The IRS says the Tax Court got a deadline ruling wrong — and asked for a redo

In August, the Tax Court refused to throw out a partnership’s case just because its petition arrived late. On October 21, the IRS asked the Court to reconsider, calling the ruling full of “glaring interpretive errors.” Here is what the fight is actually about — and what it does not change: the 90-day deadline still matters, a lot.

Tax Court deadlines are usually where cases live or die. Miss the deadline in a partnership case, and under the audit regime that governed for decades the standard answer was simple: the Court has no power to hear you. A case decided this summer — Big Apple Tompkins Realty LLC v. Commissioner, 167 T.C. No. 7 — broke that pattern for one specific deadline. Now the IRS wants the ruling undone.

What did the Tax Court decide in Big Apple Tompkins?

Big Apple Tompkins Realty LLC is a Staten Island partnership taxed under the centralized partnership audit rules Congress created in the Bipartisan Budget Act of 2015 (the BBA). The IRS mailed it a Final Partnership Adjustment (FPA) dated August 11, 2022, determining an imputed underpayment of $87,586 plus a $17,517 accuracy-related penalty for tax year 2018.

The partnership said it did not receive the FPA until November 2023 — and filed its Tax Court petition that month, more than a year after the FPA was mailed. The IRS moved to dismiss the case for lack of jurisdiction: the petition was far outside the 90-day window.

On August 5, 2026, the Court ruled in two steps. First, the IRS did properly issue and mail the FPA, and the petition was late. Second — the part that matters — the 90-day deadline “is not jurisdictional,” because Congress never clearly said it was. A late filing, by itself, does not strip the Court of power over the case. The Court denied the IRS’s motion to dismiss.

One limit in the ruling itself: the Court expressly reserved the separate question of whether the deadline can be equitably tolled — paused for fairness — until the parties raise it properly.

Which deadline is this — and which deadline is it not?

This is the deadline in section 6234(a) of the Internal Revenue Code: “Within 90 days after the date on which a notice of a final partnership adjustment is mailed… the partnership may file a petition” for court review of that adjustment.

It applies to partnerships audited under the BBA rules challenging a Final Partnership Adjustment. It is not the familiar 90-day deadline in section 6213(a) for an individual or business challenging a notice of deficiency — the IRS’s standard “90-day letter.” Different statute, different fight — and not one these opinions address. Anyone who reads this ruling as “late Tax Court petitions are fine now” is reading it wrong.

Why did the Court treat this deadline differently from North Wall?

One year earlier, in North Wall Holdings, LLC v. Commissioner, 165 T.C. 143 (2025), the same Court held that the partnership petition deadlines under the old TEFRA audit regime are jurisdictional — not subject to equitable tolling. The petition there, filed 168 days after the adjustment notice, was dismissed.

In Big Apple, the Court said the two regimes are built differently. TEFRA ran on multiple coordinated deadlines with detailed, explicit exceptions, all designed to force exactly one partnership proceeding — a structure that cannot work if deadlines bend. The BBA instead puts one party in charge — the partnership, acting through its partnership representative — with one filing. Following the Supreme Court’s test in Boechler, P.C. v. Commissioner (2022), the Court asked whether Congress clearly stated that the section 6234(a) deadline limits the Court’s jurisdiction. Its answer: it does not.

What happened next: Kings Road answered the tolling question

Weeks later, on September 21, 2026, the Court decided Kings Road Property, LLC v. Commissioner, 167 T.C. No. 11 — and took the step Big Apple had reserved. The section 6234(a) deadline, the Court held, can be equitably tolled, and it tolled the deadline on the facts in front of it.

The standard is demanding. The partnership had to prove both that it pursued its rights diligently and that extraordinary circumstances outside its control prevented a timely filing. In Kings Road, the FPA packages were returned to the IRS as undeliverable, and the IRS had not mailed the FPA to the partnership’s new counsel of record. Ordinary carelessness would not have met that test.

What is the IRS asking for now?

According to Bloomberg Tax’s report of the filing, on October 21, 2026 the IRS moved the Court to reconsider Big Apple Tompkins, arguing the opinion committed “glaring interpretive errors” and directly conflicts with North Wall — where, the IRS notes, a partnership deadline was held jurisdictional, so late filings must be rejected without regard to extraordinary circumstances.

No ruling on the motion appears in the sources cited for this post, as of October 26. Both outcomes are live: the Court could stand by Big Apple (and Kings Road with it), or it could pull the ruling back. Until it rules, the honest description of this deadline is: mandatory, but contested.

Does this mean a late petition is fine now?

No. Four reasons, in plain terms:

• The deadline did not move. Ninety days from the mailing of the FPA is still the rule, and Big Apple itself held the late petition in that case was untimely — the partnership still has to win a tolling argument to stay in court.
• Tolling is earned, not granted. Under Kings Road, the late filer must prove diligence plus extraordinary circumstances outside its control. “We missed it” is neither.
• The ruling is being challenged. The IRS’s reconsideration motion is pending. Building a plan on a ruling the IRS is actively trying to reverse is a gamble, not a strategy.
• The scope is narrow. This is about section 6234(a) partnership petitions after an FPA. Other Tax Court deadlines are separate questions, being fought deadline by deadline — and courts do not all agree with each other.

Is Congress fixing this?

Partly — and notably, not this part. The Taxpayer Assistance and Service Act (S. 5441), which the Senate passed on September 30, 2026, would clarify by statute that Tax Court petition deadlines in deficiency, collection due process, and innocent spouse cases are nonjurisdictional claims-processing rules subject to equitable tolling. Section 6234 partnership petitions are not among the deadlines the bill names — so even if the bill becomes law (it has not; it still needs the House), the Big Apple fight would remain a court fight.

What should a partnership do when an FPA arrives?

• Calendar 90 days from the mailing date — the date on the notice and the IRS’s mailing records start the clock, not the day the envelope reaches you.
• Keep the envelope and the notice together. Mailing evidence decided the first half of Big Apple; non-delivery evidence decided Kings Road.
• Make sure the IRS has your current partnership representative and counsel on file. In Kings Road, the FPA never reached the partnership’s new counsel.
• If a deadline may already have passed, do not assume it is over — and do not assume it is saved. Document, day by day, what you did and what was outside your control. That record is the tolling argument.

Quick answers

Did the Tax Court excuse the late petition in Big Apple? Not exactly. It held the petition was late but that lateness alone does not destroy its jurisdiction, denied the IRS’s motion to dismiss, and left the tolling question for later.

Can any late Tax Court petition survive now? No. This ruling covers section 6234(a) — BBA partnership petitions challenging a Final Partnership Adjustment. Other deadlines are governed by their own statutes and cases.

What is equitable tolling? A fairness doctrine that can pause a nonjurisdictional deadline when the filer was diligent and extraordinary circumstances outside its control caused the delay. After Kings Road, it is available for section 6234(a) petitions — and the filer carries the burden of proving both parts.

What happens next? The Tax Court rules on the IRS’s October 21 reconsideration motion. A denial leaves Big Apple and Kings Road standing; a grant could restore automatic dismissal for late section 6234(a) petitions.

Alex Volkov, CPA is a New York-licensed CPA with over two decades in accounting, focused on resolving IRS tax problems — back taxes, liens, levies, garnishments, and audits — for individuals and businesses nationwide.