In legislation, much more than in comedy, timing will be vital.  In comedy you simply lose fun.  In legislation, you lose a case.  In Roy A. Nutt and Bonnie W. Nutt v. Commissioner, 160 T.C. No. 10 (Might 2, 2023) (Choose Buch), we study why a petition seemingly submitted on time will likely be rejected as late.  There, the Nutts electronically submitted their Petition to the Tax Courtroom on the final day they may file.  Now everyone knows you actually do not wish 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.  In order that they appeared to be on time.

The issue was that they have been submitting from Alabama (Central Time) and the Tax Courtroom’s Clerk’s workplace is in Washington D.C. (Jap Time).  Thus, regardless that they submitted on time, Choose 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 Courtroom dismissed the Petition.

Be aware that is one other precedential opinion issued in a case with unrepresented taxpayers.  Right here, the IRS moved to dismiss and briefed the problem, however there was no responding transient to counter the federal government’s view.  These pro-se taxpayers most likely didn’t learn about all of the Tax Courtroom precedent making use of equitable rules to rescue seemingly late-filed petitions.  I give an in depth evaluation 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, Choose Buch has, in the same case, requested for amicus briefs on the problem.  I hope the Tax Courtroom there involves a distinct conclusion.  It’s at all times a balancing act: weighing the necessity for taxpayer entry to judicial evaluation with the necessity to obey statutory limits. Maybe the Tax Courtroom would possibly rethink how that stability ought to work for electronically filed paperwork.  Nevertheless, as Professor Guide places it in this publish over at Procedurally Taxing, after this case taxpayers now have a steeper hill to climb. You will discover the unhappy particulars under the fold, together with my modest ideas on strike a greater stability. 

Regulation: When Is a Petition “Filed” in Tax Courtroom For SOL Functions?
When the IRS sends a taxpayer a Discover of Deficiency (NOD), §6213(a) says that “the taxpayer might file a petition with the Tax Courtroom 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 the USA,” after the NOD is mailed.  There’s a safe-harbor rule Congress not too long ago 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 Courtroom to reply by means of each case legislation and its Guidelines.  These sources have lengthy utilized the bodily supply rule: a doc isn’t filed till it’s acquired within the correct workplace, right here the Tax Courtroom Clerk’s workplace.  See Bongam v. Commissioner, 146 T.C. 52 (2016).  Below the outdated model of Tax Courtroom Rule 22, petitions needed to be bodily delivered to the Tax Courtroom.  The overall rule was that petitions have been filed solely when truly acquired within the Tax Courtroom 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 offers {that a} doc bodily acquired after a deadline will likely be deemed well timed filed if the social gathering well timed mailed it.  See Lesson From The Tax Courtroom: 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 Courtroom petitions, no matter what the Tax Courtroom places within the Tax Courtroom 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 below authority of any provision of the inner income legal guidelines.”  Properly, gosh, §6213 is actually a kind of inner 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 rules, and the case legislation, the underside line is, as Choose Buch reminds us on this case, “the well timed mailing rule doesn’t apply to an electronically filed petition.”  Op. at 4.

Lastly, word that §7502 is a statutory mailbox rule.  However United State courts have since eternally created, expanded, and utilized a widespread legislation mailbox rule.  And the Tax Courtroom has not hesitated previously to make use of that widespread legislation.  See Lesson From The Tax Courtroom: The Frequent Regulation Mailbox Rule Lives!, TaxProf Weblog (Feb. 3, 2020).

The present Tax Courtroom Guidelines now typically require digital submitting of Tax Courtroom petitions when taxpayers are represented, however allow pro-se taxpayers to file the old style means.  Tax Courtroom Rule 26.  Present Tax Courtroom Rule 22(a) says that non-electronic filings should be acquired “throughout enterprise hours” however don’t fret: the §7502 safe-harbor exception nonetheless applies in these conditions (once more, whether or not or not the Tax Courtroom Guidelines say so).  I have no idea whether or not the Tax Courtroom nonetheless has a drop-box or, in that 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 Courtroom Rule 22(a)’s basic 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 Courtroom…”).  The rule for electronically filed petitions is present in 22(d), which says a petition “will likely be thought of well timed filed whether it is electronically filed at or earlier than 11:59 p.m., jap time, on the final day of the relevant interval.”

That’s the language at difficulty in right now’s case.  Does that language create a protected 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 (“will likely be thought of well timed filed”).  It does not say a petition submitted after midnight east coast time is per se late.  If learn as a protected 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 this moment we study that the Tax Courtroom reads the Rule as a tough cut-off; the Rule simply extends the Clerk’s “workplace hours” for electronically filed petitions to the tip of the east coast day.  The taxpayer’s time zone is irrelevant.

Let’s take a better look.

Information 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.  Nevertheless, the NOD instructed 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 Courtroom utilizing the superior DAWSON system (Hello Lewis!).  Superior DAWSON recorded the submitting as acquired at 12:05 pm on July nineteenth.  The IRS moved to dismiss.

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

Choose 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.”

Choose 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 decide allowed the submitting after which dominated towards him on the deserves for but a 3rd time.  On attraction Choose Easterbrook mentioned the trial decide didn’t have the facility to increase the submitting deadline as a result of FRCP 6(a)(4) was a tough cut-off.  Easterbrook writes: “Digital submitting methods do lengthen 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.]

Choose Buch takes Easterbrook’s thought 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 properly.” 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 Courtroom….” Id.

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

Remark: It Doesn’t Have To Be This Manner: Discovering the Proper Steadiness
Choose Buch didn’t take pleasure in a presentation from the taxpayers and so didn’t clarify his determination in any extra element.  Significantly complicated to me is his reliance on an FRCP to outline a time period within the Tax Courtroom guidelines.  The FRCP doesn’t management Tax Courtroom process and federal courts are merely not the identical kind of courtroom because the Tax Courtroom.  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 properly.  That sentence assumes its conclusion.  Superior Dawson doesn’t “stand” anyplace.  It’s simply electrons.  It doesn’t sleep.  It by no means goes dwelling.  It has no dwelling, no bodily presence.  Is Choose Buch significantly 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 Courtroom’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 Choose Buch’s studying is fallacious; it’s simply that the studying isn’t foreordained or constrained by the textual content of Rule 22.

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

Rule 22 provides the rule for when an digital doc will likely be thought of “filed” on the final day.  It says {that a} doc is acquired by 12:59 a.m. East Coast time on the final day will likely be deemed to have been filed that day.  Thus, for instance, if a taxpayer dwelling in Halifax (1 hour forward) or Bermuda (1 hour forward) is going through 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 Courtroom 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 protected harbor, Rule 22 would increase the “final day” for taxpayers dwelling east of the Washington D.C. time zone however wouldn’t shorten the “final day” for taxpayers dwelling west.

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

Right here, the statutory constraint imposed by Congress is §6213’s rule {that a} Petition should 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 Courtroom is to find out when that ninetieth day ends.

So it’s actually as much as the Tax Courtroom to determine rely the related intervals.  That features deciding when the related interval begins and when it ends.  The Tax Courtroom 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 Courtroom makes use of fairness when attainable to resolve what date to start out 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 truly receives the NOD even when later than each the primary two dates.

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

I feel the Courtroom might properly take the identical method for figuring out the tip 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 Courtroom rule, and (3) the Courtroom has the facility to create a standard legislation counting rule (aka mailbox rule), the Courtroom might properly take the identical method right here because it did in Guralnik v. Commissioner, 146 T.C. 230 (2016) the place it determined to not rely as “final day” a day the place the Tax Courtroom Clerk’s workplace was inaccessible.  That concept is now present in Tax Courtroom Rule 25(a)(2) however in 2016 the Courtroom needed to simply … properly … make it up!  In explaining it’s holding the Courtroom there emphasised that “such guidelines of process do nothing greater than present the courtroom and the events with a way of figuring out the start and finish of a statute of limitations prescribed elsewhere within the legislation.” Id. at ___.  Sure, there are totally different concerns in deciphering Tax Courtroom Rule 22 however there ought to nonetheless be a balancing.  IMHO studying Tax Courtroom Rule 22 as a protected harbor will increase equity with little or no, if any, lack of administrability.

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

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