In the case of Garalnik v. Petitioner, 145 TC No. 15 the question was a simple one at this point—had Felix managed to file his petition with the Tax Court to challenge the IRS’s Notice of Determination Concerning Collection Actions in a timely manner. While this issue involved a court filing, the same basic rules govern timely filing in other contexts.
The issue involves the “timely mailing” rule of IRC §7502 and/or the simple timely delivery requirement for his petition under IRC §6330(d)(1). In the end, Felix did not meet the requirements of the timely mailing but, due to a storm that rendered actual delivery impossible on the actual due date, the Court allowed the filing was timely under Tax Court Rule 25(a).
One important consequence of this ruling is that, since that Tax Court rule would not apply to issues outside the Tax Court, it would appear that had the item in question been a tax return, Felix would have been found to have filed the document late.
This case has been a subject of an earlier article when an order recommending that a finding the filing was timely was issued in August of 2015. The IRS filed a response to that accepting the Judge’s finding of acts but disputing the conclusion of law.
In this case the final day for Mr. Garalink to file a petition with the Tax Court was February 17, 2015. On Monday, February 16, 2015 Felix send his petition to the U.S. Tax Court using Federal Express First Overnight. That was the earliest delivery service that Federal Express offered at that time and, since tax items can be filed via Federal Express it would seem there is no problem.
But the timely mailing rule isn’t quite that simple—the taxpayer using an “alternative service” other than the U.S. Postal service must use a specific service from an approved vendor. While Federal Express has services that qualified, it did not offer “First Overnight” when Notice 2004-83 was issued in 2004—rather the highest level of service from Federal Express on that list was “Priority Overnight.” First Overnight was not added to the list until the issuance of
In this case (as is often true in tax matters) details matter. The Tax Court had previously held that the use of First Overnight did not qualify for the timely mailing rule of §7502 because it was not on the then applicable list (that is, Notice 2004-83) in the case of Scaggs v. Commissioner, TC Memo 2011-258.
First Overnight was finally added to the list by the IRS in Notice 2015-38 in May of 2015, three months after Felix sent off his petition. So, as was true in Scaggs, at the time the petition was filed Felix had used a delivery method that did not allow him to invoke the timely mailing rule despite the fact that the petition was scheduled to arrive hours before the fasted approved method offered by Federal Express at the time.
But Felix, unlike the taxpayer in Scaggs, had given the package to Federal Express the day before the final day for filing with the Tax Court. If an unapproved method is used the filing would still be timely if it actually arrived at the Tax Court before the end of the day prescribed for the filing. Since Federal Express had committed to delivering the document early in the morning, all should have been well.
At this point the weather intervened. Tuesday February 17, 2015 found Washington DC buried under snow due to Winter Storm Octavia and all federal offices, including the Tax Court, were ordered closed that day. Thus Federal Express was unable to deliver the petition on February 17, rather delivering it on the following day when the Tax Court reopened.
Felix argued that the Court should be able to grant general equitable relief in this case, but the Tax Court disagreed that the filing deadline was subject to general equitable relief. Rather, citing the Supreme Court’s decision in United States v. Brockamp, 519 U.S. 347, 349-354 (1997) that related to the similar rules for filing of petitions in refund cases, the Court found that Congress did not intend the date to be subject to equitable relief.
Next Felix argued that the snow emergency should amount to a “holiday” under IRC §7503 which would push the due date to the following day. The Tax Court agreed with the IRS that a Court cannot proclaim a legal holiday on its own, but rather there must be a legislative or executive enactment. And while the Mayor of the District of Columbia had declared the “snow day” closing down the government offices in the District, his authority to do that was separate and distinct under District Law from his ability to proclaim a legal holiday.
The IRS pointed out that if a “snow day” in DC was a legal holiday, then (since DC holidays are treated as holidays for other requirements of the Code) the date for taking any required actions under the IRC across the entire country would have been pushed back. However, the Court also understood Felix’s position that it was, from a practical standpoint, a legal holiday. But the Court found it didn’t need to resolve this matter because there was another route that allowed Felix’s petition to be treated as timely.
That relief was available via the Tax Court’s authority under Rule 1(b) to deal with a matter where there is no applicable rule or procedure under its rule for a Judge to exercise discretion. Under the rules applicable to the other federal courts found at Civil Rule 6(a), the petition would have been timely because the Clerk’s office was unavailable for accepting filings on the day the filing was required. The Tax Court’s own rules on timing, while modeled generally on Rule 6(a), did not contain the special rule regarding when the Clerk’s office is inaccessible.
The Court found that this was the sort of case where the discretionary rule under 1(b) should apply, noting that when the Tax Court wrote its applicable rule the general Civil Rule was also silent on this matter. Thus, finding that the goal was to have generally the same rules as applied in the other courts in such cases, it was acceptable to apply the general Civil Rule which allowed the filing on the following day.