A recent Tax Court precedential decision raises a really interesting question about the application of §7451’s tolling provision to seemingly late-filed Tax Court Petitions.  In Madiodio Sall v. Commissioner, 161 T.C. 13 (Nov. 30, 2023) (Judge Buch), the deadline for the taxpayer to file his Petition fell on Thanksgiving Day.  We all know that means that the deadline got kicked to the next day, Friday.  Thanks §7503!  But the taxpayer did not file on Friday.  Nope.  The taxpayer did not even put his Petition in the mail until the following Monday.  For reasons I’ll get into below, Judge Buch ruled that §7451’s tolling provision applied to extend the filing deadline for two weeks after Friday. 

So for this taxpayer, the Statute of Limitations (SOL) for filing a timely Tax Court Petition was tolled.  But this taxpayer was attempting to file by hard-copy.  Another recent Tax Court precedential  opinion—also by Judge Buch—suggests that the question of for whom the SOL tolls may have a different answer if the taxpayer attempts to file electronically, as all taxpayers may choose to do so, and as many are required now to do.

Details below the fold.

Law: Different SOL Rules for Petitions Filed Physically and Filed Electronically
When the IRS sends a taxpayer a Notice of Deficiency (NOD), §6213(a) says that “the taxpayer may file a petition with the Tax Court for a redetermination of the deficiency” so long as the taxpayer does so “[w]ithin 90 days, or 150 days if the notice is addressed to a person outside the United States,” after the NOD is mailed.  There is a safe-harbor exception as well.  The IRS is supposed to tell taxpayers in the NOD itself when that deadline is.  You find that in the last sentence in §6213(a), which says that a petition filed “on or before the last date specified for filing…in the notice of deficiency shall be treated as timely filed.”

The tax statutes do not define what it means to “file” a petition.  That question has been relegated to the Tax Court to answer through both case law and its Rules.  Those sources have long adhered to a physical delivery rule as the default: a document is not filed until it is physically received in the proper office. See Bongam v. Commissioner, 146 T.C. 52 (2016).  For Tax Court petitions that means the Tax Court Clerk’s office.

The physical delivery rule is supported by statutes, even if not mandated.  For example, §7502 says that a document received after a deadline will still be deemed timely filed if the party timely mailed it.  That statutory safe-harbor exception for timely mailed documents implies the general default rule that actual, physical, receipt of a document is what counts when determining whether it was filed within the applicable limitations period. See Lesson From The Tax Court: Using §7502 To Beat The Statute Of Limitations, TaxProf Blog (Dec. 11, 2017).

When you read §7502(a), you see that its plain wording applies to Tax Court petitions because it applies to “any return, claim, statement, or other document required to be filed…within a prescribed period or on or before a prescribed date under authority of any provision of the internal revenue laws.” (emphasis added).  Well, gosh, §6213—the statute that requires filing a petition in Tax Court—is certainly one of those internal revenue laws that prescribe a period for filing a document, a document we call a petition.

If you look more carefully at §7502(a), however, you see it only kicks in when a document “is mailed.”  That is because it was enacted long before computers were even a gleam in anyone’s eye.  It assumes, or implies, that physical delivery of a hard copy document is the default rule.  But now we have electronic delivery.  It is not only available, it is sometimes mandatory.  When the Tax Court first created an electronic filing requirement, in 2010, Tax Court Rule 26, as then written, explicitly omitted petitions from the list of documents that were required to be filed electronically.  Rule 26(b) at that time provided that “…Mandatory electronic filing does not apply to: (1) petitions and other papers not eligible for electronic filing in the Court (for a complete list of those papers, see the Court’s eFiling Instructions on the Court’s Web site….” 

Times change.  Rule 26(b)(1)(A) now provides that “Mandatory electronic filing does not apply to: (i) any papers not eligible for electronic filing (for a complete list of those papers, see the Court’s electronic filing instructions on the Court’s website)….”  I forget now when the Court changed that rule, although the url for the Rule on the Tax Court’s website reads “Rule-26_Amended_03202023.pdf.”  That suggests it was in 2020, which makes sense because that was when the Tax Court’s new docket management system DAWSON (Docket Access Within a Secure Online Network) become operational.

Thus, when you look at the Court’s current “complete list of those papers” you will see that petitions are on the list of papers than can be filed electronically.  Rule 26 thus now requires electronic filing of Tax Court petitions when taxpayers are represented.  It permits exceptions for pro-se taxpayers, and also for certain representatives who ask permission to file the old-fashioned way, by physical delivery.  Tax Court Rule 26.

Consistent with Rule 26, current Tax Court Rule 22(a) says that non-electronic filings must be received “during business hours.” The §7502 safe-harbor exception still applies in those situations (again, whether or not the Tax Court Rules say so).  But that general rule does not apply to electronically filed petitions.  It says so right in Rule 22(a): “Except for a paper filed electronically in accordance with electronic filing procedures established by the Court….”  The rule for electronically filed petitions is found in 22(d), which says a petition “will be considered timely filed if it is electronically filed at or before 11:59 p.m., eastern time, on the last day of the applicable period.”

Just like the statutory term “filed” is not defined, however, the phrase “electronically filed” in Rule 22(d) is also not defined.  That created a question of when would a document be considered filed electronically?  The Tax Court answered that question in Sanders v. Commissioner, 160 T.C. No. 16 (June 20, 2023).  There it not only adopted what you might call an “successful upload” rule, it also refused to apply any version of a timely-mailing rule.  In Sanders, the pro se taxpayer had attempted electronic filing on the last day of the §6213 90-day period, starting at about 10 pm.  He encountered various technical issues such that it took him just over two hours to successfully upload his petition.  The upload was finally successful at 11 seconds after midnight.

The Tax Court—adhering to its increasingly archaic view that the 90-day period is magically inflexible—held that 11 seconds late was late, even though there was absolutely no practical difference between filing 11 seconds before midnight and 11 second after midnight.  It’s not as though the Clerk’s office is staffed at midnight.

In Sanders the Tax Court generously invited submission of amicus briefs because Mr. Sanders was operating pro se.  The Center For Taxpayer Rights stepped up and filed a brief urging the Court to apply a rescue rule analogous to the timely-mailing rule.  Apparently the amicus argued for a rescue rule that would somehow deem a document to be filed at the point in time when the filer relinquished control.  Sadly, I could not find a publicly available a copy of the brief so I’m not quite sure what the details or scope of the argument was.  However, no doubt the brief emphasized to the Court that the timely mailing rule itself is a long-standing judge made common law rule that happens to be also codified in §7502.  And the Tax Court has not hesitated in the past to use that common law.  See Lesson From The Tax Court: The Common Law Mailbox Rule Lives!, TaxProf Blog (Feb. 3, 2020).  So it’s not as if the Court needed to somehow apply §7502.  Further, as I explained in a Guralnik – Equity Through Court Rules not Court Rulings, Procedurally Taxing (June 6, 2016), the Tax Court itself has adopted and applied non-statutory equitable rules to rescue otherwise late-filed petitions.

In Sanders, however, the Tax Court declined to apply a rescue rule in any shape or form to Mr. Sanders. The bottom line is, as Judge Buch writes in Sanders: “the timely mailing rule does not apply to an electronically filed petition.”  Op. at 4.

Thus, what is important to take away for today’s lesson is that the Court held that a rescue rule that might toll petitions filed physically would not apply to petitions filed electronically.

You have to ask: for whom does the SOL get tolled?  The SOL issue in today’s case involves that same question but a different tolling rule.  First, let’s look at the legal background.

Law: The Tolling Rule for Inaccessibility 
In Guralnik v. Commissioner, 146 T.C. 230 (2016), the Tax Court created a common-law rescue rule for late-filed petitions based on the inaccessibility of the Tax Court.  In that case, the taxpayer attempted to physically file his petition on the last day of the relevant SOL, using a Fed Ex delivery service.  It just so happened that the Tax Court was closed on that day because of a winter storm in Washington D.C.  So the  petition was physically delivered and received the next day, after the SOL had run out.

The Tax Court held that the petition was timely filed.  It got to that conclusion by borrowing from Federal Rules of Civil Procedure (FRCP) Rule 6.  Rule 6(a)(3)(A) says that “Unless the court orders otherwise, if the clerk’s office is inaccessible…on the last day for filing…then the time for filing is extended to the first accessible day that is not a Saturday, Sunday, or legal holiday.”  The Tax Court had no difficulty in applying that idea to save the taxpayer, reasoning that “procedural rules for computing time are fully applicable where the time period in question embodies a jurisdictional requirement. Rather than expanding a court’s jurisdiction, Civil Rule 6 simply supplies the tools for counting days to determine the precise due date.”  146 T.C. at 246 (Internal quotes and cites omitted).  Notice that the Tax Court took the idea in FRCP 6 and applied it.  It did not pretend that the Federal Rules of Civil Procedure were binding on Tax Court.  It wrote that “the principles of Fed. R. Civ. P. 6(a)(3) are suitably adaptable to govern the matter at hand.” Id. (emphasis added, quote marks omitted).

How the Tax Court would or would not continue to apply the principles of FRCP 6 created an unresolved issue.  The issue of inaccessibility became even more acute after Guralnik not only because of the increasing fragility of federal government funding, but also because of COVID.  In 2021 Congress amended §7451 to deal with that issue in the Infrastructure Investment and Jobs Act, 135 Stat. 149, 1336.

Section 7451(b) provides: “Notwithstanding any other provision of this title, in any case (including by reason of a lapse in appropriations) in which a filing location is inaccessible or otherwise unavailable to the general public on the date a petition is due, the relevant time period for filing such petition shall be tolled for the number of days within the period of inaccessibility plus an additional 14 days.”

Today’s case is one of the first where the Tax Court applies §7451 and it is instructive.  Let’s take a look.

Facts and Lesson
The IRS sent Mr. Sall an NOD and the last day for him to file a Tax Court petition was November 25, 2022.  That was the Friday after Thanksgiving.

Mr. Sall mailed his Tax Court petition on Monday, November 28th and it was physically received at the Tax Court on December 1st.  The IRS asserted the petition was untimely and moved to dismiss the case.

Notice that Mr. Sall could not invoke the §7502 timely mailing rule because…well…he did not timely mail his petition!  He would have been fine if he had properly mailed his petition on Friday the 25th by certified mail.

While §7502 could not rescue Mr. Sall, §7451(b) could.  Judge Buch explains that “the Court was administratively closed. The Court’s electronic filing system was operational and accessible at all relevant times.” Op. at 1.  Judge Buch then walks us through the analysis:

“Because the Court’s physical filing location was inaccessible, Judge Buch concludes that “Mr. Sall’s Petition was timely. The Petition was due to be filed on Friday, November 25, 2022. The Tax Court building in Washington, D.C., which houses the office of the clerk of the Court, was closed that day. Thus, a filing location was inaccessible that day; the availability of the Court’s electronic filing system is immaterial. The period of inaccessibility was one day. Adding that one day to the additional 14-day tolling period required by section 7451(b)(1) results in extending Mr. Sall’s petition deadline by 15 days from the original due date of his Petition. This shifts the petition due date to no earlier than December 10, 2022. Because that day was a Saturday, the petition deadline shifted even further, to Monday, December 12, 2022. The Court received Mr. Sall’s Petition on December 1, 2022, i.e., before that filing deadline. Thus, his Petition was timely.”

Comment: How Will §7451 Apply To Electronic Filing?
Let’s take a closer look at §7451, because it contains several ambiguities that may affect how it applies to electronic filing.

The first ambiguity is the same ambiguity present in FRCP 6.  Both apply whenever the filing location is “inaccessible.”  What does that word mean?

The law surrounding FRCP 6 is not clear.  Most courts think that the word means physically inaccessible with the caveat that the inaccessibility must be for the entire day.  See e.g.  Organic Cannabis Foundation v. Commissioner, 962 F.3d 1082 (9th Cir. 2020) (reviewing case law and holding that temporary inaccessibility for Fed Ex delivery person because of traffic or police issues did not mean physically inaccessibility for the entire day).  Some courts say that a filing location will be inaccessible when the particular filer could not get there Latham v. Dominick’s Finer Foods, 149 F.3d 673, 674 (7th Cir.1998) (inaccessible means “any day on which the district court is … inaccessible as a practical matter without heroic measures.”).  Yet other courts say “inaccessible” means only when the filing location is officially closed regardless of the practicality of access. In re Bicoastal Corp., 136 B.R. 288 (Bankr.M.D.Fla.1990).

As for electronic filing, courts read FRCP 6 to apply when a court’s computers made electronic filing impossible. See Justice v. Town of Cicero, 682 F.3d 662, 664 (7th Cir. 2012) (noting that if the party had attempted to file at 11:00 p.m. on the last day to do so and the clerk’s system would not accept the document, the deadline would be extended to the next day).

Alert readers will notice that §7451 goes beyond the language in FRCP 6 and applies the 14 day tolling rule whenever the filing location is “inaccessible or otherwise unavailable to the general public.” (Emphasis supplied).  What does that additional language add or take away?

On the one hand, one can read that language as creating a less generous rule than FRCP 6.  For example, most courts read FRPC 6 as applying when weather or other circumstances make the filing location inaccessible as a practical matter for the particular filer regardless of whether the location is officially closed or open.  But if a location is not officially closed, then it would appear to be accessible or available to the general public if some folks could get into the location.  So no special treatment for the unlucky taxpayer.

On the other hand, one can read that language as creating a more generous rule than FRCP 6.  That could happen if the taxpayer did not even attempt to file but could show that the Court would be inaccessible to anyone who tried that day.  That is Mr. Sall’s position.  He did not even try to file on the last day, when the Tax Court was officially closed.  So it did not matter whether the Court was inaccessible to him, just whether it was inaccessible to the general public.

The second ambiguity is how should §7451 apply to electronic filing?

Again, let’s pay close attention to text.  First, the general rule is that a taxpayer gets the extra 14 days when “a filing location is inaccessible or otherwise unavailable to the general public.”  Notice the use of the word “a.”  Second, the statute defines the term “filing location” to mean either “(A) the office of the clerk of the Tax Court, or (B) any on-line portal made available by the Tax Court for electronic filing of petitions.” (emphasis added)

Again, this statutory text is ambiguous on how it fits together.  What happens if the Court’s computer system is down but the  Court is physically open and a taxpayer is attempting to file physically?  Alternatively, what happens if the taxpayer is attempting to file electronically on a day when the Tax Court is physically inaccessible (whether because of weather or an official closing)?

On the one hand, one might read the text to mean that if “the relevant” filing location is inaccessible, then the taxpayer gets the 14 day tolling even if the other filing location was accessible.  So if the taxpayer is paper filing their petition, then the accessibility of the computer system is irrelevant.  Reading the text that way cuts against the plain meaning of the words, however.  The general rule gives the 14 days whenever “a” filing location is inaccessible.  The text does not say “the relevant” filing location.  But the statute does distinguish electronic filing from physical filing and as Judge Buch noted in Sanders different rules can apply to those different modalities.

On the other hand, if one reads the text to mean what is says, then that leads to some strange results.  A taxpayer seeking to file electronically gets another 14 days if bad weather prevents physical filing, even though DAWSON is up and running and even though, like Mr. Sall, they make no attempt to meet the deadline on that last day.  Yet they automatically get 14 more days.  Similarly, take today’s case.  The Tax Court was physically closed on the Friday after Thanksgiving.  Does that now mean that every taxpayer whose deadline to petition the Court on that Friday got an extra two weeks whether or not they were required to file electronically?

For whom does the SOL toll under §7451?  Another Tax Court case will surely teach us the answer.

Bryan Camp is the George H. Mahon Professor of Law at Texas Tech University School of Law.  He invites readers to return on the first Monday of each month (or Tuesday if Monday is a federal holiday) to TaxProf Blog for another Lesson From The Tax Court.

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