Taxpayer is a Day Late: IRS Attorney Prevails
I recently attended a legal seminar put on by the Texas Bar Association in which an attorney who was nearing retirement was lamenting the decline of the legal profession. That attorney cited examples of other attorneys using court rules to gain a competitive advantage over the other party, even though minor instances of non-compliance with the court rule would not have impacted the case. The attorney concluded that these other attorneys were “lawyers,” but not “professionals.” That brings me to today’s Austin v. Commissioner case.
Austin failed to timely file federal tax returns. The IRS imposed failure to file and failure to pay penalties. The IRS mailed Austin a notice of deficiency (also known as a 90-day letter), which required Austin to file a tax court petition by May 7, 2006 – which was a Sunday. The tax court received the tax court petition on May 10th, the handwritten FedEx label was marked May 8th, and the computer generated FedEx label was marked May 9th. The FedEx tracking information specified that the package was picked up on May 9th at 5:22 p.m.
The IRS attorney filed a Motion To Dismiss For Lack Of Jurisdiction on the ground that the petition was not filed with the Court within the 90-day timeframe prescribed by statute. The taxpayer objected to the IRS motion, stating that:
As required by law, the tax court dismissed the taxpayers tax court case due to the IRS attorney’s request – denying the taxpayer the ability to have her day in court. The IRS attorney prevailed over an unrepresented taxpayer due to the taxpayer missing a filing deadline by one day.
According to the position by the attorney cited at the beginning of this article, a tax lawyer practicing fifty years ago would never have filed this kind of motion given these facts. The taxpayer would have had her day in court, and she would have won or lost in court. Cases like this leave me wondering if perhaps that old attorney was right about the legal profession.
Austin failed to timely file federal tax returns. The IRS imposed failure to file and failure to pay penalties. The IRS mailed Austin a notice of deficiency (also known as a 90-day letter), which required Austin to file a tax court petition by May 7, 2006 – which was a Sunday. The tax court received the tax court petition on May 10th, the handwritten FedEx label was marked May 8th, and the computer generated FedEx label was marked May 9th. The FedEx tracking information specified that the package was picked up on May 9th at 5:22 p.m.
The IRS attorney filed a Motion To Dismiss For Lack Of Jurisdiction on the ground that the petition was not filed with the Court within the 90-day timeframe prescribed by statute. The taxpayer objected to the IRS motion, stating that:
[O]n May 4, 2006, she flew to Baltimore, Maryland, to attend a trade show; that she stayed at the Days Inn while in Baltimore; that she signed the petition on Sunday, May 7, 2006; that she completed the customer handwritten label at about 8 a.m. on Monday, May 8, 2006, and affixed it to the FedEx envelope; that she placed the petition in the FedEx envelope, which she then handed to the front desk clerk of the Days Inn with the understanding that the envelope would be picked up later that day by FedEx; that the front desk clerk placed the envelope in the hotel’s “pickup box”; and that, upon returning to the hotel after the trade show later that day, she inquired about the envelope and was told by a front desk clerk that the “pickup box” was empty. In sum, petitioner asserts that “There was no reason for me to think that my FEDEX package had not been picked up on the 8th.”
As required by law, the tax court dismissed the taxpayers tax court case due to the IRS attorney’s request – denying the taxpayer the ability to have her day in court. The IRS attorney prevailed over an unrepresented taxpayer due to the taxpayer missing a filing deadline by one day.
According to the position by the attorney cited at the beginning of this article, a tax lawyer practicing fifty years ago would never have filed this kind of motion given these facts. The taxpayer would have had her day in court, and she would have won or lost in court. Cases like this leave me wondering if perhaps that old attorney was right about the legal profession.
 
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2 Comments:
Sounds to me more like a case of the "good old days."
I find it hard to believe that any lawyer at any point in history would not press every advantage available to them, and if they did they could probably be accused of negligence by their clients.
The lawyers should always push for that advantage. Whether or not the courts should let them, that's another story.
Perhaps that is the real issue here, that the public has forgotten that lawyers are officers of the court and that we do have a duty to see to it that justice (however that is defined) comes about – after all, that is why we have our system of laws and our courts.
The idea that lawyers wake up every day to find loopholes in the law in order to benefit their clients is false and it is not what it means to practice law. Practicing law involves enforcing rights and influencing the development of the law such that justice will result and society will be better off. This often involves compromise, give and take, and if necessary, a day in court.
A system where lawyers, possibly driven by misconceptions by society and clients, are merely loophole finders results in entrenched parties, a body of law that comes to haphazard and conflicting conclusions, and, ultimately, unjust results, and worse yet, with regard to taxes, an administrative body that is charged with enforcing these laws without having a clear set of guidelines, resulting in a dysfunctional organization made up of individuals who (falsely) seem to believe that compromise, understanding and fairness cannot be practiced for fear of tipping the disjointed body of law irrevocably in favor of taxpayers. This no doubt leads to a disrespect and distrust for the courts, the law, and even lawyers -- and of course, the administrative body that sits in the middle of the controversy.
Professionals, by definition, work to prevent this type of situation. Non-professionals merely submit forms to the government with the aim of litigating every issue that is not decided their way, regardless of the consequences to our system of law, our society, or even the next guy who has the same or similar problem.
Ultimately, that is what the old lawyer cited in the blog post was lamenting.
In this particular case, the IRS attorney owes a duty to its client – the taxpayers, including the taxpayer involved in this case. As a taxpayer myself, I have to say that I would much rather see taxpayers have their day in court – rather than to see them denied a day in court due to a government lawyer (technically two government lawyers) raising a technical oversight to deny the taxpayer a day in court.
One of the functions of the court is to provide an independent forum for finding final resolutions to disputes and controversies. This ability to “be heard” and to be able to get a “final resolution” goes a long way in helping citizens accept decisions and get on with their lives – regardless of whether they win or lose.
The taxpayer in this case did not get that opportunity and, as a result, the taxpayer – no matter how long she lives – will probably never be content with the result and she will probably have a distrust and disrespect for our laws, our court system, and lawyers, and, no doubt, the IRS.
Had the taxpayer been given the opportunity to have her case heard in court – even if she lost – sooner or later, she probably would be able to find peace with the result....
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