In Gray v. Comm., 112 AFTR 2d ¶ 2013-5103 (7th Cir. 7/23/2013), the Seventh Circuit Court of Appeals upheld the determination of the Tax Court and found that the Tax Court lacked jurisdiction to review a collection action because more than 30 days had elapsed.
The Seventh Circuit concluded that the Tax Court properly determined that it lacked jurisdiction where the taxpayer failed to comply with the 30-day time limit pursuant to Code Sec. 6330(d)(1). Section 6330(d)(1) is the section providing the Tax Court with jurisdiction to appeal a notice of determination after a collection due process (“CDP”) hearing. In Gray, the taxpayer attempted to use the traditional 90-day time limit for challenging a notice of deficiency under Code Sec. 6213(a). But the 7th Circuit found that Sec. 6213 was only applicable to notices of deficiency, not denial of collection due process.
By way of background, taxpayers are entitled to a CDP hearing pursuant to Sec. 6330(b)(1) prior to collection activity taking place. Prior to levying on property, the IRS is required to provide written notice to the taxpayer of the taxpayer’s right to a hearing to dispute the collection action. Code Sec. 6330(a). If the taxpayer requests a hearing within 30 days of the notice, an IRS appeals officer (with no prior involvement in the matter) will review the issues that the taxpayer requests. Code Sec. 6330(b) and (c). After the hearing, the IRS will issue a notice of determination, ruling on whether the proposed collection action is justified after considering the taxpayer's objections. Code Sec. 6330(c)(3). If the taxpayer is not satisfied with the determination, he may within 30 days of such a determination Petition the Tax Court. Code Sec. 6330(d)(1).
Procedurally, in the Gray case, the taxpayer filed the Petition more than 30 days after receiving the notice of determination. Thus, the IRS filed a motion to dismiss for lack of jurisdiction based on filing out of time. While the taxpayer objected to the motion the Tax Court sided with the IRS and the 7th Circuit followed.
Conclusion, when petitioning the Tax Court for review of a determination of a collection due process hearing, be certain to file within the 30 day time period or be barred from further appeals.