United States v. Kollman

Under 26 U.S.C. § 6330(e)(1), the running of the statute of limitations is tolled during the time which a taxpayer could file an appeal to the Tax Court, even if the taxpayer does not actually file such an appeal.

On November 24, 1997, the Internal Revenue Service (“IRS”) made an assessment against Daryl J. Kollman for the 1996 tax year. Kollman submitted a request for a Collection Due Process (“CDP”) hearing. The IRS issued a notice of determination regarding Kollman’s request for a CDP hearing on June 18, 1999. He then had a right to appeal the CDP determination to the United States Tax Court within thirty days, but did not do so. On March 12, 2008, the government filed a complaint seeking to reduce the assessment to judgment. At trial, Kollman argued that under 26 U.S.C. § 6330(e)(1), the ten year statute of limitations had run. However, the district court held “[the] complaint was timely because the limitations period was tolled from March 18, 1999 (when Kollman requested the CDP hearing) until thirty days following the June 18, 1999, CDP determination.” In reaching this conclusion, the court relied on the Treasury Department Regulation interpreting 26 U.S.C. § 6330(e)(1). On appeal, the Ninth Circuit held that the district court correctly applied the Treasury Department's interpretation of the tolling statute. Applying the Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc. analysis, the panel first determined that the statute being interpreted, 26 U.S.C. § 6330(e)(1), was ambiguous as to whether the thirty-day period to appeal to the tax court is excluded from the suspension time when the taxpayer does not in fact appeal. Next, the panel determined that the Treasury Department’s regulation was a permissible construction of the statute. Therefore, the regulation meets the Chevron analysis requirements, and accordingly, the statute of limitations has not run. AFFIRMED.