PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

No. 10-1308

DENISE MANNELLA

v.

COMMISSIONER OF INTERNAL REVENUE,

Appellant

On Appeal from the United States Tax Court

(Tax Court No. 17531-07)

Tax Court Judges: Hon. Harry Haines 

and Hon. Michael B. Thornton

Argued November 17, 2010

BEFORE: AMBRO, FISHER and 

GREENBERG, Circuit Judges

(Filed: January 19, 2011)
2

Derek P. Dissinger (argued)

Russell, Krafft & Gruber

930 Red Rose Court

Hempfield Center, Suite 300

Lancaster, PA 17601-0000

Alice L Stewart

Duquesne University School of Law

Low Income Tax Practicum

Room 125 

600 Forbes Avenue

Pittsburgh, PA 15282-0000

Raymond C. Vogliano

Eckert, Seamans, Cherin & Mellott

600 Grant Street

44th Floor, U.S. Steel Tower

Pittsburgh, PA 15219-0000

Attorneys for Appellee

John A. DiCicco

Acting Assistant Attorney General

Teresa E. McLaughlin (argued)

Steven W. Parks

Attorneys Tax Division

United States Department of Justice

950 Pennsylvania Avenue, N.W.

P.O. Box 502

Washington, DC 20044-0000
3

William J. Wilkins

Internal Revenue Service

1111 Constitution Avenue, N.W.

Washington, DC 20224-0000

Attorneys for Appellant

Carlton M. Smith

Director, Benjamin N. Cardozo School of Law Tax Clinic

55 Fifth Avenue

New York, NY 10003

Attorney Pro Se as Amicus Curiae

OPINION OF THE COURT

GREENBERG, Circuit Judge.

I. INTRODUCTION

This matter comes on before the Court on the 

Commissioner of Internal Revenue=s appeal from a decision of 

the United States Tax Court entered on November 5, 2009, in 

accordance with a Tax Court opinion dated April 13, 2009, and 

a stipulation of the parties dated October 28, 2009, that 

together provided that Appellee Denise Mannella did not owe 

any income taxes, interest, or penalties for the taxable years 

1996 through 2000. In its opinion leading to its decision, the 

Tax Court invalidated a Treasury Department regulation, 26 
4

C.F.R. ' 1.6015-5(b)(1), that sets a two-year deadline to file a 

claim for equitable Ainnocent spouse@ relief under 26 U.S.C. '

6015(f) from liability resulting from a jointly filed federal 

income tax return. We now hold that the regulation is neither 

contrary to nor an impermissible implementation of section 

6015, and, therefore, inasmuch as Denise filed her claim for 

innocent spouse relief beyond the regulation=s two-year 

deadline for seeking such relief, we will reverse the decision of 

the Tax Court. See Chevron U.S.A., Inc. v. Natural Res. Def. 

Council, Inc., 467 U.S. 837, 104 S.Ct. 2778 (1984). We, 

however, will remand the case to that Court to consider an 

equitable tolling contention that Denise advances on this 

appeal with respect to the running of the two-year period.1

II. BACKGROUND

A. Statutory and Regulatory Framework

Before addressing the facts of this case, we first quote 

the Court of Appeals for the Seventh Circuit=s thorough 

explanation of the relevant portions of the Internal Revenue 

Code and the related Treasury Department regulation at issue:

 

1 There is no issue raised on this appeal concerning the 

calculation of the taxes, interest, or penalties.
5

Taxpayers filing a joint return are jointly and 

severally liable for the entire tax liability shown 

or that should have been shown on their return. 

26 U.S.C. ' 6013(d)(3). But section 6015 of the 

Internal Revenue Code sets forth 

grounds->innocent spouse= rules first added to the 

Code in 1971 and liberalized since . . . -for 

relieving the signer of a joint return of his or her 

joint and several liability for understatement or 

nonpayment of income tax due.

Section 6015(f), captioned >equitable relief,=

provides that >under procedures prescribed by 

the [Secretary of Treasury], if (1) taking into 

account all the facts and circumstances, it is 

inequitable to hold the individual liable for any 

unpaid tax or any deficiency . . . ; and (2) relief is 

not available to such individual under subsection 

(b) or (c) [of section 6015], the [Secretary] may 

relieve such individual of such liability.= By 

regulation the Treasury has fixed a deadline for 

filing claims under subsection (f) of two years 

from the IRS=s first action to collect the tax by 

(for example) issuing a notice of intent to levy on 

the taxpayer=s property. 26 C.F.R. '

1.6015-5(b)(1); see also IRS Rev. Proc.2003-61 

' 4.01(3); 26 U.S.C. ' 6630(a).

Lantz v. Commissioner, 607 F.3d 479, 480 (7th Cir. 2010) 

(internal citations omitted) (alterations in original). As the 

foregoing passage indicates, the two-year deadline for seeking 

relief under section 6015(f) does not arise from section 6015 
6

but rather comes from the Treasury regulation implementing 

subsection 6015(f).

Subsections (b) and (c) of section 6015 also provide 

avenues of relief for innocent spouses, but, in contrast to 

subsection (f), both contain two-year filing deadlines for 

seeking such relief. Subsection (b) provides: 

Under procedures prescribed by the Secretary [of 

Treasury], ifB

(A) a joint return has been made 

for a taxable year; 

(B) on such return there is an 

understatement of tax attributable 

to erroneous items of one 

individual filing the joint return; 

(C) the other individual filing the 

joint return establishes that in 

signing the return he or she did not 

know, and had no reason to know, 

that there was such 

understatement; 

(D) taking into account all the 

facts and circumstances, it is 

inequitable to hold the other 

individual liable for the deficiency 

in tax for such taxable year 
7

attributable to such 

understatement; and 

(E) the other individual elects (in 

such form as the Secretary may 

prescribe) the benefits of this 

subsection not later than the date 

which is 2 years after the date the 

Secretary has begun collection 

activities with respect to the 

individual making the election, 

then the other individual shall be relieved of 

liability for tax (including interest, penalties, and 

other amounts) for such taxable year to the 

extent such liability is attributable to such 

understatement. 

26 U.S.C. ' 6015(b)(1) (emphasis added). Subsection (c) 

provides for an allocation of liability if the signer of a joint 

return is divorced, legally separated, or no longer living in the 

same household as the individual with whom the signer filed 

the joint return. In a provision paralleling subsection 

(b)(1)(E), subsection (c) provides that a taxpayer seeking relief 

under (c) must elect such relief Anot later than 2 years after the 

date on which the [Secretary] has begun collection activities 

with respect to the individual making the election.@ 26 U.S.C. 

' 6015(c)(3)(B).

B. Facts
8

Denise2and her husband Anthony Mannella filed joint 

federal income tax returns for the years 1996 through 2000. 

The Mannellas agreed to the assessment of a deficiency for the 

year 1996. For the years 1997, 1998, 1999, and 2000, the 

Mannellas did not pay fully the taxes their returns showed as 

due. Consequently, the Commissioner on June 4, 2004, 

initiated collection procedures to recover the back taxes that 

they owed by sending the Mannellas separate notices of his 

intent to levy. The notices indicated, however, that the 

Mannellas each had the right to a collection-due-process 

hearing before such levy. 

The notices instructed the Mannellas how to obtain 

innocent spouse relief under section 6015 by including an IRS 

publication titled AWhat You Should Know About [t]he IRS 

Collection Process,@ which contained the following provision:

 

2Our use of Denise Mannella=s first name in this opinion does 

not suggest a lack of respect but rather is intended to keep the 

opinion clear with respect to the parties= identification.
9

Help for an innocent spouse C In some cases, 

you may not be responsible for taxes, interest, 

and penalties on a joint income tax return. 

Contact your local IRS office for more 

information. For information about your rights 

as an innocent spouse, see Publication 971, 

Innocent Spouse Relief. For information on 

three ways to get help with the amount you owe, 

see Form 8857, Request for Innocent Spouse 

Relief (And Separation of Liability and 

Equitable Relief).

2 App. at 39, 42. The notices also included IRS Form 12153, 

which states that A[i]f you believe that your spouse or former 

spouse should be responsible for all or a portion of the tax 

liability from your tax return, check here [__] and attach Form 

8857, Request for Innocent Spouse Relief, to this request.@ 2 

App. at 51.

The IRS sent the notices to the Mannellas= correct 

address by certified mail return receipt requested. IRS 

records indicate that it received signed return receipts dated 

June 17, 2004, for both notices at an IRS Service Center. 

Denise asserts, however, that her husband signed her name on 

the return receipt and did not inform her that the notice had 

arrived until more than two years after its arrival and the 

Commissioner does not challenge this assertion. On 

November 1, 2006, after learning of the notice of intent to levy 

and speaking with an attorney, Denise filed two Form 8857 

applications under section 6015, subsections (b), (c), and (f), 

for innocent spouse relief from joint and several liability on the 

Mannellas= joint returns filed for the years 1996-2000. The 
10

Commissioner, however, issued Denise a notice of 

determination dated May 3, 2007, denying her relief under 

section 6015 because she had not filed her claim within two 

years of June 4, 2004, the date that the Commissioner took his 

first collection action against her by mailing her notice of the 

intent to levy. Denise does not contend that the 

Commissioner misapplied the statutory and regulatory 

two-year deadline periods, as written, as she does not assert 

that she filed her applications within the two-year statutory and 

regulatory deadlines period allowed for such applications.

C. Procedural History

In response to the Commissioner=s rejection of her 

applications, Denise, acting pro se, filed a petition for relief 

with the Tax Court, contending in part:

My claim for relief was denied because it was 

filed 4 2 months to[o] late. When the 

collection process was started against me [on] 

June 4, 2004[,] it was immediately stopped. I 

was informed by my husband that everything 

was handled and that I was not liable for his tax 

obligation. The IRS stopped collection activity 

against me so I thought it was taken care of. I 

was not aware of any other problems and never 

received any other papers from the IRS 

concerning my liability for his taxes or anything 

concerning my rights as an innocent spouse. I 

never received any benefits from my husband 
11

not paying his taxes. . . . Denying my claim 

because it was filed late when I was never 

informed that a time limit existed is wrong.

2 App. at 4. Denise=s husband was informed of his right to 

intervene in the Tax Court proceedings, but did not do so. 

The Commissioner moved for summary judgment on 

the sole basis that Denise=s applications for relief under section 

6015 were untimely. She opposed the motion on the ground 

that she never received her notice from her husband and 

therefore the two-year period for seeking innocent spouse 

relief should not have begun to run against her. Denise 

represented to the Tax Court that she and her husband were 

prepared to testify in support of her contentions at a trial. She 

did not argue, however, that the regulation setting a two-year 

deadline for requesting relief under subsection 6015(f) was 

invalid.

In an opinion dated April 13, 2009, the Tax Court 

granted the Commissioner=s motion for summary judgment in 

part and denied it in part. The Court determined that the 

mailing of the notice to Denise=s last known address triggered 

the running of the two-year deadline periods under subsections 

6015(b) and (c) regardless of whether she actually received the 

June 4, 2004 notice. Accordingly, the Tax Court granted the 

Commissioner=s motion for summary judgment on Denise=s 

claims under those subsections. Nevertheless, the Court sua

sponte held that the two-year regulatory deadline under 

subsection 6015(f) was invalid, a conclusion that it based on its 

prior decision in Lantz v. Commissioner, 132 T.C. 131 
12

(2009).3 Consequently, the Court concluded that Denise=s 

subsection (f) claim was timely and it denied the 

Commissioner summary judgment on that claim. 

After the Tax Court filed its opinion, the parties 

executed a stipulation that if Denise=s subsection (f) request 

had been timely, which it was if the regulation was invalid, 

Denise Ais entitled to relief from all joint and several liabilities 

in income tax, additions to tax, penalties and assessed interest@

for all the taxable years within the scope of this action. See 2 

App. at 74. Following the filing of the stipulation, the Tax 

Court entered a decision on November 5, 2009, in Denise=s 

favor, but reserving the Commissioner=s right to appeal, which 

he has done.

III. JURISDICTION AND STANDARD OF REVIEW

The Tax Court had jurisdiction pursuant to 26 U.S.C. ''

6015(e)(1)(A)(ii) and 7442, and we have jurisdiction to review 

that Court=s decision granting summary judgment pursuant to 

26 U.S.C. ' 7482(a)(1). Our review of the Tax Court=s 

decision is plenary. Connecticut Gen. Life Ins. Co. v. 

 

3As we discuss below, after the Tax Court filed its opinion and 

decision in this case, the Court of Appeals for the Seventh 

Circuit reversed the Tax Court decision in Lantz in an opinion 

filed June 8, 2010. See 607 F.3d 479. In this opinion we 

refer to the Tax Court opinion in that litigation as Lantz v. 

Commissioner and the Court of Appeals opinion as Lantz.
13

Comm=r, 177 F.3d 136, 143 (3d Cir. 1999); ACM P=ship v. 

Comm=r, 157 F.3d 231, 245 (3d Cir. 1998).

IV. DISCUSSION

The primary issue on this appeal is whether the 

Secretary validly exercised his rulemaking authority in

adopting the regulation setting a two-year deadline for 

requesting relief under subsection 6015(f). In considering 

this issue we apply the principles the Supreme Court set forth 

in Chevron that we recently explained as follows:

[U]nder Chevron, we must first determine >if the 

statute is silent or ambiguous with respect to the 

specific issue of law in the case, using traditional 

tools of statutory construction to determine 

whether Congress had an intention on the precise 

question at issue.= If congressional intent is 

clear, >the inquiry ends, as both the agency and 

the court must give effect to the plain language 

of the statute.= Where, however, a >statute is 

silent or ambiguous with respect to the specific 

issue, the court proceeds to step two, where it 

inquires whether the agency=s answer is based on 

a permissible construction of the statute.=

Lin-Zheng v. Attorney Gen., 557 F.3d 147, 155 (3d Cir. 2009) 

(en banc) (internal citations omitted). The Tax Court in this 

case, following its opinion in Lantz v. Commissioner in which 

it had applied Chevron, held that the regulation conflicts with 
14

the clear language of subsection 6015(f) and that, even if the 

language of the statute is ambiguous, the regulation 

impermissibly implements that subsection. Denise, with 

effective assistance from amicus curiae, supplements the Tax 

Court opinion by arguing that even if we uphold the regulation 

under Chevron, the two-year filing deadline is subject to the 

doctrine of equitable tolling and that there should be equitable 

tolling in her case to the end that her applications were timely. 

We consider each issue in turn.

A. Lantz

As we have indicated, in invalidating the regulation the 

Tax Court followed its prior decision in Lantz v. 

Commissioner in which it stated:

[b]y explicitly creating a 2-year limitation in 

subsections (b) and (c) but not subsection (f) [of 

section 6015], Congress has >spoken= by its 

audible silence. Because the regulation 

imposes a limitation that Congress explicitly 

incorporated into subsections (b) and (c) but 

omitted from subsection (f), it fails the first 

prong of Chevron.

132 T.C. at 139. The Tax Court further reasoned that because 

subsection (f), in terms, is only available to taxpayers 

ineligible for relief under subsections (b) or (c), Congress, by 

omitting the two-year time limit in subsection (f), intended that 

the subsection be available to taxpayers who missed the filing 
15

deadline under subsections (b) or (c) as a result of some 

inequity. Id. at 139-41. 

After the Commissioner filed his opening brief on this 

appeal, the Court of Appeals for the Seventh Circuit released 

the opinion in Lantz, which we quote above, reversing the 

decision of the Tax Court in that case and upholding the 

two-year regulatory deadline for claims filed under subsection 

6015(f). In its opinion the Court of Appeals rejected the Tax 

Court=s theory of Aaudible silence.@ In so doing, the Court 

noted that Aif there is no deadline in subsection (f), the 

two-year deadlines in subsections (b) and (c) will be set largely 

at naught because the substantive criteria of those subsections 

are virtually the same as those of [subsection] (f).@ Lantz, 607 

F.3d at 484. The Court found further support for its decision 

in several of section 6015=s provisionsCincluding the 

introductory phrase of subsection (f)Cexpressly granting the 

Secretary rulemaking authority, and in the circumstance that 

subsection (f), rather than requiring the Secretary to grant 

relief if certain conditions are met, vests him with discretion to 

grant such relief. Id. at 485; see Lopez v. Davis, 531 U.S. 

230, 243-44, 121 S.Ct. 714, 723-24 (2001) (A[E]ven if a 

statutory scheme requires individualized determinations . . . 

the decisionmaker has the authority to rely on rulemaking to 

resolve certain issues of general applicability unless Congress 

clearly expresses an intent to withhold that authority.@) 

(internal citation and quotation marks omitted).

B. Chevron - Step 1
16

The Supreme Court in Chevron instructed that courts, 

when analyzing administrative regulations to determine if they 

are valid, first should look at whether Congress has Adirectly 

spoken to the precise question at issue.@ 467 U.S. at 842, 104 

S.Ct. at 2781. Denise argues that Congress unequivocally has 

spoken to the question at issue here and has precluded the 

Secretary from adopting a regulation establishing a two-year 

filing deadline under subsection (f). She predicates this 

contention on the correct observation that Congress did not 

include a two-year filing deadline in subsection (f) equivalent 

to that it did include in subsections (b) and (c). Rather, 

Congress instructed the Secretary to consider all relevant facts 

and circumstances when deciding whether to grant relief under 

subsection (f), and stated that relief is available under 

subsection (f) only if unavailable under (b) and (c). We 

disagree with Denise on this point.

Section 6015 tells us nothing about when claims may be 

brought under subsection (f) as the section does not address 

this point. We agree with the Court of Appeals for the 

Seventh Circuit that this silence is not made audible by the 

presence of deadlines in subsections (b) and (c). Though we 

recognize that A[i]t is generally presumed that Congress acts 

intentionally and purposely when it includes particular 

language in one section of a statute but omits it in another,@ see

City of Chicago v. Envtl. Def. Fund, 511 U.S. 328, 338, 114 

S.Ct. 1588, 1593 (1994) (internal quotation marks and citation 

omitted), the absence of a statutory filing deadline in 

subsection (f) similar to those in subsections (b) and (c) does 

not require us to conclude that the Secretary cannot impose a 

two-year deadline by regulation. 
17

It is important to recognize that there can be several 

explanations for Congress=s omission of a deadline for filing an 

application for relief under subsection (f). To start with, 

Congress may have intended to defer the issue of timing to the 

Secretary who can establish procedures for granting relief 

under subsection (f) and can determine whether relief, no 

matter when sought, should be granted.4 On the other hand, it 

is possible that Congress intended that there not be a deadline 

for claims under subsection (f) or, alternatively, that any 

deadline imposed by a regulation under that subsection be 

greater than the two-year period provided in subsections (b) 

and (c). But we cannot say that section 6015, in terms, 

requires that we embrace any particular view of Congress=s 

intent with respect to a subsection (f) filing deadline. 

 

4There is considerable discussion on this appeal between the 

parties involving the question of whether a limitations period is 

procedural or substantive. But we will not focus on that 

discussion as we are not concerned with issues such as the 

applicability of federal or state law under Erie R. Co. v. 

Tomkins, 304 U.S. 64, 58 S.Ct. 817 (1938), or the choice of 

law when the law of different states may be implicated in 

litigation. Rather, we are concerned with whether Congress 

intended to authorize the Secretary to include a filing time 

deadline among the Aprocedures@ that he can adopt to 

implement subsection 6015(f). 
18

Nor is the question of whether there can be a two-year 

deadline period under subsection (f) answered by its provision 

that the Secretary Atak[e] into account all the facts and 

circumstances@ when deciding whether to grant relief under 

that subsection. See 26 U.S.C. ' 6015(f)(1). Denise argues 

that this instruction makes clear that the timing of the request is 

a factor that the Secretary must take into account in 

considering a claim under subsection 6015(f). Congress, 

however, included an identical instruction in subsection (b), 

see 26 U.S.C. ' 6015(b)(1)(D), despite the presence of an 

explicit filing deadline in that subsection, see subsection 

(b)(1)(E), and the requirement that relief be granted if all the 

criteria listed in subsection (b)(1) are satisfied. The Secretary 

thus cannot grant relief to a taxpayer who elects to seek 

subsection (b) relief after the deadline under that subsection 

has passed, nor can he consider timing as a factor in a 

determination of whether to grant relief if the taxpayer makes a 

request for relief within the two-year period. Because the 

Secretary is prevented from considering the timing of an 

election for relief under subsection (b) notwithstanding the 

statutory instruction to Atak[e] into account all the facts and 

circumstances,@ we hardly can hold that the exact same 

instruction clearly requires the Secretary to consider the timing 

of a request for relief on an individualized basis under 

subsection (f). 

Denise also points to the circumstance that relief under 

subsection (f) is limited to individuals ineligible for relief 

under subsections (b) and (c). See 26 U.S.C. ' 6015(f)(2). 

Because the requirements for relief under subsections (b) and 

(f) are similar, though not identical, Denise argues that 

Congress must have intended that relief under subsection (f) be 
19

available to persons who missed the filing deadline under 

subsection (b). Yet Denise does not dispute that, regardless of 

timing, a taxpayer would be eligible for relief under subsection 

(f) but not subsection (b) when the taxpayer is seeking relief 

from liability for an underpayment as distinguished from an 

understatement of taxes, undoubtedly a very large category of 

cases, or when the taxpayer is seeking relief from an 

understatement that he or she knew or should have known was 

made. Accordingly, subsection (f)=s exclusion of those 

eligible for relief under subsection (b) and (c) sheds little light 

on the question before us. 

What subsection (f)(2) may mean is that for relief to be 

granted under subsection (f) it must never have been available 

under subsection (b) or (c) whether or not timely sought under 

those subsections. Indeed, such a view of Congress=s intent 

would be consistent with the establishment of explicit deadline 

periods in subsections (b) and (c). Along this line we point 

out that it would be strange if Congress established a deadline 

for a claim under one subsection but also provided that a 

claimant at a date beyond that deadline could make the same 

claim for the same type of relief under another subsection and 

thereby effectively by-pass the deadline period. In addressing 

this point we reiterate that among the reasons that relief might 

be available under subsection (f) that never was available 

under subsection (b) or (c) is that subsection (f) relief may be 

available for both understatements and underpayments of taxes 

whereas subsections (b) and (c) are limited to understatements. 

Therefore, the provision of subsection (f) limiting the 

availability of that subsection to taxpayers ineligible for relief 

under subsection (b) and (c) has real meaning even if it does 

not save claims that had been, but no longer are, within the 
20

scope of subsections (b) and (c) because, if asserted, they 

would be untimely under those two subsections. Overall, we 

see no escape from the conclusion that section 6015 is 

ambiguous on the question of when a request for relief may be 

brought under subsection (f).

C. Chevron - Step 2

Inasmuch as Congress has not spoken directly to the 

precise question in issue, i.e., can the Secretary by regulation 

establish a deadline for a taxpayer to seek subsection (f) relief, 

we next must examine whether the Secretary=s imposition of a 

two-year deadline for claims brought under subsection (f) 

permissibly implements that subsection. In resolving this 

question, we defer to the Secretary=s implementation of the 

subsection Aunless the legislative history or the purpose and 

structure of the act clearly reveal a contrary intent on the part 

of Congress.@ Appalachian States Low-Level Radioactive 

Waste Comm=n v. O=Leary, 93 F.3d 103, 110 (3d Cir. 1996) 

(quoting Chem. Mfrs. Ass=n v. Natural Res. Def. Council, Inc., 

470 U.S. 116, 126, 105 S.Ct. 1102, 1108 (1985)). ASo long as 

the regulation bears a fair relationship to the language of the 

statute, reflects the views of those who sought its enactment, 

and matches the purpose they articulated, it will merit 

deference.=@ Id. at 110 (quoting Sekula v. F.D.I.C., 39 F.3d 

448, 452 (3d Cir. 1994)).5 We therefore turn to the legislative 

 

5The deference is particularly broad when the regulation is 

adopted pursuant to authority in a specific statute as 

distinguished from being adopted under general rule making 
21

history and purpose of section 6015 to determine whether they 

reveal that Congress had an intent in adopting section 6015(f) 

that was contrary to the regulation establishing the two-year 

deadline. See id.

 

authority. See Armstrong World Indus. Inc. v. Comm=r, 974 

F.2d 422, 441 (3d Cir. 1992).
22

In her brief, Denise discusses the legislative history of 

the provisions at issue at some length. In particular, she 

points to statements various Senators made and passages from 

a joint conference report to the effect that Congress intended to 

expand significantly the prior innocent spouse provisions in 

1998 and 2006. See appellee=s br. at 25-34. Certainly there 

is no doubt but that Congress significantly expanded the 

circumstances in which a taxpayer could obtain innocent 

spouse relief when it enacted section 6015 in its current form. 

For example, the current statute eliminates the previous 

requirements that innocent spouse relief be limited to grossly 

erroneous items attributable to the other spouse and that the 

Secretary grant relief only for understatements exceeding a

certain monetary threshold. See 26 U.S.C. ' 6013(e), 

repealed by Internal Revenue Restructuring and Reform Act of 

1998, (ARRA@), Pub. L. No. 105-206 ' 3201, 112 Stat. 685, 

740. Moreover, the addition of subsection (f), 

notwithstanding the Secretary=s adoption of the regulatory 

two-year deadline, allows for the possibility of there being 

relief for underpayments and for understatements of which the 

taxpayer seeking relief knew or should have known. 

The closest Denise is able to come to pointing to any 

legislative history suggesting that Congress in enacting 

subsection 6015(f) had an intent inconsistent with the terms of 

the regulation is in the legislative history of 26 U.S.C. ' 66. 

That provision of the Internal Revenue Code addresses the 

treatment of community property in community property states 

when spouses do not file income tax returns jointly. Congress 

amended subsection (c) of section 66 by the same act that 
23

created subsection 6015(f)6and therefore, not surprisingly, 

subsection 66 provides for equitable relief in language that 

mirrors that of subsection 6015(f). See 26 U.S.C. ' 66(c)(4); 

RRA Pub. L. No. 105-206 ' 3201, 112 Stat. 685, 740. Some 

statements in the legislative history of section 66(c) suggest 

that the Secretary, when Ataking into account all the facts and 

circumstances,@ 26 U.S.C. ' 66(c)(4), should consider the 

timing of the request for relief. 

The foregoing history, which the Tax Court discussed 

in its opinion in Lantz v. Commissioner, 132 T.C. at 141-44, 

lends some support to Denise=s position, but it fails to 

overcome the deference that we must give to Treasury 

Regulation ' 1.6015-5(b)(1) under Chevron and it does not 

clearly demonstrate that Congress intended that requests for 

relief under subsection 6015(f) not be subject to a two-year 

filing deadline. Accordingly, the regulation is valid. See

also Swallows Holding, Ltd. v. Comm=r, 515 F.3d 162, 172 (3d 

Cir. 2008) (ADrawing [a] temporal line [to claim a tax 

deduction] is a task properly within the powers and expertise 

of the IRS. Chevron recognizes the notion that the IRS is in a 

superior position to make judgments concerning the 

administration of the ambiguities in its enabling statute.@).

 

6

See RRA, Pub. L. No. 105-206, 112 Stat. 685.
24

Finally, in our discussion of Chevron we take note of 

Denise=s argument that the inclusion of deadline periods in 

subsections (b) and (c) but omission of such a period in 

subsection (f) Ademonstrates Congressional intent that requests 

for equitable relief not be subject to a bright-line time 

limitation, but rather allow the taxpayer to request relief during 

the 10-year collection period of [26 U.S.C.] ' 6502.@ 

Appellee=s br. at 15. But inasmuch as Section 6502 is a 

limitation only on the government=s time for collection, Denise 

really is arguing that there is no deadline for filing a subsection 

(f) claim and that the Secretary by regulation cannot fill the 

void that Congress left by omitting such a deadline. We are 

reluctant to reach such a result as it would be inconsistent with 

the practice of the federal courts to borrow statutes of 

limitations from appropriate sources, even state law, to fill the 

void that Congress leaves when it does not establish a statute of 

limitations. See, e.g., Lake v. Arnold, 232 F.3d 360, 366 (3d 

Cir. 2000). Moreover, Denise=s argument is hardly consistent 

with the general practice of Congress to provide for all sorts of 

specific periods for action to be taken under the Internal 

Revenue Code.7

 

7We have not overlooked our contemporaneous opinion in Rea 

v. Federated Investors, No. 10-1440, 2010 U.S. App. LEXIS 

25501, at * 7, F.3d , (3d Cir. Dec. 15, 2010), a 

case construing a statute dealing with employment protection 

to persons who had been or were in bankruptcy enacted in a 

format in some ways similar to that in section 6015. There we 

would not expand on the limited protection given to persons in 

private employment from bankruptcy discrimination to include 

the more expansive protection from bankruptcy discrimination 
25

 

given to pubic employees. In Rea we declined to Acontravene 

congressional intent by implying statutory language that 

Congress omitted.@ But Rea dealt with the construction of a 

statute, not with whether a regulation implementing a statute 

should be upheld under the principles in Chevron, the issue 

involved here. Thus, though we uphold the regulation at issue 

here we are not Aimplying@ anything into section 6015.
26

D. Equitable Tolling

Denise lastly argues that even if the regulation is valid, 

it is subject to equitable tolling and she urges that the deadline 

period be tolled here.8 We have held that Athe tolling of filing 

deadlines is appropriate where principles of equity would 

make the rigid application of a limitation period unfair.@ 

Walker v. Astrue, 593 F.3d 274, 279 (3d Cir. 2010) (internal 

quotation marks and citation omitted). There may be 

equitable tolling A(1) where the defendant has actively misled 

the plaintiff respecting the plaintiff's cause of action; (2) where 

the plaintiff in some extraordinary way has been prevented 

from asserting his or her rights; or (3) where the plaintiff has 

timely asserted his or her rights mistakenly in the wrong 

forum.@ Hedges v. United States, 404 F.3d 744, 751 (3d Cir. 

2005) (internal quotation marks and citation omitted). But 

inasmuch as the Tax Court did not address the equitable tolling 

issue and additional facts not in the record may be material to 

the issue we think that that Court should explore the issue in 

the first instance. We therefore will remand the case to the 

Tax Court to decide whether the Treasury Department 

regulation at 26 C.F.R. ' 1.6015-5(b)(1) is subject to equitable 

tolling and, if so, whether Denise meets the equitable tolling 

standard. 

 

8

In the section of her brief dealing with equitable tolling 

Denise does not explain why there should be equitable tolling 

in this case. Rather, she concentrates on why there can be 

equitable tolling.
27

V. CONCLUSION

For the foregoing reasons we will reverse the decision 

of the Tax Court entered November 5, 2009, to the extent that 

that decision reflected the Tax Court=s opinion that the 

regulatory deadline for claims under subsection 6015(f) is 

invalid, and will remand the case to the Tax Court to consider 

the equitable tolling issue. The parties will bear their own 

costs on this appeal.
1

Denise Mannella v. Commissioner of Internal Revenue

No. 10-1308

 

AMBRO, Circuit Judge, dissenting

Spouses seeking relief from joint and several liability 

for understatements or underpayments of income taxes look 

to 26 U.S.C. § 6015. Among other things, it spares innocent 

spouses when it is equitable to do so. Id. § 6015(b) (dealing 

with understatements).

1

 But to be eligible for relief they must 

apply within two years after the IRS begins collection 

activity. Id. § 6015(b).

What if an innocent spouse does not qualify because 

two years have passed since collection efforts began? It 

appears there is a safety-valve (Ms. Mannella’s counsel calls 

it a ―catchall‖) ─ § 6015(f). All that it requires, other than 

showing relief is not available under subsection (b), is that it 

not be fair to hold the innocent spouse responsible for the 

other spouse’s tax liability. The intuitive (indeed, blink) 

thought, then, is that the time to file under subsection (f) 

extends beyond two years. After all, it can’t logically be less 

time, as subsection (b) is available for at least some taxpayers 

who elect within two years, and thus, one would think, (f) 

would be available for later applicants. 

 Is it that easy? Well, no. There is a catch (as opposed 

 

1

Section 6015(c) also provides relief for certain 

divorced or separated taxpayers, and for these persons 

imposes an explicit two-year statute of limitations. However, 

it is of little relevance to our case and is not discussed in this 

dissent. 
2

to a catchall), we are told. Though subsection (f) enacted by 

Congress sets no time limit to seek relief, the Department of 

the Treasury2has adopted a Regulation ─ 26 C.F.R. § 1.6015-

5(b)(1), complemented by IRS Rev. Proc. 2003-61 § 4.01(3)3

─ that does. It is two years. 

The United States Tax Court has overruled that 

deadline, Mannella v. C.I.R., 132 T.C. 196 (2009), and the 

IRS appeals. Its argument, which won in the Seventh Circuit 

Court’s decision in Lantz v. C.I.R., 607 F.3d 479 (7th Cir. 

2010), is essentially that Chevron U.S.A., Inc. v. Natural 

Resources Defense Council, 467 U.S. 837 (1984), requires us 

to defer to its judgment, as that judgment is reasonable. 

The Tax Court, whose hands heretofore were tied only 

in the Seventh Circuit,

4

reasons that the Regulation is invalid

under step one of Chevron’s procedure for reviewing an 

agency’s construction of a statute it administers because

Congress has spoken directly to the issue involved. 

Specifically, the Tax Court reasons that the Regulation ―runs 

directly contrary to the nature of the relief provided in section 

6015(f).‖ 132 T.C. at 202. And even were subsection (f) 

deemed silent or ambiguous, ―a 2-year limitations period is 

not a permissible construction of [that provision], and 

 

2

I use ―Department of the Treasury,‖ ―Secretary‖ (or 

―Secretary of the Treasury‖), the ―Service,‖ and ―IRS‖ 

interchangeably.

3

See also Rev. Proc. 2000-15 § 4.01(3).

4

See Golsen v. Commissioner, 54 T.C. 742, 1970 WL 

2191 (1970), aff’d 445 F.2d 985 (10th Cir. 1971) 

(determining that the Tax Court must apply the law of the 

Court of Appeals to which an appeal for that case would later 

lie). 
3

therefore [the Regulation] is invalid under Chevron step 2,‖ 

id., which holds that congressional silence or ambiguity on a 

specific issue confers on the administrative agency the power 

to construe the statute in any way that is permissible (that is,

reasonable). 

I agree with my colleagues, and not the Tax Court, that 

Congress has not spoken directly on what the timeframe 

under subsection (f) must be. Indeed, the subsection is 

literally silent.5 

In that case, Chevron’s second step comes into play. 

My colleagues, and all three members of the panel in Lantz, 

hold that the Regulation passes muster. They reason, per 

Chevron, that deference is due an agency’s construction of a 

statute it implements, i.e., a presumption of validity attends 

that construction. Thus, though Ms. Mannella’s position has 

―support,‖ Maj. Op. at 22, and ―[t]he arguments against the 

Tax Court’s interpretation of subsection (f) as barring a fixed 

deadline . . . are powerful,‖ Lantz, 607 F.3d at 486, they do 

not overcome that presumption. Put another way, that some, 

or even most, courts would have chosen a different deadline 

than that picked by the IRS is irrelevant, as the Supreme 

Court has settled since 1984 who gets first call in construing 

the statute.6

 

5

That said, the Tax Court’s reasoning is not so 

specious that it deserves to be dismissed as simply 

oxymoronic by its use of ―audible silence.‖ Lantz, 607 F.3d 

at 481. That gibe, however, does sidestep another oxymoron 

– humble pedantry.

6 As this is settled law, I don’t enter the well-vetted 

briarpatch of whether the Supreme Court should have 

accorded agencies of the Executive Branch interpretive 

powers that courts thought by tradition belonged to them. See 
4

But that first call must be reasonable. It is hard to say 

that is so when the IRS gives no reasons for ―add[ing] a new 

threshold requirement,‖ Rev. Proc. 2003-61 §3.01, for 

subsection (f) eligibility. ―It is well-established that an 

agency’s action must be upheld, if at all, on the basis 

articulated by the agency itself.‖ Motor Vehicle Mfrs Ass’n v. 

State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 50 (1983). 

Here, however, the IRS has not advanced any reasoning for 

its decision to impose a two-year limitations period on 

taxpayers seeking relief under subsection (f), leaving us no

basis to conduct the analysis mandated by Chevron step two. 

There may exist justifications on which the IRS could 

have reasonably relied in order to impose a two-year limit on 

subsection (f) relief. The problem is that there are also 

arbitrary and capricious reasons that, if articulated by the 

Service as the basis for the two-year limit, would require us to 

strike down that limit—for example, if the IRS enacted the 

two-year deadline based on an incorrect belief that the statute 

required it, or based on a factual supposition belied by the 

administrative record. See, e.g., Zheng v. Gonzales, 422 F.3d 

98, 120 (3d Cir. 2005) (rejecting immigration regulation at 

Chevron step two because it was based on an impermissible 

reading of the 8 U.S.C. § 1255(a)). Because the IRS has not 

articulated its reasoning, we cannot discern whether the two-

 

generally Jack M. Beerman, End the Chevron Experiment 

Now: How Chevron Has Failed and Why It Can and Should 

be Overruled, 42 Conn. L. Rev. 779 (2010); Cass R. Sunstein, 

Law and Administration After Chevron, 90 Colum. L. Rev. 

2071 (1990); Cynthia R. Farina, Statutory Interpretation and 

the Balance of Power in the Administrative State, 89 Colum. 

L. Rev. 452 (1989); Joseph F. Weis, Jr., A Judicial 

Perspective on Deference to Administrative Agencies: Some 

Grenades From the Trenches, 2 Admin. L. J. 301 (1988).
5

year limit falls into the permissible, or the arbitrary and 

capricious, category.

Into the vacuum left by the IRS the Lantz Court has 

injected reasoning of its own, which my colleagues cite at 

length. But it is black-letter law—and a necessary corollary

of the deference owed to agencies—that courts may not 

supplement deficient agency reasoning. Sec. & Exch. 

Comm’n v. Chenery Corp., 318 U.S. 80, 87 (1943) (―The 

grounds upon which an administrative order must be judged 

are those upon which the record discloses that its action was 

based.‖). Thus, the Lantz Court’s surrogate surmising of 

agency reasons does not, I believe, save the two-year limit.7

Further, I do not find Lantz’s reasoning in support of 

the two-year limit to be convincing. I will address those 

reasons, which my colleagues seemingly endorse, in turn.

 

7 My colleagues largely do not engage in this exercise

(though nothing they write shows disagreement), instead 

rejecting Ms. Mannella’s arguments against the two-year 

limit because they do not ―clearly demonstrate that Congress 

intended that requests for relief under subsection 6015(f) not 

be subject to a two-year filing deadline.‖ Maj. Op. at 20. By 

this approach my colleagues place on Ms. Mannella the 

burden (a heavy one, at that) of proving that it is not 

reasonable to adopt a deadline backed by no reason. I do not 

buy this approach. Moreover, it also ducks the critical 

inquiry—whether the IRS’s reason for implementing the twoyear limit was ―arbitrary, capricious, an abuse of discretion, 

or otherwise not in accordance with law.‖ 5 U.S.C. 

§ 706(2)(A). By abjuring reason, the IRS, I believe, abuses 

its discretion.
6

1. Reason: The Lantz Court wrote that, absent a twoyear deadline in (f), the two-year deadline in (b) would be 

made superfluous, as ―the substantive criteria of th[at] 

section[] are virtually the same as those of (f).‖ Lantz, 607 

F.3d at 484. Indeed, it took this thought even further by 

stating that ―[h]ad the Treasury decided to impose no deadline 

on the filing of claims under subsection (f), or even just a 

deadline longer than two years, or in lieu of a fixed deadline 

the flexible deadline of the laches doctrine, it would have 

been undermining the two-year deadline fixed by Congress in 

subsection[] (b).‖ Id.

Response: To begin, to the extent that it is correct 

that the ―substantive criteria‖ of (b) and (f) are ―virtually the 

same,‖ id. at 484, then Lantz’s approach renders subsection 

(f) superfluous, which cannot be what Congress intended. As 

Lantz later notes, however (and the majority agrees, Maj. Op. 

at 18), there is a large class of taxpayers who would be 

eligible for relief under (f), but not (b), because the latter, 

unlike the former, applies only to: (i) tax understatements, 

and not tax underpayments; id. at 486; and (ii) spouses who 

lacked actual or constructive knowledge of the 

understatement. 

Moreover, subsection (f) will not ―undermin[e]‖ the 

two-year deadline imposed in subsection (b) even as to those 

taxpayers who (but for the two-year limit) might qualify 

under both subsections. Of significance, (f) is discretionary, 

whereas (b) is mandatory. Compare § 6015(f) (―the Secretary 

may relieve [the innocent spouse] of such liability‖), with

§ 6015(b) (―the [innocent spouse] shall be relieved of liability 

for tax‖) (emphases added). Thus, even if (f) has no time 

limit, taxpayers who might qualify under (b) would be welladvised to file in time to take advantage of that mandatory 

provision instead of waiting to seek discretionary relief under 

(f). Put another way, Congress could have chosen to free the 
7

IRS to afford discretionary relief to innocent spouses who 

missed the two-year deadline in certain exceptional cases, 

while maintaining the two-year limitations period for the 

mine-run of cases. 

In addition, as my colleagues note, Maj. Op. at 21-22, 

Congress amended 26 U.S.C. § 66 (addressing the treatment 

of community property when spouses do not file joint returns 

in community-property states) by adding a subsection (c) at 

the same time it added subsection (f) to § 6015, and the 

language of each subsection mirrors the other. Statements in 

the legislative history of § 66(c) indicate that the IRS should 

consider the timing of the request for relief. H.R. Rep. No. 

98-432, pt 2, at 1501 & 03 (1984) (the IRS should consider, 

inter alia, ―whether the defense was promptly raised so as to 

prevent the period of limitations from running on the other 

spouse‖). Moreover, the Tax Court pointed out in its decision 

now reversed by the Seventh Circuit that, ―[i]n [the]

announcement of the proposed regulations under [§] 66(c), 67 

Fed. Reg. 2841 (Jan. 22, 2002), the Secretary [of the 

Treasury] observed that the relief provided in sec. 66(c) is 

analogous to the relief provision in section 6015(b) *** [and] 

section 6015(f).‖ Lantz v. C.I.R., 132 T.C. 131, 142 n.9 

(2009), overruled by 607 F.3d 479 (7th Cir. 2010).

2. Reason: The Lantz Court also observed that 

―[s]ince the government can refuse to grant equitable relief to 

someone who meets the statutory criteria and applies within 

two years of the first collection action, why can’t it decide to 

deny relief to a class of applicants defined as those who 

waited too long?‖ 607 F.3d at 485 (emphasis in text). 

Response: I agree that the answer to this rhetorical 

question is that the Secretary can exercise the discretion 

granted by subsection (f) either case-by-case or categorically. 

Cf. Lopez v. Davis, 531 U.S. 230, 243-44 (2001) (Bureau of 
8

Prisons could exercise its discretion to reduce the sentences of 

certain prisoners on a categorical basis). However, because it 

is not clear why the IRS promulgated the two-year limit (or 

whether it even purported to do so as an exercise of its 

discretion at all, rather than out of a misguided perception of 

what the statute required), its authority to exercise its 

discretion categorically should not save the two-year limit the 

Regulation by ukase imposes. 

3. Reason: Though ―innocent spouses who fall 

through the cracks in (b),‖ Lantz, 607 F.3d at 484., have the 

safety protection of (f), ―[t]he details . . . were left to the 

Treasury Department to work out . . . .‖ Id. The preamble to 

(f) confers on the Secretary of the Treasury the right to 

prescribe ―procedures‖ to relieve individuals of liability on 

joint income tax returns. When claims may be brought is 

such a procedure. ―Congress’s authorizing an agency to grant 

discretionary relief under procedures that the agency is to 

devise itself . . . writes the agency a blank check; and one of 

the blanks on the check is the deadline for applying for such 

relief.‖ Id. at 485.

Response: If the preamble to both subsections (b) 

and (f) is ―[u]nder procedures prescribed by the Secretary,‖ 

and (b) has a deadline of two years while (f) does not, then is 

not that deadline substantive rather than procedural? 

Procedures here cover how to go about making a request for 

relief, and limitations periods are generally considered 

substantive. Cf. Lafferty v. St. Riel, 495 F.3d 72, 76 (3d Cir. 

2007) (statutes of limitation are substantive, not procedural, 

for purposes of determining whether state or federal law 

applies in diversity cases). More specifically, in the tax 

context ―a time bar is not simply a procedural rule. In the 

case of equity, it has the substantive effect of making one 

circumstance, the time of the claim, the only relevant factor.‖ 

Hall v. C.I.R., 2010 WL 3703837 *3 (U.S. Tax Ct.).
9

4. Reason: Finally, the Lantz Court observed that the 

IRS could impose a deadline for subsection (f) applications 

―designed to reduce the flow to manageable proportions.‖ 

607 F.3d at 486.

Response: While it may be true that the IRS 

could impose a deadline in order to reduce the sheer number 

of applications for relief under subsection (f), that observation 

is of little relevance here, where there is no administrative (or 

other) record of an unmanageable flow of late-filed

exemption applications. 

* * * * *

To deny taxpayers who miss the deadline to invoke 

subsection (b) even a chance to make an equitable exemption 

claim under (f) is concededly ―harsh.‖ Id. Those taxpayers

are left in a Catch-22 paradox: they are ineligible to seek an 

exemption under (f) unless ineligible under (b), but once 

ineligible as to timing under the latter they can’t be eligible 

under the former. The take-away thought for some may be 

that Congress could have drafted directly (or more clearly) 

but it didn’t, and now the agency gets to make the 

gatekeeping rules. But the agency only gets to do so within 

reason. 

And there’s the rub. It gave no reasons. Courts thus 

make up or surmise reasons (and even they underwhelm). Is 

this the proper way to review interpretive decisions by 

agencies? 

The Supreme Court has answered that question in the 

negative. To repeat: ―[i]t is well-established that an agency’s 

action must be upheld, if at all, on the basis articulated by the 

agency itself.‖ Motor Vehicle Mfrs Ass’n, 463 U.S. at 50. 

When courts ignore that admonition, Chevron becomes an 
10

exit ramp to the twilight zone by ―reliev[ing] the pressure on 

agencies to develop a full, expert record . . . .‖ Elizabeth V. 

Foote, Statutory Interpretation or Public Administration: 

How Chevron Misconceives the Function of Agencies and 

Why it Matters, 59 Admin. L. Rev. 673, 710 (Fall 2007). In 

this way, ―[r]eviewing courts can brush off serious challenges 

to agency decisions by invoking Chevron without engaging 

whether the agency is thwarting imperfectly expressed 

congressional intent.‖ Beerman, End the Failed Chevron 

Experiment Now: How Chevron Has Failed and Why It Can 

and Should be Overruled, 42 Conn. L. Rev. at 784. I believe 

this is what happened here, and thus respectfully dissent.