The U.S. Tax Court Holds That It Has Jurisdiction Over Late-Filed BBA Partnership Petitions

By Priscilla Ayn Parrett and Carlene Y. Lowry

In an opinion issued on August 5, 2026, the United States Tax Court (Tax Court) held for the first time that untimely Tax Court petitions filed by a partnership under the Bipartisan Budget Act of 2015 (BBA) do not necessarily deprive the Tax Court of jurisdiction. This is a groundbreaking holding that opens the door for partnerships to argue that late-filed petitions should still be reviewed by the Tax Court based on equitable tolling (e.g., fairness) grounds.

The Case

In Big Apple Tompkins Realty LLC v. Commissioner, 167 T.C. 7 (2026), the petitioner filed its Tax Court petition in November 2023 challenging an Internal Revenue Service (IRS) adjustment from August 2022 that imposed an imputed underpayment and penalty. The IRS moved to dismiss the case for lack of jurisdiction, arguing that the petition was filed well past the 90-day window mandated under Internal Revenue Code (IRC) section 6234.

In its opinion, the Tax Court analyzed, for the first time, whether the Court has jurisdiction for late-filed petitions under the BBA rules. Under the older Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) rules, the Tax Court had held that the 90-day filing deadline was jurisdictional, and because the deadline was jurisdictional, the Court therefore could not consider any equitable tolling arguments made by the petitioner. North Wall Holdings, LLC v. Commissioner, 165 T.C. 143 (2025). In Big Apple, the Court differentiated North Wall by pointing out that the BBA and TEFRA rules are materially different. The TEFRA rules contained multiple deadlines and a complicated process to ensure that there was only one partnership related proceeding. By contrast, the BBA rules are intended to take an entity-focused approach, and the statutes do not contain multiple coordinated deadlines.

In analyzing section 6234, the Court found that section 6234(a) provides a “permissive grant for a partnership to file a claim but not a grant of jurisdiction,” whereas section 6234(c) provides the grant of jurisdiction. Because the Court found “no clear tie between the 90-day filing deadline in section 6234(a) and the jurisdictional grant in section 6234(c),” the filing deadline is not jurisdictional.

While the Tax Court held that the 90-day deadline is not jurisdictional, it reserved judgment on whether the 90-day deadline is now subject to equitable tolling until the parties further briefed the issue. The IRS has not yet stated whether it will appeal this decision.

What This Means for Partnerships

Partnerships that have already filed a Tax Court petition after the 90-day deadline should consider whether to raise this argument in defense of a motion to dismiss filed by the IRS. Any partnership that has received a Notice of Final Partnership Adjustment but has not yet filed a Tax Court petition should consider whether the partnership has grounds to do so even if the 90-day deadline has expired. Partnerships would still have to prove that they are entitled to equitable tolling (which is a high bar), but it is certainly an argument worth considering.