IRS Notice Validity Complicates Tax Court Jurisdiction Appeal

Appellate judges grappled during oral arguments Monday with whether they must first determine if the IRS properly notified a partnership of transferee liability before deciding if a late challenge to reassess tax deficiencies falls within the Tax Court’s jurisdiction.

The three-judge panel on the US Court of Appeals for the First Circuit wrestled with two interconnected issues: whether the IRS exercised “reasonable diligence” in sending the liability notice to Kyick Holdings LLC, and whether the US Tax Court correctly dismissed the case for lack of jurisdiction due to a late filing.

The panel explored the relationship between these questions and ...