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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 whether the history of the Tax Equity and Fiscal Responsibility Act should factor into interpretations of the Bipartisan Budget Act and considers the effects of section 6234(a) being ruled nonjurisdictional and subject to equitable tolling. This post reflects the author’s personal views and not necessarily those of Citrin Cooperman. Welcome back to my article analyzing the Tax Court’s opinion in Big Apple Tompkins Realty1 (Big Apple) and aspects of the Bipartisan Budget Act and comparing those to the Tax Equity and Fiscal Responsibility Act and the North Wall2 opinion. In part 1, I discussed the court’s interpretation of the statutory text. If you recall, the court interpreted the statutory language in section 6234 (which provides the means for a partnership to challenge the IRS’s adjustments in the final partnership adjustment (FPA)) and found it to be nonjurisdictonal. However, the language in section 6234 is materially identical to the language in section 6226 (TEFRA) which the court held to be jurisdictional in North Wall, albeit based on very

different reasons. In this part, I will explore the court’s views on what role (if any) the history of TEFRA should play in interpreting provisions under BBA (at least in this context) and what the implications could be of the court’s holding in Big Apple. Now let’s get back to talking about the two apples of my eye — BBA and TEFRA. In Big Apple, the Tax Court correctly notes that BBA does not have the “extensive judicial history” that TEFRA does. But the court goes on to say that none of the judicial history from TEFRA should inform the interpretation of BBA. In my article on North Wall (the opinion did heavily rely on the prior judicial history in TEFRA) I questioned whether the extensive judicial history of TEFRA should be that relevant in determining whether section 6226(f) (TEFRA) is jurisdictional given a lot of the filing deadlines in the code have substantial judicial history finding them to be jurisdictional only for courts to now find them nonjurisdictional. In Big Apple, the court declined to look to prior TEFRA rulings because the Supreme Court hasn’t ruled on TEFRA’s filing deadlines and because of the prior-construction canon. While I agree that the prior TEFRA case law likely has limited value post-Boechler,3 the court’s analysis of the prior-construction canon 4 was confusing to me. Historical Context As relevant to this case, the prior-construction canon (as explained in Big Apple) provides two things: (1) If courts have consistently construed statutory language a certain way and Congress 3

Boechler PC v. Commissioner, 596 U.S. 199 (2022).

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.

If anyone knows what the second paragraph on page 27 means (the one starting with “The Supreme Court”), could you please message me. I read it way too many times and couldn’t figure it out. Then I sent it to Carlton Smith, who is much more knowledgeable than I am about jurisdictional stuff, and he couldn’t figure it out either. It honestly seems internally inconsistent to me.

TAX NOTES FEDERAL, VOLUME 192, SEPTEMBER 14, 2026 For more Tax Notes® Federal content, please visit www.taxnotes.com.

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Comparing Apples to Apples: TEFRA vs. BBA, Part 3

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I note that the Joint Committee on Taxation referred to the 1997 amendment to section 6226 (TEFRA) as “clarifying jurisdiction.” JCT, “General Explanation of Tax Legislation Enacted in 1997,” JCS-23-97, 378 (1997).

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the TEFRA cases “settled the meaning” of the relevant language when Congress used the exact same words in section 6234 because of the “vastly different administrative regime[s]” between BBA and TEFRA.6 But, with all due respect, isn’t that up to Congress? As was pointed out in both North Wall and Big Apple, Congress was well aware that the courts had repeatedly held that the filing deadlines in section 6226 (TEFRA) were jurisdictional. Knowing that, Congress chose to use the exact same language in section 6234. Congress was clearly aware of the differences between BBA and TEFRA yet still decided to use the same language. To me this seems like greater evidence that the same language in section 6226 (TEFRA) and section 6234 should be interpreted the same. Yet the court in Big Apple decided that Congress could not have possibly meant what it did — that when it used the exact same language it didn’t mean to adopt the interpretations of those exact words in TEFRA. Aside from saying BBA and TEFRA are different (which Congress was clearly aware of), the court offers no explanation as to why Congress would choose to use the same words that have been analyzed by the courts for decades and not intend for them to mean the same thing. Instead, the court explains that, without other instances of Congress using the same or similar language in the same or similar regime, it “struggles” to find sufficient historical support for interpreting the jurisdictional provisions in TEFRA and BBA the same way when they use the same language. If the court “struggles,” it does so because it chooses to, not because there is no support. There’s as much support as there is for any prior case law dealing with whether filing requirements are jurisdictional nowadays. And not to continue to hammer away at this, but the exact language used in BBA and TEFRA was used

I take a bit of issue with the “vastly different” label. Both BBA and TEFRA were enacted to provide the IRS with the ability to make adjustments to partnership returns in a single partnership-level proceeding instead of multiple partner-level proceedings. The scope of the two regimes is largely identical. See JCT, “General Explanation of Certain Tax Legislation Enacted in the 115th Congress,” JCS-2-19, 149 (2018) (BBA is “not narrower” than TEFRA but “rather intended to have scope sufficient to address those items described as partnership items, affected items, and computational adjustment in the TEFRA context”). The differences between BBA and TEFRA are largely assessment and collection — who pays and who does the work to bring in any partner facts and circumstances.

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amends the statute without changing the language, it presumes Congress at least tacitly agrees with the interpretation, and (2) when “administrative and judicial interpretations” of a statutory provision are well settled, the repetition of that well-settled language in a later new statute indicates Congress intended to incorporate those interpretations as well. Honestly, those sound like the same thing to me, especially in this context, and seem to weigh very heavily toward interpreting section 6226 (TEFRA) the same as section 6234, yet the Tax Court, as with many other things in this opinion, comes out the exact opposite. While it is true that there were no judicial interpretations of section 6234 when Congress amended BBA, there were interpretations of the same language under TEFRA. In North Wall, the court discussed the extensive judicial history of TEFRA, and discussed, at length, the amendment to section 6226 (TEFRA) back in 1997 (I won’t 5 repeat all of it here). In Big Apple, the Tax Court held that the prior judicial interpretations of section 6226 (TEFRA) should not be used in interpreting section 6234 in BBA because BBA is not a reenactment of TEFRA and BBA and TEFRA are too dissimilar. While BBA is not a reenactment of TEFRA, Congress reused a lot of the same language. So what about reusing well-settled language? As mentioned, repetition of wellsettled language in a new statute indicates Congress intended to incorporate the prior interpretations of the language (not that it stopped recent case law on other filing requirements). That is exactly what we have here. As mentioned, the language in section 6226(e) and (f) (TEFRA) relating to the court’s jurisdiction and whether the filing deadlines are jurisdictional are materially identical to the language under section 6234(b) and (c). In North Wall, the court made it clear that it viewed the interpretation that the filing deadlines in section 6226 (TEFRA) were jurisdictional to be well settled and supported by over 40 years of case law. Yet, in Big Apple, the court found it was “too much of a stretch” to say

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A Stroll of Horribles Does BBA have the same parade of horribles that TEFRA does when it comes to the consequences of having a late filed petition? No, it’s not the same rotten apple as in TEFRA, but it’s not nothing either. I’ll stop a second to point out

that the court labels the comparison of the parade of horribles in North Wall the reason why equitable tolling cannot work under TEFRA. Again, agree, but that’s different than jurisdiction. What about BBA? The court looks at section 6232(f). Under section 6232(f), if a partnership does not pay all amounts owed under BBA within 10 days of notice and demand, the IRS has two years to assess the partners from the end of the adjustment year for their proportionate share of the amounts owed. If the adjustment year changes, so potentially could the partners that could be assessed (or the amount to be assessed). But the Tax Court in Big Apple says that unwinding these partner payments “only poses a headache” compared with TEFRA. That may be cold comfort for partners who have paid and can no longer get that money back. What do I mean? Let’s use this case as an example. According to the facts in the opinion, the IRS issued the FPA on August 11, 2022. This means Big Apple had until November 9, 2022, to file a petition in response to the FPA. The facts don’t say when the IRS issued notice and demand but let’s pretend it was on January 9, 2023, 60 days after the petition period expired. That means, on January 19, 2023, the IRS could assess the people who were partners of Big Apple at the end of 2022 for their proportionate share of the $87,586 imputed underpayment and $17,517 penalty. Again, the facts do not say but we will assume the IRS makes those assessments and starts collecting from the partners and is able to fully collect by October 2, 2023 (just making up a random date). Under section 6511, this means those partners have two years, until October 2, 2025, to file a claim for refund with respect to the amounts they paid. Approximately one month later, Big Apple files suit. The court’s opinion came out on August 5, 2026, almost a year after the partners’ section 6511 8 period expired. Therefore, if this suit goes forward, the adjustment year will no longer be 2022, it will be something else. And that means the partners from the end of that year (and not

The ELP regime was located in sections 6241 through 6255 (prior to repeal by the BBA).

If the partners from 2022 were aware the petition was filed, they could have filed protective claims for refund. But if the petition wasn’t filed until after their section 6511 period expired, that wouldn’t help them.

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in a similar regime — the electing large partnership regime (ELP).7 While the ELP regime was never really used and there is no case law interpreting it, if you read it, you’ll notice it looks a lot like BBA, even down to imputed underpayments and the partnership reporting the adjustments on its return for the year in which the adjustments are determined instead of the prior year. So perhaps BBA isn’t so vastly different after all. The rules regarding filing a petition to challenge the IRS’s adjustments and the court’s jurisdiction over those cases was located in section 6247. Like under BBA, section 6247 had a single petitioner (the partnership), 90 days to file a petition, a jurisdictional deposit for bringing a case in district court or the Court of Federal Claims (and the deposit is even the same as in BBA), and the same “in accordance with” language contained in the jurisdictional grant in section 6247(c). Neither North Wall nor Big Apple discuss the ELP regime or section 6247 at all. So, yes, Congress did indeed use the exact same language from section 6226 (TEFRA) and section 6234 in another similar regime, one even more similar to BBA than TEFRA. At this point, we’ve discussed the differences in how the Tax Court analyzed (or not) the materially identical language between TEFRA and BBA in its conclusion that the filing deadlines were jurisdictional in TEFRA but not in BBA. We’ve also discussed the court’s view on the history of TEFRA and whether it is relevant in evaluating BBA. What’s left? Oh yes, any consequences that could occur if the filing deadlines in BBA were nonjurisdictional and how that compares with TEFRA. Thanks for sticking with me so long!

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Given the partnership says it didn’t get the FPA until after the time to petition had expired, it clearly could not have made a push out election which must be done within 45 days of the FPA.

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section 6232(f) mean that section 6234 has to be jurisdictional? No, of course not. TEFRA and BBA are different, that much is clear. But the statutes that govern filing a petition in court are virtually identical. In North Wall, the court relied on the complexities of the filing requirements and the multiple ways partners could be “kicked out” of TEFRA to find section 6226(f) (TEFRA) was jurisdictional (that is, the context of TEFRA). Those issues are not present in BBA so if the court, in Big Apple, had said that context was the only dispositive factor, then it would logically follow that section 6234 was nonjurisdictional. But the court did not stop there; it dug into the actual language of section 6234, which, in my opinion, is where it started to unravel because the same provisions in TEFRA are identical to BBA. By making the statutory text (“in accordance with,” jurisdictional deposit) the dispositive factors, it leaves one asking — if that language was so important, why wasn’t it important in North Wall? Although the court in Big Apple finds the exact same language it didn’t rely on in North Wall to be problematic in BBA, their main objection seems to be related to what would happen if a petition is filed materially late and goes forward. While I completely agree that TEFRA is messier in this regard than BBA, BBA is still messier than deficiency procedures (and the Tax Court has no problem finding section 6213 jurisdictional). But this messiness would be caused by equitable tolling, not jurisdiction. As discussed above, the Tax Court provides no meaningful reason why the words should mean something different based on whether they are contained in section 6234 or section 6226(f) (TEFRA). By reading identical words differently, the Tax Court has placed a cloud over tax law. Now, neither taxpayers nor the government can rely on identical language used in the same context in one statute meaning the same in another statute. And for what? The problem isn’t with jurisdiction — it’s with equitable tolling. I’m not saying whether section 6234 is jurisdictional or not (as I’m not sure I’m qualified to make that determination), but I am saying that the court’s reasoning in Big Apple make less sense in light of how it analyzed (or did not analyze as the case really is) the issue in North Wall. 

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2022) would be liable for any amounts the partnership did not pay.9 But, in this hypothetical, the 2022 partners paid already and now they can’t get a refund. But I’m sure they will be comforted by the fact that it’s just a headache. The court attempts to explain this away by saying that which partners would ultimately have to pay the IU if the partnership did not elect to push out and then doesn’t pay is not a product of equitable tolling but of section 6232(f). Well, yes and no. Equitable tolling can impact which partners could be assessed under section 6232(f) as it can move the earliest possible adjustment year. For example (not the same example as above), if the FPA was mailed and defaulted in 2024 and a petition was allowed to be filed in 2026 because of equitable tolling, it by definition changes who the adjustment year partners are. In this example, the adjustment year partners can now never be the 2024 partners (and they were before the petition was filed) nor can the 2025 partners be the adjustment year partners. While it is correct that the adjustment year is determined based on when the proceeding is ultimately resolved, not started, equitable tolling does have some impact and could, potentially, be used abusively. By this I mean the partnership could decide when to file its petition (based on equitable tolling) to eliminate liability for certain partners. There are obviously limits to that as if it waits too long it may no longer meet the requirements for equitable tolling. But using the same example, by filing the petition in 2026 the partnership has stripped the 2024 and 2025 partners of any possible liability for an unpaid IU. And what if the partners in 2026 forward were insolvent? And what if this was deliberate? Seems ripe for the picking. While not as messy as TEFRA, equitable tolling can still cause shenanigans in BBA. In TEFRA the shenanigans couldn’t change which partners were liable for the tax but in BBA the shenanigans could change what partners may have to pay the partnership’s unpaid balance. But again, this is equitable tolling, not jurisdiction. Do I think the issues with