Statutory deadlines in the tax code have historically been interpreted by the Tax Court as jurisdictional. When a statutory filing deadline is jurisdictional, the petitioner’s failure to file by the deadline “deprives a court of all authority to hear a case.” Nonjurisdictional deadlines, in contrast, are “presumptively subject to equitable tolling,” meaning a statute of limitations may be “pause[d]” when “a litigant has pursued his rights diligently but some extraordinary circumstance prevent[ed] him from bringing a timely action.” In Boechler v. Commissioner (2022), the Supreme Court held that 26 U.S.C. § 6330(d)(1)’s thirty-day time limit for petitioning the review of a collection due process determination “is an ordinary, nonjurisdictional deadline subject to equitable tolling,” uncovering new, equitable territory for the Tax Court. Recently, in Culp v. Commissioner, the Third Circuit was the first Court of Appeals to hold that 26 U.S.C. § 6213(a)’s deadline—a ninety-day deadline to appeal a statutory notice of deficiency—is nonjurisdictional and subject to equitable tolling. Culp sets the stage for circuit courts to interpret statutory tax deadlines—particularly in the notice of deficiency context—as nonjurisdictional and subject to equitable tolling. The Third Circuit’s holding will have a positive practical impact on many low-income taxpayers, and other circuits would be wise to adopt similar precedent.
Isobel and David Culp received $17,652.60 to settle a lawsuit in 2015. In their 2015 tax return, the couple listed their payments as “other income,” yet the IRS interpreted this as a failure to report the settlement income. In November 2017, the IRS sent the Culps a letter alleging a deficiency, i.e. alleging that they did not report all of their income on their 2015 return; the letter gave them thirty days to respond. The Culps did not respond, and the IRS proceeded to mail them a statutory notice of deficiency pursuant to 26 U.S.C. § 6213(a). The notice, dated February 5, 2018, listed a $3,363 alleged deficiency in 2015 and a $1,324 penalty for the failure to pay. Per § 6213(a), the notice stated that the Culps had ninety days to file a petition challenging the determination in the Tax Court. The Culps claimed they never received the notice. In May 2018, the Culps received a letter stating they owed a lesser amount (though still thousands of dollars) in 2015 taxes, penalties, and interest; the Culps did not respond within the thirty-day deadline. The IRS proceeded to levy on the Culps’ social security payments and 2018 tax refund, collecting roughly $1,800.
The Culps then filed a petition in the Tax Court to contest the deficiency. The Tax Court reasoned that the ninety-day filing deadline to petition the Tax Court is jurisdictional. Citing 26 U.S.C. §§ 6212, 6213, and 6214, the Tax Court dismissed the Culps’ petition for lack of jurisdiction because the Culps did not file within the ninety-day deadline. The Culps timely appealed to the Third Circuit,1 which had appellate jurisdiction pursuant to 26 U.S.C. § 7482(a).
The Third Circuit reversed and remanded. Writing for the panel, Judge Ambro held that the ninety-day deadline is nonjurisdictional and subject to equitable tolling. The court reviewed the Tax Court’s dismissal for lack of subject matter jurisdiction de novo and reviewed the Tax Court’s factual findings for clear error. The Third Circuit addressed the Culps’ two arguments in turn: First, that the IRS failed to send them a notice in the first place and therefore the ninety-day clock hadn’t started; and second, that § 6213(a)’s timeline is not jurisdictional and is subject to equitable tolling.
The Third Circuit was not persuaded by the Culps’ first contention that the IRS did not send the notice of deficiency letter or, if it was sent, that they did not receive it. The Third Circuit held that the Tax Court did not err in its determination that the IRS mailed the notice, relying on U.S. Postal Service evidence that the IRS sent the letter. The Culps also argued that even if the IRS sent the notice, they did not receive it and therefore their “90-day clock never started ticking.” In response, Judge Ambro cited Third Circuit precedent indicating that the filing period starts when the notice is dispatched to the recipients, regardless of whether the taxpayers actually received the notice. The Culps’ first argument failed.
The Third Circuit found the Culps’ second argument persuasive, holding that § 6213(a)’s deadline is nonjurisdictional and is subject to equitable tolling. Judge Ambro cited Boechler for the assertion that the court will only treat a “procedural requirement as jurisdictional” if “Congress clearly states that it is” (internal quotation marks omitted). This clear statement rule stems from Supreme Court precedent that developed because of the prejudice imposed on litigants when a court deems a deadline jurisdictional.2 Boechler interpreted a different tax statute, § 6330(d)(1); the statute governs petitions to review collection due process determinations, wherein a taxpayer challenges an IRS tax lien or levy. After explaining the timeline to petition (thirty days), § 6330(d)(1)—the collection due process statute—says “(and the tax court shall have jurisdiction with respect to such matter).” Writing for a unanimous Court, Justice Amy Coney Barrett held that the text did “not clearly mandate a jurisdictional reading,” in part because “‘such matter’ lacks a clear antecedent.”
In Culp, Judge Ambro applied the clear statement rule to the text of § 6213(a) to hold that the ninety-day deadline is nonjurisdictional. In relevant part, § 6213(a) reads: “Within 90 days . . . after the notice of deficiency . . . is mailed . . . the taxpayer may file a petition with the Tax Court for a redetermination of the deficiency.” Judge Ambro noted that “[n]othing in that language links the deadline to the Court’s jurisdiction.” Congress did not clearly state that the ninety-day deficiency deadline was jurisdictional, therefore, Judge Ambro reasoned, it is nonjurisdictional.
Next, Judge Ambro considered whether the ninety-day deadline could be equitably tolled. Judge Ambro rejected the Commissioner’s argument that the Culps failed to preserve the issue of equitable tolling; he said that “the Culps had no logical reason to assert their claims may be tolled” in the Tax Court because they were only disputing the jurisdictional issue. Moreover, relying on Supreme Court precedent, Judge Ambro reasoned that “nonjurisdictional limitations periods are presumptively subject to equitable tolling” and the Court should next ask whether “Congress did not want the equitable tolling doctrine to apply” (internal quotation marks omitted). Judge Ambro first evaluated the text of the statute; he reasoned that the filing period was not emphasized in a technical manner, and while Congress provided exceptions to the deadline, they were not “exhaustive” or “highly technical,” nor did they provide “substantive limitations” (internal quotation marks omitted). The “statutory context” also led the panel to believe that Congress did not intend to foreclose equitable tolling for several reasons: The deadline applies to the petitioner, not the court; the time limit is relatively short; and the deadline applies to pro se litigants. After rejecting the IRS’s claim that equitable tolling would not be administrable here, the Third Circuit reversed and remanded for the Tax Court to decide whether the Culps were entitled to relief given the equitable tolling standard.3
On June 24, 2024, the Supreme Court denied the Solicitor General’s petition for a writ of certiorari in Culp, indicating potential agreement with (or at least acquiescence to) the Third Circuit’s Boechler-like interpretation of statutory notice of deficiency filing deadlines as nonjurisdictional. The Supreme Court only rejects thirty percent of certiorari petitions filed by the Solicitor General, whereas it rejects ninety-seven percent of certiorari petitions filed by other parties. Thus, the Supreme Court’s rejection of the cert petition here may signal agreement with the Third Circuit’s decision in Culp. If adopted by other circuits, the Third Circuit’s interpretation of § 6213(a)’s deadline would benefit low-income taxpayers nationwide. These equitable benefits not only flow from the statutory text and Supreme Court precedent, as detailed by the Third Circuit, but also compensate for inherent inequities within the administration of tax law and align with Congressional intent behind the Tax Court’s formation.
Other circuits4 would be wise to follow Culp’s lead in interpreting § 6213(a)’s deadline as nonjurisdictional in part because of the structural inequities in Tax Court litigation. About ninety percent of people before the Tax Court are pro se litigants (a factor in favor of interpreting a deadline as nonjurisdictional and subject to equitable tolling5). Additionally, about ninety-five percent of Tax Court cases are filed under deficiency jurisdiction, i.e. under § 6213(a), meaning many of these self-represented litigants are disputing the same letter that the Culps did. These taxpayers already must overcome several barriers to access the Tax Court, such as paying filing fees, having a lack of knowledge about the legal system, and facing the difficulties of being an advocate for oneself while navigating the other strains of life as a low-income worker with a looming, alleged tax debt. If other circuits interpret § 6213(a)’s deadline as Culp did, it will allow the Tax Court to apply an equitable tolling standard when the taxpayer has been pursuing their rights diligently and an extraordinary circumstance prevented the taxpayer from filing within the prescribed ninety days. In other fora, courts have applied equitable tolling when a petitioner is homeless, there are problems with the mail, and where a litigant has psychiatric and physical disabilities. Undoubtedly, equitable tolling could apply in some of the many pro se litigants’ cases coming before the Tax Court.
Guidance on deadlines from the IRS can sometimes be unclear, another factor weighing in favor of circuit courts interpreting the statutory notice of deficiency deadline as nonjurisdictional. Indeed, “[s]ome taxpayers and tax professionals still struggle to access information from the IRS, including finding clear and timely guidance on which they can rely, determining the status of pending issues, understanding IRS correspondence and whether they must respond to it, and reaching an IRS employee with the knowledge to answer their questions and the authority to resolve their problems.” Furthermore, there is high employee turnover at the IRS, which can result in inexpert advice or miscommunications. Sometimes, the IRS gives taxpayers erroneous information about their timeline to petition, resulting in Tax Court petitions that comply with the IRS notice’s deadline, but not with the statutory deadline. If other circuits follow Culp’s lead, petitioners who file outside of the ninety-day deadline for these reasons could also raise equitable tolling in their arguments before the Tax Court.
Low-income filers are more likely to come before the Tax Court in the first place because the complexity of the tax code causes systemic inequities in its administration. The IRS is five times more likely to audit low-income wage earners than any other taxpayer. Further, while the U.S. government delivers some of its most powerful anti-poverty measures through the tax code, the law and IRS regulations are far from straightforward, leading to potential errors on tax returns. The Earned Income Tax Credit (EITC), for example, is one of the largest federally administered anti-poverty programs in the world, yet its terms of qualification sometimes cause low- and moderate-income workers to owe thousands of dollars to the IRS. In 2023, roughly “23 million eligible workers and families received about $57 billion in EITC.” The average amount a family received was $2,541, lifting millions of people above the poverty line. Alongside this rosy story is a darker reality: Tools like the EITC are so difficult for the average taxpayer, let alone the under-resourced worker, to understand, that many good-faith taxpayers believe they are entitled to a credit but are in fact either ineligible or only entitled to a lesser amount than they claimed.
Take one obvious example of a potential error: A “qualifying child” for the purposes of the EITC must be under age nineteen (or under age twenty-four and a full-time student), whereas a “qualifying child” for the purposes of the Child Tax Credit (CTC) must be under age seventeen. People who make mistakes in claiming the EITC or CTC founded on this or other potential misunderstandings expect a refund, and instead often owe thousands of dollars to the IRS in unpaid liabilities, penalties, and interest. In other words, while often lauded as some of the most effective anti-poverty programs in the country, the EITC and CTC sometimes leave good-faith taxpayers in situations where they receive the statutory notices of deficiency mandated by § 6213(a). Petitioners in these shoes may be especially susceptible to filing late (as they are representing themselves pro se) and thus could benefit from being able to raise equitable tolling before the Tax Court.
Finally, the Third Circuit’s holding comports with Congress’s purpose behind establishing the Tax Court. There is no constitutional right to prepayment judicial review of purported tax deficiencies. In 1924, Congress established the Board of Tax Appeals—later named the Tax Court of the United States—to give taxpayers the chance to dispute IRS determinations before an independent board prior to paying an alleged liability. Congress wanted to eliminate the “harsh rule of payment first and litigation afterwards,” especially for people unable to pay their liability first and sue the IRS later. Judge Ambro’s holding in Culp, then, aligns with Congress’s intention of protecting taxpayers’ ability to petition a tax assessment before having to pay it and incur unjust financial hardship.
If other circuits interpret § 6213(a)’s deadline as nonjurisdictional, they will not only align with doctrine and history but also will advance justice for low-income taxpayers. Take, for example, Naysha Y. Oquendo, who is the sole provider for her niece and two siblings. Oquendo listed them as qualifying children and dependents on her 2022 return. She also claimed associated benefits, like the EITC and CTC. Instead of receiving her anticipated refund of $8,000, the IRS froze her refund and audited her return. The IRS alleged a deficiency of about $1,600 in taxes and $1,900 in penalties. When the IRS sent Oquendo a notice of deficiency letter on May 30, 2023, they mailed it to her old address and she never received the mailing; even after retaining counsel at a low-income taxpayer clinic, the IRS did not send a copy of their notice to Oquendo’s counsel in contravention of the IRS’s Internal Revenue Manual. As a result, Oquendo only learned about the deficiency after the IRS began collections efforts. Oquendo filed a petition for redetermination of her deficiency in the Tax Court on November 1, 2023, outside of the ninety-day window. The Tax Court held that § 6213(a)’s deadline is jurisdictional. The case is currently pending review before the Sixth Circuit. The court had initially held the case in abeyance, which it lifted when the Supreme Court denied certiorari in Culp. Now, the Sixth Circuit has the chance to choose whether to interpret the deadline as jurisdictional, potentially affecting thousands of low-income taxpayers.
In short, taxpayers across the country faced with challenges as “simple” as accurately preparing their taxes and as complex as filing a petition in the Tax Court would benefit from other circuits determining that § 6213(a)’s deadline is nonjurisdictional and subject to equitable tolling. The Sixth Circuit and the Second Circuit have immediate opportunities to do so. The Third Circuit wisely relied upon judicial precedent and statutory interpretation to reason that the ninety-day deadline is nonjurisdictional and subject to equitable tolling. The practical impact of this holding means that taxpayers will be better equipped to dispute purported liabilities. This makes good sense given the disproportionate impact of the deadline on pro se, lower-income litigants and given Congress’s intention to advance financial justice for these very people.
1 The Tax Court follows the rule of law in the circuit in which the case arises.
2 The Supreme Court has acknowledged that “tardy jurisdictional objections . . . result in a waste of adjudicatory resources and can disturbingly disarm litigants.” The Court has held that “most filing deadlines” are nonjurisdictional.
3 “As a general matter, equitable tolling pauses the running of, or ‘tolls,’ a statute of limitations when a litigant has pursued his rights diligently but some extraordinary circumstance prevents him from bringing a timely action.”
4 The Sixth Circuit has a statutory notice of deficiency case pending review, see Oquendo v. Comm’r of Internal Revenue, No. 24-1205 (on appeal from the United States Tax Court (No. 17249-23)), as does the Second Circuit, see Buller v. Comm’r of Internal Revenue, No. 25011-22 (on appeal from the United States Tax Court (No. 25011-22)). This ripe matter will surely come before other circuits as well.
5 In Zipes v. Trans World Airlines, Inc., 455 U.S. 385 (1982), the Court noted that jurisdictional readings are “particularly inappropriate in a statutory scheme in which laymen, unassisted by trained lawyers, initiate the process” (quoting Love v. Pullman Co., 404 U.S. 522 (1972)).
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