Walled Off: Does North Wall Holdings Impact BBA?
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. Jenni is also a contributing author for Procedurally Taxing.
In this post, Black examines whether the Tax Court’s holding in North Wall Holdings sheds any light on whether section 6234(a), as enacted by the Bipartisan Budget Act of 2015, is jurisdictional or subject to equitable tolling. This post reflects the author’s personal views and not necessarily those of Citrin Cooperman.
On October 21, 2025, the Tax Court issued a full T.C. opinion in North Wall Holdings LLC, 165 T.C. No. 9 (North Wall). The North Wall case involved a late petition filed under the partnership audit procedures enacted by the Tax Equity and Fiscal Responsibility Act of 1982. When respondent moved to dismiss the case due to lack of jurisdiction, petitioner objected, arguing that the filing deadline under TEFRA (which is under section 62261) is not jurisdictional and should be subject to equitable tolling. In its opinion, the Tax Court held that section 6226 is jurisdictional and, even if it wasn’t jurisdictional, equitable tolling is not available for petitions filed under section 6226.2 The language of section 6226(a) (and (e), although
1 Unless stated otherwise, the citations in this article will be to the code provisions as they existed prior to repeal by the Bipartisan Budget Act of 2015.
2 Although the Tax Court considered these issues separately, it used the same analysis for both, so I will consider them together.
that was not at issue in this case) is pretty much identical to the language in section 6234(a) (and (b)) under the centralized partnership audit regime enacted by the Bipartisan Budget Act of 2015, once you account for the differences in terminology between the two regimes. Given that the filing deadlines under BBA and TEFRA are worded materially the same, it begs the question: Does the Tax Court’s holding in North Wall shed any light on whether section 6234(a) (as enacted by the BBA) is jurisdictional and/or subject to equitable tolling? This two-part article dives into this issue. Mr. Gorbachev, let’s tear down this wall!
As mentioned, under TEFRA, the deadline for filing a petition is located under section 6226. Under section 6226, there is a collective 150-day time frame to file a petition in response to a notice of final partnership administrative adjustments (FPAA). The petition period is broken up into two pieces. First, under section 6226(a), the tax matters partner (TMP) has an exclusive right to file a petition within the first 90 days. Then, if the TMP does not file a petition in those 90 days, any notice partner3 may file a petition within the next 60 days. TEFRA has a series of ordering rules under section 6226(b) for situations where multiple partners file petitions. This collective 150 days (90 for the TMP only, 60 for the rest) starts on the day the IRS mails the FPAA to the TMP. Section 6226(a). The IRS must mail the notice partners a copy of the FPAA within 60 days after it mails the FPAA to the TMP. The “notice partner FPAAs” will list the date the IRS mailed the FPAA to the TMP. In North Wall, petitioner (a notice partner and not the TMP) mistakenly filed its petition within 150 days of the date of its “notice partner FPAA” instead of within
3 A notice partner is any partner (or 5 percent group — in all my years working on TEFRA, I never saw one of these) entitled to receive notice directly from the IRS under section 6223. To keep it simple and not go into all the exceptions, a notice partner is a direct partner. The TMP is almost always also a notice partner (I’ve never seen one that wasn’t).
150 days of when the FPAA was mailed to the TMP. Unfortunately for petitioner, at the time it filed its petition, the time to file a petition prescribed in section 6226 had expired.
BBA is similar to and different from TEFRA in many ways. As relevant to this discussion, under TEFRA, the partners, and not the partnership, are parties to the proceeding. North Wall,165 T.C. at 7; Chef’s Choice Produce Ltd. v. Commissioner, 95 T.C. 388, 393-395 (1990). Under BBA, it’s the opposite and only the partnership, not the partners, is a party to the proceeding. See, for example, sections 6223, 6234; reg. section 301.6223-2(d). In addition, TEFRA has a “pool” of potential petitioners in that, generally, all direct partners in the partnership for the year at issue may file a petition in response to the FPAA. Section 6226. However, in BBA, only the partnership can file a petition; the partners cannot file a petition. Section 6234 (BBA). These differences may make all the difference.
Let’s dig into why the court found section 6226 to be jurisdictional and not subject to equitable tolling and see how they might apply (or not) to BBA. The Tax Court focused primarily on three categories — 1) the history of TEFRA, 2) the structure of TEFRA and number of exceptions to the filing deadline that existed under TEFRA, and 3) the utter disaster that would occur if section 6226 was subject to equitable tolling. As I was finishing up this article, Carlton Smith published a great article analyzing the Tax Court’s opinion in North Wall. I highly recommend checking it out.
History of TEFRA
The court spends a lot of time discussing an amendment Congress made to section 6226 in 1997. As discussed above, TEFRA has two separate and distinct petition periods — one for the TMP only, and (only if the TMP doesn’t petition) one for everyone else. The 1997 amendment addressed premature petitions — that is, petitions filed by a non-TMP during “TMP only time.” Prior to the 1997 amendment, the Tax Court routinely dismissed premature petitions for lack of jurisdiction as the non-TMP partner had no ability to file during the initial 90-day period. In 1997, Congress amended section 6226(b) (which covers the rules for petitions filed by non-TMP partners) to add paragraph (5). Under section 6226(b)(5), if a non-TMP partner files during
“TMP only time,” the petition basically gets put to the end of the line. The premature petition is treated as filed on the last day of the 60-day period notice partners can petition during, but only if the TMP doesn’t file a petition. What impact does this have? If any other partner files a petition in Tax Court, the premature partner’s petition gets dismissed. After the addition of section 6226(b)(5), if a non-TMP partner files during the first 90 days, it will not be dismissed for lack of jurisdiction.
In the North Wall opinion, the court uses this as evidence Congress intended section 6226 to be jurisdictional and not subject to equitable tolling. The court notes that Congress was aware courts treated section 6226 as jurisdictional at the time it amended section 6226 such that, if Congress didn’t want section 6226 to be jurisdictional, it would have said so at the time. The court also notes that, if equitable remedies were available to address petitions filed outside of the prescribed time, Congress’s amendment to section 6226 would have been unnecessary. See North Wall, 165 T.C. at 13-15.
Finally, the court points to the long history of cases that have held section 6226 to be jurisdictional. While this is true, North Wall is the first case since the Supreme Court’s decision in Boechler4 to address the issue of whether section 6226 is jurisdictional. And prior to Boechler there was a long history of cases finding section 6330 and 6213 to be jurisdictional as well, but we all see how that’s gone.
So while the Tax Court is correct about all of this, I’m not sure how much the history of TEFRA speaks to whether section 6226 is jurisdictional. I’m honestly not sure Congress thought any of these filing deadlines were not jurisdictional until Boechler. But, when it comes to BBA, it obviously does not have the history TEFRA does. BBA was enacted on November 2, 2015, and not truly effective until 2018. So, while BBA is 10 years old now (and that makes me feel old), it’s still in its infancy when it comes to case law and no amendments have been made to BBA after the Supreme Court’s decision in Boechler. In part two of this article, I examine the structure of TEFRA
4 Boechler P.C. v. Commissioner, 596 U.S. 199 (2022).
and how it played into the court’s decision in North Wall and whether the structure of BBA is similar enough to TEFRA to apply any of the court’s analysis to BBA.
