Tuesday, May 15, 2018

Whistleblower Requests Deadline Extension to File With Tax Court

According to Law360, a tax whistleblower said the U.S. Tax Court should hear his untimely petition because the Internal Revenue Service letter declining his claim was vague and failed to tell him he could appeal, according to a brief filed Tuesday with the D.C. Circuit.

David Myers filed a whistleblower claim with the IRS in 2009 and received a denial letter in March 2013. Myers did not file with the Tax Court until January 2015, which dismissed his claim in 2017 for filing outside the 30-day time period set in Internal Revenue Code § 7623(b)(4).

“In this case, given that Myers' whistleblower claim had been pending for years, and given that he had not been provided his statutorily significant document that forms the predicate basis for Tax Court jurisdiction, the Tax Court should have ordered the IRS Whistleblower Office to issue Myers his ‘ticket to Tax Court,’” Myers' attorney, Joseph DiRuzzo, said in the brief.

Myers’ petition was not untimely because the 2013 notice of determination rejecting his whistleblower claim lacked “basic” information on his right to file a petition with the Tax Court, DiRuzzo said. The IRS did not explain why it disallowed the claim or state that he had 30 days to appeal to the Tax Court.

“The IRS Letters Were So Bereft of Information as to Not Qualify as a 'Determination' under Section 7623(b)(4),” DiRuzzo said. 
 
The IRS Whistleblower Office also failed to send Myers a preliminary denial or rejection letter and did not send its denial by certified mail, DiRuzzo said. A certified mailing is necessary to start the 30-day statutory period, he said.
 
Myers’ case was appropriate for equitable tolling, his attorney said. He filed pro se and only had 30 days to file his petition at the Tax Court, DiRuzzo said in the brief. The court has a majority of pro se litigants and a relatively small number of whistleblower cases, he said.
 
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1 comment:

  1. Harvard Tax Clinic Backs Whistleblower Appeal In DC Circ.


    A tax whistleblower's appeal missed a 30-day filing deadline, but that should not stop the U.S. Tax Court from hearing the appeal, said an amicus brief filed in the D.C. Circuit by Harvard Law School's Federal Tax Center.

    The brief, filed Monday, supports an appeal by David Myers, who filed a whistleblower claim with the IRS in 2009 and received a denial letter in March 2013. Myers did not file with the Tax Court until January 2015, which dismissed his claim in 2017 for filing outside the 30-day time period set by Internal Revenue Code § 7623(b)(4).

    The U.S. Supreme Court generally has held that filing deadlines are claims-processing rules that do not deprive a court of authority over the case, the brief said. The court in Kontrick v. Ryan reasoned that judges had been “careless” interpreting the term “jurisdictional” and should reserve it for subject matter and personal jurisdiction, the brief said.

    Filing deadlines may still be jurisdictional, but only if the Congress made a “clear statement” in a statute, the brief said, citing United States v. Wong. There isn’t a clear statement in IRC § 7623(b)(4), which only states that a petitioner “may” appeal to the Tax Court within 30 days. The word “may” is not a clear statement, and does not compel action similar to the word “shall,” the U.S. Supreme Court ruled in Sebelius v. Auburn Regional Medical Center.

    Since Kontrick, the Supreme Court has upheld filing deadlines as jurisdictional only when it’s predicated by stare decisis. The high court has never specifically ruled on whether a Tax Court filing deadline is jurisdictional, so stare decisis does not apply, the brief said.

    The D.C. Circuit and other appellate circuits have held that similar filing deadlines are not jurisdictional, the brief said. This includes wrongful IRS collection actions — Keohane v. United States — and wrongful levy action — Volpicelli v. United States.

    The court's ruling will bind the Tax Court in all whistleblower award cases in the future because the D.C. Circuit is the only court where whistleblower suits can be appealed, said Carlton M. Smith, counsel for the Federal Tax Clinic at Harvard Law School.

    Myers is one of several cases pending on the issue of whether tax-filing deadlines are jurisdictional, but is the only one involving a whistleblower, he said. The others are Nauflett v. Commissioner, Pfizer v. U.S., Organic Cannabis Foundation v. Commissioner and Northern California Small Business Assistants Inc. v. Commissioner. The Federal Tax Clinic is participating in those cases as well, Smith said.

    In his appeal, Myers claimed his petition was not untimely because the 2013 notice of determination rejecting his whistleblower claim lacked “basic” information on his right to file a petition with the Tax Court. The IRS did not explain why it disallowed the claim or state that he had 30 days to appeal to the Tax Court, he said.

    The IRS Whistleblower Office also failed to send Myers a preliminary denial or rejection letter and did not send its denial by certified mail, he said.

    Legal representatives for Myers could not be immediately reached for comment. The U.S. Department of Justice declined to comment Tuesday.

    The brief was filed by Carleton M. Smith of the Federal Tax Clinic of the Legal Services Center of Harvard Law School.

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