Tax Court Bench Opinions

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The Tax Court has several ways in which it issues opinions on the cases tried before it. I recently looked at the least publicized of these opinions, Bench Opinions, and provide here a preliminary report on my findings.  The Tax Court requires the issuance of an order in conjunction with a Bench Opinion.  The Order tab on the Tax Court web site created in June 2011 now allows dynamic searching of orders and makes retrieval of Bench Opinions possible without searching every docket in a specific year.  While the data reported here requires checking and refinement, it offers a glimpse at the number of Bench Opinions issued by the Tax Court over a given period.  My research assistant used the following parameters in searching the data reported here:

From the Tax Court website under the tab Orders Search, I changed the Date Search to 1/1/2011 to 1/1/2013. I also placed in the text search box “Bench Opinion” and changed the number of hits to display to 1. This method yielded almost 300 results. From there I went through each one of those individually to determine if the result was actually a bench opinion or the result was only referring to a bench opinion.  I recorded the docket number, the date, the case name, and the judge for each bench opinion.  I repeated this process, but changed my text search from “Bench Opinion” to “152(b).” 152(b) is the rule judges reference when they write a bench opinion.  The second search yielded numerous repeat results from the first search.

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At the highest end of the pecking order of Tax Court opinions are precedential opinions which come in two flavors – fully reviewed and division.  By their nature, the court issues these opinions only in “regular” cases and not in small tax cases.  The Court issues a handful of fully reviewed opinions each year in which all 19 (or however many non-recused or excluded sitting judges exist at the time of the review) of the judges weigh in on the outcome of the case including dissents and concurrences.  A division opinion provides the opinion of one of the 19 judges.  Whether the regular opinion issues as fully reviewed or the opinion from one division, it represents a decision by the chief judge and the lawyers working with the chief judge that the opinion provides Tax Court insight into a previously undiscussed area of the law or offers a change in a position previously taken.  For an excellent discussion of the workings of the Tax Court in deciding which type of opinion to issue see the article by former chief judge Mary Ann Cohen. The Government Printing Office publishes these opinions.  They are cited as xxx T.C. xxx (20xx) and carry the name TC opinions or full TC opinions because of their citation form.

Next in the Tax Court’s pecking order of opinions come Memorandum opinions. Memorandum opinions also get issued only when the taxpayer has filed the Tax Court case as a regular and not a small tax case.  These opinions reflect the view of the judge (or division) issuing the opinion.  The Chief Judge has decided that the matter covered by the opinion involves routine or already decided issues.  Memorandum opinions do not carry the precedential weight of the opinions discussed above although occasionally a memorandum opinion will cover new and important ground.  These opinions are published by commercial publishers.  They are cited as T.C. Memo 20xx-xxx or TCM 20xx-xxx and carry the name TC Memo or TCM opinions.

Generally thought of as last and least are Summary opinions. These opinions get issued in cases in which the taxpayer has elected the small case procedure because the amount at issue (since 1998) is less than $50,000 per year or per case in CDP cases.  The Tax Court did not make these opinions public prior to 2001.  Perhaps because of the number of earned income tax credit cases and other cases involving individual income tax issues that usually had small dollars at issue, the court decided that making these opinions public would aid taxpayers and representatives in predicting outcomes of certain issues where the precedential opinions rarely, if ever, came out.  I agree with their decision and think that making these opinions public has had a positive impact on practitioners who primarily deal with small cases such as those of us representing taxpayers in low income taxpayer clinics.  If you read Judge Cohen’s article, you can see that it came out shortly before the Court changed its mind on this issue.

So, this is a long build up to the topic of this blog which is Bench Opinions. Bench Opinions have become public if you troll the Orders tab of the Tax Court web site but these opinions do not become public in the traditional sense.  Tax Court judges issue Bench Opinions when the case raises legal and factual issues the judge can quickly resolve.  The Tax Court Rules permit the judge to go on the record and read the opinion into the record as a Bench Opinion if the judge can do it during the same calendar in which the trial of the case takes place. For example, if the Tax Court comes to Philadelphia on Monday January 26 to hold a calendar, it will generally begin the calendar with a calendar call at 10:00 AM that morning.  After listening to the cases still for trial, it will set the cases for trial that week.

Suppose five cases exist for trial. The judge may set two or three on Monday, one on Tuesday and one on Wednesday.  Suppose further that one of the cases tried on Monday presents a very common situation and the Court quickly decide that the IRS or (much more unlikely in a bench opinion case) the taxpayer should win.  Assume further that the judge has some time Tuesday afternoon because the trial that day ends at noon.  Rather than walk around Philadelphia and see the sights, the judge writes out the bench opinion, notifies the parties by phone and goes back on the record.  The judge will sit on the bench from which the cases are tried, recall the case and then read into the record of the case the opinion.  This may occur in a courtroom populated only by the judge, the trial clerk and the court reporter.  It must occur before the judge terminates the calendar meaning that before the judge makes the formal statement that the January 26 trial calendar in Philadelphia is over the judge must go on the record and read the Bench Opinion.

The procedure makes sense as a quick way to resolve cases that really do not need to wait for further development. The preliminary statistics from my research show that some judges on the Tax Court use this procedure regularly some do not use it and one former judge used it frequently.  Here is the result of the initial research just showing raw cases and not type of case or other information:

Judge # of Bench Opinions
Armen Jr. 12
Carluzzo 22
Cohen 1
Crewson Paris 1
Gale 4
Goeke 29
Gustafason 22
Guy Jr. 2
Halpern 8
Holmes 14
Kroupa 60
Laro 4
Marvel 12
Morrisson 7
Vasquez 7
Wells 1
Whalen 12
Wherry Jr. 1
Thorton 3
Total 222

 

Bench Opinions can issue in regular or small tax cases. Because small tax cases, which comprise about 50% of the Tax Court’s inventory of cases, have many recurring issues, in some ways the number of bench opinions seems small.  Bench Opinions seem to slip under the radar.  I hope to provide more information after going through the cases in more detail.

 

 

Comments

  1. Carl Smith says:

    Great points, Keith.

    But although it is commonly supposed that no opinion in an S case can be anything other than a Summary Opinion, that is not historical Tax Court practice. For example, in Dressler v. Commissioner, 56 T.C. 210 (1971), Docket No. 104-71S, the Tax Court — in a T.C. opinion in an S case — rejected an IRS motion to convert the case to a regular case. The issue in the case was whether the taxpayer was a “minister of the gospel”. The court thought that, in light of a number of prior T.C. opinions, this could easily be determined.

  2. As long as the opinions provide enough detail and reasoning for appellate review I’d say kudos for the quick turnaround, which benefits everyone involved.

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