Tax Court Rules That 30-day Rule For Requesting a Collection Due Process Hearing Is Subject To Equitable Tolling
The U.S. Tax Court in Organic Cannabis Foundation,
LLC v. Commissioner,161 T.C. No. 4 (September 27,
2023), held that the 30-day time limit for requesting a collection due
process hearing under section 6320(a)(3)(B) is a nonjurisdictional deadline
subject to equitable tolling.
The Internal Revenue Service Must Consider A Cannabis Company's Day-Late Request For An Administrative Hearing With The Agency To Discuss A Federal Tax Lien Notice.
The taxpayer had unpaid tax for 2010, 2011, and 2018. The
IRS issued notices of federal tax lien filings to the taxpayer for all three
years, and the taxpayer timely requested a hearing with the IRS Independent
Office of Appeals during the 30-day period for requesting a collection due
process hearing under section 6320(a)(3)(B) for 2010 and 2011, but requested a
hearing for 2018 after the 30-day period.
IRS Appeals provided a hearing for 2010 and 2011, but
because the taxpayer’s hearing request for 2018 was untimely, it provided an
equivalent hearing for 2018 under Treas. Reg. § 301.6320-1(i)(1). IRS Appeals
issued a notice of determination for 2010 and 2011 but no determination for
The taxpayer then filed a petition before the Tax Court
seeking review for all three years. After the petition was filed, IRS Appeals
issued a decision letter for 2018.
The IRS moved to dismiss the taxpayer’s case before the Tax
Court as to 2018 for lack of jurisdiction on the ground that IRS Appeals did
not make a determination for review under section 6330(d)(1). The taxpayer
argued that the 30-day period for requesting a collection due process hearing
under section 6320(a)(3)(B) is subject to equitable tolling and thus IRS
Appeals erred in failing to make a determination for 2018. In response, the IRS
argued that the 30-day period is a fixed deadline that is not amenable to
The Tax Court began its discussion by noting that it
previously held in Kennedy v. Commissioner,
116 T.C. 255 (2001), that the 30-day period for requesting a collection due
process hearing is a fixed deadline not subject to equitable tolling.
in Boechler, P.C. v. Commissioner, 142 S. Ct. 1493, 1501
(2022), the U.S. Supreme Court held that a different 30-day period in section
6330(d)(1) for a taxpayer to file a petition with the Tax Court for review of
IRS Appeals’ determination following a collection due process hearing is a
nonjurisdictional deadline that is subject to equitable tolling.
in Hallmark Research Collective v. Commissioner, 159 T.C.
126 (2022), the Tax Court distinguished Boechler in holding
that the 90-day deadline for filing a deficiency petition under section 6213(a)
In the light of the Supreme Court’s decision in Boechler and its opinion in Hallmark, the Tax Court decided to reexamine its precedent as to
the 30-day deadline in section 6320(a)(3)(B) for requesting a collection due
process hearing. The court ultimately held that the 30-day period in section
6320(a)(3)(B) is subject to equitable tolling when the circumstances warrant
it, and overruled Kennedy in that regard.
The court said it "must honor" the choice Congress made to add taxpayer protections by creating an administrative process for challenging the IRS. CDP hearings are meant to balance taxpayer concerns about collections with the government's need to quickly collect, the court said.
"These principles are reinforced by the application of equitable tolling," Judge Goeke said.