Why Shouldn’t Equitable Tolling Apply to the Federal Tax Refund Look-Back Period?

In Libitzky v. United States,[1] the United States Court of Appeals for the Ninth Circuit affirmed disallowance of a $700,000 federal income tax refund claim. The court said that this was an “unfortunate” case, but they were bound by the statutory language providing for tax refunds, which did not permit equitable tolling of a limitation period.

Perhaps Libitzky is consistent with the 2022 decision of the Supreme Court – Boechler, P.C. v. Commissioner[2] - on the granting of equitable relief - or perhaps it is not, but the Ninth Circuit did not even cite, let alone discuss, Boechler in its decision. The application of Boechler is contentious. In 2023, the Third Circuit relied on Boechler to equitably toll the limitation period to petition the United States Tax Court to redetermine a proposed tax deficiency, but in 2022 the Eleventh Circuit expressly refused to rely on Boechler.

Federal Tax Refund…