari on June 24, 2024. See docket entries linked below.

The Government has filed a petition for certiorari with the following requested issues (see Petition in Commissioner v. Culp (S. Ct. No. 22-1789), here (Pet. (I):

1. Whether 26 U.S.C. 6213(a) grants the Tax Court jurisdiction to review an untimely petition for redetermination of a tax deficiency?

2. Even assuming that the Tax Court has jurisdiction to review some untimely petitions for redetermination of tax deficiencies, whether that jurisdiction extends to a petition filed after the Internal Revenue Service has already assessed the previously determined deficiency, as it is required to do under 26 U.S.C. 6213(c) “[i]f the taxpayer does not file a petition with the Tax Court within the time prescribed.”

Readers of this blog (and most others paying attention to tax procedure matters) will already be familiar with the first issue, so I won’t address that issue further here except to say that the Government requests Supreme Court review because the court of appeals decision (Culp v. Commissioner, 75 F.4th 196 (2023)) is: (i) wrong; and (ii) to resolve a conflict among the Circuits.

The second issue is apparently a new or at least newly articulated as a separate issue if the Court were to hold that the 90-day period is not jurisdictional. Specifically, it articulates a point in which an open-ended inquiry for equitable relief can apply based on the statutory mandate to assess the tax if the taxpayer does not file a petition. The Government makes its argument on this as a separate issue in a footnote under the heading B. The Decision Below Creates A Clear Circuit Conflict On An Important And Recurring Question (Pet. 28 n. 3):

    n3 Because every other court to have addressed the question has held that the 90-day deadline is itself jurisdictional, no circuit conflict exists on the second question presented, see p. i, supra, concerning whether a post-deadline assessment made in compliance with Section 6213(c) independently deprives the Tax Court of deficiency jurisdiction. But because that question is itself jurisdictional, is closely related to the first question presented, and could not arise in circuits that treat the 90-day deadline as jurisdictional, it should be considered in this case along with the first question presented.

Liberty Global Court Holds that Government May Proceed by Collection Suit without a Notice of Deficiency (8/13/23)

I earlier wrote on an unresolved issue in United States v Liberty Global (D. Colo. Civil Dkt.22-cv-02622-RBJ), CL here. The issue was whether, as in this case, the Government could bring a tax collection suit without first issuing a notice of deficiency. See Further Commotion in Liberty Global Collection Suit Over Whether a Notice of Deficiency Is Required Before Collection Suit (1/16/23; 1/19/23), here.

The district court resolved the issue in United States v. Liberty Global, Inc. (D. Colo. Opinion dated June 1, 2023), CL here. The Court summarizes its holding (Slip Op.. 5-6):

          LGI’s proposition that § 6213(a) was intended to convert the administrative route to a plenary scheme for income tax collection is inconsistent with the weight of authority among courts who have addressed this issue. Moreover, the analysis required to reach that conclusion does not comport with canonical approaches to statutory interpretation, which charge courts to refrain from adopting interpretations that would displace longstanding common-law rights or disrupt established distributions of power among governmental bodies in the absence of clear language demonstrating Congress’s intent to do so. See FBI v. Fazaga, 142 S. Ct. 1051, 1060-1061 (2022). Because there is no indication that § 6213(a) was intended to supplant the existing common-law avenue for the government to recover unpaid taxes, the Court will not infer that intent here.

          Therefore, this analysis adopts the proposition that there exist two avenues for the government to collect unpaid taxes: the administrative route (assessment and collection) and the common-law route (filing suit on the debt). Defendant alleges a defect in the government’s compliance with the requirements to proceed via the administrative route. However, compliance with those requirements is irrelevant here because the government does not seek to proceed via the administrative route (and in fact was foreclosed from doing so by defendant’s own maneuvers), and because defendant has not shown that the notice requirements in the administrative process have been or should be read onto the alternative common-law process.

 JAT Notes:

Further Commotion in Liberty Global Collection Suit Over Whether a Notice of Deficiency Is Required Before Collection Suit (1/16/23; 1/19/23)

Updated 1/19/23 with Court docket entry stating that the claim Liberty Global wanted to assert should not be filed.  See Comment #2 below.

I recently wrote on the Government’s Collection Suit against Liberty Global. Government Files Collection Suit in Liberty Global Raising Procedural Issues (Federal Tax Procedure Blog 10/8/22; 10/12/22), here. In their respective positions in pre-filing letters to the court, the parties address Liberty Global’s claim that a collection suit cannot be commenced without assessment of the tax and the assessment must be preceded by a notice of deficiency which did not occur here. Liberty Global’s letter of 12/20/22 at Docket Entry 15 is here; the Government’s response letter of 1/11/23 at Docket Entry 19 is here. (I noted in paragraph 9 of my initial blog that the complaint did not allege assessment of the tax liability.)  The docket entries in the case are here.

The letters are short and recommended reading. The gravamen of the competing claims are

• Liberty Global’s Claim. Timely notice of deficiency and assessment are required to precede a collection suit, citing § 6213(a), here (“no levy or proceeding in court for its collection shall be made, begun, or prosecuted until such notice has been mailed to the taxpayer”).
• The Government’s Claim. The Government claims that neither notice of deficiency nor assessment is required before filing a tax collection suit within the assessment period, citing § 6501(a), here (“no proceeding in court without assessment for the collection of such tax shall be begun after the expiration of such [three-year] period”)

Basically, on the face of the claims, § 6213(a) and § 6501(a) seem to conflict. Which is it?

We’ll see.

JAT Comments:

Tax Court Holds that § 6213(a) Time Deadline for Petitions for Redetermination Is Jurisdictional, Thus Not Subject to Equitable Relief (12/13/22)

I have not yet written on Hallmark Research Collective v. Commissioner, 159 T.C. 126 (2022)  (unanimous reviewed opinion), TCPamphlet here & GS here.

The holding is that the § 6213(a) 90-day / 150-day period for petitions to redetermine deficiencies is jurisdictional, meaning that there is no equitable relief to file out-of-time petitions. I won’t analyze the holding because the opinion speaks for itself and makes, perhaps, the best case for the holding. (That is not a statement that it is a correct holding.) The issue was whether § 6213(a) was subject to the recent trend to treat time statutory time deadlines as claims processing rules rather than jurisdictional requirements (meaning must be met). The most relevant and recent iteration is Boechler, P.C. v. Commissioner, 142 S. Ct. 1493 (2022), where the Court held that the § 6330(d)(1) 30-day CDP deadline was not jurisdictional, thus subject to equitable relief.

Readers interested in this area of law have already seen several, perhaps many, comments on the Hallmark holding. I don’t think I have anything to add to those commentaries. Perhaps the longest and strongest criticism of the Hallmark opinion is in a series of posts by Carl Smith on the Procedurally Taxing Blog titled What’s Wrong with the Tax Court’s Hallmark Opinion: Part 1 ….., here (I think there are more Parts to come, but the link is a search link and should pick up the later Parts). 

I am agnostic as to the resolution of the issue of whether the § 6213(a) deadline must be met (jurisdictional) or not (claims processing subject to equitable relief). However, I do note that there are some consequences if that particular deadline is deemed to be claims processing rather than jurisdictional that should be considered given the collateral provisions (such as statute of limitations suspension while the taxpayer can file a petition, etc.); I am not sure they have been fully dealt with in the Hallmark opinion, perhaps because the Court held that the deadline was jurisdictional; still they should be considered as perhaps reasons that the deadline must be jurisdictional in order to make the parts of the superstructure work.

Supreme Court Decides Time Limit to Petition Tax Court CDP Determination is Nonjurisdictional and Subject to Equitable Tolling (4/21/22; 4/25/22)

In Boechler, P.C. v. Commissioner, 583 U.S. ___, 142 S.Ct. 1493 (2/21/22),  SC here and GS here,  the Court held that “Section 6330(d)(1)’s 30-day time limit to file a petition for review of a collection due process determination is a nonjurisdictional deadline subject to  equitable tolling.” (From the Syllabus.)  The holding is based on a close reading of § 6330(d)(1) and the notion that for jurisdictional status or prohibition of equitable tolling, an express or clear statement is required, which this statute lacks. And, it seems that even nonjurisdictional time limits may not be equitably tolled if there is some reason in the text to conclude that. (I am not sure equitable tolling is separate from the nonjurisdicitional conclusion, but the Court seems to think so. E.g., Slip Op. 8, “Of course, the nonjurisdictional nature of the filing deadline does not help Boechler unless the deadline can be equitably tolled.”)

Other than permitting equitable tolling for § 6330(d)(1)’s time limit, I am not sure the opinion offers any broader important lessons. However, the opinion does state (Slip Op. 14-15):

Finally, the broader statutory context confirms the lack of any clear statement in §6330(d)(1). Other tax provisions enacted around the same time as §6330(d)(1) much more clearly link their jurisdictional grants to a filing deadline. See 26 U. S. C. §6404(g)(1) (1994 ed., Supp. II) (the Tax Court has “jurisdiction over any action . . . to determine whether the Secretary’s failure to abate interest under this section was an abuse of discretion, . . . if such action is brought within 180 days”); §6015(e)(1)(A) (1994 ed., Supp. IV) (“The individual may petition the Tax Court (and the Tax Court shall have jurisdiction) to determine the appropriate  relief available to the individual under this section if such petition is filed during the 90-day period”). These provisions accentuate the lack of comparable clarity in §6330(d)(1).

So, I guess we know what the answer is for those provisions.

Restitution Based Assessment--Some Issues of Interest (8/3/19; 8/7/19)

Readers of this blog will likely be interested in a recent post on Procedurally Taxing Blog:  Keith Fogg, Interest and Penalties on Restitution-Based Assessments (Procedurally Taxing Blog 7/31/19).  Highly recommended.  The context is the relationship between restitution as ordered by the court in a criminal case and the restitution based assessment that the IRS is mandated to make, particularly as related to interest on the restitution.

After some emailing with Keith, I thought I would add some related material and comments that readers of this blog might find interesting or useful.

1.  The amount of the restitution can include an interest factor from the date of the loss through the date of the restitution order by judgment in the criminal case.  The DOJ Criminal Tax Manual thus says:  "Prosecutors should seek prejudgment Title 26 interest in restitution in order to fully compensate the IRS."  DOJ CTM 44.00 RESTITUTION IN CRIMINAL TAX CASES (last edited January 2019), here.

The U.S. Attorneys Manual (now called Justice Manual after renaming in 2018) had a template in the Tax Resource Manual that would include interest under 6601 and/or 6621 in the restitution order as of the date of sentencing.

• https://www.justice.gov/archives/usam/tax-resource-manual-20-optional-restitution-paragraphs
• https://www.justice.gov/archives/usam/tax-resource-manual-21-proposed-restitution-order

The Tax Resource Manual seems to have dropped off the current Manual (called the Justice Manual), although the prior Tax Resource Manual is still available per the links above.  (Perhaps it will be added back later.)  So, diligent US Attorneys should be aware of it.  And, of course, DOJ Tax CES attorneys should be aware of the CTM provision.  And, since the IRS makes the calculations, the IRS agents should be aware of as well.  (By contrast, interest is not included on tax loss for Sentencing Guidelines purposes except in the case of evasion of payment, when interest was included in the amount the defendant sought to evade.)

My understanding, though, is that courts sometimes (perhaps even often) do not include interest in restitution.  (See discussion of recent case in paragraph 3 below.)

2.  I have just updated the text and a footnote in the working draft of my Federal Tax Procedure Book (will be published on SSRN by mid-August 2019) dealing with some of the nuance.  Here is a cut and paste of the text and the key text amd footnote:

Tax Procedure Book Errata - Notice of Deficiency Determination (2/11/17)

  

Book Outline Section	Nature of Update	Location for current editions
Ch. 11 Notice of Deficiency I.   The Notice of Deficiency and its Role in the System (A Reprise).      A.  General.      B.   What is a Notice of Deficiency?             1.  A Deficiency.              2.  The Notice of Deficiency.                      a.   The Notice, Determination and Explanation.                             (1)    The Determination Requirement.	Discussion of a recent case, Dees v. Commissioner, 148 T.C. ___, No. 1 (2017) (reviewed opinion), here, holding that a notice of deficiency stating $0.00 deficiency but with attachments indicating that a claimed tax benefit had been denied was a valid notice of deficiency	Student Ed. P. 358 (after the 2d full paragraph) Practitioner Ed. p.  504 (after the carryover paragraph at the top)

               The tolerance for some level of imperfection in notices of deficiency is understandable given the ability to resolve or moot the problems by filing a Tax Court petition for redetermination.  But, what about a document in the regular form of a notice of deficiency that states the amount of the deficiency as $0.00?  A taxpayer receiving such a document would know that it is described as a notice of deficiency and that he may file a petition for redetermination is he does not agree.  But the deficiency is stated to the $0.00, and he may agree with that number.  In a 2017 reviewed opinion of the Tax Court (with strong concurring and dissenting opinions), the Court held that the standard form letter for a notice of deficiency that stated that the deficiency amount was $0.00 but included attachments clearly indicating that a deficiency had been determined because a claimed credit was disallowed met the requirements for a notice of deficiency.  n1635a The majority formulated the questions presented as:

   n1635a   Dees v. Commissioner, 148 T.C. ___, No. 1 (2017) (reviewed opinion).

• “Whether the notice objectively put a reasonable taxpayer on notice that the Commissioner determined a deficiency in tax for a particular year and amount.  If the notice, viewed objectively, sets forth this information, then it is a valid notice”
• If, however, that inquiry does not provide an answer (i.e., the notice is ambiguous as to the requirements for a deficiency, then, for the notice to be valid, the evidence “establish that the Commissioner made a determination and that the taxpayer was not misled by the ambiguous notice.”  The majority elsewhere in the opinion frames the latter inquiry as to whether the “taxpayer was prejudiced by an ambiguous notice.”  On the latter point, the majority concluded as follows:

The notice on its face is ambiguous, but the Commissioner has established that he made a determination and that Mr. Dees was not misled by the notice. Mr. Dees timely filed a petition to challenge the notice, and that petition makes clear that Mr. Dees understood that the Commissioner had disallowed his refundable credit: He stated in his petition both that the Commissioner had erred in denying his premium tax credit and that he had documents to substantiate his entitlement to the credit. This establishes that Mr. Dees was not misled by the notice.

 The tests thus enunciated may be described as an objective test and a subjective test. n1635b

   n1635b Judge Ashford’s concurring opinon says that “The opinion of the Court delineates a two-prong approach (with both objective and subjective elements) to determining our deficiency jurisdiction * * * *.”

               As with the last known address requirement for notices, a taxpayer desiring to present this issue should consider the statute of limitations on assessment.  If the taxpayer brings the issue to the IRS’s attention while the statute is still open (either in some administrative process or by petition to the Tax Court, the IRS may solve the problem by issuing a new notice.  If the taxpayer files a petition in the Tax Court while the statute is still open, the mere filing of the petition will suspend the statute of limitations until the Tax Court decision is final even if the notice is ultimately determined by the Tax Court to be invalid. n1635c

   n1653c  §§ 6213(a) (prohibition on assessment which Tax Court petition for redetermination is pending; and 6503(a)(1) (suspension during period of prohibition).  See Shockley v. Commissioner, 686 F.3d 1228 (11th Cir. 2012) (holding that the filing of a Tax Court petition invoked the suspension even if the notice of deficiency was invalid or the filing was not by the proper person; per § 6503(a)(1), the suspension occurs “if a proceeding in respect of the deficiency is placed on the docket of the Tax Court”).

Addendum:  Links to statutes cited:

• § 6213(a), here.
• § 6503(a)(1), here.

Good Review of Points Previously Covered in Class (9/28/15)

Lua v. United States, 2015 U.S. Claims LEXIS 1235 (9/25/15), here, offers a good review of concepts we have studied in this case.

In Lua, upon completion of the audit, the unsophisticated taxpayers who did not have a representative signed a Form 4549 Income Tax Examination Changes.  This form has language "waiving their right to a notice of deficiency."  Section 6213(a), here, prohibits the IRS from assessing prior to issuing a notice of deficiency in income tax cases.  Section 6213(d) provides that a taxpayer may waive the right to receive a notice of deficiency, thus allowing an assessment without the notice of deficiency.  This waiver is often done on the Form 870, Waiver of Restrictions on Assessment, but also from the language quoted above, may be done on the Form 4549.  See Student Edition pp. 145-146 & 334-335.

Shortly after signing the waiver, the taxpayers engaged a tax professional.  The tax professional requested audit reconsideration in a telephone call to the agent and a day later confirmed the request in a letter to the group manager.

On November 26, 2007, the IRS assessed the deficiencies, but granted the request for audit reconsideration.  As a result of the audit reconsideration, the IRS ultimately reduced the amount of the deficiencies, but by that time the taxpayers had filed amended returns and, apparently protectively, payments substantially in excess of the amounts ultimately determined to be due.  It is a little fuzzy to me precisely what happened after the assessment, but it may not be critical for the points discussed below.  What appears to be in issue in this refund litigation is the amount paid up to the amount that was not abated in audit reconsideration -- in other words the amount determined due after audit reconsideration

1. Did the taxpayers waive the right to a notice of deficiency.

Yes.  The taxpayers did sign the Form 4549 which waives the notice of deficiency in clear language.  In this regard, the Court indicated in footnote 12 that the waiver had not been improperly induced.

2.  Did the taxpayers withdraw the waiver of the notice of deficiency.

No.  The taxpayers asked for audit reconsideration which is a separate procedure.  Audit reconsideration is addressed in the text.  See Student edition p. 452.

Seventh Circuit Opinion on Role of Notice of Deficiency and Last Known Address Requirement (3/7/15)

In Gyorgy v. Commissioner, ___ F.3d ___, 2015 U.S. App. LEXIS 3100 (7th Cir. Feb. 27, 2015), here, the Court addressed certain key aspects of tax procedure relating to the key role of the notice of deficiency.  For practitioners (other than novice practitioners), this is perhaps redundant to information they already know.  In some way, it is probably redundant for students also.  Still it is a pretty good summary of the process, so I offer it here.  In most cases, I will eliminate most case or other citations, except when I think they are important:  I include the Code sections because the Code is important.  The excerpts are:

We begin with an overview of the CDP process and the taxpayer's right to appeal. The Internal Revenue Code (the "Code") directs the Treasury Secretary—acting through the IRS—to determine, assess, and collect federal taxes. See I.R.C. §§ 6201(a), 6301. It also requires taxpayers to file returns as prescribed by the IRS. See id. § 6011(a). If the IRS finds that a person has unpaid taxes for a given year, it must notify him of the deficiency before it can collect the debt. See id. §§ 6212(a), 6213(a). Once the IRS mails notice, the taxpayer may petition the tax court to redetermine the correct amount of the deficiency. Id. §§ 6213(a), 6214(a). If he does not file a timely petition (normally within ninety days), then the deficiency "shall be assessed, and shall be paid upon notice and demand." Id. § 6213(c). 

If the taxpayer does not pay, then his tax liabilities become a lien on his real and personal property. Id. § 6321. To protect the government's rights against other secured creditors with respect to the encumbered property, the IRS must generally file a notice of the tax lien with the appropriate state authority. See id. § 6323(a), (f). It must then inform the taxpayer that it filed the lien notice. Id. § 6320(a). 

The taxpayer is entitled to challenge the lien in a CDP hearing before the Appeals Office, which is an independent bureau within the IRS. Id. § 6320(b). The "hearing" is informal and may consist of correspondence, telephone conversations, or in-person meetings. Treas. Reg. § 301.6330-1(d)(2), . In general, the taxpayer may raise any relevant issue. I.R.C. § 6330(c)(2)(A). That includes a challenge to his underlying tax liability if he did not receive any statutory notice of deficiency for such tax liability or did not otherwise have an opportunity to dispute such tax liability. Id. § 6330(c)(2)(B). The appeals officer must consider the issues raised by the taxpayer and verify that the IRS followed proper procedures. § 6330(c)(3). 

After the hearing, the Appeals Office issues a notice of determination containing its findings and conclusions. Treas. Reg. § 301.6330-1(e), Q&A-E8. If the taxpayer is dissatisfied, he can appeal the determination to the tax court. I.R.C. § 6330(d)(1). If his underlying tax liability was properly at issue in the CDP hearing, the tax court reviews that issue de novo. It reviews the Appeals Office's other determinations for abuse of discretion. Jones v. Comm'r, 338 F.3d 463, 466 (5th Cir. 2003) ("In a collection due process case in which the underlying tax liability is properly at issue, the Tax Court ... reviews the underlying liability de novo and reviews the other administrative determinations for an abuse of discretion." (citing Craig v. Comm'r, 119 T.C. 252, 260 (2002))). 

The tax court's decision is in turn subject to review in the appropriate court of appeals. I.R.C. § 7482(a)(1). We review tax court decisions "in the same manner and to the same extent as decisions of the district courts in civil actions tried without a jury." Id. 

With this background in hand, we turn to the two issues on appeal. 

Principal Life -- A Masterpiece of Tax Procedure (11/29/13)

In my last Tax Procedure Class, we spent most of the class discussing Principal Life Ins. Co. v. United States, 95 Fed. Cl. 786 (Fed. Cl. 2010).  The Court's slip opinion is here; students can link to a nonofficial version (Harvard Caselaw Access Project) but with local page citations, here.  I do ask, however, that students download the actual case with the local page citations. 

The reasons I think the case is important are: (i) it is a tax procedure case; (ii) it is a tour de force tax procedure case; and (iii) it covers a lot of ground that we covered earlier in the class.  I promised the students that I would post a blog on the case in order to help them learn Tax Procedure and, even, study for the examination.  THIS POSTING IS NOT INTENDED AND SHOULD NOT BE USED AS A SUBSTITUTE FOR ACTUALLY READING AND STUDYING THE CASE.

Judge Allegra (Wikipedia here) introduces the case as follows:

"The procedural aspects of the tax laws are of overriding importance in many controversies," one commentator has noted, "eclipsing or making moot substantive issues such as the allowance of deductions or credits, recognition or deferral of income, and methods of accounting." Theodore D. Peyser, 627-3rd Tax Management Portfolio, "Limitations Periods, Interest on Underpayments and Overpayments, and Mitigation" at 1 (2010). At times, the questions spawned by these procedures take on an almost "metaphysical" cast, Baral v. United States, 528 U.S. 431, 436, 120 S. Ct. 1006, 145 L. Ed. 2d 949 (2000), like "when is taxable income taxed?" The ontology needed to solve such abstruse inquiries comes not from philosophical tomes, but from Chapters 63 through 66 of the Internal Revenue Code of 1986, which supply interfused rules mapping the contours of commonly-used, but frequently-misunderstood, tax concepts such as "assessment," "deposit," and "overpayment." 

Though the background provided by these rules can be numbing in its intricacy, the dispute presented by the cross-motions for summary judgment pending before the court can be stated simply: Plaintiff, Principal Life Insurance Company and Subsidiaries (plaintiff or Principal) argues that it is entitled to certain overpayments because its taxes were not timely assessed by the Internal Revenue Service (IRS). Defendant responds that the taxes in question were timely assessed and that even if they were not, they are not recoverable as an overpayment. Plaintiff is wrong; defendant is right. It remains to explain why.

KEY FACTS:

Tax Court Announcement on Effect of Government Shutdown (10/21/13)

The United States Tax Court, here, has issued an announcement regarding the resumption of Tax Court operations after the Government Shutdown.  The announcement is here.  I think that, for most readers of this blog, the key part of the announcement relates to statutory filing deadlines during the shutdown.  The following is the announcement

Statutory Filing Deadlines 

The Court lacks authority to extend statutory filing deadlines imposed in the Internal Revenue Code (I.R.C.). For example, I.R.C. section 6213(a) provides that a taxpayer must file a petition with the Court to redetermine a deficiency within 90 days after the mailing of a notice of deficiency, and I.R.C. section 6330(d)(1) provides that a taxpayer must file a petition to review a determination involving a proposed lien or levy within 30 days after the mailing of the notice of determination. Hand-delivery to the Courthouse was not available during the period the Court was closed due to the Federal government shutdown. During that period, taxpayers were required to comply with the statutory deadlines by timely mailing petitions to the Court. Timeliness of mailing of the petition is determined by the United States Postal Service’s postmark or the delivery certificate of an approved private express delivery company.

The Code sections cited are 6213, here, and 6330(d)(1), here.  As I remind my students, Section 6213(a) is the key code section for the prepayment remedy afforded by the Tax Court.  That section kicks in provisions from other sections (such as suspension of the statute of limitations) to assure that prepayment remedy.  The key point here is that the petition for redetermination has be filed in the 90-day period from the date of the notice of deficiency.

The Effect of Violation of the Statutory Requirements for a Notice of Deficiency (8/15/13)

Leslie Book has a good blog entry titled What Happens When The IRS Violates a Statutory Requirement Relating to Notices of Deficiency? (Procedurally Taxing 8/13/13), here.  His general topic is when courts will treat a failure to meet the statutory requirements for a notice of deficiency as invalidating the purported notice of deficiency.  The statutory requirements for the notice are:

1. The date to file a petition for redetermination in the U.S. Tax Court.
2. Notice of Taxpayer Advocate's Contact Information.
3. Notice sent to Taxpayer's Last Known Address.
4. Explanation of Basis for Deficiency.

I encourage readers to read Professor Book's blog entry for more detail than I offer here (except as to item 4).  The unifying theme is whether the taxpayer has been prejudiced by some IRS footfault in meeting these statutory requirements.  Professor Book discusses that prejudice issue in the context of requirements 1 and 2.  It is also present in #3, for the cases hold that, if, despite not being sent to the last known address, the taxpayer actually receives the notice of deficiency in time to file a petition for redetermination, the notice of deficiency will not be invalidated (so that it will operate to suspend the statute of limitations and support the ultimate assessment if the taxpayer did not petition the Tax Court or even if he did petition the Tax Court and loses the last known address issue).

I would like to address briefly the Scar case (Scar v. Commissioner, 814 F.2d 1363 (9th Cir. 1987)) which Professor Book discusses briefly.  I offer the following from  my book (footnotes omitted):

As noted above, the deficiency notices must describe the basis for the deficiency but failure to do so will not invalidate the deficiency.  Thus, the taxpayer appears to have a statutory right to the information in the notice of deficiency, but no statutory remedy if he does not receive it in the notice of deficiency.  As we shall note, however, there may be some remedies short of invalidity of the notice for failure to meet this requirement of § 7522(a). 

Usually, there will be some explanation.  It may be summary or even cryptic because the determination usually follows an audit in which the taxpayer participated and was aware of the issues the IRS was raising.  Indeed, in such cases, usually the taxpayer will have been provided some type of report (often referred to as a Revenue Agent's Report (“RAR”)) that explains the proposed adjustments.  But again, although the Code provides that the taxpayer be notified of the basis for the deficiency, there is no Code remedy if one is not provided.

Assessment Statute of Limitations When Contesting an Allegedly Invalid Notice of Deficiency (8/16/12)

In the text, I noted (Footnoted version pp. 187-188; Nonfootnoted version p. 133):

Parsing the text of the statute, § 6503(a)(1) suspends the period of limitation on assessments until 60 days beyond whichever of the following dates applied (depending upon whether the taxpayer petitions the Tax Court): (1) if the taxpayer does not petition the Tax Court, the end of the 90-day period during which the IRS was prohibited from making the assessment (the same 90 period during which the taxpayer could have petitioned the Tax Court but did not), and (2) if “a proceeding in respect of the deficiency is placed on the docket of the Tax Court,” the date the Tax Court decision becomes final. n647 

 n647 Recognizing the text’s substantial meaning, see Shockley v. Commissioner, 686 F.3d 1228 (11th Cir. 2012).

Section 6503(a) is here.  The Shockley opinion is here.

I ask you now to focus on the quote establishing second suspension period indicated in the quote - "if a proceeeding * * * is placed on the docket of the Tax Court" and the accompanying footnote.  In a recent article, practitioners have critiqued the Shockley holding for its potential consequences beyond the limited confines of the case.  Andy R. Roberson and Kevin Spencer, 11th Circuit Allows Invalid Notice to Suspend Asssessment Period, 136 Tax Notes 709 (Aug. 6, 2012) (criticizing Shockley for the scope of its potential application in other cases).  The article is here.