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Myers v. Commissioner of Internal Revenue Service

United States Court of Appeals, District of Columbia Circuit

July 2, 2019

David T. Myers, Appellant
Commissioner of Internal Revenue Service, Appellee

          Argued December 4, 2018

          On Appeal from the Decision of the United States Tax Court

          Joseph A. DiRuzzo III argued the cause and filed the briefs for appellant.

          Carlton M. Smith was on the brief for amicus curiae The Federal Tax Clinic of the Legal Services Center of Harvard Law School in support of the appellant.

          Janet A. Bradley, Attorney, U.S. Department of Justice, argued the cause for appellee. With her on the briefs were Joan I. Oppenheimer and Bethany B. Hauser, Attorneys.

          Before: Henderson and Pillard, Circuit Judges, and Ginsburg, Senior Circuit Judge.


          Ginsburg, Senior Circuit Judge.

         The Internal Revenue Service denied David T. Myers's application for a whistleblower award. Myers sought relief from the Tax Court, which found his claim was untimely and dismissed it for lack of jurisdiction. We hold first that this court has jurisdiction over Myers's appeal. We then reverse the Tax Court's dismissal and remand this case for further proceedings because, although Myers's petition was untimely, the filing period is not jurisdictional and is subject to equitable tolling.

         I. Background

         In 2009 Myers filed an Application for Award of Original Information (Form 211) with the Whistleblower Office of the IRS. He alleged his former employer had intentionally misclassified him and other employees as independent contractors in order "to avoid paying workmen compensation, health insurance, vacation time etc.," and sought a monetary award under 26 U.S.C. § 7623(b) of the Internal Revenue Code for bringing to the Secretary's attention "persons guilty of violating the internal revenue laws," id. § 7623(a).

         In a letter dated March 13, 2013, the Whistleblower Office denied Myers's claim:

We have considered your application for an award dated 08/17/2009. Under Internal Revenue Code Section 7623, an award may be paid only if the information provided results in the collection of additional tax, penalties, interest or other proceeds. In this case, the information you provided did not result in the collection of any proceeds. Therefore, you are not eligible for an award.
Although the information you submitted did not qualify for an award, thank you for your interest in the administration of the internal revenue laws.

         On March 27, 2013 Myers sent a fax to the Whistleblower Office stating, among other things, "I inexplicably received a letter denying my claim."

         Myers continued to send correspondence regarding his claim to the Whistleblower Office, which responded in four more letters dated November 20, 2013; January 8, 2014; February 24, 2014; and March 6, 2014. Other than the one dated February 24, 2014, those letters were identical, stating, in pertinent part:

We considered the additional information you provided and determined your claim still does not meet our criteria for an award. Our determination remains the same despite the information contained in your latest letter….
Although the information you submitted did not qualify for an award, thank you for your interest in the administration of the internal revenue laws.

         The full text of all five letters is reproduced in the Appendix.

         Myers alleges that following the March 2014 letter he began corresponding "with various other Government officials," including then-IRS Chief Counsel William Wilkins, "on account of his frustration with the Whistleblower Office." Myers v. Comm'r, 148 T.C. 438, 448 (2017).

         On January 20, 2015 Myers mailed his pro se petition to the Tax Court, asking it "to revisit the denial of [his] IRS Whistleblower (W/B) claim ... that was inexcusably denied by the IRS on 3/13/2013." The IRS moved to dismiss Myers's petition for lack of jurisdiction on the ground that it was not timely filed under 26 U.S.C. § 7623(b)(4). That provision states:

Any determination regarding an award under paragraph (1), (2), or (3) may, within 30 days of such determination, be appealed to the Tax Court (and the Tax Court shall have jurisdiction with respect to such matter).

         In October 2015, the Tax Court held an evidentiary hearing on the IRS's motion because the parties disputed whether the IRS had sufficient evidence of having properly mailed the determination letters to Myers. The Tax Court ultimately concluded this issue was immaterial because actual notice of the IRS's adverse determination suffices to begin the filing period. 148 T.C. at 448. The Tax Court then found Myers had actual notice "no later than April 11, 2014" - the date of his first email to Wilkins - and on June 7, 2017 entered an order dismissing Myers's claim for lack of jurisdiction. Id. at 441, 448-49.

         On June 25, 2017, Myers filed a "Motion for Reconsideration" in which he "ask[ed] the court to respectfully reconsider their decision to dismiss the case for lack of jurisdiction." The Tax Court denied the motion on July 13, 2017. Myers thereafter appealed to the Tenth Circuit and mailed the notice of appeal to the Tax Court on September 21, 2017 - 106 days after that court had entered its order dismissing his case and 70 days after it had denied his motion for reconsideration. Myers's appeal was subsequently transferred from the Tenth Circuit to this court.

         The parties' briefs did not raise any question concerning our jurisdiction. Nonetheless, prior to oral argument we directed the parties to file "supplemental briefs addressing whether appellant's notice of appeal was timely under Federal Rule of Appellate Procedure 13." Myers v. Comm'r, No. 18-1003 (D.C. Cir. November 14, 2018) (order).

         II. This Court's Jurisdiction

         We begin, as we must, with the question of our own jurisdiction over this appeal. See, e.g., Sierra Club v. U.S. Dep't of Agric., 716 F.3d 653, 656 (D.C. Cir. 2013). If Myers's appeal was not timely and if the time limit is "mandatory and jurisdictional," Bowles v. Russell, 551 U.S. 205, 209 (2007), then this court lacks jurisdiction over his claim. The timeliness of Myers's notice of appeal depends upon the effect of his motion for reconsideration.

         Federal Rule of Appellate Procedure 13(a)(1)(A) and 26 U.S.C. § 7483 each provides that an appeal from the Tax Court to the court of appeals must be filed with the Tax Court within 90 days after the entry of the Tax Court's decision. Because Myers mailed his notice of appeal 106 days after the Tax Court's dismissal order, it would not be timely under those provisions. That mailing, however, occurred only 70 days after the Tax Court had denied his motion for reconsideration. Rule 13(a)(1)(B) states:

If, under Tax Court rules, a party makes a timely motion to vacate or revise the Tax Court's decision, the time to file a notice of appeal runs from the entry of the order disposing of the motion or from the entry of a new decision, whichever is later. (Emphasis added)

         Myers apparently did not make a "motion to vacate or revise" the Tax Court's decision, which would be brought under Tax Court Rule 162. Instead, because Myers styled his filing as a "motion for reconsideration," the Tax Court treated it as a "motion for reconsideration of findings or opinion" under Tax Court Rule 161; that type of motion is not mentioned in Rule 13. It follows that Myers's notice of appeal is timely if the 90-day period to appeal did not begin until the Tax Court denied his motion for reconsideration. The question before us, then, is whether a motion for reconsideration restarts the clock, as described in Rule 13(a)(1)(B), even though the Rule does not explicitly so state. The IRS and Myers agree that it does, relying principally upon the Ninth Circuit's reasoning in Nordvik v. Commissioner, 67 F.3d 1489, 1493-94 (1995) (reversing Trohimovich v. Commissioner, 776 F.2d 873, 875 (1985)).[*]

         We agree with the parties. We do not read the reference in Rule 13(a)(1)(B) to a "motion to vacate or revise" to refer solely to motions brought under Tax Court Rule 162. Any post-decisional motion that "places the correctness of the judgment in question" is the "functional equivalent" of a motion to vacate or revise and should be treated as such for the purpose of determining timeliness. Rados v. Celotex Corp., 809 F.2d 170, 171 (2d Cir. 1986) (cleaned up) (treating a motion for reconsideration as a motion to amend under Fed.R.Civ.P. 59(e) for the purpose of determining appellate jurisdiction).

         The Supreme Court has made clear that, in general, "[a] timely motion for reconsideration ... 'renders an otherwise final decision of a district court not final' for purposes of appeal." Nutraceutical Corp. v. Lambert, 139 S.Ct. 710, 717 (2019) (quoting United States v. Ibarra, 502 U.S. 1, 6 (1991)); see also Dep't of Banking, Neb. v. Pink, 317 U.S. 264, 266 (1942) ("A timely petition for rehearing tolls the running of the [appeal] period because it operates to suspend the finality of the state court's judgment"). The rationales behind this rule are twofold. First, it "giv[es] district courts the opportunity promptly to correct their own alleged errors," United States v. Dieter, 429 U.S. 6, 8 (1976), which "prevents unnecessary burdens being placed on the courts of appeals," Ibarra, 502 U.S. at 5. And, because "a notice of appeal filed before the disposition of a post trial motion ... would not embrace objections to the denial of the motion, it is obviously preferable to postpone the notice of appeal until after the motion is disposed of." Fed. R. App. P. 4(a)(4), advisory committee's notes to 1979 amendments. This reasoning applies with equal force to decisions of the Tax Court, which we review "in the same manner and to the same extent as decisions of the district courts in civil actions tried without a jury." 26 U.S.C. § 7482(a)(1); cf. InverWorld, Ltd. v. Comm'r, 979 F.2d 868, 872 (D.C. Cir. 1992) (applying "general principles familiar from appeals of district court decisions" to determine whether the Tax Court's decision was final).

         Illustrating the strength of this general rule, the Supreme Court in United States v. Healy, a criminal case in which the district court had dismissed the indictment, held "the 30-day period [for appeal] begins to run from ... the denial of [the Government's] petition for rehearing," even though Federal Rule of Criminal Procedure 37(a)(2) provides only that the time for appeal restarts upon a defendant's "motion for a new trial or in arrest of judgment." 376 U.S. 75, 78, 79 n.3 (1964) (quoting the 1963 version of the Rules). The Court drew no negative inference from the silence of the rule with regard to the Government's motion. Id. at 79-80 (stating that the Rule "sheds no light on the relevance of a petition for rehearing"). The Court therefore concluded it was "constrained to read these rules as consistent with a traditional and virtually unquestioned practice" of treating rehearing petitions by the Government and by the defense "as having the same effect on the permissible time for seeking review" in "criminal, as well as civil, litigation." Id. Then, in Ibarra, the Supreme Court held a "motion for reconsideration" had the same effect as a "petition for rehearing" under Healy with regard to the time to appeal. 502 U.S. at 6.

         So, too, here: Rule 13 is silent as to the effect of a motion for reconsideration. Meanwhile, the Advisory Committee's Notes to the 1967 Adoption of the Rule explain that Rule 13(a) simply "states the settled teaching of the case law," which drew no distinction between a motion for reconsideration and any other post-judgment motion challenging the disposition. Citing Robert Louis Stevenson Apts, Inc. v. Comm'r, 337 F.2d 681, 685 (8th Cir. 1964) (holding the time for appeal restarts upon any motion that, if "granted, would ... necessitate[] the Tax Court's reversing its determination"), and Denholm & McKay Co. v. Comm'r, 132 F.2d 243, 249 (1st Cir. 1942) (explaining that a timely motion for reconsideration "retains the case within the Board [of Tax Appeal]'s jurisdiction," and "[t]he decision does not become final until ... after the motion is denied if it is denied"). In a decision predating those referenced by the Advisory Committee, this court similarly recognized that

[i]n the Federal courts the rule is well established that ... the filing of a petition for rehearing, or of a motion for a new trial, will suspend the running of the period within which an appeal may be taken, and that this period then begins to run anew from the date on which final action is taken on the petition or motion, whether it be denied or granted. The rule as above stated applies even though a statute fixes the time within which appeal may be taken as a definite period from the entry of judgment. This rule has been applied by this court, as well as by other circuit courts of appeals, to proceedings before the Board of Tax Appeals.

Saginaw Broad. Co. v. FCC, 96 F.2d 554, 558 (D.C. Cir. 1938) (citations omitted) (emphasis added) (The Board of Tax Appeals is the predecessor of the Tax Court). Considering these authorities, we do not infer that the phrase a "motion to vacate or revise" in ...

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