Tilden v. Commissioner

In the United States Court of Appeals For the Seventh Circuit ____________________   No.  15-­‐‑3838   ROBERT  H.  TILDEN,   Petitioner-­‐‑Appellant,   v.   COMMISSIONER  OF  INTERNAL  REVENUE,   Respondent-­‐‑Appellee.   ____________________   Appeal  from  the  United  States  Tax  Court.   No.  11089-­‐‑15  —  Robert  N.  Armen,  Jr.,  Special  Trial  Judge.   ____________________   ARGUED  OCTOBER  6,  2016  —  DECIDED  JANUARY  13,  2017   ____________________   Before   WOOD,   Chief   Judge,   and   EASTERBROOK   and   MANION,  Circuit  Judges.   EASTERBROOK,  Circuit  Judge.  Taxpayers  living  in  the  Unit-­‐‑ ed  States  have  90  days  to  file  a  petition  asking  the  Tax  Court   to  review  a  notice  of  deficiency  sent  by  the  Commissioner  of   Internal  Revenue.  26  U.S.C.  §6213(a).  Robert  Tilden  got  such   a   notice   covering   his   tax   years   2005,   2010,   2011,   and   2012.   The   last   day   to   seek   review   was   April   21,   2015.   The   Tax   Court   received   Tilden’s   petition   on   April   29,   2015,   and   dis-­‐‑ 2   No.  15-­‐‑3838   missed   it   as   untimely.   The   Commissioner   has   confessed   er-­‐‑ ror—properly  so,  we  conclude.   Although  §6213(a)  requires  petitions  to  be  filed  within  90   days,  another  statute  treats  mailing  as  filing.  26  U.S.C.  §7502.   Section   7502(a)   makes   the   date   of   the   postmark   dispositive.   Section   7502(b)   adds   that   the   mailing-­‐‑as-­‐‑filing   rule   “shall   apply   in   the   case   of   postmarks   not   made   by   the   United   States   Postal   Service   only   if   and   to   the   extent   provided   by   regulations   prescribed   by   the   Secretary.”   That   matters   to   Tilden,  because  his  lawyer’s  staff  did  not  put  a  stamp  on  the   envelope,   and   the   Postal   Service   did   not   apply   a   postmark.   Instead  the  staff  purchased  postage  (both  first-­‐‑class  mail  and   the   supplement   for   certified   delivery)   from   Stamps.com,   a   service  that  supplies  print-­‐‑at-­‐‑home  postage  so  that  everyone   can  enjoy  the  convenience  of  a  traditional  postage  meter.  The   staff   printed   a   label   from   Stamps.com;   it   is   dated   April   21,   2015,  and  a  member  of  the  staff  states  that  she  delivered  the   envelope  to  the  Postal  Service  in  Salt  Lake  City,  Utah,  on  that   date.  Tilden  contends  that  this  makes  the  filing  timely  under   26  C.F.R.  §301.7502–1(c)(1)(iii)(B)(1),  which  reads:   If   the   postmark   on   the   envelope   is   made   other   than   by   the   U.S.   Postal  Service—   (i)  The  postmark  so  made  must  bear  a  legible  date  on  or  be-­‐‑ fore  the  last  date,  or  the  last  day  of  the  period,  prescribed  for   filing  the  document  or  making  the  payment;  and   (ii)  The  document  or  payment  must  be  received  by  the  agen-­‐‑ cy,  officer,  or  office  with  which  it  is  required  to  be  filed  not   later  than  the  time  when  a  document  or  payment  contained   in   an   envelope   that   is   properly   addressed,   mailed,   and   sent   by   the   same   class   of   mail   would   ordinarily   be   received   if   it   were   postmarked   at   the   same   point   of   origin   by   the   U.S.   Postal  Service  on  the  last  date,  or  the  last  day  of  the  period,   prescribed  for  filing  the  document  or  making  the  payment.   No.  15-­‐‑3838   3   In   the   Tax   Court   the   Commissioner   accepted   Tilden’s   con-­‐‑ tention   that   the   envelope   had   been   delivered   to   the   Postal   Service  on  April  21  but  invoked  the  next  principal  division,   (B)(2):   If  a  document  or  payment  described  in  paragraph  (c)(1)(iii)(B)(1)   is   received   after   the   time   when   a   document   or   payment   so   mailed  and  so  postmarked  by  the  U.S.  Postal  Service  would  or-­‐‑ dinarily  be  received,  the  document  or  payment  is  treated  as  hav-­‐‑ ing   been   received   at   the   time   when   a   document   or   payment   so   mailed   and   so   postmarked   would   ordinarily   be   received   if   the   person   who   is   required   to   file   the   document   or   make   the   pay-­‐‑ ment  establishes—   (i)  That  it  was  actually  deposited  in  the  U.S.  mail  before  the   last   collection   of   mail   from   the   place   of   deposit   that   was   postmarked  (except  for  the  metered  mail)  by  the  U.S.  Postal   Service  on  or  before  the  last  date,  or  the  last  day  of  the  peri-­‐‑ od,   prescribed   for   filing   the   document   or   making   the   pay-­‐‑ ment;   (ii)   That   the   delay   in   receiving   the   document   or   payment   was  due  to  a  delay  in  the  transmission  of  the  U.S.  mail;  and   (iii)  The  cause  of  the  delay.   By   relying   on   (B)(2)   the   IRS   was   supposing   that   eight   days   (April   21   to   29)   is   more   than   the   Postal   Service   ordinarily   takes   to   deliver   certified   mail   from   Utah   to   Washington,   D.C.,   which   would   knock   out   the   use   of   (B)(1)   as   well.   But   the   Tax   Court   concluded   that   both   sides   had   picked   the   wrong  part  of  the  regulation.  It  thought  that  the  right  part  is   (B)(3),  which  tells  us:   If   the   envelope   has   a   postmark   made   by   the   U.S.   Postal   Service   in   addition   to   a   postmark   not   so   made,   the   postmark   that   was   not  made  by  the  U.S.  Postal  Service  is  disregarded,  and  whether   the   envelope   was   mailed   in   accordance   with   this   paragraph   (c)(1)(iii)(B)   will   be   determined   solely   by   applying   the   rule   of   paragraph  (c)(1)(iii)(A)  of  this  section.   4   No.  15-­‐‑3838   The   Tax   Court   conceded   that   the   Postal   Service   had   not   placed  a  postmark  on  the  envelope.  It  also  observed  (what  is   uncontested)   that   the   envelope   had   been   entered   into   the   Postal   Service’s   tracking   system   for   certified   mail   on   April   23,   and   the   judge   thought   this   just   as   good   as   a   postmark,   which   meant   that   April   23   was   the   date   of   filing.   That   was   two   days   late,   so   the   court   dismissed   the   petition.   T.C.   Memo  2015–188  (Sept.  22,  2015).   Seeking  reconsideration,  Tilden  observed  that  the  parties   had   not   raised   the   possibility   that   tracking   data   must   be   treated  as  a  “postmark  made  by  the  U.S.  Postal  Service”.  The   IRS  joined  Tilden  in  contending  that  the  judge  had  been  mis-­‐‑ taken;  abandoning  its  earlier  position,  the  IRS  asked  the  Tax   Court  to  apply  (B)(1)  and  deem  both  of  its  subsections  satis-­‐‑ fied.   But   the   judge   denied   the   motion,   stating   that   because   the   90-­‐‑day   limit   in   §6213(a)   is   jurisdictional   the   court   is   not   obliged  to  accept  the  parties’  agreement.   At   oral   argument   in   this   court   the   judges   and   counsel   discussed   whether   any   of   §6213,   §7502,   or   §301.7502–1   cre-­‐‑ ates   a   rule   that   is   properly   called   “jurisdictional”   under   the   Supreme   Court’s   current   approach   to   distinguishing   truly   jurisdictional  limits—which  a  court  must  enforce  even  if  not   raised  by  the  parties,  whether  or  not  the  litigants  agree  that  a   filing  is  proper—from  case-­‐‑processing  rules,  which  are  sub-­‐‑ ject   to   waiver   and   forfeiture.   Compare   United   States   v.   Kwai   Fun  Wong,  135  S.  Ct.  1625  (2015)  (filing  deadlines  under  the   Federal   Tort   Claims   Act   are   not   jurisdictional),   and   Irwin   v.   Department   of   Veterans   Affairs,   498   U.S.   89   (1990)   (all   filing   deadlines   for   suits   against   the   United   States   are   presump-­‐‑ tively   subject   to   equitable   tolling,   as   truly   jurisdictional   deadlines   are   not),   with   John   R.   Sand   &   Gravel   Co.   v.   United   No.  15-­‐‑3838   5   States,   552   U.S.   130   (2008)   (deadline   for   filing   suit   in   the   Court  of  Federal  Claims  is  jurisdictional),  and  Bowles  v.  Rus-­‐‑ sell,  551  U.S.  205  (2007)  (deadline  for  filing  a  notice  of  appeal   in   civil   litigation   is   jurisdictional).   The   parties’   briefs   in   this   court   cited   many   appellate   decisions   calling   §6213   jurisdic-­‐‑ tional,   but   those   decisions   precede   the   Supreme   Court’s   re-­‐‑ cent   cases   or   fail   to   analyze   their   significance.   We   deferred   consideration   of   the   appeal   while   the   parties   filed   supple-­‐‑ mental   memoranda   on   the   issue.   We   have   also   considered   the   Tax   Court’s   en   banc   ruling   in   Guralnik   v.   CIR,   146   T.C.   No.  15  (June  2,  2016),  which  unanimously  concludes  that  fil-­‐‑ ing   deadlines   for   petitions   seeking   its   review   are   jurisdic-­‐‑ tional  under  the  Supreme  Court’s  current  approach.   Kwai   Fun   Wong   tells   us   that   (a)   filing   deadlines   are   pre-­‐‑ sumptively   not   jurisdictional,   but   (b)   Congress   can   make   them  so,  without  necessarily  using  magic  words  such  as  “ju-­‐‑ risdiction”.   135   S.   Ct.   at   1632.   As   it   happens,   however,   §6213(a)   does   use   the   magic   word.   It   provides,   among   other   things:   “The   Tax   Court   shall   have   no   jurisdiction   to   enjoin   any   action   or   proceeding   or   order   any   refund   under   this   subsection   unless   a   timely   petition   for   a   redetermination   of   the  deficiency  has  been  filed  and  then  only  in  respect  of  the   deficiency   that   is   the   subject   of   such   petition.”   Tilden   does   not  want  either  an  injunction  or  a  refund;  he  has  yet  to  pay   the  assessed  deficiencies.  But  it  would  be  very  hard  to  read   §6213(a)  as  a  whole  to  distinguish  these  remedies  from  oth-­‐‑ ers,   such   as   ordering   the   Commissioner   to   redetermine   the   deficiency.   For   many   decades   the   Tax   Court   and   multiple   courts   of   appeals   have   deemed   §6213(a)   as   a   whole   to   be   a   jurisdictional   limit   on   the   Tax   Court’s   adjudicatory   compe-­‐‑ tence.  See,  e.g.,  Patmon  and  Young  Professional  Corp.  v.  CIR,  55   F.3d  216,  217  (6th  Cir.  1995);  Keado  v.  United  States,  853  F.2d   6   No.  15-­‐‑3838   1209,   1212,   1218–19   (5th   Cir.   1988);   Pugsley   v.   CIR,   749   F.2d   691,   692   (11th   Cir.   1985);   Andrews   v.   CIR,   563   F.2d   365,   366   (8th   Cir.   1977);   Foster   v.   CIR,   445   F.2d   799,   800   (10th   Cir.   1971).   We   think   that   it   would   be   imprudent   to   reject   that   body  of  precedent,  which  (given  John  R.  Sand  &  Gravel)  plac-­‐‑ es  the  Tax  Court  and  the  Court  of  Federal  Claims,  two  Arti-­‐‑ cle   I   tribunals,   on   an   equal   footing.   So   we   accept   Guralnik’s   conclusion   and   treat   the   statutory   filing   deadline   as   a   juris-­‐‑ dictional  one.   But  it  does  not  follow  that  the  Tax  Court  may  disregard   the   parties’   agreement   that   a   particular   petition   has   been   timely   filed.   True,   litigants   cannot   stipulate   to   jurisdiction.   But   they   may   agree   on   the   facts   that   determine   jurisdiction.   See,  e.g.,  Kenosha  v.  Bruno,  412  U.S.  507  (1973);  Railway  Co.  v.   Ramsey,  89  U.S.  (22  Wall.)  322,  323  (1875).  For  example,  if  in  a   suit  under  the  diversity  jurisdiction,  28  U.S.C.  §1332,  the  par-­‐‑ ties   agree   that   the   plaintiff   is   domiciled   in   Illinois   and   that   the  defendant  is  incorporated  in  Delaware  and  has  its  prin-­‐‑ cipal  place  of  business  in  Texas,  a  district  court  need  not,  in-­‐‑ deed  must  not,  look  behind  that  agreement  unless  the  judge   suspects   that   the   allegations   are   collusive.   See   28   U.S.C.   §1359.   The   Tax   Court   did   not   suspect   that   Tilden   and   the   Commissioner  are  colluding  to  expand  its  jurisdiction;  to  the   contrary,  the  Commissioner  initially  denied  that  Tilden’s  pe-­‐‑ tition  was  timely.  So  the  judge  did  not  have  a  sound  reason   to  doubt  that  the  envelope  was  indeed  handed  to  the  Postal   Service  on  April  21,  2015,  as  the  Commissioner  has  conceded   throughout.   And   now   that   the   Commissioner   has   acknowl-­‐‑ edged  that  all  requirements  of  (B)(1)  have  been  met—not  on-­‐‑ ly  deposit  on  April  21  but  also  that  certified  mail  often  takes   eight  days  to  reach  the  Tax  Court  from  Utah—the  only  basis   No.  15-­‐‑3838   7   for  dismissing  Tilden’s  petition  would  be  a  legal  conclusion   that  (B)(3)  is  the  sole  subsection  entitled  to  a  controlling  role.   On   that   subject   we   agree   with   the   parties   that   the   Tax   Court   was   mistaken.   Part   (B)(3)   of   the   regulation   specifies   what   happens   if   an   envelope   has   both   a   private   postmark   and  a  postmark  from  the  U.S.  Postal  Service.  Tilden’s  enve-­‐‑ lope   had   only   one   postmark.   The   regulation   does   not   ask   whether   a   date   that   is   not   a   “postmark”   is   as   good   as   a   postmark.  It  asks  whether  there  are  competing  postmarks.   To  say  “A  is  as  good  as  B”  is  not  remotely  to  show  that  A   is   B.   “Vanilla   ice   cream   is   as   good   as   chocolate”   does   not   mean  that  a  customer  who  orders  chocolate  must  accept  va-­‐‑ nilla,  just  because  the  customer  likes  both.  They  are  still  dif-­‐‑ ferent.   Subsection   (B)(3)   does   not   make   anything   turn   on   a   date  as  reliable  as  an  official  postmark.  It  makes  the  outcome   turn  on  the  date  of  an  official  postmark.  If  the  Postal  Service   were  to  treat  tracking  data  as  a  form  of  postmark,  that  might   inform  our  reading  of  the  regulation,  but  we  could  not  find   any  evidence  that  the  Postal  Service  equates  the  two.   For  what  it  may  be  worth,  we  also  doubt  the  Tax  Court’s   belief   that   the   date   an   envelope   enters   the   Postal   Service’s   tracking   system   is   a   sure   indicator   of   the   date   the   envelope   was  placed  in  the  mail.  The  Postal  Service  does  not  say  that   it  enters  an  item  into  its  tracking  system  as  soon  as  that  item   is   received—and   the   IRS   concedes   in   this   litigation   that   the   Postal  Service  did  not  do  so  for  Tilden’s  petition,  in  particu-­‐‑ lar.  Recall  that  the  Commissioner  has  acknowledged  that  the   envelope   was   received   by   the   Postal   Service   on   April   21.   It   took   two   days   for   the   Postal   Service   to   enter   the   20-­‐‑digit   tracking  number  into  its  system,  a  step  taken  at  a  facility  in   zip  code  84199,  approximately  ten  miles  away  from  the  Ar-­‐‑ 8   No.  15-­‐‑3838   bor   Lane   post   office   (zip   84117)   where   the   envelope   was   handed  in.   Although   the   taxpayer   thus   prevails   on   this   appeal,   we   have   to   express   astonishment   that   a   law   firm   (Stoel   Rives,   LLP,  of  Salt  Lake  City)  would  wait  until  the  last  possible  day   and   then   mail   an   envelope   without   an   official   postmark.   A   petition   for   review   is   not   a   complicated   document;   it   could   have   been   mailed   with   time   to   spare.   And   if   the   last   day   turned  out  to  be  the  only  possible  day  (perhaps  the  firm  was   not   engaged   by   the   client   until   the   time   had   almost   run),   why   use   a   private   postmark   when   an   official   one   would   have   prevented   any   controversy?   A   member   of   the   firm’s   staff   could   have   walked   the   envelope   to   a   post   office   and   asked   for   hand   cancellation.   The   regulation   gives   taxpayers   another  foolproof  option  by  providing  that  the  time  stamp  of   a   private   delivery   service,   such   as   FedEx   or   UPS,   is   conclu-­‐‑ sive.   26   C.F.R.   §301.7502–1(c)(3).   Stoel   Rives   was   taking   an   unnecessary   risk   with   Tilden’s   money   (and   its   own,   in   the   malpractice   claim   sure   to   follow   if   we   had   agreed   with   the   Tax  Court)  by  waiting  until  the  last  day  and  then  not  getting   an  official  postmark  or  using  a  delivery  service.   The  judgment  of  the  Tax  Court  is  reversed,  and  the  case   is  remanded  for  a  decision  on  the  merits.