The IRS has announced that taxpayers filing petitions in the Tax Court have until the later of the agency’s extended deadline or the court’s reopening to file their petitions.
Taxpayers preparing to file petitions for Tax Court review of IRS determinations will have until July 15 to file if the court opens before then and until the court reopens if that happens later, according to an April 27 update to the agency’s frequently asked questions about filing deadlines.
The newly added question asks how Notice 2020-23, 2020-18 IRB 1, interacts with the Tax Court’s decision in Guralnik v. Commissioner, 146 T.C. 230 (2016). Notice 2020-23 expansively invoked the IRS’s authority under section 7508A to extend a litany of deadlines in response to the coronavirus pandemic — including the deadlines to file tax litigation — until July 15.
Before that, petitioners could only rely on the Tax Court’s notice that while its office is closed, taxpayer should mail in their petitions and keep the returned mail to prove timely filing when the court reopens. The Tax Court’s initial response was based on Guralnik, in which it held that its jurisdictional court filing deadlines can’t elapse on days when the court is unavailable. In Guralnik, the problem had been a blizzard, whereas now it is the pandemic.
In response to Notice 2020-23, the Tax Court updated its website to say, “If the statutory deadline for filing a petition or notice of appeal falls on or after April 1, 2020 and before July 15, 2020, the filing deadline is now extended to July 15, 2020.”
The updated FAQ addresses practitioners’ concern regarding the difference between the effective date of Notice 2020-23 and the Tax Court’s March 19 closure.
The IRS said that taxpayers get to take advantage of both the notice and Guralnik. “For example, if the last day for filing a petition fell on March 19, 2020, the date that the Tax Court closed, the taxpayer will get the benefit of Guralnik from March 19, 2020 and the benefit of this notice from April 1, 2020 until July 15, 2020,” according to the IRS. The availability of both filing deadline delay periods applies to their ending as well as their beginning, according to the IRS.
So Far, So Good
Carlton Smith, former director of the tax clinic at the Benjamin N. Cardozo School of Law, told Tax Notes he’s glad the IRS has announced that its section 7508A extension applies if the petitioner needed to use the Tax Court’s closure extension to delay the filing deadline until Notice 2020-23 takes over.
“Although the Tax Court is the ultimate decider of its jurisdiction, the Q and A makes it hard for the Tax Court to reject such a position, since the position seems part of the [section] 7508A relief (albeit by Q and A, not the notice itself),” he said in an email.
T. Keith Fogg, director of the Harvard Law School Federal Tax Clinic, praised the IRS’s attempt to remove uncertainty in the FAQ and said its position makes sense. “Because the court closed before the extension date on the notice, reading the due date in the way the IRS has done gives Tax Court petitioners the maximum protection and avoids some people falling into an unfortunate hole,” he said.
Sheri A. Dillon of Morgan, Lewis & Bockius LLP said that taxpayers and practitioners appreciate the IRS’s quick response and efforts to clarify the issue. “However, many taxpayers, especially low-income or vulnerable taxpayers, may have been affected by COVID-19 prior to the Tax Court closure and have good cause for not filing their petitions within the statutory time period. So, while the FAQ is helpful, a legislative solution would provide more certainty,” she said.
Smith has been calling for the Tax Court to give practitioners and petitioners advance notice of any plan to reopen so that they can avoid a sudden Guralnik due date.
A Tax Court spokesperson told Tax Notes the court will post an announcement on its website about reopening its building and mailing address as early as possible.