Another Circuit Court Determines that the 90-Day Period for Filing a Petition in the Tax Court is a Non-Jurisdictional Rule Subject to Equitable Tolling.
The Second Circuit Court of Appeals in Buller v. Commissioner, Docket No. 24-1557 (August 14, 2025) has joined the Third Circuit Court of Appeals (Culp v. Commissioner, 75 F.4th 196 (3d Cir. 2023)) in ruling that the 90-day period for filing a petition in a deficiency case in the United States Tax Court is a claim-processing rule that is not jurisdictional and is therefore subject to equitable tolling. But, be aware, equitable tolling is applied sparingly. See Irwin v. Dep't of Veterans Affs., 498 U.S. 89, 96 (1990); Belagio Fine Jewelry, Inc., 164 T.C. No. 7 (filed April 15, 2025). To be entitled to equitable tolling, a taxpayer must establish both that (1) he pursued his rights diligently and (2) extraordinary circumstances beyond his control prevented him from filing on time. See Menominee Indian Tribe of Wis. v. United States, 577 U.S. 250, 255 (2016); Sanders v. Commissioner, 160 T.C. 563, 575 (2023) (citing Lozano v. Montoya Alvarez, 572 U.S. 1, 10 (2014)).
The first prong of the test requires that a litigant take all reasonable steps to ensure the timeliness of his petition, including, engaging with their attorney to ensure the petition is timely filed. See Holland v. Florida, 560 U.S. 631, 653 (2010); Hogan v. Dep't of Veterans Affs., 121 F.4th 172, 178 (11th Cir. 2024); Thomas v. Florida, 795 F.3d 1286, 1291 (11th Cir. 2015). As for the second prong of the test, it “is met only where the circumstances that caused a litigant's delay are both extraordinary and beyond its control.” See Menominee Indian Tribe of Wis., 577 U.S. at 257.
So, can one rely on the fact that one’s attorney was at fault for failing to make sure that a petition was timely filed in order for equitable tolling to apply? If the failure to properly mail the petition is viewed as simple “garden variety negligence’, the answer is no, which is exactly what the Court held in Belagio Fine Jewelry, Inc. v. Commissioner, supra.
In the Belagio case, the Taxpayer urged the Court to apply equitable tolling to its late filed petition by arguing that its petition was filed a day late because its attorney was negligent and did not use a private delivery service designated by the IRS to qualify under Sec. 7502(f) to have the petition treated as filed when mailed. In declining to apply equitable tolling, the Tax Court first noted there was no indication that Belagio had followed up with his attorney to ensure the petition was timely filed. Consequently, he failed to satisfy the first prong of the test for applying equitable tolling.
The inquiry could have ended there since both prongs need to be met for equitable tolling to apply, but the Tax Court went on to analyze the second prong of the test to determine whether there existed any extraordinary circumstances outside of Belagio’s control that prevented the petition from being filed on time. Belagio argued the extraordinary circumstances that warranted equitable tolling was the negligence of its attorney (or rather his legal staff) in mailing the petition using the wrong type of delivery service. The court rejected this argument. While acknowledging that there might be instances where an attorney’s negligence might rise to a level supporting equitable tolling (such as if an attorney were to simply abandon a client), the Court held that simple, garden variety negligence on an attorney’s behalf would not warrant equitable tolling. In the Tax Court’s view, the error committed by Belagio’s legal staff’s error in selecting the wrong type of private delivery service for mailing the petition was such garden–variety neglect that it did not rise to a level warranting equitable tolling. Accordingly, the court granted the IRS’s motion and dismissed the case for failure to state a claim upon which relief can be granted.
As the Belagio case proves, the two–prong test described in Menominee Indian Tribe of Wis. sets a very high bar in order for equitable tolling to apply when a tax court petition is filed late with the taxpayer being required to show that not only did they pursue their rights diligently in trying to ensure the petition was filed timely, but that there also existed extraordinary circumstances beyond their control which prevented them from filing the petition on time.