Ninth Circuit Holds Sec. 6694(c) Deadline to Review Tax Preparer Penalties is Jurisdictional; Affirms Dismissal of Refund Action

The Ninth Circuit, in Taylor v. Commissioner, affirmed the district court's dismissal of a tax preparer's refund action that sought review of preparer penalties assessed for the understatements of his clients' tax liabilities. The district court held that the taxpayer's failure to timely comply with the statutory filing deadline of section 6694(c) of Internal Revenue Code required “full payment” of the assessed penalties before a refund action could be maintained in federal court. Since the taxpayer had paid just 15% of the assessed penalties, but missed the filing deadline, the court lacked subject matter jurisdiction to adjudicate the refund action and, thus, granted the government's motion to dismiss