The US Supreme Court Wednesday heard oral arguments in Boechler, P.C. v. Commissioner of Internal Revenue, a case concerning the time limit to file petitions with the US Tax Court to review Internal Revenue Service (IRS) determinations.
On June 5, 2015, the IRS notified Boechler, P.C., a personal injury law firm in North Dakota, of a discrepancy between prior tax document submissions. Boechler did not answer the IRS notification. As a result of not responding, the IRS applied a 10 percent penalty. Boechler did not pay the penalty. The IRS notified Boechler of its intent to set conditions to collect outstanding debts related to Boechler’s tax penalty. Boechler requested a Collection Due Process hearing but did not establish why the penalties related to the original unpaid fine should be relieved.
Therefore, on July 28, 2017, the IRS Independent Office of Appeals notified Boechler of its decision to uphold the IRS’s conditions to collect Boechler’s outstanding debts. The notification was delivered on July 31, 2017. According to the Independent Office of Appeals notification, there was a 30-day filing deadline for Boechler to submit a Collection Due Process hearing petition. Boechler mailed the petition on August 29, 2017, the day after the deadline passed.
The US Tax Court received Boechler’s petition, but the IRS moved to dismiss the case for lack of jurisdiction. Boechler argued that the 30-day deadline was not related to the court’s jurisdiction, that the deadline should be equitably tolled and the IRS’s calculation of the deadline from the issuance of the determination notice, not the date of receipt, violated the due process clause. The Tax Court dismissed the case for lack of jurisdiction.
Boechler appealed the case to the US Court of Appeals for the Eighth Circuit. The court affirmed the Tax Court’s decision to dismiss the case. Boechler petitioned the Supreme Court, and on September 30, 2021, the Supreme Court agreed to hear Boechler’s case.
During oral arguments, Supreme Court justices appeared skeptical of the government’s argument that a tax code deadline barred a day late challenge to an IRS levy. Multiple justices commented that the government’s case could be undermined by the many plausible statutory interpretations of a 30-day deadline. Justice Brett Kavanaugh said, “the fact that a North Dakota Law Firm, Boechler, P.C., advanced reasonable arguments could in itself undermine the government’s position.”
The outcome of this case has important implications for the treatment of tax law, interpretation of filing deadlines within interconnected statutory schemes and disparate outcomes for low-income taxpayers.