- Court: 9th Circuit Court of Appeals Archives
- Area(s) of Law: Tax Law
- Date Filed: 04-04-2013
- Case #: 10-56904
- Judge(s)/Court Below: Circuit Judge Paez for the Court; Circuit Judges Wardlaw and Rawlinson
- Full Text Opinion
Ingborg Pattee’s will named Peter Knappe as executor of her estate. As Knappe had no prior experience as executor, he acquired helped from a Certified Public Accountant, Francis Burns. The Internal Revenue Service (“IRS”) deadline for filing the proper forms was nine months from the date of Pattee's death, which was insufficient time for Knappe. Burns suggested filing Form 4768, which would provide an automatic six month extension to file the return. An extension of time to pay is granted at the discretion of the IRS and capped at twelve months. Knappe only cursorily reviewed the form before Burns filed it. Knappe did not verify the deadline and relied on Burns's statement that he could obtain a twelve month filing extension. The IRS approved both extensions, but neither Burns nor Knappe realized that the filing deadline extended only six months. As a result, the estate tax return was filed several months late. The IRS penalized Knappe for the late filing and denied his request for abatement of the penalty, finding the failure to file was not “due to reasonable cause.” Knappe's appeal was denied, as was his refund request. The district court held that reasonable cause under 26 U.S.C. § 6651(a)(1) was a question of law, and Knappe’s reliance on Burns’s advice did not establish “reasonable cause,” thus granting summary judgment in favor of the government. The Ninth Circuit dispensed with Knappe's argument that the IRS deadlines are debatable, finding the statute unambiguous regarding the six month extension. Rather than relying on a distinction between delegation to an agent and reliance on an expert's advice, the panel found the appropriate line between substantive and nonsubstantive matters is whether the executor's duties were delegable. Ascertaining a deadline is not a delegable duty, and Knappe should have responsibly verified the deadline. AFFIRMED.