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PROCEDURALLY TAXING tax notes federal

by Jenni Black Jenni Black is a managing director in Citrin Cooperman’s national tax office and the practice leader of the tax procedure and controversy practice. She is also a contributing author for Procedurally Taxing. In this post, Black examines the Tax Court’s recent holding in Big Apple that the section 6234 deadline to file a petition challenging a notice of final partnership adjustment is nonjurisdictional, and she compares it with North Wall, in which the court reached the opposite conclusion. This post reflects the author’s personal views and not necessarily those of Citrin Cooperman. Start spreadin’ the news — on August 5 the Tax Court issued its opinion in Big Apple Tompkins 1 Realty in which it held that section 6234(a), the provision that governs the filing of a petition under the Bipartisan Budget Act is nonjurisdictional. Now, if you’re like me and started reading through the opinion and got confused, you are not alone. I mean, we just did this for the 1982 Tax Equity and Fiscal Responsibility Act in the fully reviewed opinion in North Wall.2 As I was reading, my mind kept saying “but that’s the same as TEFRA, why wasn’t

this important in North Wall?” The language that the court, in Big Apple, found dispositive of the jurisdictional question for section 6234 also existed in TEFRA but were barely mentioned in North Wall. Why? Let’s get to the core of it.3 In this three-part post, I will analyze the holding in Big Apple, compare the Big Apple opinion to the North Wall opinion, and get into the various difference between BBA and TEFRA and how that should (if at all) impact the analysis of the statutory language. I’m feeling a little saucy — applesaucy. I’ll start off by saying that I do not think North Wall is wrongly decided. In fact, in a previous post I said it was correctly decided (Tax Notes Federal, Nov. 24, 2025, p. 1357; and Tax Notes Federal, Dec. 1, 2025, p. 1503). But I promise I am not being a hypocrite. I just cannot say I understand the Tax Court’s analysis in Big Apple as compared with how it analyzed TEFRA in North Wall. I’m not trying to upset the apple cart and do not express an opinion on whether section 6226 (TEFRA) or section 6234 are jurisdictional, and nothing in this post should be interpreted in any way as me taking a position on this. In my post on North Wall back on November 24, 2025 (with part 2 following on December 1), I concluded that the analysis in North Wall would not be determinative for BBA. I still agree with me. In North Wall, the Tax Court based its ruling primarily on things that don’t apply under BBA, such as the provisions for managing petitions filed by multiple partners and the various rules and exceptions governing whether partners can “convert out” of TEFRA. The court also noted the

Big Apple Tompkins Realty LLC v. Commissioner, 167 T.C. No. 7 (2026).

North Wall Holdings LLC v. Commissioner, 165 T.C. No. 9 (2025). While North Wall was a fully reviewed opinion, Big Apple was not.

I promise to only use each “bad apple” pun only once. I’m not sorry for any of them.

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Comparing Apples to Apples: TEFRA vs. BBA

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Although petitioner did not contest that the IRS correctly mailed the FPA on August 11, 2022, the court went through all the steps of determining whether respondent had adequately established it mailed the FPA on August 11, 2022 (which it found that it did). I’m largely going to skip over this part as it was not contested by petitioner. The Tax Court did hold (as a matter of first impression) that it would treat BBA the same as TEFRA and deficiency procedures when it comes to proof of mailing which should surprise apple-solutely no one. But the mailing stuff was just the apple-tizer. The court then went on to discuss whether section 6234(a) was jurisdictional or a nonjurisdictional claims processing rule. In doing so, the court focused primarily on the text of section 6234. But the language of section 6226 (TEFRA) and section 6234 in BBA are twinsies, 5 which the court acknowledges. In this regard, the BBA-apple doesn’t fall far from the TEFRA-tree. Instead, it finds that the reason the identical words lead to two entirely different results is because TEFRA has more “administrative complexities” that would occur if a petition could be filed after the prescribed due date than BBA does. Agreed, but what does that have to do with jurisdiction? This seems like an equitable tolling issue. As the court notes, the test is whether Congress has made a “clear statement” that the filing deadline should be jurisdictional as opposed to a claims processing rule. In North Wall, the Tax Court found this clear statement in the structure and history of TEFRA (that is, the context of TEFRA), which are not the same as in BBA. The court goes on to explain that, to determine whether Congress has made the necessary clear statement, you look to the text, context, and relevant historical treatment. As always, any analysis must start with the text of the statute itself. Start With the Statute

Given that the court held that section 6226 (TEFRA) was jurisdictional, the equitable tolling piece was not necessary as jurisdictional deadlines are not subject to equitable tolling. Perhaps it was getting out ahead of a circuit court potentially holding that section 6226 (TEFRA) was not jurisdictional. Although no appeal was filed in North Wall, an appeal was filed in Island Shoals Henry 430 LLC v. Commissioner, which was decided immediately after North Wall and based on the North Wall opinion. See Shoals Henry 430 LLC v. Commissioner, No. 30074-21 (T.C. Oct. 22, 2025).

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In the discussion on whether BBA should be treated the same as TEFRA and deficiency procedures when it comes to the issuance and mailing of the FPA, the Tax Court quotes the

Big Apple, 167 T.C. No. 7, at 25.

TAX NOTES FEDERAL, VOLUME 192, SEPTEMBER 7, 2026 For more Tax Notes® Federal content, please visit www.taxnotes.com.

utter chaos that would occur if TEFRA was subject to equitable tolling.4 These issues are not present in BBA (although there could be some minor chaos as discussed later). But the analysis in Big Apple is a lot different and is based primarily on the statutory text of the jurisdictional pieces of section 6234. The language the court focused on is identical to language in TEFRA and that language was not analyzed in North Wall. As I noted, “the two regimes differ too much on the points the Tax Court found instructive in TEFRA.” But the reasons relied upon in Big Apple aren’t the same as the reasons in North Wall and don’t make sense when compared to TEFRA. So, yes, I am having my apple pie and eating it too. According to the facts, the IRS issued a notice of final partnership adjustment (FPA) to Big Apple on August 11, 2022, making adjustments to its 2018 tax year and asserting an imputed underpayment of $87,586 and an accuracy-related penalty of $17,517. At this point, Big Apple had until September 26, 2022, to make an election to push out the adjustments and until November 9, 2022, to file a petition in court to challenge the adjustments in the FPA. Big Apple did not file its petition until November 6, 2023, almost a year late. Respondent filed a motion to dismiss for lack of jurisdiction. In its objection to the motion, Big Apple alleged it did not receive the FPA until November 2023. Now, I’m calling bull manure on this. Not to say this didn’t happen (because I don’t know), but even if the FPA wasn’t received until November 2023, you would think the assessment of the imputed underpayment in the FPA and the collection notices should have been a hint that an FPA was issued. The opinion doesn’t discuss assessment and collection, but it would be odd if the IRS hadn’t assessed and sent a notice and demand for payment in the time since the FPA defaulted. At the same time, stranger things have happened.

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TEFRA proceedings, it’s not going to cut anyone out of some court action. Most of the court’s reasons in North Wall go to why equitable tolling is not appropriate in TEFRA, not whether section 6226 (TEFRA) is jurisdictional. And I completely agree that equitable tolling is not appropriate for TEFRA due to all the reasons stated by the court in North Wall. But the Tax Court seemed to conflate jurisdiction and equitable tolling in North Wall although, as the court noted in Big Apple, equitable tolling is not synonymous with nonjurisdictional, and a nonjurisdictional deadline is “not necessarily subject to equitable 8 tolling.” In part 2 of my post, I compare TEFRA and BBA and discuss the very different approaches the Tax Court used in North Wall and Big Apple to determine whether their respective filing deadlines were jurisdictional. 

Id. at 8 (quoting Commissioner v. Lester, 366 U.S. 299, 304 (1961)).

A Tax Court action only has priority if the petitions are filed by someone other than the tax matters partner. If the tax matters partner files in a district court or Court of Federal Claims, it will have priority, even if a notice partner files in the Tax Court. Although not truly relevant, in my experience it is very rare to have a TEFRA case in which more than one person files a petition.

Big Apple, 167 T.C. No. 7, at 22 n.26. Recently, the First Circuit, in Kyick Holdings LLC v. Commissioner, No. 25-1429 (1st Cir. Aug. 17, 2026), that the filing deadline in section 6213 was nonjurisdictional but not subject to equitable tolling. Although it noted that a nonjurisdictional deadline is not necessarily subject to equitable tolling, the court’s view is that the regime’s compatibility with equitable remedies can aid in determining whether there is a clear statement of jurisdiction. But does that mean the opposite is true? Are equitable remedies incompatible with deficiency procedures?

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Supreme Court for the principle that “the Code must be given ‘as great an internal symmetry and consistency as its words permit,’” then promptly does the exact opposite when it comes to the statutory language.6 And although the Tax Court said the reason why identical words should not mean identical things is due to the administrative complexities of TEFRA, its analysis is largely on the phrasing of that identical language itself. Therein lies my confusion, as the words the court found illustrative in section 6234 were not materially mentioned in their analysis of section 6226 (TEFRA). That’s the core issue. As an initial matter, there are very good reasons why the administrative complexities in TEFRA dictate that the TEFRA filing deadlines must be strictly adhered to. The biggest issue with TEFRA is reopening a partnership-level proceeding after the partner-level proceedings have been completed because all partners are parties to TEFRA proceedings. But that seems more like an equitable tolling issue to me than jurisdiction. It’s less of a concern if the IRS can just waive the late filing because, presumably, the IRS would be aware of any administrative complexities this would cause in that specific case. Let’s take an example. A TEFRA petition is filed 10 days late and the IRS does not challenge the timeliness of the petition. If the filing deadline is jurisdictional, it must be dismissed. If it’s not, the IRS can choose not to challenge the late filing. Does not filing the petition “ripe on time” break TEFRA? No. The only possible impact would be if a petition was filed by a notice partner in the district court or the Court of Federal Claims and the late petition was filed in the Tax Court. Under section 6226(b) (TEFRA), a Tax Court action takes priority, so the district court or Court of Federal 7 Claims case would be dismissed. So, aside from funking up the priority rules regarding venue (and only if the tax matters partner doesn’t file a petition), there aren’t really any major catastrophes. As all partners can participate in