116 T.C. No. 26
UNITED STATES TAX COURT
JAMES A. ROCHELLE, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 18483-99. Filed May 24, 2001.
R mailed to P a notice of deficiency which failed
to provide a date in the section entitled “Last Day to
File a Petition With the United States Tax Court”
(i.e., the petition date). Although P received the
notice within several days of its mailing, P did not
file his petition with this Court until 56 days after
expiration of the 90-day period prescribed by sec.
6213(a), I.R.C.
Held: R’s failure to provide the petition date in
accordance with sec. 3463(a) of the Internal Revenue
Service Restructuring and Reform Act of 1998, Pub. L.
105-206, 112 Stat. 685, 767, does not render the notice
of deficiency invalid.
Held, further, P’s petition is not rendered timely
by the operation of the last sentence of sec. 6213(a),
I.R.C.
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Lawrence R. Jones, Jr., for petitioner.
Denise G. Dengler, for respondent.
OPINION
VASQUEZ, Judge: Respondent determined the following
deficiencies in Federal income tax and section 6662(a) accuracy-
related penalties:
Penalty
Year Deficiency Sec. 6662(a)
1995 $229,096 $45,819
1996 34,549 6,910
This case is before the Court on the parties’ cross-motions to
dismiss for lack of jurisdiction. Petitioner has moved for
dismissal in his favor on the ground that respondent’s notice of
deficiency is invalid. Respondent moves for dismissal in his
favor on the ground that the petition in this case was not timely
filed. A hearing was held with respect to these motions on
February 5, 2001.
Unless otherwise indicated, all section references are to
the Internal Revenue Code as amended, and all Rule references are
to the Tax Court Rules of Practice and Procedure.
Background
Petitioner resided in Austin, Texas at the time the petition
in this case was filed. Petitioner is an attorney who performed
legal services in the Dallas, Texas, area during the years at
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issue. The facts necessary to decide the motions are few, and
they are based on the parties’ stipulations.
On July 20, 1999, respondent sent petitioner a notice of
deficiency via certified mail.1 The notice was sent to
petitioner’s last known address in Austin, Texas. Although the
exact date of delivery cannot be ascertained from the U.S Postal
Service delivery receipt, the parties agree that petitioner
received the notice of deficiency on or about July 23, 1999.
After the heading “Date” located in the upper right corner
of the notice of deficiency appears a stamped date of July 20,
1999. Also in the upper right corner of the notice of deficiency
appears a heading entitled “Last Day to File a Petition With the
United States Tax Court”. The space immediately following this
heading is blank, and nowhere else within the notice does the
Commissioner provide the specific calendar date on which
petitioner can last timely file a petition with this Court. The
body of the notice of deficiency does, however, contain the
following passage regarding the timing considerations for filing
a petition with this Court:
If you want to contest this deficiency in court
before making any payment, you have 90 days from the
above mailing date of this letter (150 days if
addressed to you outside of the United States) to file
a petition with the United States Tax Court for a
1
The notice of deficiency was also mailed to Tom Gilbert,
a certified public accountant listed as petitioner’s
representative under a power of attorney.
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redetermination of the deficiency. * * * The time in
which you must file a petition with the Court (90 or
150 days as the case may be) is fixed by law and the
Court cannot consider your case if your petition is
filed late.
Petitioner mailed his petition to the Court on December 10,
1999, and the petition was received on December 13, 1999. The
parties have stipulated that these dates are 143 and 146 days
after the mailing of the notice of deficiency, respectively.
Discussion
There are two prerequisites to this Court’s jurisdiction to
redetermine a deficiency: (1) The issuance of a valid notice of
deficiency by the Commissioner; and (2) the timely filing of a
petition with the Court by the taxpayer. See Rule 13(a), (c);
Monge v. Commissioner, 93 T.C. 22, 27 (1989); Abeles v.
Commissioner, 91 T.C. 1019, 1025 (1988); Pyo v. Commissioner, 83
T.C. 626, 632 (1984). The parties have each moved this Court to
dismiss for lack of jurisdiction, albeit on different grounds.
Petitioner moves to dismiss on the ground that the notice of
deficiency issued by respondent is invalid. Respondent moves to
dismiss on the ground that the petition filed in this case was
untimely. If the notice of deficiency is found to be invalid, we
must dismiss in petitioner’s favor regardless of whether the
taxpayer’s petition was timely filed. See Weinroth v.
Commissioner, 74 T.C. 430, 435 (1980). Accordingly, we shall
first address the validity of respondent’s notice.
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A. Validity of Notice of Deficiency
Petitioner contends that the notice of deficiency issued by
respondent is invalid on account of its failure to specify the
last possible date on which petitioner could file a timely
petition with this Court (the petition date), as required by
section 3463(a) of the Internal Revenue Service Restructuring and
Reform Act of 1998 (RRA 1998), Pub. L. 105-206, 112 Stat. 685,
767.2 Section 3463 of RRA 1998 provides in full as follows:
(a) In General.--The Secretary of the Treasury or
the Secretary’s delegate shall include on each notice
of deficiency under section 6212 of the Internal
Revenue Code of 1986 the date determined by such
Secretary (or delegate) as the last day on which the
taxpayer may file a petition with the Tax Court.
(b) Later Filing Deadlines Specified on Notice of
Deficiency To Be Binding.–-Subsection (a) of section
6213 (relating to restrictions applicable to
deficiencies; petition to Tax Court) is amended by
adding at the end the following new sentence: “Any
petition filed with the Tax Court on or before the last
date specified for filing such petition by the
Secretary in the notice of deficiency shall be treated
as timely filed.”.
(c) Effective Date.–-Subsection (a) and the
amendment made by subsection (b) shall apply to notices
mailed after December 31, 1998.
2
Sec. 3463(a) of the Internal Revenue Service
Restructuring and Reform Act of 1998, Pub. L. 105-206, 112 Stat.
685, 767, has not been incorporated as a provision of the
Internal Revenue Code. Nonetheless, this provision has the force
of law. See Smith v. Commissioner, 114 T.C. 489, 491 (2000); see
also United States Natl. Bank v. Independent Ins. Agents of Am.,
Inc., 508 U.S. 439, 448 (1993) (stating that an uncodified
provision shall have the force of law as long as the provision is
in the Statutes at Large).
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Petitioner notes that the Commissioner’s obligation to provide
the petition date in the notice of deficiency is described in
mandatory terms. Petitioner argues that respondent’s failure to
provide the petition date as required renders the notice invalid.
We recently addressed section 3463(a) of RRA 1998 in Smith
v. Commissioner, 114 T.C. 489 (2000). The taxpayer in Smith
received a notice of deficiency mailed after December 31, 1998,
which failed to specify the last day for filing a timely Tax
Court petition. The taxpayer therein nonetheless filed his
petition within the 90-day period prescribed by section 6213(a).
We rejected the taxpayer’s argument that the notice of deficiency
was rendered invalid by the Commissioner’s failure to comply with
section 3463(a) of RRA 1998. Instead, we held that where the
Commissioner fails to provide the petition date on the notice of
deficiency but the taxpayer nonetheless receives the notice and
files a timely petition, the notice is valid. See id. at 492.
Unlike the taxpayer in Smith, petitioner did not file his
petition within the 90-day period prescribed by section 6213(a).
Petitioner therefore argues that our decision in Smith does not
foreclose his argument that the notice of deficiency in this case
is invalid. Despite the fact that petitioner filed his petition
beyond the statutory period, we hold that the notice in this case
is valid. We explain our reasoning below.
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Section 6212(a) provides that if the Commissioner determines
a deficiency in income tax, “he is authorized to send notice of
such deficiency to the taxpayer by certified mail or registered
mail.” The purpose of this provision is to provide the taxpayer
with actual notice of the deficiency in a timely manner, so that
the taxpayer will have an opportunity to seek a redetermination
of such deficiency in the prepayment forum offered by this Court.
See Smith v. Commissioner, supra at 490-491; McKay v.
Commissioner, 89 T.C. 1063, 1067 (1987), affd. 886 F.2d 1237 (9th
Cir. 1989). In this case, the notice of deficiency was received
by petitioner within days of its mailing. The statutory goal of
providing the taxpayer with actual notice of the deficiency
determination in a timely manner was therefore satisfied.
Although the notice of deficiency failed to provide the
petition date, the notice was by no means devoid of information
regarding the time frame in which petitioner had to file his Tax
Court petition. The notice clearly stated that the petition had
to be filed within 90 days of the mailing of the notice. In
addition, the necessity of filing a timely petition was
emphasized in underscored type.
Furthermore, petitioner was not prejudiced by the
respondent’s failure to specify the petition date in the notice.
The legislative materials accompanying section 3463 of RRA 1998
reveal that Congress was concerned about taxpayers who, due to a
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miscalculation of the filing period under section 6213(a), would
foreclose their ability to litigate their deficiencies on a
prepayment basis by filing their petitions late. Below is an
excerpt from the Senate Finance Committee report accompanying RRA
1998:
Present Law
Taxpayers must file a petition with the Tax Court
within 90 days after the deficiency notice is mailed
(150 days if the person is outside the United
States)(sec. 6213). If the petition is not filed
within that time period, the Tax Court does not have
jurisdiction to consider the petition.
Reasons for Change
The Committee believes that taxpayers should
receive assistance in determining the time period
within which they must file a petition in the Tax Court
and that taxpayers should be able to rely on the
computation of that period by the IRS.
Explanation of Provision
The provision requires the IRS to include on each
deficiency notice the date determined by the IRS as the
last day on which the taxpayer may file a petition with
the Tax Court. The provision provides that a petition
filed with the Tax Court by this date is treated as
timely filed.
S. Rept. 105-174, at 90 (1998), 1998-3 C.B. 537, 626; see also H.
Rept. 105-364 (Part 1), at 71 (1998), 1998-3 C.B. 373, 443.
Petitioner does not claim that his failure to timely file his
petition was a product of a miscalculation of the filing period.
Indeed, given that his petition was filed 56 days late, we would
find any such claim implausible. Rather, petitioner points only
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to respondent’s technical noncompliance with section 3463(a) of
RRA 1998 as a means of invalidating the deficiency notice. As we
noted in Smith v. Commissioner, supra at 492, Congress did not
specify what consequences were to follow from the Commissioner’s
failure to provide the petition date in the notice of deficiency.
We conclude that section 3463(a) of RRA 1998 does not require
invalidating the notice under the present circumstances.
B. Timeliness of Petition
Petitioner concedes that his petition was filed outside the
filing period set forth in the first sentence of section 6213(a).
Petitioner nonetheless contends that his petition is rendered
timely by the operation of the last sentence of section 6213(a),
added by section 3463(b) of RRA 1998. As amended, section
6213(a) reads in pertinent part as follows:
SEC. 6213(a). Time for Filing Petition and
Restriction on Assessment.–-Within 90 days, or 150 days
if the notice is addressed to a person outside the
United States, after the notice of deficiency
authorized in section 6212 is mailed (not counting
Saturday, Sunday, or a legal holiday in the District of
Columbia as the last day), the taxpayer may file a
petition with the Tax Court for a redetermination of
the deficiency. Except as otherwise provided in
section 6851, 6852, or 6861 no assessment of a
deficiency in respect of any tax imposed by subtitle A
or B, chapter 41, 42, 43, or 44 and no levy or
proceeding in court for its collection shall be made,
begun, or prosecuted until such notice has been mailed
to the taxpayer, nor until the expiration of such 90-
day or 150–day period, as the case may be, nor, if a
petition has been filed with the Tax Court, until the
decision of the Tax Court has become final. * * * Any
petition filed with the Tax Court on or before the last
date specified for filing such petition by the
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Secretary in the notice of deficiency shall be treated
as timely filed. [Emphasis added.]
In his petition and his objection to respondent’s motion to
dismiss, petitioner argues that the last sentence of section
6213(a) requires that, where the Commissioner fails to provide
the petition date in the notice of deficiency, any petition filed
by the taxpayer will be treated as having been timely filed.3
Accordingly, petitioner contends that his petition is timely
under section 6213(a) despite the fact that it was filed 56 days
after expiration of the 90-day period prescribed by the first
sentence of that section.
Respondent does not address at length the merits of
petitioner’s argument described above. Rather, respondent simply
denies that the last sentence of section 6213(a) operates to
treat petitioner’s petition as having been timely filed.
Implicit in respondent’s denial is his contention that the last
sentence of section 6213(a) has no application in this case.
We begin our analysis with the actual text of the provision
in dispute. The relief offered by the last sentence of section
6213(a) (that is, treating the petition as having been timely
3
Petitioner’s argument, if accepted, would afford
taxpayers who receive a deficiency notice lacking the petition
date with an unlimited time period in which to timely file their
Tax Court petitions. We note that the existence of an unlimited
filing period could produce uncertainty as to (a) the ability of
the Commissioner to assess the determined deficiency given the
restriction contained in the second sentence of sec. 6213(a), and
(b) the tolling of the period of limitations on assessment
provided by sec. 6503.
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filed even where the petition is filed after expiration of the
period prescribed by the first sentence of section 6213(a)) is
predicated upon the filing of a petition “on or before the last
date specified for filing such petition by the Secretary”.
(Emphasis added.) The parties differ on what effect the absence
of an actual “last date specified” has on petitioner’s ability to
satisfy the condition to relief.
Petitioner argues that where the petition date is not
specified by the Commissioner in the notice of deficiency, the
condition to relief under the last sentence of section 6213(a) is
satisfied by the mere filing of a petition. Petitioner appears
to interpret the statute to provide that the petition is rendered
timely because it was not filed after the last date specified in
the deficiency notice. This, however, is not how the statute
reads. The statute requires the petition to be filed on or
before the last date specified in the notice of deficiency.
Because the last date for filing a timely Tax Court petition was
not specified by the deficiency notice in this case, the petition
could not be filed on or before any such date. A textual
analysis of the last sentence of section 6213(a) therefore
supports respondent’s position that such provision does not apply
in the present case.
Respondent’s position finds further support in the
legislative history behind the amendment to section 6213(a).
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After noting the requirement that the Commissioner specify the
petition date in the notice of deficiency, the Senate Finance
Committee report explained that the taxpayer “should be able to
rely on the computation of that period by the IRS.” S. Rept.
105-174, at 90 (1998), 1998-3 C.B. 537, 626; see also H. Rept.
105-364 (Part 1), at 71 (1998), 1998-3 C.B. 373, 443. This
passage indicates that the justification behind the addition of
the last sentence of section 6213(a) was to protect those
taxpayers who, absent some form of relief, would have
detrimentally relied on the Commissioner’s miscalculation of the
petition date.
The theory of detrimental reliance assumes the actual
provision of misleading information upon which a party could
rely. This case, however, does not involve the provision of
misinformation. Although petitioner appears to argue on brief
that the failure to provide the petition date in the notice led
him to believe that he did not have to file his petition within
the 90-day period,4 we find such argument implausible. As
discussed above, the notice of deficiency issued to petitioner
clearly provided that his petition had to be filed within 90 days
of the mailing of the notice, and it emphasized the consequence
4
Petitioner’s specific argument reads as follows:
“Petitioner received the notice of deficiency, but did not file a
Petition with the Tax Court within 90 days from the date of the
notice of deficiency, since the notice of deficiency did not
specify the last date on which Petitioner could file a Petition.”
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of not doing so. We do not believe that a reasonable person, let
alone one with petitioner’s legal training, would interpret the
mere absence of a stamped petition date following the heading
“Last Date to File a Petition With the United States Tax Court”
as the grant of an unlimited filing period, particularly given
the express provisions to the contrary contained in the body of
the notice. Simply put, this is not a case of taxpayer prejudice
which Congress intended to rectify through the addition of the
last sentence of section 6213(a).5
In light of the text of the last sentence of section 6213(a)
and its legislative history, we hold that such provision does not
operate in the instant case to render petitioner’s petition
timely.
C. Conclusion
The notice of deficiency issued by respondent is valid, and
petitioner failed to file a timely petition with this Court.
Accordingly, petitioner’s motion to dismiss for lack of
jurisdiction will be denied, and respondent’s motion to dismiss
for lack of jurisdiction will be granted.
5
We do not address in this opinion the situation in which
a taxpayer receives a deficiency notice omitting the petition
date and files his petition just after expiration of the filing
period set forth in the first sentence of sec. 6213(a) due to the
taxpayer’s miscalculation thereof.
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To reflect the foregoing,
An appropriate order denying
petitioner’s motion to dismiss for
lack of jurisdiction and granting
respondent’s motion to dismiss for
lack of jurisdiction will be
entered.
Reviewed by the Court.
WELLS, COHEN, GERBER, RUWE, WHALEN, HALPERN, BEGHE, LARO,
and THORNTON, JJ., agree with this majority opinion.
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BEGHE, J., concurring: My impression is that it was due to
mere inadvertence, a ministerial omission, that respondent’s
employees charged with the responsibilities of preparing and
sending the notice of deficiency failed to stamp the date for
filing the petition at the appropriate space provided on the
notice form; it was not with the intention of flouting the
expressed will of Congress. After all, the Commissioner has
redesigned the statutory notice form so that it provides a space
for stamping the date by which the petition must be filed; the
vast majority of the statutory notices that are issued bear the
requisite date stamp, and nothing we say or do in the majority
opinion encourages the Commissioner to be less than diligent in
his continuing efforts to achieve 100-percent compliance with the
Congressional mandate.
It’s also my impression, consistent with the majority’s
inference that there was no detrimental reliance or confusion on
petitioner’s part, that he decided to file the petition more than
90 days after issuance of the notice with a view to testing its
validity. Since petitioner, a member of the bar, chose not to
testify in the hearing on the cross-motions, I’m comfortable in
making this inference. See Wichita Terminal Elevator Co. v.
Commissioner, 6 T.C. 1158, 1165 (1946), affd. on other grounds
162 F.2d 513 (10th Cir. 1947).
I agree with the majority and Judges Foley and Swift that
the statute, despite its imperative mood and lack of a savings
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provision like the second sentence of section 7522(a), doesn’t
require us to invalidate the notice. To invalidate the notice
would impose a disproportionately severe sanction against the
fisc. Any impression created by the Commissioner’s occasional
mistake, evidenced by this case, and by Smith v. Commissioner,
114 T.C. 489 (2000) (upholding validity of similar notice where
taxpayer filed petition within 90-day period specified by section
6213(a)), that the Commissioner is flouting the expressed will of
Congress, is belied by the revised format of the notice form and
the directions and instructions in the Internal Revenue Manual.1
Having expressed agreement with the majority’s upholding of
the notice, what should we do with the petition, in the absence
of any argument of detrimental reliance or any evidence of
petitioner’s confusion? The Court’s response to a somewhat
analogous situation in Shea v. Commissioner, 112 T.C. 183, 207
(1999), at least raises the question whether some sanction
against respondent or relief to petitioner would be appropriate.
I join the majority in answering the question in the
negative in this case. Because petitioner has failed to dispel
1
See, e.g., 2 Audit, Internal Revenue Manual (CCH), sec.
4.3.19.1.8.2, at 7712 (statutory notice letter must include the
last day taxpayer can file petition with Tax Court); 2 Audit,
Internal Revenue Manual (CCH), Exhibit 4.3.19.1-2, at 7748 (form
of deficiency notice cover letter, as revised in 1999, includes
heading “Last Day to File a Petition With the United States Tax
Court:”); 2 Audit, Internal Revenue Manual (CCH), sec.
4.3.19.1.6.3, at 7709 (issuer of deficiency notice must enter
“Last Day to File” date in the form letter).
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the impression that the late filing of his petition was a product
of his conscious resolve to test the validity of the notice, or
even to allege that he was confused by the notice, I don’t
believe he’s entitled to a ticket of admission to the Tax Court.
I’m therefore comfortable in making our usual comment that he’s
not without a remedy--he can pay the deficiency, and claim and
sue for a refund, see, e.g., Zimmerman v. Commissioner, 105 T.C.
220, 226 n. 4 (1995) (citing McCormick v. Commissioner, 55 T.C.
138, 142 (1970)). In any event, attorneys, who are
professionally charged with the responsibility generally of
counting days for statute of limitations purposes–-not just in
tax cases--should be held to a higher standard than other pro se
petitioners. Cf. Rendina v. Commissioner, T.C. Memo. 1996-392;
Sisson v. Commissioner, T.C. Memo. 1994-545; deRochemont v.
Commissioner, T.C. Memo. 1991-600, citing Whitaker v.
Commissioner, T.C. Memo. 1988-418 (citing Fihe v. Commissioner,
265 F.2d 511, 513 (9th Cir. 1958), affg. a Memorandum Opinion of
this Court)).
All this leaves for another day the question of what to do
with the case of a late filing pro se lay petitioner, who might
be suffering from cognitive deficit, dyscalculia, or other
disability. The resulting residual uncertainty about what we
would do in such a case should help to stiffen the Commissioner’s
resolve to achieve 100-percent compliance in the future.
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CHABOT, J. dissenting: The Congress decided that, if the
Commissioner sent a notice of deficiency to a taxpayer, then the
taxpayer should have help in determining the last date for
petitioning this Court. The Congress decided to charge the
Commissioner with the task of providing this help. The Congress
decided to effectuate the foregoing by enacting that the
Commissioner “shall include on each notice of deficiency”
(emphasis added) the last date for petitioning this Court. Sec.
3463(a) of the 1998 Act.
The majority’s opinion may be read to permit, or perhaps
even encourage, the Commissioner to ignore the obligation of the
statute, with no consequences except (1) where the taxpayer was
misled and detrimentally relied on the misleading interpretation,
or (2) perhaps where the taxpayer filed the “petition just after
the expiration of the [statutory] filing period”.
From the foregoing, I dissent.
I. “Shall”
When used in a statute, the word “shall” is ordinarily a
word of command. See Escoe v. Zerbst, 295 U.S. 490, 493 (1935)
(citing Richbourg Motor Co. v. United States, 281 U.S. 528, 534
(1930)); United States v. Wood, 295 F.2d 772, 783 (5th Cir.
1961); Estate of La Sala v. Commissioner, 71 T.C. 752, 762-763
(1979).
Neither the context of the statutory provision nor its
legislative history indicates that, in section 3463(a) of the
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1998 Act, the word “shall” was intended to be directory rather
than mandatory. Indeed, the full text of section 3463 of the
1998 Act (set forth supra in the majority’s opinion p. 5) shows
that “shall” appears in each subsection of section 3463 of the
1998 Act; thus far it has not been seriously suggested that
“shall” is other than mandatory as it appears in subsections (b)
and (c). Giving “shall” the same meaning in each of the three
places it appears in section 3463 of the 1998 Act, I conclude
that the Congress’ choice of that word in subsection (a) mandates
the Commissioner to state on the notice of deficiency what is the
last date for petitioning this Court. See United States v.
Olympic Radio & Television, 349 U.S. 232, 236 (1955);1 Estate of
Owen v. Commissioner, 104 T.C. 498, 507-508 (1995) (and cases
cited therein); Office of the Legislative Counsel, U.S. House of
Representatives, Style Manual, Drafting Suggestions for the
1
In United States v. Olympic Radio & Television, 349 U.S.
232, 236 (1955), the Supreme Court instructed as follows:
It may be that Congress granted less than some thought or
less than was originally intended. We can only take the
Code as we find it and give it as great an internal symmetry
and consistency as its words permit. We would not be
faithful to the statutory scheme, as revealed by the words
employed, if we gave “paid or accrued” a different meaning
for the purposes of section 122(d)(6) [I.R.C. 1939] than it
has in the other parts of the same chapter.
To the same effect see Commissioner v. Keystone Consol.
Industries, Inc., 508 U.S. 152, 159 (1993).
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Trained Drafter, at 3 (1989).2
I would hold that section 3463(a) of the 1998 Act requires
the Commissioner to state on the notice of deficiency what is the
last date for petitioning this Court; and that the statutory
language is not merely directory, that “shall” is not here the
functional equivalent of “may”.
II. “Each”
Section 3463(a)of the 1998 Act requires the Commissioner to
state this information on “each notice of deficiency”.
As the majority’s opinion notes, the Congress concluded that
some taxpayers need assistance in determining the deadline for
filing a timely petition. However, the enacted statutory
language and legislative history do not indicate that the
Commissioner is obligated to provide the required assistance only
to those who need it, or who might reasonably be expected to need
it. Rather, the Congress imposed the statutory obligation with
2
The House Legislative Counsel’s Office’s style manual
instructs legislative drafters as follows:
(4) Use same word over and over.--If you have
found the right word, don’t be afraid to use it again
and again. In other words, don’t show your pedantry by
an ostentatious parade of synonyms. Your English
teacher may be disappointed, but the courts and others
who are straining to find your meaning will bless you.
(5) Avoid utraquistic subterfuges.--Do not use the
same word in 2 different ways in the same draft (unless
you give the reader clear warning).
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respect to each notice of deficiency.
It is not at all unusual for the Congress to act more
broadly than the confines of the problem described in the
legislative history; the Congress has done so in many different
areas of the tax law. See, e.g., Bartels Trust for Ben. of Univ.
v. United States, 209 F.3d 147, 153-154 (2d Cir. 2000) (relating
to charities’ unrelated trade or business income); Corn Belt Tel.
Co. v. United States, 633 F.2d 114, 117-118 (8th Cir. 1980)
(relating to the definition of “public utility property” for
investment credit purposes); Warrensburg Board & Paper Corp. v.
Commissioner, 77 T.C. 1107, 1110-1111 (1981) (relating to
subchapter S corporations’“one-shot” elections); Estate of Beal
v. Commissioner, 47 T.C. 269, 271-272 (1966) (relating to
includability of the value of certain annuities in decedents’
estates). Where the Congress has chosen to so legislate, the
courts do not confine the statute to the original problem, but
rather apply the statute to the wider net that the Congress has
cast.
The legislative history does not explain why the Congress
chose to use statutory language that is broader than the problem
it sought to address. However, it is plain that the Congress
required the Commissioner to provide assistance on each notice of
deficiency, and not merely where the assistance was, or might be,
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needed. We may speculate that the Congress so acted in order to
simplify the Commissioner’s obligations, by not requiring the
Commissioner to make case-by-case determinations. It is
possible, of course, that the Congress decided to avoid case-by-
case determinations on the part of the Commissioner, and yet
require or permit the Court to make such determinations. This
seems to be contemplated in the majority’s opinion, see supra p.
13 note 5, and is stated in Judge Swift’s dissent, see infra
p. 28 . However, I do not find evidence of such a distinction in
either the statute or the legislative history.
In any event, it is clear that the Congress required the
Commissioner to provide the filing date deadline information on
each notice of deficiency, a rule broader than the problem that
gave rise to Congress’ concern.
III. The Shotgun Behind the Door
In section 3463 of the 1998 Act, the Congress imposed an
obligation on the Commissioner. The Congress contemplated that
the Commissioner might err in carrying out this obligation, by
putting the wrong filing deadline date on the notice of
deficiency. Accordingly, in section 3463 of the 1998 Act, the
Congress provided a consequence for such an error; the
Commissioner is not allowed to “sandbag”3 the taxpayer, even
3
See, e.g., Barkins v. International Inns, Inc., 825 F.2d
905, 907 (5th Cir. 1987) (“waiting until the expiration of the
(continued...)
- 23 -
inadvertently, by putting a date on the notice of deficiency that
is after the last date for filing a timely petition. The
Congress accomplished this in section 3463(b) of the 1998 Act by
providing that a petition will be timely if it is filed by the
date that the Commissioner set forth on the notice of deficiency.
Consistent with the approach in section 3463(a) of the 1998 Act,
the taxpayer’s right to the subsection (b) relief is not affected
by whether the taxpayer was in fact misled by the Commissioner’s
incorrect advice.
Thus, the Congress specifically provided a consequence to
the Commissioner’s failure to comply correctly. But, the
majority in the instant case hold, there is not any consequence
to the Commissioner’s failure to comply at all. Not only is
there not any consequence provided for in section 3463 of the
1998 Act under the majority’s holdings, but there is not a
shotgun behind the door.4 The effect of the majority’s holding
is to make section 3463(a) of the 1998 Act into mere surplusage.
Section 3463(b) of the 1998 Act presumably would continue to
operate in those instances where the Commissioner chose to
specify in the notice of deficiency a cutoff date for filing a
3
(...continued)
limitations period to point out an error recognizable well
before”).
4
See Silver v. New York Stock Exchange, 373 U.S. 341, 352
(1963).
- 24 -
petition; subsection (c) would continue to provide an effective
date; but under the majority’s holdings, subsection (a) would not
have effect.
The majority’s construction “offends the well-settled rule
of statutory construction that all parts of a statute, if at all
possible, are to be given effect.” Weinberger v. Hynson,
Westcott & Dunning, 412 U.S. 609, 633 (1973); see Fort Stewart
Schools v. F.L.R.A., 860 F.2d 396, 403 (11th Cir. 1988), affd.
495 U.S. 641 (1990); Beisler v. Commissioner, 814 F.2d 1304, 1307
(9th Cir. 1987), affg. T.C. Memo. 1985-25.
We can interpret the statute so as to make it “work”, and we
can do so without arrogating to this Court the authority to make
line-drawing decisions that normally are regarded as being within
the province of the Congress.
Section 3463(a) of the 1998 Act directs the Commissioner to
include certain information “on each notice of deficiency under
section 6212 of the Internal Revenue Code of 1986”.
Respectfully, I would interpret this Congressional command as an
instruction that the Commissioner must comply with in order to
have a valid notice of deficiency. It is simple for the
Commissioner to comply with this Congressional command. It is
simple for a reviewing court (ordinarily, this Court) to
determine whether this congressional command has been complied
- 25 -
with in any specific instance.5 The power to determine the
validity of a notice of deficiency is one that clearly is within
this Court’s arsenal of powers. The exercise of this power does
not draw us into the uncertainties of limitations periods and
restrictions on assessments that may well result from other
proposals.
Although invalidation of the notice of deficiency may
provide a windfall to some taxpayers, such windfalls are wholly
within the power, and it may be, the technology, of the
Commissioner to eliminate entirely.
Invalidating the notice of deficiency under these
circumstances may be regarded as legislating, but--
We often must legislate interstitially to iron out
inconsistencies within a statute or to fill gaps resulting
from legislative oversight or to resolve ambiguities
resulting from a legislative compromise. [U.S. Bulk
Carriers v. Arguelles, 400 U.S. 351, 354 (1971); fn. ref.
omitted.]
Invalidating the notice of deficiency is consistent with the
statutory scheme; it will put the shotgun back behind the door.
We have on other occasions refrained from such interstitial
legislation and left the statute with meaningless provisions.
5
Sec. 7522(a) provides that notices of deficiency and other
specified documents must include descriptions of the bases for
certain matters. The adequacy of any such description may fairly
be open to dispute. The statute provides that “An inadequate
description * * * shall not invalidate such notice.” This
contrasts sharply with the requirement of sec. 3463(a) of the
1998 Act, where proper compliance ordinarily is not open to
dispute.
- 26 -
But we have done so only reluctantly, and after making
substantial efforts to give effect to all the statutory language;
and we have acknowledged when our efforts failed. See, e.g.,
Adams v. Commissioner, 70 T.C. 373 (1978), 70 T.C. 446 (1978), 72
T.C. 81 (1979), affd. without published opinion 688 F.2d 815 (2d
Cir. 1982).6 In that instance, our continuing respectful
dialogue with the Congress resulted in the enactment of Public
Law 96-596, 94 Stat. 3469, enacted in 1980 (even before Adams was
affirmed), which revised the law to resolve the problems we had
struggled with.
The majority’s holdings in the instant case make part of the
statute meaningless. There is a way to give effect to the entire
6
In Adams v. Commissioner, 72 T.C. 81, 92 n.16 (1979), we
stated as follows:
It was not without considerable deliberation and
thought that our decision herein was reached. We can
certainly appreciate Congress’ desire to eliminate the
potential for abuse inherent in dealings with tax-
exempt organizations. Also, we are not unaware of the
difficulty in drafting legislation which will equitably
dispose of a variety of factual settings. Regrettably,
however, when considering all the potentially viable
alternatives available to assist us in implementing the
statute, we were consistently confronted with another
statute or well-established rule of law which prevented
our reaching a satisfactory resolution of the problems
discussed herein.
- 27 -
statute, and to do so within our normal range of powers and in a
way that is not likely to lead us into difficult interpretative
and practical problems. The majority reject that approach.
Respectfully, I dissent.
GALE and MARVEL, JJ., agree with this dissenting opinion.
- 28 -
SWIFT, J., dissenting: I generally agree with the analysis
set forth in Judge Foley’s dissent and with his suggested
conclusion that the petition herein be treated as timely.
In this case, however, I would not conclude, as a matter of
law, that respondent’s failure to provide in the notice of
deficiency the specific due date for filing a Tax Court petition
automatically provides the taxpayer an unlimited period of time
to do so. Respondent’s failure to provide the due date should
extend the deadline for the filing of a Tax Court petition for a
reasonable period of time based on the facts and circumstances of
each case and based on the intent and conduct of the taxpayer.
In the current case there is no evidence of intentional
mischief by petitioner, and -– in the realities of the business
world -– 56 days (including weekends and holidays), particularly
in the absence of a due date provided by respondent, is but a
blink. Herein, I would conclude that the petition is timely.
- 29 -
FOLEY, J., dissenting: In section 3463(a) of the Internal
Revenue Service Restructuring and Reform Act of 1998 (RRA 1998),
Pub. L. 105-206, 112 Stat. 685, 767, Congress provided: “The
Secretary of the Treasury or the Secretary’s delegate shall
include on each notice of deficiency * * * the date determined by
such Secretary (or delegate) as the last day on which the
taxpayer may file a petition with the Tax Court.” Congress
further provided that the date determined by the Internal Revenue
Service (IRS) would establish the deadline for filing a petition
with this Court. Section 3463(b) of RRA 1998 amends section
6213(a) by adding the following thereto: “Any petition filed
with the Tax Court on or before the last date specified for
filing such petition by the Secretary in the notice of deficiency
shall be treated as timely filed.” The majority concludes that
“Because the last date for filing a timely Tax Court petition was
not specified by the deficiency notice in this case, the petition
could not be filed on or before any such date”, majority op. p.
11, and that “the last sentence of section 6213(a) * * * does not
operate in the present case”, majority op. p. 13. I disagree.
The plain language of the statute provides that the IRS must
determine a date; this date may establish a deadline that is
later than the statutorily prescribed 90-day period; and
petitions filed on or before the deadline established by the IRS
shall be treated as timely filed. Respondent’s failure to
- 30 -
provide any specified date is tantamount to providing that there
is no deadline. Accordingly, the petition is timely.
The majority asserts that “Respondent’s position finds
further support in the legislative history”. Majority op. p. 11.
Again, I disagree. Assuming arguendo that the statute is not
clear on its face, the legislative history, on the contrary,
bolsters petitioner’s contention. In setting forth the rationale
for the amendment to section 6213(a), the Senate Finance
Committee report (report) states: “The Committee believes that
taxpayers should receive assistance in determining the time
period within which they must file a petition in the Tax Court
and that taxpayers should be able to rely on the computation of
that period by the IRS.” S. Rept. 105-174, at 90 (1998), 1998-3
C.B. 537, 626 (emphasis added). Focusing on the statement that
“taxpayers should be able to rely on the computation of that
period by the IRS”, the majority emphasizes that petitioner did
not contend that he detrimentally relied on the information in
the notice and that the theory of detrimental reliance is not
applicable in this case because no misleading information was
provided. I agree that the theory of detrimental reliance is not
applicable. Neither the statute nor the legislative history
imposes such a requirement. While the report provides that
“taxpayers should be able to rely on the computation of that
- 31 -
period by the IRS”, the report does not require a taxpayer to
establish detrimental reliance.
Moreover, I believe the IRS provided misleading information
to petitioner. While the text of the notice states that “you
have 90 days from the above mailing date of this letter * * * to
file a petition”, the space in the upper right corner of the
notice, entitled “Last Day to File a Petition With the United
States Tax Court”, is blank. This notice is more confusing than
notices issued under prior law and creates the type of confusion
that Congress intended to remedy.
The IRS made a mistake and did not follow the congressional
mandate, and, as a result, the petition should, pursuant to
section 6213(a), be treated as timely filed. The majority’s
holding is contrary to the statute and legislative history. In
essence, it allows the IRS to circumvent the congressional
mandate. That is an unreasonable interpretation of the statute.
Accordingly, I respectfully dissent.
COLVIN, J., agrees with this dissenting opinion.