A Win for Taxpayers—Section 6330(d)(1) is a Nonjurisdictional Deadline

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Zachary J. Montgomery

Zachary J. Montgomery

Attorney

469.998.8484
zmontgomery@freemanlaw.com

Zachary J. Montgomery is a dual-credentialed attorney and CPA. He practices in the area of federal and state tax litigation, white-collar defense, business and tax planning, and litigation. Mr. Montgomery has experience representing both businesses and individuals in federal tax controversies, including appeals, examinations, penalty abatement and collection matters. He has also represented taxpayers—from small organizations to Fortune 500 companies—with Texas franchise tax refund claims, audits, penalty abatement, and corporate structuring.

Mr. Montgomery is a graduate of the University of Virginia School of Law where he focused his studies on corporate and tax law and served on the editorial board of the Virginia Tax Review. Prior to joining the firm, he gained experience with PricewaterhouseCoopers, LLP, and a regional firm, focusing on federal and state tax controversies. His previous experience also includes Ernst & Young, Deloitte & Touche, and a judicial student clerkship with the First Court of Appeals of Texas.

Mr. Montgomery is a graduate of Texas A&M University, where he graduated Summa Cum Laude and received his B.B.A. with a double major in Accounting and Business Honors and his M.S. in Management Information Systems. While attending Texas A&M, he developed his business acumen, working as an enterprise risk consultant and financial analyst.

Collection Due Process Hearings and Jurisdiction

Collection Due Process (“CDP”) hearings are crucial to taxpayers. Taxpayers have a right to a Collection Due Process hearing with the IRS Independent Office of Appeals before levy action is taken. According to the IRS, a “CDP hearing is an opportunity to discuss alternatives to enforced collection and permits you to dispute the amount you owe if you have not had a prior opportunity to do so.”[1] When a taxpayer receives a notice of determination from IRS Appeals, the taxpayer has 30 days to petition the U.S. Tax Court. The U.S. Supreme Court in Boechler, P.C. v. Commissioner recently held that a Tax Court petition may still be considered by the Tax Court even if it is late. 

I.R.C. § 6330(d)(1) – Collection Due Process Hearings

The statute at issue in Boechler is Section 6330(d)(1). For reference, the statutory language is reproduced below:

(d) Proceeding after hearing.

(1) Petition for review by Tax Court.—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).[2]

Question Presented: Is the Section 6330(d)(1) Time Limit Jurisdictional?

Per my previous blog on BoechlerCDP Proceedings—Is the Time Limit in Section 6330(d)(1) a Jurisdictional Requirement for Tax Court Petitions?—the question presented, as stated in Boechler’s filings, was as follows:

Section 6330(d)(1) of the Internal Revenue Code establishes a 30-day time limit to file a petition for review in the Tax Court of a notice of determination from the Commissioner of Internal Revenue. 26 U.S.C. § 6330(d)(1). The question presented is:

Whether the time limit in Section 6330(d)(1) is a jurisdictional requirement or a claim-processing rule subject to equitable tolling.

The Supreme Court’s Decision—April 21, 2022

On April 21, 2022, just three months after oral arguments were held on January 12, 2022, the Supreme Court issued its decision in Boechler.[3] The primary holding was as follows:

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.[4]

Justice Barrett wrote the opinion for the unanimous Court. During oral argument, Justice Barrett made the following statements regarding the clarity of Section 6330(d)(1): “Let’s say that I think the government’s interpretation is maybe a little bit more plausible but not a slam dunk. In light of the backdrop of the clear statement rule, what am I supposed to do with that? I mean, how clear does it have to be?” Unsurprisingly, the Court’s decision dealt with that exact question. The Court’s holding stated, in part:

Jurisdictional requirements mark the bounds of a “court’s adjudicatory authority.” Kontrick v. Ryan, 540 U. S. 443, 455 (2004). Yet not all procedural requirements fit that bill. Many simply instruct “parties [to] take certain procedural steps at certain specified times” without conditioning a court’s authority to hear the case on compliance with those steps. Henderson v. Shinseki, 562 U. S. 428, 435 (2011). These nonjurisdictional rules “promote the orderly progress of litigation” but do not bear on a court’s power. Ibid.

The distinction matters. Jurisdictional 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. Id., at 434–435; Sebelius v. Auburn Regional Medical Center, 568 U. S. 145, 154 (2013). Mindful of these consequences, we have endeavored “to bring some discipline” to use of the jurisdictional label. Henderson, 562 U. S., at 435.

To that end, we treat a procedural requirement as jurisdictional only if Congress “clearly states” that it is. Arbaugh v. Y & H Corp., 546 U. S. 500, 515 (2006). Congress need not “incant magic words,” Auburn, 568 U. S., at 153, but the “traditional tools of statutory construction must plainly show that Congress imbued a procedural bar with jurisdictional consequences,” United States v. Kwai Fun Wong, 575 U. S. 402, 410 (2015). . . .

Where multiple plausible interpretations exist—only one of which is jurisdictional—it is difficult to make the case that the jurisdictional reading is clear. See Sossamon v. Texas, 563 U. S. 277, 287 (2011). . . .

Equitable tolling is a traditional feature of American jurisprudence and a background principle against which Congress drafts limitations periods. Lozano, 572 U. S., at 10–11.  Because we do not understand Congress to alter that backdrop lightly, nonjurisdictional limitations periods are presumptively subject to equitable tolling. Irwin v. Department of Veterans Affairs, 498 U. S. 89, 95–96 (1990).[5]

Conclusion

The Supreme Court’s decision is a favorable ruling for taxpayers, particularly with respect to CDP hearings. As I previously wrote in my blog on Boechler, this holding is not surprising given the focus of the justices’ comments and questions during oral argument. Because Section 6330(d)(1) is a nonjurisdictional statute that is subject to equitable tolling, taxpayers may still have their petitions of CDP hearing determinations heard by the Tax Court—even if they miss the 30-day deadline. Whether a given taxpayer (including Boechler) is entitled to equitable tolling depends on the facts and circumstances of the taxpayers’ case. For now, taxpayers should enjoy the win with respect to their ability to appeal CDP hearing determinations.

 

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[1] Collection Due Process (CDP) FAQs, IRS, available at: https://www.irs.gov/appeals/collection-due-process-cdp-faqs.

[2] I.R.C. § 6330(d)(1).

[3] See Boechler, P.C. v. Comm’r, 596 U.S. ___ (2022).

[4] Id.

[5] Id.