The Latest
Last week, an amicus brief was filed with the First Circuit Court of Appeals in support of a taxpayer’s[i] challenge to the U.S. Tax Court’s dismissal of the taxpayer’s petition[ii] for lack of jurisdiction. The Tax Court determined that the taxpayer failed to satisfy the statutory requirement that a petition be filed with the Court within 90 days after the IRS mails a Notice of Deficiency to the taxpayer if the taxpayer wants to challenge the asserted deficiency in the Tax Court.[iii]
According to the brief, Congress never clearly stated that the 90-day deadline for filing a petition with the Tax Court was jurisdictional. For that reason, it urged the First Circuit to join the Second, Third, and Sixth Circuits in deciding that the deadline was not a jurisdictional requirement and, therefore, should be subject to equitable tolling;[iv] meaning that the running of the statutory period may be paused (or “tolled”) in cases where a taxpayer pursued their rights diligently, but some extraordinary circumstance beyond their control prevented compliance with the statutory filing period.
To better understand the issue presented to the Court of Appeals, it may be helpful to briefly review the process by which additional tax may be assessed against a taxpayer.
The IRS Determines a Deficiency
In general, when the IRS identifies an error on a taxpayer’s federal income tax return and determines that such error will result in an understatement (a deficiency) of the taxpayer’s tax liability – i.e., as compared to the liability calculated and “self-assessed” by the taxpayer on their tax return – the agency will provide the taxpayer with a report that includes the items on the return that the IRS proposes to adjust and of the deficiency that would result therefrom (the “30-day letter”).[v]
Office of Appeals
The taxpayer generally has 30 days to accept this proposed adjustment or to request a conference with the IRS Independent Office of Appeals, which serves as an informal administrative forum for any taxpayer wanting to contest a proposed adjustment.
90-Day Letter
If the taxpayer does not respond to the IRS’s report or does not prevail in the conference with the Appeals Office, the IRS is “authorized” to send a statutory notice of deficiency (also known as a “90-day letter”) to the taxpayer by certified or registered mail.[vi]
Although the statutory language regarding the issuance of a notice of deficiency appears more permissive (“is authorized”) than mandatory (“shall”), as a practical matter the notice must be issued when there is a proposed tax deficiency with which the taxpayer does not agree and: (i) expiration of the statute of limitations is imminent, and no extension can be obtained; (ii) the taxpayer does not respond to, or file a valid protest to, a 30-day letter; or (iii) the taxpayer requests the issuance of the notice in order to petition the case to the Tax Court.[vii]
Limitations Period
An important consideration in the IRS’s decision to send a notice of deficiency to a taxpayer is the amount of time remaining in the statute of limitations for the assessment of additional tax.
In general, the IRS can assess additional tax within 3 years after the due date for the filing of a taxpayer’s return (including extensions), or – if the taxpayer filed late – within 3 years after the IRS received the return, whichever is later.[viii]
Last Known Address
This notice must be sent to the taxpayer’s last known address[ix] and must inform the taxpayer of their right to contact a local office of the Taxpayer Advocate and provide the location and phone number of the appropriate office.[x]
Contents of the Notice
The notice of deficiency is a legal determination that is presumptively correct.[xi] Among other things, it must include an explanation of the notice and its purpose, the amount of the deficiency asserted by the IRS and how it was computed, an explanation of the adjustments resulting in the asserted deficiency, and a description of the taxpayer’s right to petition the Tax Court to dispute the proposed adjustments.
Significantly for purposes of this post, the notice of deficiency must include two dates: (1) the date the notice is issued, and (2) the last day the taxpayer can file a petition with the Tax Court “for a redetermination of the deficiency”[xii] (i.e., to challenge the proposed deficiency).
The last day the taxpayer can file a petition with the Tax Court is 90 days after the notice is issued.[xiii] Because the Tax Court is the only judicial forum in which the taxpayer can challenge the asserted tax deficiency before paying the liability in full, the timely filing of the petition is important to the taxpayer.
Protecting the Taxpayer
The notice of deficiency and the timely filing of a petition with the Tax Court provide or trigger other important procedural rights and protections.
For example, the IRS must issue a notice of deficiency to a taxpayer before assessing any additional income tax against the taxpayer.[xiv] Indeed, no deficiency may be assessed[xv] against a taxpayer until the expiration of the 90-day filing period.[xvi]
Moreover, if a taxpayer has timely filed a petition with the Tax Court, a deficiency may not be assessed against the taxpayer until the Court’s decision becomes final.[xvii]
Protecting the Fisc
That said, the limitations period within which the IRS may assess additional tax is suspended during the 90-day filing period and, assuming the timely filing of a petition, for 60 days after a final Tax Court decision.[xviii]
However, if the taxpayer does not timely file a petition with the Tax Court, the IRS will assess the proposed deficiency.
Where Are We?
In other words, the timely filing of a petition with the Tax Court is of the utmost importance for both the taxpayer and the government.
Or is it?
Last month, the Courts of Appeals for the Second[xix] and Sixth[xx] Circuits decided that the Tax Court may consider an extension of the 90-day period for petitioning the Court under the doctrine of equitable tolling.
By doing so, these Courts joined the Third Circuit[xxi] in concluding that the 90-day period within which a taxpayer must file a petition in the Tax Court is not jurisdictional.
The Tax Court in these cases dismissed the taxpayers’ petitions for lack of jurisdiction to decide their claims because the petitions were filed more than 90 days after the IRS sent the taxpayers their notices of deficiency.
According to these Circuits, there is nothing in the Code that ties the Tax Court’s jurisdiction over a taxpayer’s claim with the taxpayer’s filing of a petition within the statutorily prescribed 90-day period. The Circuits stated that because Congress did not “clearly” assign jurisdictional consequences to the filing deadline, the deadline was not jurisdictional.
These Circuits also “observed” that, although Congress had amended those provisions of the Code that include the issuance of the notice of deficiency and the 90-day period for filing a petition, it never added language specifying that the filing deadline imposed a jurisdictional bar.
Taxpayer Bill of Rights 3
How accurate or defensible are the reasons cited by these Circuits in support of their decisions that the 90-day statutory deadline for filing a petition is not jurisdictional?
As I wrote a few weeks ago, not very.[xxii]
The Internal Revenue Service Restructuring and Reform Act of 1998[xxiii] represented a significant overhaul of the agency. The legislation included the following provision:[xxiv]
“SEC. 3463. NOTICE OF DEFICIENCY TO SPECIFY DEADLINES FOR FILING TAX COURT PETITION.
(a) In General.–The Secretary of the Treasury or the Secretary’s delegate shall include on each notice of deficiency under section 6212 of the Internal Revenue Code of 1986 the date determined by such Secretary (or delegate) as the last day on which the taxpayer may file a petition with the Tax Court.
(b) Later Filing Deadlines Specified on Notice of Deficiency To Be Binding.–Subsection (a) of section 6213 (relating to restrictions applicable to deficiencies; petition to Tax Court) is amended by adding at the end the following new sentence: “Any petition filed with the Tax Court on or before the last date specified for filing such petition by the Secretary in the notice of deficiency shall be treated as timely filed.”.
(c) Effective Date.–Subsection (a) and the amendment made by subsection (b) shall apply to notices mailed after December 31, 1998.”
The House, Senate, and Conference Committee Reports[xxv] prepared and issued in connection with the introduction and eventual passage of the bill were basically identical; in relevant part they stated:
“Present Law
Taxpayers must file a petition with the Tax Court within 90 days after the deficiency notice is mailed (150 days if the person is outside the United States) (sec. 6213). If the petition is not filed within that time period, the Tax Court does not have jurisdiction to consider the petition.
Reasons for Change
The Committee believes that taxpayers should receive assistance in determining the time period within which they must file a petition in the Tax Court and that taxpayers should be able to rely on the computation of that period by the IRS.
Explanation of Provision
The bill requires that the IRS include on each deficiency notice the date determined by the IRS as the last day on which the taxpayer may file a petition with the Tax Court. It is expected that the last day on which a taxpayer who is outside the United States may file a petition with the Tax Court will be shown as an alternative. The bill provides that a petition filed with the Tax Court by this date shall be treated as timely filed.”
It bears repeating the language used by each of the House Ways and Means Committee, Senate Finance Committee, and Conference Committee reports: “If the petition is not filed within that time period, the Tax Court does not have jurisdiction to consider the petition.”
In light of the foregoing Congressional Reports – which were not referenced in any of the Circuit opinions – it seems pretty clear that Congress understood the 90-day filing deadline to be jurisdictional. That’s why Congress found it imperative, as part of the Internal Revenue Service Restructuring and Reform Act of 1998, to require the IRS to include on each deficiency notice the date determined by the IRS as the last day on which the taxpayer may file a petition with the Tax Court.
Based on this legislative history, it appears that Congress did not think it necessary to revise the language of the 90-day provision because its jurisdictional implications were obvious (as, indeed, they were to almost all of us until recently, when this history was apparently ignored).
Does It Matter?
On the same day that the above-mentioned amicus brief was filed with the First Circuit, the “Tax Court Improvement Act” (the “Bill”)[xxvi] was introduced into the House and referred to the Ways and Means Committee.
The Bill
Section 5 of the Bill reads in its entirety as follows:
SEC. 5. CLARIFICATION OF TAX COURT JURISDICTION TO APPLY EQUITABLE TOLLING IN DEFICIENCY CASES
(A) IN GENERAL. Section 7451(b) is amended to read as follows:
‘‘(b) TOLLING OF TIME.
‘‘(1) IN GENERAL. The Tax Court shall have jurisdiction to toll the period for filing a petition under section 6213(a) in cases in which the Tax Court determines based on the facts and circumstances that equity warrants such tolling.
‘‘(2) RULES FOR INACCESSIBLE FILING LOCATIONS.
‘‘(A) IN GENERAL. Notwithstanding any other provision of this title, in any case (including by reason of a lapse in appropriations) in which a filing location is inaccessible or otherwise unavailable to the general public on the date a petition is due, the relevant time period for filing such petition shall be tolled for the number of days within the period of inaccessibility plus an additional 14 days.
‘‘(B) FILING LOCATION. For purposes of this paragraph, the term ‘filing location’ 14 means
‘‘(i) the office of the clerk of the Tax Court, or
‘‘(ii) any on-line portal made available by the Tax Court for electronic filing of petitions.’’.
(b) CONFORMING AMENDMENT. Section 7459(d) is amended
- by striking ‘‘If a petition’’ and inserting the following:
‘‘(1) IN GENERAL. If a petition’’, and
- by adding at the end the following new paragraph
‘‘(2) EXCEPTION. Paragraph (1) shall not apply with respect to any dismissal which is solely based on a determination of the Tax Court not to toll the period for filing a petition under section 6213(a).’’.
(c) EFFECTIVE DATE. The amendments made by this section shall apply to filings made after the date of the enactment of this Act.
(d) NO INFERENCE. The amendment made by subsections
(a) shall not be construed to create any inference with respect to the jurisdiction of the Tax Court with respect to any petition filed on or before the date of the enactment of this Act. [xxvii]
Joint Committee Report
According to the description of the Bill prepared by the Joint Committee on Taxation,[xxviii] the Tax Court and the U.S. courts of appeal had, until recently, consistently held that the taxpayer’s meeting of the 90-day deadline was a prerequisite for the Tax Court’s jurisdiction over a deficiency dispute and that the deadline could not be extended even on grounds of equity; in other words, the deadline was not subject to equitable tolling.
The Report the explained In 2022, however, the Supreme Court stated that a filing deadline is jurisdictional only if Congress “clearly states” that it is.[xxix]
After the Supreme Court’s 2022 decision, the Tax Court reconsidered the 90-day deadline for deficiency petitions and reaffirmed its longstanding position that the deadline is jurisdictional.
However, the Report continues, the Courts of Appeal for the Second, Third, and Sixth Circuits have since held that the deficiency petition deadline is not jurisdictional and, so, is subject to equitable tolling. Since the Tax Court follows the relevant precedent of the Circuit Court to which the taxpayer’s case would be appealable,[xxx] the Tax Court currently will consider a motion for equitable tolling when a taxpayer misses the 90-day petition deadline and the taxpayer’s case would be appealable to the Second, Third, or Sixth Circuits.
Given this state of affairs, the Bill would expressly grant the Tax Court jurisdiction to toll the 90-day period[xxxi] for filing a petition contesting a notice of deficiency in cases where the Court determines that equitable tolling is warranted.
Accordingly, when a deficiency petition is filed beyond the statutory deadline and none of the other statutory exceptions apply, the Tax Court would consider a motion for equitable tolling, regardless of the Court of Appeals to which its decision would be appealable.
Observations on the Bill
The Bill converts a jurisdictional requirement into one that is non-jurisdictional. Query what this will mean for the Tax Court, which is already backlogged.
If the goal of the proposed amendment is to provide relief to taxpayers, why not just extend the filing period to give them more time to prepare and submit a petition?
The notice of deficiency would still be required to state the final date by which the petition must be filed, and it would still provide the taxpayer with the contact information for the Taxpayer Advocate, presumably to assist a less “sophisticated” taxpayer. If a more sophisticated taxpayer misses their deadline, well, we draw lines for a reason.
Why put the Tax Court in the position of applying equitable tolling principles,[xxxii] especially when one considers that the Court probably receives a significant number of late-filed petitions?
Parting Thoughts
Where does this leave us?
It is doubtful this pro-taxpayer measure will be opposed on the merits by any in Congress, so let’s assume it finds its way to the President’s desk.
The proposal would be effective for Tax Court petitions filed after the date of enactment.
However, the proposed amendment also states that it is not to be construed to create any inference regarding the Tax Court’s jurisdiction over any petition filed on or before the date of the proposal’s enactment.
In other words, the jurisdictional issue regarding pre-enactment petitions will continue to be litigated in the Courts of Appeal and, perhaps ultimately, in the Supreme Court. I hope that someone, along the way, recalls the 1998 Committee Reports.
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[i] Kyick Holdings, LLC v. Faulkender, Case No. 25-1429 (1st Cir.).
[ii] Kyick Holdings, LLC v. Faulkender, U.S. Tax Court Docket Number: 11594-23. The Order form Dismissal was entered on January 31, 2025. The taxpayer filed a Notice of Appeal for the First Circuit on April 29, 2025; one month later, the Record on Appeal was e-filed with the First Circuit. https://dawson.ustaxcourt.gov/case-detail/11594-23.
[iii] The taxpayer would otherwise have to pay the additional tax asserted as owing, file a claim for refund, and then wait for the claim to be rejected by the IRS or 6 months (whichever occurs first) to bring suit for a refund at the appropriate federal District Court or at the Court of Federal Claims.
[iv] The taxpayer claimed it was unable to file its petition in the Tax Court before the deadline because the notice of deficiency was sent to the wrong address, notwithstanding the taxpayer had filed other returns, with the correct address, to which the IRS had access.
[v] If there is insufficient time remaining on the limitations period for assessment, the IRS may skip the issuance of a 30-day letter and go straight to the notice of deficiency. This may occur, for example, where the taxpayer refuses to consent to an extension or where an extension is not available, as in the case of the estate tax. IRC Sec. 6501(c)(4)(A).
[vi] IRC Sec. 6212(a).
[vii] IRM 4.8.9.
[viii] IRC Sec. 6501(a), (b).
[ix] See Reg. Sec. 301.6212-2. The last known address is defined as “the address that appears on the taxpayer’s most recently filed and properly processed Federal tax return, unless the Internal Revenue Service (IRS) is given clear and concise notification of a different address.” See also Rev. Proc. 2010-16.
[x] IRC Sec. 6212 (a), (b).
[xi] In general, the taxpayer has the burden of proof. Tax Court Rule 142. This means the taxpayer must present evidence to the Court sufficient to prove that the determination of the IRS as set forth in the notice of deficiency is not correct.
[xii] Added by The Internal Revenue Service Restructuring and Reform Act of 1998, discussed below.
[xiii] IRC Sec. 6213(a). The last day is 150 days if either the taxpayer is outside the U.S. when the notice is mailed, or the notice is mailed to an address outside the U.S.
[xiv] Unless the taxpayer agrees to the additional assessment.
[xv] To “assess” a tax against a taxpayer is to formally record the taxpayer’s liability as owing, following which the IRS may seek to collect the amount thereof. Until the assessment is made, no collection activity make be pursued.
[xvi] IRC Sec. 6213(a).
[xvii] IRC Sec. 6213(a).
[xviii] IRC Sec. 6503(a)(1).
[xix] Buller v. Comm’r, No. 24-1557 (2nd Cir. 2025).
[xx] Oquendo v. Comm’r, No. 17249-23 (6th Cir 2025).
[xxi] Culp v. Comm’r, 75 F.4th 196 (3rd Cir. 2023).
[xxii] https://www.taxslaw.com/2025/09/responding-timely-to-a-90-day-letter-is-it-jurisdictional/
[xxiii] Sec. 3463 of Pub. L. 105-206 (the “Act”). The Act included “The Taxpayer Bill of Rights.”
[xxiv] Emph. added. This provision was not inserted into the Code.
Although Sec. 3463(a) of the Act did not amend IRC Sec. 6212, Sec. 6213, or any other provision of the Code, this section of the Act has the same force of law as any Code provision. See United States Natl. Bank v. Independent Ins. Agents of Am., Inc.,508 U.S. 439 (1993) (stating that an uncodified provision shall have the force of law as long as the provision is in the Statutes at Large).
[xxv] H. Rept. 105-364, S. Rept. 105-174, H. Rept. 105-599. (Emph. added.)
[xxvi] H.R. 5349 (Sept. 15, 2025).
[xxvii] IRC Sec. 7451(b) currently read as follows:
(b) Tolling of time in certain cases
(1) In general. Notwithstanding any other provision of this title, in any case (including by reason of a lapse in appropriations) in which a filing location is inaccessible or otherwise unavailable to the general public on the date a petition is due, the relevant time period for filing such petition shall be tolled for the number of days within the period of inaccessibility plus an additional 14 days.
(2)Filing location. For purposes of this subsection, the term “filing location” means—
(A) the office of the clerk of the Tax Court, or
(B) any on-line portal made available by the Tax Court for electronic filing of petitions.
[xxviii] JCX-40-25 (Sep. 15, 2025).
[xxix] Citing Boechler v. Comm’r, 596 U.S. 199 (2022).
[xxx] Golsen v. Comm’r, 54 T.C. 742, aff’d on other grounds, 445 F.2d 985, cert. denied, 404 U.S. 940.
[xxxi] Or the 150-day period, as the case may be.
[xxxii] Perhaps inconsistently across many different taxpayers with possibly convoluted situations.