U.S. Supreme Court revives law firm’s day-late challenge to IRS levy

People visit the U.S. Supreme Court building in Washington, U.S. March 15, 2022. REUTERS/Emily Elconin

(Reuters) – The U.S. Supreme Court on Thursday ruled that a small North Dakota law firm deserved a shot to challenge the Internal Revenue Service’s ability to seize its property after missing by one day a deadline to bring a case challenging a levy it issued.

The justices in a 9-0 decision ruled that the Boechler firm could seek to have the fact that it missed the 30-day deadline to file a case in U.S. Tax Court by one day excused because Congress did not clearly state it related to the court’s jurisdiction, which would make it a strict deadline.

Justice Amy Coney Barrett called the wording of the relevant provision of the IRS code “awkward” and subject to “multiple plausible interpretations.”

It said a taxpayer “may, within 30 days of a determination under this section, petition the Tax Court for review of such determination (and the Tax Court shall have jurisdiction with respect to such matter).”

Barrett said Boechler’s claim that the first part of the sentence and the parenthetical operated separately, making the deadline unrelated to the Tax Court’s jurisdiction, was “hardly a slam dunk” and the IRS may have the “better” reading.

“But in this context, better is not enough,” Barrett wrote. “To satisfy the clear-statement rule, the jurisdictional condition must be just that: clear.”

She said that meant the Tax Court could forgive the firm’s filing of a petition 31 days after the IRS’ Independent Office of Appeals upheld the agency’s plans to seize and sell Boechler’s property to satisfy a $19,250 penalty.

Melissa Arbus Sherry, a Latham & Watkins partner who argued the case for Boechler, said she was “thrilled.” The case was handled by an all-women team of lawyers, a notable fact given the Supreme Court bar is still overwhelmingly male. Associate Amy Feinberg brought the case in pro bono.

“We are especially gratified that all taxpayers, and especially low-income and pro se taxpayers, will now be given a fair opportunity to have their day in court,” Sherry said in a statement.

The IRS declined to comment.

Fargo-based Boechler is run by Jeanette Boechler, a one-time Democratic candidate for North Dakota attorney general in 2010 who handles asbestos litigation.

In 2015, the IRS informed the firm about a discrepancy with its 2012 taxes. After Boechler did not respond, the IRS imposed the penalty and notified her of its plans to seize her property.

After the IRS Office of Appeals sustained the levy in 2017, Boechler filed a petition with the Tax Court a day late, resulting in its dismissal. The 8th U.S. Circuit Court of Appeals affirmed.

The case is Boechler
PC v. Commissioner of Internal Revenue, U.S. Supreme Court, No. 20-1472.

For Boechler: Melissa Arbus Sherry, Amy Feinberg and Caroline Flynn of Latham & Watkins

For the IRS: Jonathan Bond of the U.S. Justice Department

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