Court Limits Equitable Tolling For Late Tax Court Petitions – Houston Tax Attorneys

We live in a fast-paced world where technology has made it possible to do more, see more, and accomplish everything else more efficiently. While some routines of life have not changed, most have been transformed by our increasingly connected environment.

For better or worse, one thing that has not changed is the concept of deadlines, particularly when it comes to dealing with the government. The IRS is a prime example. It can often miss deadlines and the law either affords a remedy or the government shrugs it off as a loss to the fisc generally that does not even warrant conversation. Taxpayers usually don’t have this luxury. When it comes to tax law, the law isn’t written to protect taxpayers generally. The law is biased toward tax procedure and making it possible for the IRS to administer the law in mass and in bulk.

This is what made the Boechler, P.C. v. Commissioner case interesting when it was considered by the Supreme Court. It was a taxpayer-favorable ruling on a procedural issue, which is rare. The Supreme Court held that a taxpayer could have a remedy even if it filed a tax court petition a few days late. The Supreme Court ruled in Boechler, P.C. v. Commissioner that these deadlines are subject to equitable tolling. This seemed to offer hope for taxpayers who missed deadlines due to circumstances beyond their control.

But what exactly must a taxpayer prove to successfully in…

But what exactly must a taxpayer prove to successfully invoke equitable tolling? The recent remand decision in Boechler, P.C. v. Commissioner, 2025 U.S. Tax Ct. LEXIS 15 (2025), provides the answer. This case provides an opportunity to examine exactly what taxpayers must prove to successfully invoke equitable tolling.

Facts & Procedural History

Boechler operates a solo law practice specializing in asbestos litigation. Her firm employed only herself, her sister Lisa, and a part-time administrative assistant in 2017. The practice maintained approximately 25 active cases, often involving 30 or more defendants per case. To those who do not litigate cases, this sound like a small operation. To those who do litigation, they know that 25 cases is often a lot–certainly more than full time for an attorney.

The tax dispute in this case involved the IRS’s assessment of penalties under Section 6721 for allegedly failing to file timely information returns for 2012. When Boechler contested the assessment, the IRS attempted to collect and issued a Final Notice of Intent to Levy on October 31, 2016. After Boechler requested an appeals hearing, the IRS issued a Notice of Determination on July 28, 2017, sustaining the levy notice.

The Notice of Determination clearly stated that Boechler had 30 days from the date of the letter to file a petition with the U.S. Tax Court. The 30-day deadline fell on August 27, 2017, which was a Sunday. Boechler’s attorney, Mr. Thompson, mailed the petition on August 29, 2017. This was two days late.

During the filing period

During the filing period, Boechler faced competing demands on her time. She was caring for her elderly mother in her late 90s, sharing caregiving responsibilities with her two sisters. As a single mother, she was also helping her son transition to college, including traveling to New York between August 17-22 to assist with his dormitory move-in and attend parent meetings.

Given the late filing

Given the late filing, the IRS attorney filed a motion to dismiss for lack of jurisdiction. The U.S. Tax Court initially granted the motion based on the idea that it was a court of limited jurisdiction and it did not have jurisdiction when the petition was filed late. The Eighth Circuit affirmed on appeal. However, the Supreme Court reversed the lower courts in 2022. The Supreme Court held that the 30-day deadline under Section 6330(d)(1) is not jurisdictional and is subject to equitable tolling. The case was remanded to the appeals court specifically, so continued tax litigation, for factfinding on whether equitable tolling applied to these circumstances.

Section 6330 and Collection Due Process Rights

To understand this case, we have to first consider the Collection Due Process Hearing generally. This is the process one can invoke when the IRS takes certain collection actions, such as issuing a lien notice of notice of intent to levy.

The Collection Due Process provisions in Section 6330 provide taxpayers with procedural safeguards when the IRS initiates these collection actions. These provisions require the IRS to notify taxpayers before levying their assets and provide an opportunity for administrative review. Thus, the hearing part of the collection due process process.

Under Section 6330(d)(1), taxpayers can then petition the U.S. Tax Court within 30 days of receiving a notice of determination from the IRS Office of Appeals in the CDP hearing. This petition right serves as the exclusive judicial remedy for challenging collection actions after the administrative process concludes.

The 30-day deadline represents a compromise between providing taxpayers meaningful access to judicial review and allowing the IRS to proceed with collection activities. The rationale for this is that Congress recognized that collection cases often involve unpaid tax debts and there may be circumstances that warrant the IRS not taking immediate collection actions to collect the debts. Life, etc. happens, and sometimes collecting immediately is not the right answer.

The tax dispute here was a tax court petition filed in re…

The tax dispute here was a tax court petition filed in response to the determination notice issued by the IRS Office of Appeals in a CDP hearing. It did not originate from the IRS audit function–which is most of the cases the U.S. Tax Court hears.

What is Equitable Tolling?

This brings us to equitable tolling. What is it?

Equitable tolling is a judicial doctrine that allows courts to excuse compliance with statutory deadlines under extraordinary circumstances. The Supreme Court has described it as “a traditional feature of American jurisprudence and a background principle against which Congress drafts limitations periods.” So it is just a judicial rule of lieniency that the courts can apply.

The doctrine recognizes that rigid application of deadlines can sometimes produce unjust results. When Congress establishes a limitations period, courts presume that equitable tolling applies unless the statutory language or scheme clearly indicates otherwise.

However, equitable tolling is not a general remedy for missed deadlines. Courts apply it sparingly, recognizing that limitations periods serve important purposes in maintaining orderly judicial proceedings and providing finality to legal disputes.

That was and is the lingering question from this case. When the Supreme Court sent the case back down to the trial court, there was a question of how victorious was the taxpayer? Did they create new law, yes, but is that new law helpful? That depends on how the lower courts apply equitable tolling, which is what this new court opinion in the case is about.

The Two-Pronged Test for Equitable Tolling

The court opinion in this case pulled together concepts from other court cases. According to this new court option, this mash-up produces a two-pronged test to determine whether equitable tolling applies. The taxpayer must establish both elements.

First, the taxpayer must demonstrate that it pursued its rights diligently. This requires showing that all reasonable steps were taken to ensure timely filing of the petition. The inquiry focuses on whether the taxpayer exercised due diligence in monitoring the deadline and communicating with counsel. Second, the taxpayer must prove that extraordinary circumstances outside of its control prevented timely filing. This prong requires more than showing difficult circumstances – the circumstances must be both extraordinary and beyond the taxpayer’s control. As with just about everything when it comes to tax disputes, the burden of proof rests entirely with the taxpayer. Courts will not presume that equitable tolling applies simply because a petition was filed late.

So how are these tests met? According to the court, the diligence requirement examines whether the taxpayer took reasonable steps to ensure timely filing. This analysis focuses on the taxpayer’s conduct during the limitations period, not just the circumstances that caused the delay. For example, in Holland v. Florida, the Supreme Court found that a petitioner acted diligently when he repeatedly contacted his attorney to ensure the petition was filed on time. The petitioner sent multiple letters and made numerous phone calls to his counsel, documenting his efforts to monitor the case’s progress.

The U

The U.S. Tax Court in this case distinguished this case from Holland v. Florida, where the petitioner repeatedly contacted his attorney to ensure the petition was filed on time. In Holland, the petitioner sent multiple letters and made numerous phone calls, creating a clear record of diligent efforts to monitor the deadline. That apparently didn’t happen here.

The U.S. Tax Court found that the taxpayer here failed to satisfy this requirement. The record contained no evidence that anyone at Boechler followed up with counsel to ensure timely filing. Boechler could not even recall whether she filed the petition herself or provided direction to the person who filed it, according to the court. So the rule coming out of this case is that when representation by a tax attorney is involved, the taxpayer must show efforts to communicate with counsel about the deadline. Simply hiring an attorney does not automatically satisfy the diligence requirement.

The court also rejected Boechler’s argument that her personal circumstances constituted extraordinary circumstances. The court noted that while Boechler faced multiple demands on her time, she had assistance from her sisters in caring for her mother. She also had co-counsel on several of her cases, which reduced her workload. The court emphasized that miscalculating a deadline is not an extraordinary circumstance beyond one’s control. The court said that attorney miscalculation of deadlines is insufficient to warrant equitable tolling.

The Takeaway

This case reflects courts’ reluctance to apply equitable tolling broadly, even after the Supreme Court confirmed its availability. The doctrine remains an exceptional remedy reserved for truly extraordinary circumstances. This restrictive approach is based on a two-pronged test that creates significant barriers for taxpayers seeking relief. In the end, a right to equitable tolling may prove to be a right on paper, without affording most with a remedy they can actually use. The traditional barriers to late filing remain largely intact–with equitable tolling serving as a narrow exception rather than a remedy for missed deadlines.

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Stephan Dorsey

Stephan is the sports journalist for the Maple Grove Report.

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IRS Collections: Can Taxpayers Rely on IRS Statements? – Houston Tax Attorneys

Taxpayers who enter into payment arrangements with the IRS often believe they are safe from IRS collection actions. Many assume that agreeing to monthly payments will prevent the government from filing tax liens.

This assumption seems reasonable given the IRS’s own published guidelines. These guidelines suggest liens won’t be filed in certain circumstances. But can taxpayers rely on this guidance? What happens when one IRS unit tells a taxpayer no lien will be filed while another unit within the IRS has already decided otherwise?

Shouldn’t taxpayers be able to rely on the policies when representations are made by IRS employees about IRS policy? What about when the IRS policy is widely known and confirmed by the IRS employee working the case?

The case of Horsham v. Commissioner, T.C. Memo. 2025-56, gets into this. It involves a case where the taxpayer upheld their end of the bargain when it came to IRS collections and expected the IRS to do the same.

Facts & Procedural History

The taxpayer in this case owed the IRS approximately $42,000 in back taxes for 2017 through 2019. For the 2017 year, she had filed her tax return late. She also failed to pay the full amounts due for all three years. This led to assessed tax liabilities plus additions to tax (i.e., penalties) and interest.

In February 2022, the taxpayer tried to resolve her tax debts. She submitted an offer-in-compromise (“OIC”) to settle her liabilities for less than the full amount owed. By December 2022, the OIC specialist reviewing her case indicated he would recommend rejection. This was based on the taxpayer’s financial information, which showed she could fully pay the taxes owed. The specialist explicitly told the taxpayer she could “withdraw her offer, waiving her appeal rights, and apply for an installment agreement.” He warned that “liens would be filed on all offer year[s]” if she chose this path.

Despite this warning, the taxpayer decided to withdraw her OIC in February 2023. She chose to pursue an IRS installment agreement instead. On March 23, 2023, she submitted her installment agreement proposal for $737 monthly payments. The IRS accepted this proposal. They established it as a direct debit installment agreement (“DDIA”).

On March 30, 2023, the IRS mailed the taxpayer a standard letter confirming acceptance of her installment agreement. This letter stated that if she defaulted, the IRS “could take enforcement action [which] could include filing a Notice of Federal Tax Lien.” The employee who issued this letter was unaware that the OIC unit had already decided to file liens.

The taxpayer spoke with the IRS employee handling her installment agreement on March 23, 2023. She was told that because her debt was below $50,000 and she had arranged for direct debit payments, she “would not have a lien” filed against her. This directly contradicted what the OIC specialist had told her months earlier.

Unknown to the installment agreement employee, the OIC unit had already prepared Form 668(Y)(c), Notice of Federal Tax Lien, on the same day the taxpayer submitted her payment plan. The IRS tax lien was filed on April 4, 2023. The taxpayer received notice of the filing along with information about her right to request a Collection Due Process hearing.

The taxpayer timely requested a Collection Due Process hearing. She argued for withdrawal of the lien based on her installment agreement and the representations made by IRS personnel. The IRS Settlement Officer sustained the lien filing. She explained that the offer specialist had properly informed the taxpayer that liens would be filed. The installment agreement employee had been unaware of this prior decision.

The taxpayer petitioned U.S. Tax Court to review the CDP results, which was the subject of this court opinion.

Federal Tax Lien Authority and Discretion

The authority for the IRS to file liens is found in Section 6321 of the tax code. This section creates an automatic lien in favor of the United States. The lien arises when any person liable to pay federal tax “neglects or refuses to pay the same after demand.” This statutory lien arises by operation of law. It attaches to all property and rights to property belonging to the taxpayer, both current and future.

However, the existence of this statutory lien differs significantly from the filing of a Notice of Federal Tax Lien (“NFTL”). The underlying lien exists automatically upon assessment and demand. The NFTL serves as public notice of the government’s claim. It determines priority against certain competing creditors under Section 6323.

IRS employees have discretion in deciding whether to file an NFTL. Even when filed, Section 6323(j) provides several grounds under which the IRS may withdraw a filed lien. These grounds include situations where the taxpayer has entered into an installment agreement that renders the lien unnecessary. They also include situations where withdrawal would facilitate collection of the tax liability. This statutory framework uses permissive language. It states that the Secretary “may” withdraw liens when certain conditions are met. It does not create mandatory withdrawal requirements.

How IRS Policies Create Taxpayer Expectations

Given the rules noted above, the IRS has developed policies that suggest liens generally won’t be filed in certain circumstances. This particularly applies to taxpayers who qualify for streamlined installment agreements. These policies recognize that filing liens can sometimes hinder rather than help tax collection. Liens can damage taxpayers’ ability to maintain income or secure financing needed to pay their debts.

According to the IRS’s website and internal policy manual, for taxpayers owing $50,000 or less who qualify for streamlined processing, IRS guidelines typically discourage lien filing. The IRS website notes that this applies when the taxpayer agrees to direct debit payments. IRM 5.12.2.3.1 indicates that “An NFTL filing determination is not required on Guaranteed/Streamlined Installment Agreements or In-Business Trust Fund Express Agreements.”

The theory behind this approach makes practical sense. Taxpayers who demonstrate good faith by entering into secured payment arrangements pose less collection risk. They may be harmed more than helped by public lien filings. These internal guidelines reflect sound collection policy. Taxpayers making regular payments through automatic bank drafts provide the IRS with a reliable payment stream. This approach avoids the administrative costs and potential backlash associated with lien filing and subsequent appealing IRS collection actions.

However, these policies create reasonable expectations among taxpayers. They expect that compliance with payment agreements will protect them from lien filing. When IRS employees reference these policies in conversations with taxpayers, they reinforce this belief. Taxpayers believe that following agency guidelines will result in predictable treatment. The disconnect arises when different IRS units operate under different priorities. It also occurs when units lack access to complete information about taxpayer cases.

Reliance on IRS Employee Statements

The Tax Court in Horsham addressed the question of whether taxpayers can enforce internal IRS policies when agency employees provide conflicting information about their application? The taxpayer received specific assurances from an IRS employee that directly contradicted earlier warnings from a different IRS unit.

The installment agreement employee told the taxpayer that because her debt was below $50,000 and she had arranged for direct debit payments, she “would not have a lien” filed against her. This statement appeared to be grounded in actual IRS policy. As noted above, the IRS’s IRM indicates that NFTL filing determinations are generally not required for streamlined installment agreements. The IRS website also suggests that taxpayers owing $50,000 or less can qualify for streamlined processing that typically avoids lien filing.

The IRS employee making this representation was unaware that the OIC unit had already decided to file liens and had clearly communicated this decision to the taxpayer months earlier. The court noted this communication breakdown. It observed that “the call site employee with whom petitioner spoke ‘could not see [the NFTL request] at that time’ because that employee ‘does not have access to the system that the offer examiner works on.’”

Considering these facts, the tax court’s analysis focused on the discretionary nature of lien withdrawal authority under Section 6323(j)(1). The court emphasized that this provision “by its terms is discretionary.” It noted that “nothing in it requires [the Commissioner] to withdraw the NFTL because of [an] installment agreement.” Even when IRS employees reference legitimate agency policies, those policies remain subject to override when other IRS units make different determinations.

The court distinguished between the taxpayer’s understandable reliance on employee statements and her legal right to enforce those statements. The court acknowledged that the taxpayer had received conflicting information from different IRS personnel. The installment agreement employee’s statement about the $50,000 threshold wasn’t incorrect as a matter of general policy. However, it didn’t account for the specific decision already made in her case. The court found this communication failure insufficient to require lien withdrawal.

The Takeaway

The message from this case is clear: taxpayers cannot rely on the IRS or its statements regarding collection actions. This remains true even when those policies seem reasonable and are supported by statements on the IRS’s own website. Unlike private parties, the IRS is not held to any standard in its course of dealing with taxpayers. The IRS can induce taxpayers to enter into agreements while giving up and modifying their rights. It can even make contradictory statements without any recourse available to affected taxpayers.

While the IRS often does follow its own policies and public statements, those facing unpaid tax debts must understand that there is no legal remedy when the agency chooses to act differently. Taxpayers should approach IRS collection matters with the understanding that only statutory rights provide reliable protection, not agency policies or employee representations that may change based on internal coordination failures or shifting enforcement priorities.