Kyick Holdings, LLC, Transferee v. Commissioner of Internal Revenue Service, No. 25-1429, --- F.4th --- (1st Cir. Aug. 17, 2026)

In the complex realm of federal tax litigation, the procedural rules governing the timing of Tax Court petitions are of paramount importance. The United States Court of Appeals for the First Circuit recently addressed these rules in Kyick Holdings, LLC, Transferee v. Commissioner of Internal Revenue Service. Decided on August 17, 2026, the case delivers a nuanced, three-part holding that significantly impacts how tax professionals evaluate Tax Court filing deadlines. Specifically, the First Circuit held that while the ninety-day filing deadline under Internal Revenue Code (I.R.C.) § 6213(a) is nonjurisdictional, it remains a mandatory claim-processing rule that is completely immune to the doctrine of equitable tolling.

In doing so, the First Circuit established a major circuit split, departing from the Second, Third, Sixth and Eighth Circuits’ equitable tolling stances. To reach this conclusion, the panel relied heavily on the Supreme Court’s recent decision in Enbridge Energy, LP v. Nessel (2026), which fundamentally reshaped the federal courts’ approach to nonjurisdictional time bars and equitable exceptions. For CPAs and Enrolled Agents (EAs), Kyick Holdings serves as a stern reminder that procedural technicalities can be just as fatal to a client’s case as substantive errors, even when the taxpayer acts with utmost diligence.

Factual Matrix and Divergent Transferee Paths

The dispute arose out of an IRS investigation into transactions that occurred in January 2018. Dwight Raymond and several of his business entities transferred numerous valuable assets to two separate entities: Kyick Holdings, LLC (the appellant) and Kyick Charters, LLC (a nonparty to this appeal). These assets were substantial, including “a twenty-eight-slip marina, a boatyard with a travel lift, an eighty-foot whale watch vessel, a sixty-five-foot scenic cruise vessel, and a seafood restaurant with an attendant parking lot”. The sole members of both transferee LLCs were Dwight Raymond’s children, Kylie Raymond and Nicholas Raymond.

Following its investigation, the IRS concluded that these transactions were fraudulent, undertaken to “avoid federal income tax and to transfer the assets for less than their fair market value”. Consequently, on August 30, 2022, the IRS sent notices of transferee liability to both LLCs under I.R.C. § 6901, asserting a deficiency of $696,269.77 in unpaid income tax, plus interest, via certified mail.

At this juncture, the procedural paths of the two transferee LLCs diverged. The IRS mailed the notice for Kyick Charters, LLC to a post office box listed on its most recent Form 941 Quarterly Tax Return. Kyick Charters received the notice and timely filed a petition in the Tax Court. However, the IRS mailed Appellant Kyick Holdings’ notice to 4 Western Avenue, Kennebunk, Maine, which was the address listed on its then most recent federal tax filing, a 2021 tax return.

In early October 2022, the United States Postal Service returned Appellant’s notice to the IRS stamped “Return to Sender/Unclaimed/Unable to Forward”. Appellant did not receive a copy of the notice until January 9, 2023. The discovery occurred when the counsel for both LLCs, having received the Kyick Charters notice, spoke with the IRS representative listed on that notice. The representative mentioned that Appellant’s notice had not been “picked up”. Counsel requested a copy, which the IRS resent to him at a newly provided address on January 9, 2023. On January 20, 2023—143 days after the IRS mailed the original notice, but only 11 days after actually receiving it—Kyick Holdings filed a petition in the Tax Court to challenge the transferee liability.

The Taxpayer’s Request for Relief and the Tax Court’s Dismissal

The IRS moved to dismiss Appellant’s petition for lack of jurisdiction, arguing that the petition was untimely under I.R.C. § 6213(a) because it was filed 143 days after the mailing date. In response, Appellant objected, seeking to restructure its petition as a request for “a declaratory judgment that the IRS assessment [was] invalid because it failed to send the assessment notice to [Appellant] at its last known address”. Appellant maintained that the Tax Court had jurisdiction to make this validity determination.

Furthermore, Appellant asserted in a footnote that “even if” it was “challenging the substance of the assessment, the [Tax] Court would have jurisdiction over the Petition”. In support of this alternative argument, Appellant cited Culp v. Commissioner, 75 F.4th 196 (3d Cir. 2023), which held that I.R.C. § 6213(a) is a nonjurisdictional filing deadline that may be equitably tolled.

Following a remote proceeding in October 2024, the Tax Court (per Hon. Christian N. Weiler) granted the IRS’s motion to dismiss. The Tax Court held that the IRS properly determined Appellant’s “last known address” under Treasury Regulation § 301.6212-2(a) and exercised “reasonable diligence”. Because there was “no dispute that the Petition in this case was not filed within the [ninety]-day period prescribed in [§] 6213(a),” the Tax Court concluded it lacked subject-matter jurisdiction to hear the case. Under the operation of I.R.C. § 6213(c), the Tax Court’s dismissal meant that the $696,269.77 deficiency would be assessed and paid upon notice and demand.

The Last Known Address Rule and Reasonable Diligence Standard

On appeal, the First Circuit first reviewed the “last known address” and “reasonable diligence” arguments de novo as to legal conclusions and for clear error as to factual findings. Before assessing a tax deficiency or enforcing transferee liability, the IRS must mail notice to the taxpayer at their “last known address”. Under Treasury Regulation § 301.6212-2(a), 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 [IRS] is given clear and concise notification of a different address.”

Appellant argued that because of the extensive investigation, the IRS had “actual knowledge” that the 4 Western Avenue address was incorrect, and that the IRS was required to exercise “reasonable diligence” to find the correct address. The First Circuit observed that the “reasonable diligence test comes from non-binding, out-of-Circuit case law, and it predates promulgation of the regulations that define ‘last known address’”. Referencing the Seventh Circuit’s observation in Gyorgy v. Commissioner, 779 F.3d 466, 479 (7th Cir. 2015), the court noted that “there is a tension” between the reasonable diligence case law and the newer regulatory definitions.

The panel declined to formally adopt the reasonable diligence standard. However, it held that even if it did, the IRS had met its burden. The IRS sent the notice to the address listed on Appellant’s 2021 return and confirmed it in its internal database. Although the IRS possessed documents listing other addresses from its investigation, those documents predated the 2021 return and were not, as a matter of law, “clear and concise notification” from Appellant. The court emphasized that even under the reasonable diligence standard, the IRS “had no duty to send duplicate notices to every single address of which [it] had knowledge”, citing Marks v. Commissioner, 947 F.2d 983, 986 (D.C. Cir. 1991). Thus, the mailing was legally “sufficient” under I.R.C. §§ 6212(b)(1) and 6901(g).

The Jurisdictional Boundary: Section 6213(a) Under the Modern Clear Statement Test

The “heart of [the] appeal” centered on whether the ninety-day filing deadline in I.R.C. § 6213(a) limits the Tax Court’s jurisdiction or is merely a procedural time limit. Historically, the First Circuit in Ferré v. Commissioner, 718 F.2d 6 (1st Cir. 1983), had summarily held that the statutory deadline is “jurisdictional”. However, under the “law-of-the-circuit” doctrine, a multi-panel circuit may depart from prior panel decisions when intervening Supreme Court authority “offers a sound reason for believing that the former panel, in light of fresh developments, would change its collective mind”, quoting United States v. López, 890 F.3d 332, 340 (1st Cir. 2018).

The First Circuit found that sound reason in the Supreme Court’s modern “clear statement” line of cases, specifically Boechler, P.C. v. Commissioner, 596 U.S. 199 (2022) and Wilkins v. United States, 598 U.S. 152 (2023). In Boechler, the Supreme Court held that “jurisdictional requirements mark the bounds of a court’s adjudicatory authority” and “cannot be waived or forfeited”. A procedural rule may only be treated as jurisdictional if Congress “clearly states” that it is, citing Arbaugh v. Y & H Corp., 546 U.S. 500, 515 (2006).

Applying the “traditional tools of statutory construction”, the First Circuit analyzed the text, structure, and context of I.R.C. § 6213(a):

Text of the First Sentence: “Within 90 days... the taxpayer may file a petition with the Tax Court for a redetermination of the deficiency”. The court noted this sentence “does not speak in jurisdictional terms or refer in any way to the jurisdiction of” the Tax Court, but instead “reads like an ‘ordinary, run-of-the-mill statute of limitations’”, quoting United States v. Wong, 575 U.S. 402, 411 (2015).
Text of the Fourth Sentence: This sentence states that “The Tax Court shall have no jurisdiction to enjoin any action or proceeding or order any refund under this subsection unless a timely petition for a redetermination of the deficiency has been filed...”.
Structural Separation: The court observed that the fourth sentence’s explicit jurisdictional limitation on injunctions and refunds proves that “Congress knew how to limit the scope of the Tax Court’s jurisdiction”, quoting Culp, 75 F.4th at 202. However, Congress did not apply similar jurisdictional language to the underlying power to hear untimely redetermination petitions. The separation of the filing deadline in the first sentence from the jurisdictional grant in the fourth indicates that the time bar is nonjurisdictional, citing Wong, 575 U.S. at 411.
Statutory Context: The court noted that I.R.C. § 6214(a) grants the Tax Court jurisdiction to “redetermine the correct amount of [a] deficiency,” and I.R.C. § 6512(b)(1) grants jurisdiction to determine overpayments. Neither of these provisions conditions their jurisdictional grants on the timely filing of a petition.

Thus, the First Circuit joined the Second, Third, Sixth and Eighth Circuits in holding that I.R.C. § 6213(a)’s ninety-day filing deadline is nonjurisdictional.

Rebutting the Equitable Tolling Presumption: The Impact of Enbridge Energy

While Appellant successfully argued that the deadline is nonjurisdictional, it failed on the critical next step of the analysis: whether the deadline is subject to equitable tolling. A nonjurisdictional limitations period is “presumptively subject to equitable tolling” under Irwin v. Department of Veterans Affairs, 498 U.S. 89, 95-96 (1990). However, this presumption is rebutted if tolling is “inconsistent with the statutory scheme”, citing Arellano v. McDonough, 598 U.S. 1, 6-7 (2023).

To evaluate this rebuttal, the First Circuit relied on the Supreme Court’s decision in Enbridge Energy, LP v. Nessel (2026). In Enbridge Energy, the Supreme Court unanimously held that the 30-day civil removal deadline under 28 U.S.C. § 1446(b)(1) was mandatory and not subject to equitable tolling, despite being nonjurisdictional. Justice Sotomayor, writing for the Court, clarified that a nonjurisdictional rule remains “mandatory” and “not susceptible of the equitable approach” when “Congress’s choice is evident”, when tolling would be “inconsistent with the text of the relevant statute”, and where there is “good reason to believe that Congress did not want the equitable tolling doctrine to apply”.

Enbridge Energy established a rigorous, multi-pronged framework for analyzing whether a statutory scheme rebuts the presumption of equitable tolling:

Textual Phrasing: The Court noted that while mandatory language alone (e.g., “shall be filed within 30 days”) is insufficient to rebut the presumption, it is highly consistent with treating a deadline as mandatory and inflexible.
Structure and the Brockamp Principle: The Court emphasized the “Brockamp principle” from United States v. Brockamp, 519 U.S. 347, 352 (1997). An “explicit listing of exceptions,” set forth in a detailed manner, strongly indicates “that Congress did not intend courts to read other unmentioned, open-ended, ‘equitable’ exceptions into the statute that it wrote”. This is especially true when the “specific exceptions” already “reflect equitable considerations”, such as § 1446(b)(3)’s extension for later-discovered removability (functioning like an equitable discovery rule) and § 1446(c)(1)’s “bad faith” exception to the one-year diversity cap.
Statutory Divergence: The Court contrasted civil removal with criminal removal under § 1455(b)(1), where Congress explicitly authorized courts to grant leave to file late “for good cause shown”. The omission of a similar “good cause” provision in civil removal conveyed a deliberate congressional choice to withhold that authority in civil cases.
The Subject Matter and Efficiency Concerns: The Court noted that civil removal statutes have an “obvious concern with efficiency” and a “general interest in avoiding prolonged litigation on threshold nonmerits questions”. Allowing equitable tolling would create a “cloud of uncertainty,” generating waste of resources and delaying resolution on the merits.

Application of the Enbridge Framework to Section 6213(a)

Applying the lessons of Enbridge Energy to the Tax Code, the First Circuit concluded that I.R.C. § 6213's text, structure, and context provide good reason to believe that Congress made the ordinary filing period mandatory and immune to equitable tolling.

First, the court analyzed the text of I.R.C. § 6213(a) itself and identified three explicit statutory exceptions and adjustments that “already reflect equitable considerations”:

The Overseas Extension: Congress provided an extended 150-day deadline “if the notice is addressed to a person outside the United States”.
Holiday and Weekend Exclusions: Congress directed that Saturday, Sunday, or a District of Columbia legal holiday cannot be counted as the last day of the limitations period.
The 1998 Safe Harbor: Under the final sentence of § 6213(a), any petition filed on or before the last date specified by the Secretary in the notice of deficiency “shall be treated as timely filed”.

Under Enbridge and Brockamp, this detailed “explicit listing of exceptions” indicates that “Congress did not intend courts to read other unmentioned, open-ended, ‘equitable’ exceptions into the statute that it wrote”.

Second, the court examined the broader statutory scheme of the Tax Code, warning against a “laser focus” on the single provision containing the deadline, as instructed by Enbridge. Additional exceptions and adjustments to § 6213(a)’s ninety-day window elsewhere in the Tax Code “drive home the point”:

Excise Tax Suspension: I.R.C. § 6213(e) suspends the running of the petition filing period during any period in which the IRS extends the time allowed for making corrections on certain excise taxes.
Bankruptcy Coordination: I.R.C. § 6213(f) suspends the filing period during the time a debtor is prohibited by a Title 11 case from filing a petition, plus an additional sixty days thereafter.
Inaccessible Filing Locations: I.R.C. § 7451(b)(1) modifies filing deadlines when a filing location is inaccessible or otherwise unavailable.
Combat Zone Exclusions: I.R.C. § 7508(a)(1)(C) suspends filing deadlines for service members serving in combat zones or contingency operations.
Disaster and Military Action Relief: I.R.C. § 7508A(a)(1) modifies deadlines for taxpayers affected by federally declared disasters, significant fires, or terroristic/military action.
The Mailing Rule: I.R.C. § 7502(a) treats timely mailing as timely filing, mitigating geographic delays.

These detailed exceptions reflect the core principle that tax law is “not normally characterized by case-specific exceptions reflecting individualized equities”, quoting Brockamp, 519 U.S. at 352-53. Therefore, the First Circuit concluded that § 6213(a)’s ninety-day filing deadline may not be equitably tolled.

The Resulting Circuit Split and Disagreement with Other Circuits

By holding that § 6213(a) is nonjurisdictional but completely immune to equitable tolling, the First Circuit created a significant split with several of its sister circuits. Specifically, the Second Circuit in Buller v. Commissioner (2025), the Third Circuit in Culp v. Commissioner (2023), the Sixth Circuit in Oquendo v. Commissioner (2025) and the Eighth Circuit in Maniktala v. Commissioner (2026) had all concluded that § 6213(a)’s filing deadline is nonjurisdictional and subject to equitable tolling on remand.

The First Circuit panel directly addressed this departure. It noted that while it agreed with those circuits on the jurisdictional analysis, it could not join them on the equitable tolling question. The panel’s reason for disagreeing was simple yet decisive:

“Each of those decisions issued before the Supreme Court decided Enbridge Energy, so those circuit courts did not have the benefit of the Supreme Court’s analysis in that case.”

Because the Second, Third, and Sixth Circuits lacked Sotomayor’s definitive guidance on how a nonjurisdictional statute can still be mandatory and how a detailed scheme of statutory exceptions rebuts the Irwin presumption, their equitable tolling analyses were outdated. Kyick Holdings represents the second appellate decision to synthesize the Enbridge framework with Tax Court deadlines, potentially exposing a vulnerability in those earlier circuit precedents.

However the first appellate decision to address this issue did not find a need to break from the three Circuits whose decisions predate Enbridge. The Eighth Circuit Court of Appeals panel referenced the Supreme Court’s decision in Enbridge twice in its opinion to determine whether the ninety-day filing deadline under Section 6213(a) is subject to equitable tolling.

First, the panel used Enbridge to define the threshold required to overcome the strong legal presumption that nonjurisdictional deadlines can be equitably tolled. The court noted that to rebut this presumption, there must be “an affirmative indication” of congressional intent to preclude tolling. Citing Enbridge, the panel stated that “The presumption is rebutted if there is good reason to believe that Congress did not want the equitable tolling doctrine to apply.”
Second, the panel relied on Enbridge to analyze whether the statutory structure of Section 6213(a) contains any such “good reason” or affirmative indication to reject tolling. In tax jurisprudence, highly detailed statutes with explicit, technical exceptions (such as the refund claim limitations under Section 6511) are read to exclude unmentioned equitable remedies. The panel cited Enbridge for the principle that “an explicit listing of exceptions, set forth in a detailed manner, strongly indicates that Congress did not intend courts to read other unmentioned, open-ended, equitable exceptions into the statute that it wrote.”

Because the ninety-day filing deadline in Section 6213(a) is not written in a highly technical format, is directed at the taxpayer rather than the court, and does not contain a restrictive list of statutory exceptions, the Eighth Circuit panel found nothing to rebut the presumption and held that the deadline is subject to equitable tolling.

So we have two circuits that each have taken Enbridge into account and they arrive at contrary conclusions regarding the impact of that Supreme Court decision on equitable tolling in this case.

Practical Implications for Tax Practitioners

For CPAs and Enrolled Agents, Kyick Holdings establishes an unyielding standard in the First Circuit. The ninety-day filing deadline is an absolute, inflexible bar. If a client misses the deadline—even by a single day—there is no possibility of obtaining equitable relief from the Tax Court, regardless of the hardships, USPS delivery errors, or delayed actual notice.

If the ninety-day window closes without a petition being filed, the IRS is legally permitted to assess the deficiency, and the taxpayer must pay the tax upon notice and demand. The taxpayer’s only remaining judicial remedy is the “pay-to-play” model under I.R.C. § 7422:

The taxpayer must pay the full assessed deficiency.
The taxpayer must file an administrative claim for refund or credit with the IRS.
If the IRS denies the claim (or fails to act within six months), the taxpayer can file a civil action for refund in a United States District Court or the United States Court of Federal Claims.

For many small businesses and middle-income taxpayers, paying a large deficiency upfront (in this case, nearly $700,000) is financially impossible, effectively making the Tax Court the only accessible forum to contest deficiencies pre-assessment.

To protect clients from the harsh realities of Kyick Holdings, practitioners must implement strict office procedures:

Address Monitoring: Ensure that clients notify the IRS of any address changes using Form 8822 (or Form 8822-B for businesses). Relying on the IRS to find a new address through an ongoing audit or investigation is a high-risk gamble that Kyick Holdings proves the IRS is not required to win.
Mailing Verification: When filing returns, use certified mail or registered mail with return receipt requested to establish the date of filing and preserve the “timely mailed, timely filed” rule under I.R.C. § 7502(a).
Immediate Response: Since actual receipt is not required for a notice of deficiency to be valid if it was sent to the last known address, practitioners must act immediately upon any indication of IRS correspondence.

Kyick Holdings demonstrates that while the jurisdictional labels in federal tax law are shifting, the practical need for strict compliance with statutory deadlines remains as vital as ever.

Prepared with assistance from Gemini Notebook.