Deadlines for Partnership Challenges Clarified in Tax Court Case

The US Tax Court’s Oct. 21 ruling in North Wall Holdings LLC v. Commissioner offers a glimpse into the court’s general approach to whether its statutory deadlines are jurisdictional.

Practitioners should be aware of this case because the years under which the Tax Equity and Fiscal Responsibility Act could apply to a case may remain open for some partnerships, even if it doesn’t apply to more recent partnership audits.

The ruling addressed the deadlines for petitioning courts that were set forth in TEFRA in 1982. The court held that deadlines were jurisdictional and, even if not, failure to comply with those deadlines could not be excused under the doctrine of equitable tolling, dismissing the petitioner’s case.

TEFRA governs audits of complex partnerships for all years ending Dec. 31, 2017, or earlier, while the Bipartisan Budget Act of 2015 governs more recent partnership periods. Partnerships subject to TEFRA have a designated tax matters partner, or TMP, which would have the authority and responsibility to represent the partnership in audits.

At the conclusion of the audit, the IRS would mail to the TMP a notice of final partnership administrative adjustment identifying the IRS’s proposed changes. The TMP then has 90 days to file a petition for readjustment, challenging the adjustment in the Tax Court, the Court of Claims, or the appropriate federal district court.

If the TMP doesn’t file a challenge, then a partner or group of partners entitled to notice under TEFRA could file one within 60 days after the close of the 90-day period. In North Wall, the taxpayer, a notice partner, filed suit 168 days after the mailing date of the FPAA, far outside the 60-day window.

The Tax Court’s analysis reveals how it’s likely to approach future jurisdictional questions about deadlines under the Bipartisan Budget Act and other laws, and that is to continue to interpret deadlines as jurisdictional. Among other cases, the Tax Court considered the US Supreme Court’s decisions in United States v. Brockamp and Boechler, P.C. v. Commissioner, which addressed whether other Tax Court filing deadlines were jurisdictional.

The court discussed the differences between the statutes governing Brockamp and Boechler, and why the Supreme Court came to opposite conclusions about those statutes. The justices held that the deadline for filing a refund suit was jurisdictional, but that the deadline for filing a collection due process petition wasn’t and could be equitably tolled and focusing on the detailed “technical language” governing refund suits. The justices then reasoned that TEFRA, with its 90-day and subsequent 60-day deadlines, fit this pattern.

However, the Tax Court’s opinion isn’t airtight. Although all judges of the Tax Court concurred, Judge Christian Weiler and Judge Alina Marshall concluded that after Boechler, three courts of appeals had rejected the Tax Court’s treatment of various statutory deadlines as jurisdictional and found that equitable tolling applied.

Weiler said that, based on this pattern, he would have held that equitable tolling was available but the facts supporting it hadn’t been established, while Marshall said she would have held that the deadline under TEFRA wasn’t jurisdictional but that equitable tolling did not apply. One could anticipate that a reasonable court could disagree with the Tax Court.

The North Wall case has three main takeaways for practitioners. First, they should take great care to comply with Tax Court filing deadlines, as it is likely that the court will find that such deadlines are jurisdictional. Even if a party has a strong belief that a deadline isn’t jurisdictional and the party has good cause to toll it, the likelihood that the Tax Court will disagree means that a party is faced with the possibility that it will have to first file a case, then appeal a dismissal before even getting into the substantive issues in the case.

Second, regarding TEFRA specifically, it’s crucial to meet all applicable deadlines if possible, because the Tax Court will dismiss such a case for lack of jurisdiction. Finally, if deadlines can’t be met, all hope isn’t lost—as Weiler noted, there is a pattern of the Tax Court being reversed in these cases.

It isn’t yet clear whether North Wall will be appealed by the taxpayers. If it is, practitioners should definitely keep an eye on whether, as Weiler’s concurrence noted, the post-Boechler pattern of the appeals courts overturning Tax Court rulings on jurisdictional deadlines holds true.

The case is North Wall Holdings LLC v. Commissioner, 27773-21, T.C., opinion 10/21/25.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law, Bloomberg Tax, and Bloomberg Government, or its owners.

Author Information

Robert M. Romashko is leader of Husch Blackwell’s tax practice specialty group and previously was an attorney in the IRS Office of Chief Counsel.

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