As CPAs advising clients on federal tax matters, understanding the procedural prerequisites for accessing judicial review, particularly in the United States Tax Court, is paramount. A critical juncture involves the timely filing of a petition to redetermine a deficiency after receiving a Notice of Deficiency from the IRS. The seemingly straightforward 90-day deadline under Internal Revenue Code (IRC) § 6213(a) has become a focal point of complex legal debate, particularly in the wake of recent Supreme Court jurisprudence on the distinction between jurisdictional limits and non-jurisdictional claims-processing rules. The case of Naysha Oquendo v. Commissioner, currently before the Sixth Circuit Court of Appeals after dismissal by the Tax Court, highlights these complexities and the potential availability of equitable tolling.

Facts of the Underlying Dispute

The dispute originates from a Notice of Deficiency issued by the Commissioner of Internal Revenue on May 30, 2023, which determined a deficiency and penalties in the petitioner, Naysha Oquendo’s, federal income tax for the tax year 2022. IRC § 6213(a) generally requires a taxpayer to file a petition with the Tax Court within 90 days after the date the notice of deficiency is mailed to their address within the United States. In this case, the notice was mailed on May 30, 2023, making the last day to file a petition August 28, 2023. Ms. Oquendo electronically filed her Petition on November 1, 2023. This filing date was beyond the 90-day period.

The Commissioner filed a Motion to Dismiss for Lack of Jurisdiction on the ground that the Petition was not filed within the time prescribed by the IRC. Petitioner filed an Objection to this motion.

The Tax Court’s Original Analysis and Decision

The Tax Court is a court of limited jurisdiction, empowered to exercise authority only as authorized by Congress. When its jurisdiction is challenged, the party seeking to invoke it must affirmatively demonstrate that all facts giving rise to jurisdiction are present. In deficiency cases, the Tax Court’s jurisdiction depends on two requirements: the issuance of a valid notice of deficiency and the timely filing of a petition.

The Tax Court determined that the notice of deficiency was properly mailed on May 30, 2023, to the petitioner’s last known address. This established the first jurisdictional requirement. However, the electronic filing of the Petition on November 1, 2023, was outside the 90-day period calculated from the mailing date.

The Tax Court held that it has no authority to extend this 90-day period. Petitioner argued that the Court should apply the doctrine of equitable tolling, citing the Third Circuit’s decision in Culp v. Commissioner, 75 F.4th 196, 205 (3d Cir. 2023). However, the Tax Court found Petitioner’s reliance on Culp misplaced because Culp is a Third Circuit case, and the Oquendo case is presumably appealable to the Sixth Circuit. The Tax Court noted that the Sixth Circuit has held that the timely filing deadline in deficiency cases is jurisdictional, citing Patmon & Young Pro. Corp. v. Commissioner, 55 F.3d 216 (6th Cir. 1995). Furthermore, the Tax Court stated that in Sanders v. Commissioner, 161 T.C., slip op. at 7-8 (Nov. 2, 2023), it had thoroughly examined the Culp decision and held that it would continue treating the timely filing deadline as jurisdictional in deficiency cases appealable outside the Third Circuit. Therefore, the Tax Court concluded that the petitioner was not entitled to equitable tolling in this case.

While sympathetic to the petitioner’s circumstances, the Tax Court reiterated that its jurisdiction is limited by Congress and that it lacks authority to extend the 90-day period set forth in IRC § 6213(a), "whatever the equities of a particular case may be and regardless of the cause for its not being filed within the required period.".

The Tax Court granted the Commissioner’s Motion to Dismiss, dismissing the case for lack of jurisdiction because the Petition was not filed within the prescribed period under IRC § 6213(a). The Tax Court noted that while judicial review in the Tax Court was unavailable, the petitioner could potentially pursue administrative resolution with the IRS or pay the determined amounts and file a claim for refund, which if denied, could lead to a suit for refund in a U.S. District Court or the U.S. Court of Federal Claims.

Oral Arguments Before the Sixth Circuit

The case proceeded to the Sixth Circuit Court of Appeals, where arguments centered on whether the 90-day deadline in IRC § 6213(a) is jurisdictional or a claims-processing rule subject to equitable tolling. This distinction is critical because if the deadline is jurisdictional, the court lacks the power to hear the case if the deadline is missed, regardless of circumstances. If it’s a claims-processing rule, missing the deadline may be excused under the doctrine of equitable tolling.

Petitioner’s Argument

Counsel for Ms. Oquendo argued that the first sentence of IRC § 6213(a), which provides the deadline for petitioning the Tax Court, is an ordinary deadline and a claims-processing rule that is not jurisdictional and is subject to equitable tolling. This conclusion, counsel asserted, is compelled by the Supreme Court’s decision in Beckler and the Third Circuit’s holding in Culp. The deadline is not jurisdictional because there is no clear statement in the statute that it is jurisdictional. Following Beckler, the text explains what the taxpayer may do, not what the Tax Court shall do, and it does not address the Tax Court’s jurisdiction or clearly link jurisdiction to the deadline. The Commissioner, counsel argued, fails to identify a clear statement and relies on inferences from other statutes, which are insufficient to meet the requirement that jurisdiction be clearly stated.

Since the deadline is not jurisdictional, it is presumptively subject to equitable tolling under the Irwin presumption (from Irwin v. Department of Veterans Affairs, 498 U.S. 89 (1990)). Nothing in the text of IRC § 6213(a) rebuts this presumption; the deadline is short, not written emphatically, does not preclude equitable tolling, and is directed at the taxpayer, not the court.

Counsel acknowledged a potential pre-Beckler circuit split where the Seventh and Ninth Circuits had held the deadline jurisdictional, but argued that Beckler undermined their reasoning. Beckler addressed a similar provision in the collection due process statute, finding it wasn’t a clear statement of jurisdiction. The Third Circuit’s post-Beckler decision in Culp relied heavily on Beckler, finding the § 6213(a) text even weaker than the text in Beckler for finding jurisdiction, particularly noting that Beckler involved a statute that said "the tax court shall have jurisdiction over such matter" linked to the filing allowance, whereas § 6213(a) does not have such language directly linking jurisdiction to the deadline. Counsel highlighted that the Supreme Court denied the Commissioner’s certiorari petition in Culp, which counsel believes is a strong indicator that the Supreme Court may not view the circuit split as significant anymore.

Regarding the path forward if the Sixth Circuit agreed the deadline was not jurisdictional, counsel suggested the court could decide whether equitable tolling is legally available as a matter of law, as this is a purely legal issue. Remanding solely for the Tax Court to decide this legal question might lead to another appeal, as the Tax Court has consistently held the deadline strict and likely to rule against equitable tolling. The factual question of whether Ms. Oquendo qualifies for equitable tolling would require a remand for fact-finding. Counsel emphasized the legal questions of jurisdiction and equitable tolling availability are closely tied, making it logical for the appellate court to decide both.

In response to a judge’s question about what language would be considered jurisdictional post-Beckler, counsel offered examples like the amount in controversy requirement for diversity jurisdiction and a sentence in Quickway Transportation v. NLRB directed at the court. He also mentioned Henderson v. Shinski, where the Supreme Court found a deadline jurisdictional because it was linked to rules for appealing from district courts, which have jurisdictional deadlines. Other examples often involve a long line of Supreme Court cases holding the deadline jurisdictional, such as the notice of appeal deadline.

Addressing the Commissioner’s argument about "harsh consequences" under IRC § 7459(d), which treats a dismissal for untimely filing (if not jurisdictional) as a decision on the merits, precluding other avenues, counsel presented an argument not raised in Culp or Organic Cannabis. Counsel contended that IRC § 6512 only precludes refund litigation if a petition is filed within the time prescribed under IRC § 6213(a). A taxpayer who files outside the 90-day window, even if arguing for equitable tolling, has not filed within the time prescribed, and thus § 6512 would not apply to bar a subsequent refund suit if equitable tolling is denied. Counsel acknowledged the Commissioner disputes this interpretation but suggested the court doesn’t need to resolve this specific point; the lack of a clear statement on jurisdiction is sufficient.

Commissioner’s Argument

Counsel for the Commissioner argued that while text is important, the Supreme Court since Arbaugh has emphasized that no magic words are required for a limitation to have jurisdictional consequences. Courts should consider text, context, and history. Context and history are unique to each statute, making Beckler not dispositive of the § 6213(a) deadline issue, as the latter is "venerable," refined over a hundred years, and has a very different context within the administrative collection of taxes.

The Commissioner contended that the grant of deficiency jurisdiction is found in IRC § 6213(a), specifically in the first sentence which grants the cause of action to the taxpayer to petition the Tax Court for a redetermination. Counsel argued that no court has accepted the argument that jurisdiction is in § 6214(a). The link between the deadline (a condition on the cause of action) and the jurisdictional grant within § 6213(a) is clearer than in Beckler, where the jurisdictional language was set off by a parenthetical. Here, the condition applies directly to the cause of action/jurisdictional grant in the same sentence. The Commissioner argued the Third Circuit in Culp "glossed over" the question of where the jurisdictional grant is located.

Counsel cited the Ninth Circuit’s decision in Organic Cannabis Association v. CIR, which post-Arbaugh and Beckler held the deadline jurisdictional based on textual, contextual, and historical analysis.

A key part of the Commissioner’s argument was the "harsh consequence" imposed by IRC § 7459(d) if the deadline is not jurisdictional. Under this section, a dismissal of an untimely petition for a non-jurisdictional reason is treated as a decision that the deficiency is the amount determined by the Secretary, having preclusive effect on future disputes about the tax year. This harsh consequence is unique to the Tax Court deficiency system compared to the contexts in Beckler and other cases involving claims-processing rules, where plaintiffs usually only get one chance at judicial review regardless of the deadline’s nature. If the Tax Court deadline is missed and the case is dismissed for non-jurisdictional untimeliness, the taxpayer is foreclosed from challenging the tax amount in district court, bankruptcy court, or other administrative relief avenues. This creates a "trap for the unwary," where a taxpayer missing the deadline by even one day could lose all rights to challenge the deficiency later if they attempt Tax Court litigation.

The Commissioner used the Culp taxpayers as an example, noting that despite their success on the jurisdictional issue in the Third Circuit, they have since filed a protective refund suit in the Court of Federal Claims, demonstrating the very problem the Third Circuit allegedly downplayed.

Regarding equitable tolling, the Commissioner argued that even if it is legally available, the presumption is that the vast majority of people will not qualify on the facts. Citing the amicus brief, counsel noted that out of over a hundred cases reviewed, only about six had a plausible basis for a tolling claim. Furthermore, counsel claimed the Tax Court, in cases appealable to the Third Circuit, is prolonging proceedings by evaluating equitable tolling but almost universally denying the claims, leading to dismissals under § 7459(d) and preclusion. This, the Commissioner argued, slows down the collection process.

Responding to the judges’ questions about deciding equitable tolling availability at the appellate level, the Commissioner agreed it is a legal question the court could decide, as it depends on the statutory appraisal and context. However, counsel noted the two questions (jurisdiction and tolling availability) are intertwined. Crucially, the Commissioner argued that reversing the Tax Court’s jurisdictional dismissal but then finding that Ms. Oquendo would likely not qualify for equitable tolling on the facts alleged would necessitate a dismissal on the merits under § 7459(d), which would be a greater harm to the taxpayer (preclusion) than the original jurisdictional dismissal (which, if jurisdiction was truly lacking, would preserve other potential, albeit limited, avenues like refund suits under the taxpayer’s argument). Therefore, the Commissioner asked the court to affirm the Tax Court’s decision.

Nature of Judges’ Inquiries

The judges’ inquiries during the oral argument reflected a deep engagement with the complex legal issues and the practical consequences for taxpayers. Several key areas were explored:

The Circuit Split and Impact of Beckler: Judges repeatedly questioned the nature and current status of the circuit split regarding the § 6213(a) deadline and how Beckler has impacted prior holdings. They pressed both sides on whether Beckler’s reasoning was dispositive or merely informative.
Location of Jurisdictional Grant: A central line of questioning focused on where in the IRC the Tax Court’s jurisdiction over deficiency redetermination is granted. Judges challenged the Commissioner to pinpoint the "magic words" or clear textual link to jurisdiction in § 6213(a). They also entertained the Petitioner’s alternative sources of jurisdiction.
Jurisdictional Language Post-Beckler: Judges sought clarification on what statutory language would be considered jurisdictional under the current Supreme Court framework following Beckler. They asked for concrete examples. One judge noted that the court’s own 30-day appeal deadline, long held jurisdictional, lacked obvious "magic language" under the new test.
Equitable Tolling and Remand: Judges explored whether equitable tolling would apply if the deadline was deemed non-jurisdictional. A significant back-and-forth occurred regarding whether the Sixth Circuit should decide the legal availability of equitable tolling or remand the case to the Tax Court for that determination. Judges questioned the efficiency of remanding a purely legal question that the appellate court is equipped to decide.
Culp Cert Denial: Judges specifically inquired about the Supreme Court’s denial of certiorari in Culp and what that might indicate about the perceived circuit split.
Harsh Consequences (§ 7459(d)): Judges extensively probed the Commissioner’s argument about the harsh consequences under § 7459(d) if the deadline is not jurisdictional. They questioned whether this harsh result only materializes if equitable tolling is denied and whether the potential availability of equitable tolling sufficiently mitigates the concern about the trap for the unwary.
Alternative Avenues (Refund Suits): Judges specifically asked about the availability of refund suit litigation in district court for a taxpayer who missed the Tax Court deadline. They pressed the Commissioner on the amicus brief’s representation about the lack of examples and the Culp taxpayers’ protective suit. They also engaged with the Petitioner’s argument that § 6512 wouldn’t preclude refund suits if the petition wasn’t "timely filed" under § 6213(a) in the context of denied equitable tolling.
Intertwined Issues: Judges noted the close relationship between the jurisdictional question and the legal availability of equitable tolling.

Conclusion

The Oquendo case presents a critical opportunity for the Sixth Circuit to weigh in on the jurisdictional nature of the Tax Court’s 90-day deadline under IRC § 6213(a) following the Supreme Court’s guidance in Beckler and the Third Circuit’s contrary holding in Culp. The oral arguments reveal a complex interplay of textual analysis, statutory context, historical understanding, and consideration of the practical consequences for taxpayers navigating the intricate U.S. tax collection system. CPAs must stay abreast of the court’s decision, as it will directly impact how we advise clients regarding the finality of the notice of deficiency deadline and the potential, or lack thereof, for equitable relief. The outcome will clarify the landscape for potentially missed deadlines and the availability of alternative judicial forums.

Prepared with assistance from NotebookLM.

Audio for the oral arguments before the panel can be accessed via the link below:

Naysha Oquendo v Commissioner: Play Download