Time, Time, Time Is Not on Their Side
Those of you old enough (I am) to remember the 1964 Rolling Stones song parodied in the title to this blog will get the irony with the Tax Court’s decision.1 Roy and Bonnie Nutt received a notice of deficiency on April 14, 2022, with an income tax deficiency and an accuracy penalty. The last day for the Nutts to file a Tax Court petition was July 18, 2022. An electronic filing would be timely if filed before midnight on July 18, 2022.
The Nutts lived in the Central Time Zone and filed a petition at 11:05 p.m. Central time on July 18, 2022. The Tax Court’s electronic case management system automatically recorded the time of receipt as 12:05 a.m. Eastern Time on July 19, 2022. The IRS filed a motion to dismiss the Nutts' case contending the Tax Court lacked jurisdiction because it was not timely filed.
Sure enough the Tax Court held that the petition was not timely filed and dismissed the case because the filing deadline is determined by the time in reference to where the court is located. In this case, the Tax Court was located in the Eastern time zone, so midnight Eastern time is 11:00 p.m. Central time. Oops! And it was not like the rule (Rule 22(d)) was hard to find. It is prominently displayed on the Tax Court website.
1 Parts of this article are drawn from James A. Beavers, CPA, CGMA, J.D., LL.M., "Tax Court Holds Firm to Deadline for Petition Filed After Midnight Eastern Time," The Tax Advisor, July 1, 2023.