“In delay there lies no plenty.” – William Shakespeare, Twelfth Night, Act II, Scene III (circa 1601).
In a recent decision, Sanders v. Commissioner, 160 T.C. No.16 (2023), the United States Tax Court held that the court was required to dismiss the case for lack of jurisdiction because the taxpayer had filed the petition 11 seconds late.
When a taxpayer receives a Notice of Deficiency (tax bill) from the Internal Revenue Service (IRS), the taxpayer generally has 90 days to file a petition with the United States Tax Court to challenge the IRS determination without first having to pay the tax bill.
This 90-day window is a strict jurisdictional rule with few, very limited exceptions.
In this case, the IRS sent a Notice of Deficiency dated September 12, 2022, to the taxpayer, Antawn Sanders. Following standard procedure, the Notice of Deficiency included a statement that the last day to file a Tax Court petition contesting the notice was December 12, 2022.
Sanders created an account on the Tax Court’s electronic filing system at 9:59 p.m. on December 12, 2022, and downloaded the PDF forms to prepare the petition onto his Android phone. He was unable to send the forms from his phone. Sanders then switched to his computer, from which at 11:56 p.m. he tried unsuccessfully to log in to the Court’s system. One minute later, he was able to log in.
After Sanders had logged in and started the filing process, he was slowed by having to go through three intermediate steps to verify the filing before he could actually file the petition. He also needed to refer to the electronic filing instructions several times, thus delaying the actual submission of the petition. At all relevant times, the Tax Court’s electronic filing system was fully operational.
Sanders began uploading his petition at nine seconds after midnight, according to the Tax Court’s records, and the upload was completed two seconds later. The Tax Court’s system automatically recorded receiving and filing the petition as of 12 a.m. on December 13, 2022.
Sanders v. Commissioner of Internal Revenue at the US Tax Court
The IRS filed a motion to dismiss the petition for lack of jurisdiction, arguing that the Court did not receive the petition within the 90-day period allowed by the Internal Revenue Code and the Tax Court’s rules. Sanders filed an objection to the IRS’s motion and argued that after he had made several unsuccessful attempts to send the petition “well before midnight” he was finally able to begin the upload before the midnight cutoff. He stated that he believed he could prove that the Court’s electronic filing system had errors and that his upload was loaded before midnight.
The Center for Taxpayer Rights submitted an amicus brief arguing that the taxpayer’s petition should be treated as filed when he relinquished control of it, similar to the timely mailing rule under the Internal Revenue Code.
Under Section 7445 of the Internal Revenue Code, Rule 10 of the Tax Court rules, and under case precedent, a petition is ordinarily considered filed when the Tax Court receives it. If a petition is filed electronically, the filing must occur at or before 11:59 p.m. ET on the last day of the applicable 90-day period.
The Tax Court’s Decision
In its decision, the Tax Court noted that it has held that taxpayers may have additional time to file a petition when its clerk’s office or other filing location is inaccessible or otherwise unavailable to the general public. The Court noted that this did not happen in Sanders’ case.
The filing system was operating at all times relevant to Sanders’ attempts at filing. Another user was able to log in to the system one second after his failed attempt to do so, and his own successful login occurred one minute later. In other words, the Tax Court’s electronic filing system was generally available to the public at the time Sanders attempted to file his petition.
The Tax Court denied the amicus argument by the Center for Taxpayer Rights that the petition should be considered filed when Sanders relinquished control over it, first noting that the mailing rule by its very terms does not apply to electronic filings with the Tax Court. Further, the Tax Court noted that the taxpayer did not relinquish control over the petition until he began the upload which occurred nine seconds after midnight, after the 90-day deadline.
What Can We Learn from this Case?
In sum, the Tax Court held that because the electronic filing system was accessible to the general public on the relevant date and times, the taxpayer did not file his petition within the time prescribed by the tax code and the Tax Court rules. Thus, the court dismissed the case for lack of jurisdiction.
The takeaway, of course, is not to procrastinate when you receive a notice or other correspondence from the IRS. The tax code and related regulations contain a number of specific deadlines for responding to correspondence, notices, and other actions by the Internal Revenue Service. Time, the tides, and the Tax Court wait for no one.