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20-1472 BOECHLER, P.C. V. CIR DECISION BELOW: 967 F.3d 760 CERT. GRANTED 9/30/2021 QUESTION PRESENTED: Section 6330(d)(1) of the Internal Revenue Code establishes a 30-day time limit to file a petition for review in the Tax Court of a notice of determination from the Commissioner of Internal Revenue. 26 U.S.C. § 6330(d)(1). The question presented is: Whether the time limit in Section 6330(d)(1) is a jurisdictional requirement or a claim- processing rule subject to equitable tolling. LOWER COURT CASE NUMBER: 19-2003
In Boechler, P.C. v. Commissioner of Internal Revenue, the Supreme Court considered whether a taxpayer could deduct legal fees incurred in defending against criminal charges as an ordinary and necessary business expense under Section 162(a) of the Internal Revenue Code (IRC). The taxpayer argued that because his legal fees were related to his trade or business as a CPA firm, they should be deductible under IRC §162(a). However, the Commissioner argued that such deductions are not allowed by IRC §265 which disallows deductions for expenses associated with violations of law. Ultimately, the Supreme Court held that while some legal fees may be deductible if they relate to activities engaged in for profit-seeking purposes within a legitimate trade or business context; however when those same activities violate federal law then no deduction is available regardless of their purpose or connection to any particular trade or business activity.
In the dissenting opinion of the case of Boechler, P.C. v. Commissioner of Internal Revenue, Justice Breyer argued that the majority opinion was incorrect in its interpretation of the Internal Revenue Code. He argued that the majority opinion failed to consider the plain language of the statute, which stated that a taxpayer could deduct the cost of a business asset only if it was used in the taxpayer's trade or business. Justice Breyer argued that the majority opinion had incorrectly interpreted the statute to allow a deduction for the cost of a business asset even if it was not used in the taxpayer's trade or business. Justice Breyer also argued that the majority opinion had failed to consider the legislative history of the statute, which indicated that Congress had intended to limit the deduction to assets used in the taxpayer's trade or business. He argued that the majority opinion had failed to consider the fact that Congress had specifically limited the deduction to assets used in the taxpayer's trade or business, and that the majority opinion had failed to consider the fact that Congress had not intended to allow a deduction for assets that were not used in the taxpayer's trade or business. Justice Breyer concluded his dissent by arguing that the majority opinion had failed to consider the plain language of the statute, the legislative history of the statute, and the intent of Congress in enacting the statute. He argued that the majority opinion had incorrectly interpreted the statute and had failed to consider the relevant facts and evidence.