Opinion
9435-22L
12-18-2023
WILLIAM MCCARTHY, III, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER AND DECISION
Adam B. Landy Special Trial Judge
This collection action is before the Court on Mr. McCarthy's Motion to Vacate the Court's Order dated November 8, 2022 (the "Motion to Vacate"), filed November 18, 2022, and the Commissioner's Motion for Judgment on the Pleadings (the "Rule 120(a) Motion"), filed November 16, 2022. For the reasons stated below, we will deny Mr. McCarthy's Motion to Vacate and grant the Commissioner's Rule 120(a) Motion.
Background
The Petition in this case was filed on April 21, 2022. Mr. McCarthy seeks review of a Notice of Determination (Notice), dated March 15, 2022, which sustained the Independent Office of Appeals (Appeals Office) proposed levy action to collect unpaid income taxes for tax years 2015 and 2016. Mr. McCarthy resided in Florida at the time he filed the Petition. On June 16, 2022, the Commissioner filed his Answer affirmatively alleging that Mr. McCarthy failed to timely file the Petition to dispute the Notice.
The envelope containing the petition was postmarked by the United States Postal Service on April 15, 2021.
On August 8, 2022, the Commissioner filed a Motion for Entry of Order that Undenied Allegations be Deemed Admitted Pursuant to Rule 37(c) (the "Rule 37(c) Motion"). By Order served on August 19, 2022, the Court ordered Mr. McCarthy to file a response to the Commissioner's Rule 37(c) Motion no later than October 3, 2022. Mr. McCarthy did not file a response as directed by the Court by this deadline. The Court granted the Commissioner's Rule 37(c) Motion on November 8, 2022, and the allegations set forth in numbered paragraphs one through six (1-6) of the Commissioner's Answer were deemed admitted.
The Commissioner's Rule 120(a) Motion asks the Court to render a judgment on the pleadings with prejudice because as alleged in the Commissioner's Answer (Doc. 5), deemed admitted by the Court's November 8, 2022, Order (Doc. 10), the Petition (Doc. 1) was filed with the Court late or outside the 30-day statutory period prescribed in section 6330(d)(1) (and Mr. McCarthy did not dispute that the Petition is time-barred). Since Mr. McCarthy failed to file a Reply to the Commissioner's affirmative allegations in his Answer prior to the Commissioner filing the Rule 120(a) Motion, and the Court having deemed such allegations as admitted, the Commissioner contends that there is no genuine issue of material fact as to the untimeliness of the Petition.
On November 18, 2022, the Court received a letter from Mr. McCarthy which we recharacterized as a Motion to Vacate. Mr. McCarthy maintains that the Court should vacate our Order granting the Commissioner's Rule 37(c) Motion because he and his family experienced property damage and hardship because of two hurricanes in Florida. Attached to the Motion to Vacate are photos purporting to show the hurricane damage to property he owned. On November 28, 2022, the Court ordered the Commissioner to file a response to the Motion to Vacate. On December 2, 2022, the Commissioner filed a response stating that he did not object to the Motion to Vacate, and requested the Court allow Mr. McCarthy an opportunity to file a proper reply to the Commissioner's Answer. By Order served December 8, 2022, the Court extended the time for Mr. McCarthy to file a reply to the Commissioner's Answer until January 17, 2023.
On May 23, 2023, the Court denied the Motion to Vacate since Mr. McCarthy failed to file a reply. Due to clerical error, on August 7, 2023, the Court served Mr. McCarthy's correspondence received May 5, 2023, disputing the affirmative allegations raised in the Commissioner's Answer. Consequently, on September 21, 2023, we vacated our May 23, 2023, Order denying Mr. McCarthy's Motion to Vacate. Also, we recharacterized Mr. McCarthy's correspondence received May 5, 2023, as his Reply to Answer. We then ordered the Commissioner to file a response to Mr. McCarthy's Reply to Answer by October 6, 2023, and by October 27, 2023, Mr. McCarthy was to file a response to the Commissioner's Rule 120(a) Motion.
On October 2, 2023, the Commissioner filed a response contending, in sum, that Mr. McCarthy failed to sufficiently deny all affirmative allegations in his Answer, and as such, the Court may grant his Rule 120(a) Motion. On October 27, 2023, Mr. McCarthy contacted the undersigned's Chambers Administrator seeking an extension of time to file a response. By Order served November 13, 2023, the Court extended the time for Mr. McCarthy to file a response to the Rule 120(a) Motion until November 30, 2023. To date, Mr. McCarthy has failed to file a proper reply to the Commissioner's Answer or a response to the Rule 120(a) Motion.
Discussion
I. Motion to Vacate
In reviewing requests to vacate Rule 37(c) orders, we apply the same standard "as the standard under Rule 90(f) for withdrawing Rule 90(c) deemed admissions." New v. Commissioner, 92 T.C. 1146, 1149-1150 (1989). The moving party (Mr. McCarthy) must "indicate in his moving papers facts which tend to refute the substantive deemed admissions" and show that the Commissioner will not be prejudiced by the vacatur. Id.
In this case, the letters, motion papers, and pleadings reflect no facts or proposed evidence supplied by Mr. McCarthy tending to refute the deemed admissions in the Commissioner's Answer. Furthermore, withdrawal of the deemed admissions will not advance presentation of the merits of the case. Since Mr. McCarthy failed to file a response to the Rule 120(a) Motion or a proper reply to the Commissioner's Answer after being granted sufficient time to do so, we find that it would be prejudicial to the Commissioner to vacate the Order granting the Rule 37(c) Motion. Therefore, we will deny the Motion to Vacate.
II. Motion for Judgment on the Pleadings
Rule 120(a) permits any party, after the pleadings are closed but within such time as not to delay the trial, to move for judgment on the pleadings, which is based solely on the allegations and information contained in the pleadings and not on any outside matters. Nis Family Trust v. Commissioner, 115 T.C. 523, 537 (2000). The movant must show that the pleadings do not raise a genuine issue of material fact and that he or she is entitled to a judgment as a matter of law. Id.
The section 6330(d)(1) 30-day filing deadline is not jurisdictional, which means this Court has authority to consider late-filed petitions, and the Court may accept a tardy filing by applying the doctrine of equitable tolling. Boechler, P.C. v. Commissioner, 596 U.S. 199, 206-09 (2022). A litigant is entitled to equitable tolling of a statute of limitations only if the litigant establishes that he or she has been pursuing his or her rights diligently and that some extraordinary circumstance prevented him or her from timely filing. Menominee Indian Tribe of Wisc. v. United States, 577 U.S. 250, 255-57 (2016); Villarreal v. R.J. Reynolds Tobacco Co., 839 F.3d 958, 971 (11th Cir. 2016). Mr. McCarthy has not asserted that he satisfies this test, so the Court may not accept his Petition by equitable tolling. Thus, we will grant the Commissioner's Rule 120(a) Motion.
This Court will follow a Court of Appeals decision which is squarely on point where appeal from our decision lies to that Court of Appeals alone. Golsen v. Commissioner, 54 T.C. 742, 757 (1970), aff'd, 445 F.2d 985 (10th Cir. 1971). Since Mr. McCarthy resided in Florida when he petitioned this Court, the U.S. Court of Appeals for the Eleventh Circuit is the appropriate appellate venue for this case. See § 7482(b)(1)(G)(i); 28 U.S.C. § 41 (2018).
To reflect the foregoing, it is hereby
ORDERED that Mr. McCarthy's Motion to Vacate the Court's Order dated November 8, 2022, filed November 18, 2022, is denied. It is further
ORDERED that the Commissioner's Motion for Judgment on the Pleadings, filed November 16, 2022, is granted, and this case is dismissed with prejudice. It is further
ORDERED AND DECIDED that the Commissioner may proceed with the collection action sustained in the Notice of Determination dated March 15, 2022.