Big Apple Tompkins Realty LLC, Mojahed H. Bhutta, Partnership Representative v. Commissioner of Internal Revenue, 167 T.C. No. 7 (August 5, 2026)

In tax controversy, the line between a jurisdictional requirement and a mere claim-processing rule can make or break a taxpayer’s case. If a filing deadline is jurisdictional, an untimely petition leaves the court completely powerless to hear the dispute, and equitable considerations cannot save the taxpayer from dismissal. Conversely, if a deadline is a nonjurisdictional claim-processing rule, the court retains the authority to hear the case, and late filings may be excused under principles such as equitable tolling.

In a landmark decision of first impression, the U.S. Tax Court in Big Apple Tompkins Realty LLC v. Commissioner evaluated the jurisdictional status of the 90-day filing deadline for judicial review of a Notice of Final Partnership Adjustment (FPA). Operating under the centralized partnership audit procedures enacted by the Bipartisan Budget Act of 2015 (BBA), the court navigated the statutory text, the broader administrative scheme, and Supreme Court precedent. The court’s holding represents a major development for tax practitioners: the 90-day deadline under Section 6234(a) is not jurisdictional, opening the door for partnerships to seek equitable relief in untimely filings.

The Case Background and Factual Matrix

Big Apple Tompkins Realty LLC (Big Apple) is an entity treated as a partnership for federal income tax purposes. For the 2018 tax year, Big Apple was subject to the centralized partnership audit and litigation procedures established by the BBA. Mojahed H. Bhutta served as Big Apple’s designated partnership representative under Section 6223(a).

Following an administrative proceeding, the Commissioner issued a Notice of Final Partnership Adjustment (FPA) dated August 11, 2022, determining an imputed underpayment of $87,586 and an accuracy-related penalty under Section 6662(d) of $17,517. The IRS asserted that it mailed two copies of the FPA via certified mail on August 11, 2022—one to Big Apple and one to Mr. Bhutta—at their respective last known addresses.

The taxpayer did not file a petition for readjustment in the Tax Court until November 13, 2023. The petition was mailed to the court in an envelope bearing a printed U.S. Postal Service (USPS) stamp dated November 6, 2023, which partially obscured the underlying postmark. This date of mailing occurred 452 days after the IRS’s FPA date of August 11, 2022.

The Taxpayer’s Request for Relief

In response to the late petition, the Commissioner filed a Motion to Dismiss for Lack of Jurisdiction, arguing that Big Apple had failed to file its petition within the mandatory 90-day window prescribed by Section 6234(a) or the timely mailing rules under Section 7502.

Big Apple and its partnership representative filed an objection to the IRS’s motion. The taxpayer requested that the court deny the motion and allow the appeal to proceed. The core of the taxpayer’s request for relief was that neither the partnership nor its representative (or power of attorney) actually received the FPA until November 2023. Upon receiving the notice, the taxpayer argued that they “promptly filed a Petition with the United States Tax Court, as required.” This set up a dual challenge for the court: first, to determine whether the FPA was properly issued and mailed, and second, to decide if the 90-day deadline is jurisdictional, which would determine whether the court could even consider the taxpayer’s excuse of non-receipt.

The IRS’s Proper Issuance and Mailing of the FPA

Before reaching the jurisdictional status of the deadline, the court had to resolve the factual question of whether the FPA was validly issued and mailed. Under BBA Section 6232(b)(1), a validly issued and mailed FPA is a prerequisite to making an assessment. Applying the statutory construction rule that “the Code must be given ‘as great an internal symmetry and consistency as its words permit,’” the Tax Court concluded that FPA mailing rules must be construed in pari materia with traditional deficiency notice procedures under Section 6212(b)(1).

Consequently, the court held that “whether an FPA is properly issued and mailed is determined in pari materia with our deficiency caselaw.” Under this standard, a notice is sufficient if it is sent via certified or registered mail to the taxpayer’s last known address, even if the taxpayer never actually receives it.

The Burden of Proof and Presumption of Proper Mailing

In allocating the burden of proof, the Tax Court observed that “the Commissioner bears the burden of proving, by competent and persuasive evidence, the date that a notice was mailed.” To meet this burden, the IRS introduced USPS Form 3877 (Firm Mailing Book) and two USPS Forms 3800 (Certified Mail Receipts) bearing date stamps of August 11, 2022.

However, the court found that the IRS’s Form 3877 was incomplete because “it contains no indication of the number of articles received by USPS and is not signed or initialed by a USPS employee.” As a result, the IRS was “not entitled to the presumption of proper mailing.”

Despite losing the presumption, the court noted that the Commissioner could still prevail by presenting “otherwise sufficient evidence of mailing.” The matching date stamps from the Dunn Loring, Virginia Post Office, the identical certified mail tracking numbers on the Forms 3800 and Form 3877, and the lack of dispute from Big Apple regarding their last known address led the court to conclude that the IRS met its burden.

The court found that “the preponderance of the evidence supports a finding that respondent mailed the two copies of the FPA... on August 11, 2022.” Accordingly, the statutory 90-day filing deadline expired on November 9, 2022. Because Big Apple’s petition was mailed no earlier than November 6, 2023, the petition was indisputably untimely under both Section 6234(a) and the postmark rules of Section 7502.

The Jurisdictional Status of Section 6234(a) under the Supreme Court’s Clear-Statement Doctrine

Because the petition was untimely, the Tax Court had to resolve the critical legal issue of whether the 90-day deadline is jurisdictional. The court noted that “a litigant’s failure to comply with the bar deprives a court of all authority to hear a case” if subject matter jurisdiction depends on a timely filing. However, “quintessential claim-processing rules” promote the progress of litigation and “ordinarily are not jurisdictional,” even when they are “framed in mandatory terms.”

To determine whether the deadline is jurisdictional, the Tax Court applied the Supreme Court’s “clear-statement rule,” which imposes a high bar. As established in Boechler, P.C. v. Commissioner, “to satisfy the clear statement rule, the jurisdictional condition must be just that: clear.” If multiple plausible interpretations exist, a jurisdictional reading is not clear. The court examined the text, context, and historical treatment of Section 6234 to apply this rule.

Textual Interpretation of Section 6234: Subsections (a), (b), and (c)

The court began by parsing the text of Section 6234. Subsection (a) provides that within 90 days after the FPA is mailed, “the partnership may file a petition for a readjustment.” The court observed that this subsection “clearly contains a permissive grant for a partnership to file a claim but not a grant of jurisdiction.” It lacks any mention of “jurisdiction” or the court’s authority, using instead “mundane statute-of-limitations language.”

The court contrastingly looked at Section 6234(b), which outlines the “Jurisdictional requirement for bringing action in district court or Court of Federal Claims.” This subsection provides that a petition may be filed in those venues “only if” the partnership makes a jurisdictional deposit of the imputed underpayment and penalties. The body of the statute explicitly refers to these as “jurisdictional requirements.”

Under the principle of statutory construction that Congress acts intentionally when it includes language in one section but omits it in another, the Tax Court emphasized this contrast. The court stated:

“In contrast to the permissive language of section 6234(a), section 6234(b) very clearly delineates ‘jurisdictional requirements,’ referring to them in both the title and the body of the statute... indeed we can think of no phrasing more clearly intended to convey the jurisdictional nature of a requirement than ‘jurisdictional requirements.’”

The court further noted that Section 6234(c), which contains the actual grant of jurisdiction (“A court with which a petition is filed... shall have jurisdiction...”), applies only to petitions filed “in accordance with this section.” While the IRS argued that “in accordance with” ties the 90-day deadline in subsection (a) directly to the jurisdictional grant, the court disagreed. Because Congress chose to use explicit, conditional “only if” and “jurisdictional requirements” language in subsection (b) but omitted it from subsection (a), the court held that “Congress’s choice... undermines the claim that ‘in accordance with’ clearly ties judicial review in section 6234(c) to the 90-day deadline in section 6234(a).” Thus, there is “no clear tie” between the deadline and the court’s jurisdiction.

Structural Analysis: Contrasting BBA Entity-Level Procedures with TEFRA’s Partner-Level Regime

In its search for a clear statement, the court turned to the broader context of the BBA statutory scheme, comparing it with the old Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) procedures. Previously, in North Wall Holdings, LLC v. Commissioner, the Tax Court held that the filing deadlines under TEFRA’s Section 6226 were jurisdictional. However, the court identified three fundamental structural differences between TEFRA and the BBA that make a jurisdictional reading inappropriate under the new law:

First, TEFRA required a “distressingly complex and confusing” series of coordinated deadlines involving multiple parties (tax matters partners, notice partners, 5-percent groups) to ensure a single, unified partnership proceeding. In contrast, the BBA is strictly entity-focused, using Section 6223 to ensure there is only one party to the proceeding—the partnership representative. As a result, the BBA “avoids the ‘distressingly complex and confusing’ menu of petitions and deadlines that were central to TEFRA’s administrative scheme.”
Second, TEFRA contained highly detailed, explicit exceptions within the statutory text to protect partners who did not receive notice, leaving no room to read in implicit exceptions like equitable tolling. Conversely, the BBA does not contain a multitude of tailored exceptions; it relies on centralized BBA procedures with a broad, generalized “opt-out” under Section 6221(b) for small partnerships. This indicates that the BBA’s structure is not designed to exclude court-created equitable exceptions for late filings.
Third, and most importantly, the court evaluated the administrative compatibility of equitable tolling with the assessment and collection procedures of both regimes. Under TEFRA, partnership-level adjustments had to be converted into individualized, partner-level assessments. This required a strict and final assessment date to prevent administrative chaos. If a TEFRA petition were equitably tolled, the IRS would have to unwind assessments across numerous individual partners, leading to administrative paralysis.

Under the BBA, however, adjustments are assessed and collected primarily at the partnership level as an “imputed underpayment” in the “adjustment year.” While a late-filed petition might create collection “headaches” if the IRS has already assessed partners under the secondary collection tools of Section 6232(f), the court ruled that these headaches do not threaten the fundamental functionality of the BBA. The judge famously remarked:

“But whereas equitable tolling of a TEFRA petition threatened administrative paralysis, it only poses headaches under the BBA.”

The Prior-Construction Canon and Historical Precedent

The Commissioner urged the court to apply the prior-construction canon, arguing that because the BBA’s Section 6234(a) and Section 6234(c) text nearly mirrored TEFRA’s former Section 6226(a) and Section 6226(f), Congress must have intended to incorporate the well-settled jurisdictional interpretation of TEFRA.

The prior-construction canon provides that “repetition of the same language in a new statute indicates... the intent to incorporate its administrative and judicial interpretations.” However, the Tax Court rejected this argument. First, the court noted that the judicial history of the TEFRA provisions was legally limited. Under Supreme Court guidance, pre-Henderson decisions that did not explicitly analyze the jurisdictional vs. claim-processing distinction are of limited precedential value. This left only two cases, A.I.M. Controls, L.L.C. v. Commissioner and Wise Guys Holdings, LLC v. Commissioner, that could support the canon.

Second, the court explained that the canon cannot easily bridge two fundamentally different statutory frameworks. The BBA did not merely amend TEFRA; it completely repealed and replaced it with an entirely new audit, assessment, and litigation system. The court concluded:

“Even accepting the similarity in text between former section 6226 and section 6234, we think it too much of a stretch to say that two cases interpreting a preceding statute similarly worded to the one at issue but which operated in a vastly different administrative regime could be said to have ‘settled the meaning’ of the statutory language used in the new statute or establish consistent construction from one statute to another.”

Application of the Law to the Facts and Conclusions

Applying these principles to the facts of the case, the Tax Court reached several clear conclusions:

The IRS properly issued and mailed the FPA to Big Apple and its partnership representative on August 11, 2022.
Big Apple failed to file its petition within the 90-day period prescribed by Section 6234(a), as the petition was mailed 452 days after the FPA.
The 90-day filing deadline in Section 6234(a) is not jurisdictional, as there is no clear statement from Congress to that effect.
Consequently, the Tax Court is not deprived of jurisdiction over the case due to the late filing.

Based on these conclusions, the court issued its ruling: “R’s Motion to Dismiss for Lack of Jurisdiction will be denied.” Crucially, the court did not automatically grant Big Apple relief from its late filing. The court chose to “reserve judgment on whether the 90-day deadline is subject to equitable tolling until the parties raise this issue in an appropriate manner.”

CPA Observations and Strategic Implications

For CPAs, EAs, and tax attorneys representing partnerships under the BBA framework, Big Apple Tompkins Realty LLC is a groundbreaking precedent. Under the old TEFRA regime, missing the 90-day filing window was an absolute and incurable disaster. Under the BBA, however, the Tax Court’s determination that the Section 6234(a) deadline is nonjurisdictional means that a late-filed petition is no longer a death sentence.

Tax professionals should take away several key strategic points from this decision:

Equitable Tolling is on the Table: If a partnership fails to file its petition within 90 days due to circumstances beyond its control—such as the non-receipt of the FPA claimed by Big Apple—the representative can plead for equitable tolling. While the bar for equitable tolling remains high, the court now has the legal authority to grant it.
Mailing Records Matter: The IRS’s failure to properly complete USPS Form 3877 stripped it of the presumption of proper mailing. Practitioners should always scrutinize the IRS’s administrative mailing records (such as Form 3877) when challenging a notice’s timing. A defective Form 3877 shifts the burden of proving the actual mailing date back to the IRS, which may be difficult for the agency to establish without secondary corroborating evidence.
The Last Known Address Rule is In Pari Materia: The Tax Court has formally aligned BBA FPA mailing rules with deficiency notice standards. An FPA sent to the last known address is sufficient even if the partnership representative never receives it. Thus, ensuring that the partnership representative’s address of record is kept current is of paramount importance.

In summary, Big Apple Tompkins Realty LLC represents a significant victory for taxpayer rights. By dismantling the jurisdictional barrier of Section 6234(a), the Tax Court has ensured that partnerships will not be shut out of judicial review by a rigid, non-negotiable clock when equity demands otherwise.

Prepared with assistance from Google Notebook.