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.

Supreme Court Holds that Tax Court Levy CDP Jurisdiction is Mooted by Satisfaction of Underlying Assessment (6/13/25)

I previously blogged on the

• Third Circuit's opinion in Zuch v. Commissioner, 97 F.4th 81 (3rd Cir. 2024). 3rd Circuit Holds Tax Court Has Jurisdiction to Determine Overpayments in CDP Proceedings (Federal Tax Procedure Blog 3/29/24; 3/30/24), here; and
• The Supreme Court's granting of the Government's petition for writ of certiorari. Supreme Court Accepts Cert in Zuch as to Mootness in CDP where IRS Collected by Offset the Tax Subject to Levy (Federal Tax Procedure Blog 1/13/25), here.

Yesterday, the Supreme Court decided Zuch, holding that the Tax Court loses jurisdiction over a CDP case when the assessment supporting the original proposed levy has been paid so that there is nothing behind the levy. 605 U.S. 422 (2025), here Opinion of the Court by Justice Barrett, joined by all other Justices except Gorsuch who dissented (SC here and GS here). The Opinion of the Court is a short (at least for Opinions of the Court) and relatively straightforward opinion. I therefore will not belabor readers with a scholarly (perhaps pseudo-scholarly) discussion of the opinion. My off-hand summary is that what is in issue in a levy CDP case is the levy and once the proposed levy is mooted by satisfaction of the underlying assessment, there is nothing left for the Tax Court to do.

So, I get back to the questions I considered in the blog entry reporting the granting of cert. The relevant ones are:

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.

NJ Fed District Court Finds No Jurisdiction to Recognize Claim of Universal Vacatur of Notice 2007-83 for 6th Circuit Decision (4/29/23)

In OOM Inc., et al. v. United States (D. N.J. Dkt 22-2762 Opinion & Order dtd 4/24/23 Not for Publication), CL here and GS here, the court granted the Government’s Motion to dismiss the First Amended Complaint (“FAC”), here, seeking “a declaratory judgment ordering, among other things, that the reporting requirement was vacated by the Sixth Circuit [in Mann Construction, Inc. v. United States, 27 F.4th 1138 (6th Cir. 2021)] and that they are entitled to rescission or refund of the assessed penalties.”

The basis for the FAC is the claim that Mann Construction was what is sometimes referred to as a universal or nationwide vacatur, vacating Notice 2007-83 upon which plaintiffs’ § 6707A penalty was based. As I have discussed before, the concept of the universal vacatur of administrative action is a hot-button issue now. Accordingly, some courts vacated administrative action take different approaches—

(i)          vacatur for the parties in the action,

(ii)        if a district court opinion, vacatur affecting all persons in the district including parties and nonparties in the case,

(iii)      if a circuit court opinion, vacatur affecting all persons in the district including parties and nonparties in the case, and

(iv)       if a district or circuit court opinion, applying nationwide, including parties and nonparties.

The OOM Inc. plaintiffs asserted that Mann Construction effected vacatur under (iv).

The problem was that penalties are treated as taxes, subject to the usual predicates applicable to tax refunds and other types of tax relief. For example, to the extent that the OOM Inc. plaintiffs were seeking a refund of the penalties, they had not met the predicates for a refund suit. To the extent that they were seeking to obliterate the unpaid assessments, they ran squarely into § 7421(a). To the extent they were seeking a declaratory judgment, they ran squarely into 28 U.S.C. § 2201(a).

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.

Ah, the Flora Full Payment Rule Raises Its Ugly Head (1/16/13)

In Roseman v. United States, 2013 U.S. Claims LEXIS 2 (2013), here, a nonpublished opinion and order, the Court of Federal Claims (Judge Allegra) dismissed the taxpayer's trust fund recovery refund suit for failure to meet the prepayment requirement for refund suits.  This just applies the so-called Flora rule (see Flora v. United States, 362 U.S. 145, 150 (1960)) that a refund suit requires full payment, a rule that is mitigated in so-called divisible tax cases to require only the payment for one such divisible tax.  I explain this below, but first address the Rosenman opinion.

The body of the opinion is short, but a good reminder for practitioners and their clients:

Jurisdiction in this tax refund suit lies, if at all, under 28 U.S.C. § 1491(a)(1). n2 As a general rule, before bringing a refund suit, a taxpayer must, inter alia, pay his or her full tax liability. See Shore v. United States, 9 F.3d 1524, 1526 (Fed. Cir. 1993) (citing Flora v. United States, 362 U.S. 145, 150 (1960)); see also Ledford v. United States, 297 F.3d 1378, 1382 (Fed. Cir. 2002). This rule, however, does not apply to so-called divisible taxes, including the penalty under section 6672. Rather, "a taxpayer assessed under section 6672  need only pay the divisible amount of the penalty assessment attributable to a single individual's withholding before instituting a refund action." Boynton v. United States, 566 F.2d 50, 52 (9th Cir. 1977); see also Steele v. United States, 280 F.2d 89, 90-91 (8th Cir. 1960). n3 Courts have held that this requirement is satisfied where a plaintiff pays the penalty attributable to one employee's wages for one quarter. See, e.g., Ruth v. United States, 823 F.2d 1091, 1092 (7th Cir. 1987); USLIFE Title Ins. Co. of Dall. v. Harbison, 784 F.2d 1238, 1243 n.6 (5th Cir. 1986); Boynton, 566 F.2d at 52; Suhadolnik v. United States, 2011 WL 2173683, at *5 (C.D. Ill. June 2, 2011); Todd v. United States, 2009 WL 3152863, at *3-4 (S.D. Ga. Sept. 29, 2009); Lighthall v. Comm'r of Internal Revenue, 1990 WL 53127, at *2 (N.D. Ill. Apr. 12, 1990), aff'd, 948 F.2d 1292 (7th Cir. 1991). n4
   n2 It is worth repeating that jurisdiction for refund suits in this court is not provided by 28 U.S.C. § 1346. See Hinck v. United States, 64 Fed. C1. 71, 74-76 (2005), aff'd, 446 F.3d 1307 (Fed. Cir. 2006), aff'd, 550 U.S. 501 (2007).
   n3 "This relaxed requirement is based on the theory that section 6672 assessments represent  a cumulation of separable assessments for each employee from whom taxes were withheld." Boynton, 566 F.2d at 52.
   n4 Defendant argues that payment must be made for one employee for each of the periods involved. Given the facts presented, this court need not address this argument. 

Plaintiff's payment of $25 per quarter satisfies neither the Flora "full payment" rule nor the Boynton exception for divisible taxes. As confirmed by the tax records filed in this case, the penalties in question were imposed based on a finding that plaintiff was an employee of his corporation. The amount of employment tax owed with respect to plaintiff for any of the quarters at issue far exceeds the $25 payment amount. Accordingly, the jurisdictional prerequisite for bringing this refund action has not been satisfied. 

Based on the foregoing, the court GRANTS defendant's motion to dismiss under RCFC 12(b)(1). The Clerk is hereby ordered to dismiss the complaint.

IRS Disclosures of Knowingly False Return Information is Subject to Civil Action for Wrongful Disclosure (11/24/12)

In Aloe Vera of America, Inc. v. United States, 699 F.3d 1153 (9th Cir. 2012), here, the Ninth Circuit addressed the application of the two year time limit for filing a suit for wrongful disclosure of return information.  Section 6103, here, titled Confidentiality and disclosure of returns and return information, generally requires that return information -- virtually everything the IRS knows about a taxpayer -- be confidential, with certain specified exceptions.  Section 7431, here, titled Civil damages for unauthorized inspection or disclosure of returns or return information, provides a taxpayer a civil remedy the IRS's disclosures of return information not authorized by Section 6103.  Section 7431(d) provides that the suit must be brought "within 2 years after the date of discovery by the plaintiff of the unauthorized inspection or disclosure."  The question addressed by the Ninth Circuit was when the limitations period begins.

The Court (with Judge Sidney R. Thomas, here, as author of the majority opinion) starts its exegesis with a crisp statement of the issue and the holding:

This appeal presents the question, among others, of what event triggers the running of the statute of limitations for a claim for wrongful disclosure of a tax return pursuant to 26 U.S.C. § 7431(d). We conclude that the statute of limitations begins to run when the plaintiff knows or reasonably should know of the government's allegedly unauthorized disclosures. We also conclude, in the circumstances presented by this case, that the statute of limitations did not begin to run when the plaintiffs became aware of a pending general investigation that would involve disclosures, but only later when they knew or should have known of the specific disclosures at issue. Applying these principles to the facts of this case, we affirm in part and reverse in part.