In the tax clinic, we file very few Tax Court petitions because our clients do not come to us at the stage of receiving a notice of deficiency. When we do file a Tax Court petition in response to a notice of deficiency, we sign the petition unless the taxpayer comes to us at the last second, preventing us from verifying the information in the petition. In cases where the taxpayer shows up at the last second, we will assist the taxpayer in preparing a petition, have the taxpayer file the petition pro se, and obtain a power of attorney. In most Tax Court cases worked by the clinic, the taxpayer comes to us because of the stuffer notice issued by the Tax Court after the individual has filed their petition. In those cases, we do not typically enter an appearance but rather obtain a power of attorney. I use the power of attorney rather than entering an appearance because I want the taxpayer to demonstrate to me that they will work with me to resolve the case and also because I want time to verify the information the taxpayer brings to the initial meeting before I jump in with an entry of appearance that requires court permission to undo. For a cautionary tale on entering an appearance in a Tax Court case before you know your client see the post by guest blogger Scott Schumacher.
Chief Counsel’s office has struggled over the past decade in which I have worked in tax clinics about what to do with practitioners who obtain a power of attorney but do not enter an appearance in the Tax Court case. On April 18, 2017, it issued Notice CC-2017-006 which is the latest, and the best, statement about how it will deal with practitioners like me who seek to represent clients in Tax Court cases using a power of attorney. The latest notice supplements Chief Counsel Notice CC-2014-003 which replaced Chief Counsel Notice CC-2013-005. I blogged about the 2013 notice here. The latest notice amends prior notices based on the American Bar Association (ABA) Committee on Ethics and Professional Responsibility Formal Opinion 472 which provides guidance with respect to communication to persons receiving limited scope legal services.
For those of you following changes in the leadership of Chief Counsel’s Office, Notice CC-2017-006 is signed by Kathy Zuba as the Acting Associate Chief Counsel (Procedure & Administration). Kathy replaces Drita Tonuzi who has become the Deputy Chief Counsel (Operations) following the retirement of Debra Moe.read more...
Tax Court Rule 201(a) tells practitioners before the Court to practice in accordance with the ABA Model Rules of Professional conduct making the opinions of the ABA Ethics committee more important in Tax Court practice than they might be elsewhere. ABA Model Rule 4.2 provides that, “in representing a client, a lawyer shall not communicate about the subject of the representation with a person the lawyer knows to be represented in the matter, unless the lawyer has the consent of the other lawyer or is authorized to do so by law or a court order.” The requirement that a lawyer (government or private) communicate with a party’s representative only applies to communications covered by the scope of the representation and only where “the lawyers knows that the person is in fact represented in the matter to be discussed.”
ABA Formal Opinion 472 gives guidance in situations in which the represented party has an attorney for some but not all aspects of the matter. The Opinion requires the attorney to communicate with the opponent’s attorney if the communication concerns “an issue, decision, or action” covered by the limited representation. If the matter is outside the scope of the limited representation then Model Rule 4.3, not 4.2, governs the communication. The Opinion provides that when an attorney has “reason to know” the other party “may be represented with respect to some portion of a matter” the attorney should inquire about the nature and scope of the representation and not close their eyes to the obvious.
ABA Model Rule 4.2 must be read in conjunction with the Tax Court rules on representation in a Tax Court proceeding. Tax Court Rule 24(b) provides that a petitioner who has not had counsel enter an appearance is deemed to be appearing “on the party’s own behalf.” This rule limits what a representative with only a POA can do in Tax Court. Such a representative cannot sign documents filed with the court such as a stipulation of fact or a decision document. Such a representative also cannot stand up in court and speak on behalf of the client.
The Notice concludes, that despite the limitations placed on a representative operating only with a POA in the Tax Court case, Opinion 472 requires Chief Counsel attorneys to communicate with the limited scope representative “when the communication concerns an issue, decision, or action that is within the scope of the limited representation.” The Notices also directs Chief Counsel attorneys to ask the taxpayer if he or she is represented “in some or all aspects of the Tax Court case” and further directs them to contact the limited scope representative if the taxpayer’s response does not make the scope clear.
Most Chief Counsel offices have probably already been operating more or less as the Notice provides. For the offices that have not treated the POA as something requiring recognition in a Tax Court case, the new Notice will make it easier for the POA to handle the case. Working with a POA should generally make it easier for the Chief Counsel attorney. I have experienced very little difficulty working with Chief Counsel’s office with a POA and hope the attorneys there with whom I have worked feel the same in working with the clinic. We understand the limitations and regularly enter an appearance at some point after starting out with a POA. The POA gives flexibility in situations in which the client needs immediate assistance but you are trying to come to an understanding of the case and sometimes an understanding of the client. It allows you to give and get information from Chief Counsel and Appeals as you make a decision concerning whether to enter an appearance and provide full scope representation. The Notice may not change the practice in many places but does provide a good statement of how the parties can work together in a Tax Court case even without an entry of appearance.