Johnson: Congressional Primacy, Equitable Tolling, And Tax Court Deficiency Litigation

Steve R. Johnson (Florida State), Congressional Primacy, Equitable Tolling, and Tax Court Deficiency Litigation, 77 Tax Law. __ (2023):

In April 2022, in the Boechler case, the Supreme Court considered the nature of the statutory deadline for filing petitions to obtain Tax Court review in collection due process (“CDP”) cases. The Court held that the statutorily prescribed 30-day filing period is not jurisdictional and is subject to nonstatutory equitable tolling in “appropriate cases.”

In pending cases, the courts are considering whether to extend Boechler to the far more important area of Tax Court deficiency litigation. When a taxpayer wishes to contest IRS determinations set out in a notice of deficiency without first paying the additional tax determined by the IRS, the taxpayer must file a petition with the Tax Court within a statutorily prescribed period. The rules defining that period are many and are interrelated. For convenience, this Article will often call this complex timing regime the “90-day rule” because 90 days from the issuance of the notice of deficiency is the most common deadline, but the short-hand “90-day rule” should not obscure the full complexity of the rule.

For nearly a century, it has been settled law that the statutorily prescribed 90-day filing period in deficiency cases is jurisdictional and is not amenable to tolling – except to the extent that Congress specifically authorizes tolling by statute. This Article does not discuss whether the 90-day period should continue to be held to be jurisdictional. Instead, it focuses on equitable tolling. This Article maintains that, even were the courts eventually to conclude that the 90-day period is a claims-processing rule rather than jurisdictional, they nonetheless should refrain from creating, by judicial fiat, a general, nonstatutory equitable tolling rule.

The distinction between “statutory equitable tolling” and “nonstatutory equitable tolling” is crucial. Statutory tolling is when Congress expressly writes an equitable tolling provision into the statute. Nonstatutory tolling is when Congress has written no such provision into the statute but a court adds one as a “gloss” upon the statute. This Article will show that Congress has already written many limited equitable tolling provisions and related provisions into the 90-day filing period regime. The Article maintains that Congress’ choice to establish these mechanisms instead of creating a general, open-ended equitable tolling regime bars the courts from rewriting the statute to provide nonstatutory tolling.