Join the Annual PT Giving Tuesday Drive

It’s that time of year for the annual Procedurally Taxing tradition (among other traditions such as April Fool’s, Taxatturkeys, etc.) in which we provide an update on the Center for Taxpayer Rights’ activities over the last year and ask that you support the Center’s work.  We know that PT readers are being bombarded with charitable solicitations for very worthy causes, but the Center’s work is directly on point for PT’s focus on procedural due process and taxpayer rights.  We hope you’ll read on to learn about the things we’ve been able to accomplish given folks’ past support of the Center and the exciting things planned for 2022  And of course, we hope all this will motivate you to donate to the Center this year.

As I’ve discussed here and here and here, 2021 brought renewed focus on the role of the tax system in administering social benefits.  The Center was privileged to receive a grant from the Rockefeller Foundation to explore this topic.  As a result, we held an online workshop series this fall titled Reimaging Tax Administration: Social Programs through the Tax Code.  We’ve posted most of the workshop videos on our Youtube channel (you all should subscribe!); you can access the videos and materials from the workshop series on our website here.  In 2022 we will publish our report and recommendations for running social programs through the tax code.

The second part of the Rockefeller grant is to conduct a survey of state and local tax procedure and taxpayer rights, especially as they impact low income and unrepresented taxpayers.  We will be partnering with volunteers from the American Bar Association (ABA) Tax Section’s State and Local Tax Committee and Low Income Tax Clinics (LITCs), as well as others, to complete the survey.  This will be a comprehensive review of taxpayer protections in the context of state (and local) tax administration, including income, employment, property, and other taxes.  From this, we plan to identify best practices as well as harmful consequences of existing practices, and propose model legislation for state funding of LITCs for representation in state-level tax disputes and establishment of state taxpayer advocate offices.

The Rockefeller grant also enabled us to retain Anna Gooch as a research fellow for both projects, and she has worked tirelessly on developing the state survey, consulting with experts, incorporating advice and comments, and basically bringing it to fruition.  The really good news is that Anna has been awarded the American Bar Association Tax Section’s Christine A. Brunswick Public Service Fellowship for 2022 to 2024, so we will have Anna with us for at least three years.  Yay!!  (Anna will be posting on PT soon; see her earlier post here.)


As a client of the Tax Clinic at the Legal Services Center of Harvard Law School, we filed amicus briefs in two cases on certiorari to the United States Supreme Court.  CIC Services was decided along the lines we briefed, and we are hopeful that Boechler will be as well.  Les has discussed CIC Services here and here, and Keith has discussed the Boechler briefs here.  This is all part of a broader movement to get LITCs to file amicus briefs in cases that impact low income and other pro se taxpayers, even when the cases involve well-off or corporate taxpayers.

Here are a few other things the Center accomplished in 2021:

  • We continued to hold weekly litigation strategy calls with LITCs to share experiences with representing taxpayers before the IRS and the courts, and to coordinate strategy, including litigation, on emerging issues.
  • In May 2021 we held the 5th International Conference on Taxpayer Rights on Quality Tax Audits and the Protection of Taxpayer Rights.  The materials and some of the videos of this session are available here.
  • In October 2021 we held the 6th International Conference on Taxpayer Rights on Taxpayer Rights, Human Rights: Issues for Developing Countries.  This conference was originally scheduled to be held in October 2020 at the University of Pretoria, South Africa.  The materials of the sessions are available here, and videos will be posted this month.
  • We held monthly online Tax Chats! with scholars and researchers on topics as diverse as Gender, Artificial Intelligence, and Administrative Burden in Tax Administration.  You can access the videos of the Tax Chats! here.
  • On May 11, 2021, I testified before the Senate Finance Committee’s Subcommittee on Taxation and Oversight on the tax gap; and on June 10, 2021, I testified on the same subject before the House Ways and Means Committee Subcommittees on Select Revenue Measures and Oversight.
  • On August 13, 2021, I testified before the Australian House of Representative’s Standing Committee on Tax and Revenue about the taxpayer bill of rights and the US Office of the Taxpayer Advocate.  The Committee issued its report this November, recommending adoption of a TBOR and that the Inspector General for Taxation adopt some aspects of the US Taxpayer Advocate.  You can read the report here.
  • We participated in a joint project on digital taxation with the World Bank, Her Majesty’s Revenue and Customs, Via University and DigiTax at the University of Antwerp; you can watch past online sessions here.

Okay, that’s a lot that we’ve accomplished.  So, what is on the docket for 2022 and why do we need your support now?  Well, in addition to continuing our work with the 7th International Conference on Taxpayer Rights (at Harvard Law School in May, 2022), Tax Chats! and all that, after the New Year we are launching a new website for the LITC Support Center, which will be just what the name says – a project of the Center for Taxpayer Rights that will provide technical support, training, and assistance to LITCs, promote pro bono representation, and ensure access to justice for low income taxpayers within the tax system.  The LITC Support Center website will include training videos and workshops for volunteer attorneys and other tax professionals, including on federal district court litigation.  The website will have a section called “Know Your Rights,” which will hold fact sheets and videos for low income taxpayers, VITA volunteers and non-tax advocates on navigating the filing season, tips for self-help, and when to seek help from a LITC.  One particular focus is survivors of domestic violence, as they attempt to receive their Rebate Recovery Payments and Child Tax Credit.

But the really big news for 2022, in addition to having Anna as a Public Service Fellow, is the launch of LITC Connect!, the dating app for LITCs and volunteers.  We’ve worked all year with our programming team to develop a really neat application.  LITCs will be able to create a profile and submit Assistance Requests for volunteers.  Volunteer attorneys, CPAs, and Enrolled Agents can create profiles, identifying the types of services they’d like to volunteer for (e.g., representation, Tax Court calendar calls, training, mentoring, providing technical advice) and the types of tax controversies they are interested in working in (e.g., audits, collection, litigation).  They can also identify areas of representation they would like additional training in, which will help us develop our training plan.  The app algorithm will then match an LITC’s assistance request with the best candidates for volunteering.

Here’s where our funding need comes in – to make this work really well, we need to hire a Pro Bono Coordinator, both to keep the app running smoothly but also to work with the clinics and the volunteers to ensure they have the support and information they need.  This is really good stuff we are launching; it may serve as a model for tax clinic programs around the world, especially in developing countries where brick and mortar infrastructure may be too expensive to implement.  But for now we need to support LITC Connect! And get it launched right.

So help the Center for Taxpayer Rights help others – donate today!

Thank you.

Overpayment, or Not?

We welcome back guest blogger Bob Probasco. Today Bob untangles the issue of deposits versus payments in relation to stipulated decision documents filed with the Tax Court. The character of the taxpayer’s remittance matters here, as it determines whether they are entitled to overpayment interest. For those looking to make a deposit rather than a payment, the IRS gives detailed instructions in Rev. Proc. 2005-18, which Stephen discussed in a post here. Christine

A Tax Court memorandum opinion, dismissing the case for lack of jurisdiction, came out recently in Hill v. Commissioner, T.C. Memo 2021-121 (Oct. 25, 2021).  I almost didn’t read it, because lack of jurisdiction is usually clear-cut and (by definition) memorandum opinions don’t address novel or unsettled issues of law.  This sounded like something I could skip, without missing much.  But that would have been a mistake. 

The jurisdictional issue was not quite as clear as I assumed, and the opinion included a lot of helpful little nuggets along the way.  Reminders of nuances that I rarely think about or skip when discussing a topic; or explanations of things that I’ve seen for years without giving them much thought.  When you read nuggets like that, you may think “Of course, that makes sense; why didn’t I think of that?”  This sometimes qualifies as a Blinding Flash of the Obvious, or, for persons of a certain age, perhaps a “V-8 moment.”  These nuggets were that for me anyway, and hopefully also for at least a few of the readers of Procedurally Taxing.


The parties had entered a stipulated decision in the case on July 19, 2019.  (Docket no. 794-18; the stipulated decision is not available in DAWSON.)  Then the petitioner filed a motion on August 14, 2020, to redetermine interest under section 7481(c) and Tax Court Rule 261.  Those rules allow the petitioner to challenge either (a) excessive underpayment interest assessed pursuant to the court’s decision and paid or (b) insufficient overpayment interest allowed on an overpayment determined by the court.  The first category was a good reminder for me of a nuance I occasionally skip when explaining procedure to students: underpayment interest is not subject to deficiency procedures but there is still a route to a refund suit in Tax Court for such amounts. 

But this case involved the second category.  The IRS had not paid any overpayment interest on a check received from the government for this case after the stipulated decision was entered, and the petitioner argued that it should have.  A basic requirement of a motion to redetermine overpayment interest is that the court finds in its previous decision that the taxpayer made an overpayment.  The stipulated decision, however, determined a gift tax deficiency but did not determine an overpayment.  I was generally aware of this type of motion but somehow had never dealt with it before.  So the opinion offered a useful explanation, but the conclusion that there was no jurisdiction seemed straight-forward. 

Money Due to Petitioner, But . . . It’s Not an Overpayment

The jurisdictional issue was not as easy to resolve as I had assumed.  The petitioner did get a $3,473,750 check (without interest) because of the decision, but the court decided that there was no overpayment.  The gift tax deficiency for tax year 2011 was $6,790,000 but the petitioner had given the IRS a check for $10,263,750 back in 2012.  Why wasn’t that an overpayment??  Because the 2012 remittance was a deposit under section 6603, not a payment.  A deposit does not become a payment until it is used to pay a tax, which happens after the assessment, which happens after the Tax Court decision.

The petitioner didn’t argue that the 2012 remittance was a payment.  That would have been very difficult to do, as the opinion cites multiple times that the petitioner had referred to it as a deposit and cited section 6603 specifically.  The petition itself referred to “depositing” that amount and the petitioner alleged that it was “intended as a deposit pursuant to I.R.C. § 6603(a)” in the motion to redetermine interest.  Apparently, the petitioner did not refer to the 2012 remittance as a payment until his reply to the IRS response to the motion.

He did, however, argue that the 2019 stipulated decision had in substance determined an overpayment.  It was an ingenious argument (kudos to counsel) but ultimately unsuccessful.  I’ll get to what that involved, and why the judge disagreed, after a brief digression.

Asking For the Return of a Deposit

When explaining the differences between “deposit” and “payment” to my students, I usually explain one key difference much the way the court did here.  A taxpayer “could demand the immediate return of his deposit at any time” but could get back a payment “only by pursuing the IRS’ formal refund process, which could be lengthy.”  That certainly is an important benefit, as the court points out, particularly when the statute of limitations for refund claims has expired.  Of course, that is a slight simplification.  Section 6603(c) says that the right of return on request is not absolute and does not apply “in a case where the Secretary determines that collection of tax is in jeopardy.”  This was another nuance that I sometimes skip when explaining deposits; I hadn’t really given it much thought.  I have some questions/concerns about the process for jeopardy determinations, in this context or others, but that’s a topic for another day.

In this case, the petitioner requested in 2014 that the IRS return the deposit.  Did the IRS return the deposit right away?  No.  It asked for additional information about the potential gift tax liability, citing the limitation on return when collection in jeopardy.  (This may have sounded strange to some Texans – worry that a member of the extended Hunt family, as in “Hunt Oil Company,” would not be able to pay the tax?)

The IRS apparently resolved its concerns about ability to collect the tax, but it still did not return the deposit.  The gift tax liability arose from a settlement of civil litigation in district court over division of wealth among family members.  Under the settlement reached, the petitioner was required to assign his rights to installment payments from his father (total amount $30,675,000) to trusts for the benefit of his children.  Because of the potential gift tax liability, the registry of the district court, rather than the taxpayer, issued the check for $10,263,750 payable to Treasury.  The IRS eventually concluded that, if the petitioner insisted on return of the deposit, it would have to be returned to the district court registry instead.  So the funds remained with the IRS.

In Substance, A Determination of an Overpayment?

OK, back to the jurisdictional argument.  The stipulated decision stated that “there is a deficiency in gift tax due from petitioner for the calendar year 2011 in the amount of $6,790,000” and that “there are no deficiencies in gift tax due from, nor overpayments due to petitioner for the calendar years 2010 and 2015.”  It said nothing about an overpayment for 2011.

The petitioner argued that a stipulation in the decision was, in substance, a determination of an overpayment.  That stipulation provided for the $10,263,750 to be transferred from the 2012 tax year, where it was originally applied, to the 2011 tax year.  It then went on to say: “It is further stipulated that the deficiency for the taxable year 2011 is computed without considering the prepayment credit of $10,263,750.”  Since $10,263,750 is more than the $6,790,000 deficiency, that sure sounds like the court had determined an overpayment, doesn’t it?

The court pointed out two problems with that argument.  The second problem was that the stipulation referenced the $10,263,750 as a “prepayment credit” rather than a payment.  There could not have been an overpayment when the 2019 decision was entered, because “a deposit is not a payment of tax prior to the time the deposited amount is used to pay a tax,” and that doesn’t occur until after assessment.  Even then, only the amount used to pay the tax becomes a payment; the remainder is an unused deposit that is returned to the taxpayer.  No overpayment.

One thing that is not intuitively clear to most of my students is that “deficiency” is not the same thing as “amount the taxpayer owes.”  The Form 4549, Income Tax Examination Changes, in a notice of deficiency helps them to see the difference.  (We see the Form 4549 version more often than the Form 5278 version, but they’re very similar.)  At the bottom of page 1 of Form 4549, line 13 includes changes to certain amounts on the return that are subject to deficiency procedures.  Line 14 is the total deficiency.  Line 15 is for changes to that are not subject to deficiency procedures, but which affect how much the taxpayer owes.  And line 16 is the bottom-line amount that either the taxpayer owes the government, or the government owes the taxpayer. 

Line 15, for our clinic clients, tends to be one of two different things: a frozen refund, or additional withholding because the Automated Underreporter program identified an information return not included on the return.  That makes sense to students, that our client would owe less because more was withheld than reported on Form 1040 or the account transcript shows a balance due the taxpayer for a frozen refund.  Page 2 of Form 4549 helpfully lists other things that might be included there: taxes paid by a RIC or REIT on undistributed capital gains, excess Social Security, additional Medicare tax, and other timely payments.

The notice of deficiency, as with virtually all notices, is an opportunity for the IRS to “suggest” payment, so of course they tell the taxpayer how much to send.  They include an estimated amount of interest on page 2 of Form 4549, for the same reason.  But clinic clients don’t always catch that and may be needlessly worrying about having to pay the full amount of the deficiency when the actual amount due might be substantially less.  But I digress.

The stipulation used the term “prepayment credits” but the court concludes that the deposit not only doesn’t affect the deficiency amount but also doesn’t create an overpayment, for the reasons stated above.

I realized something, while reading this opinion, about what I’ve been seeing on stipulated decisions for years.  If something like a frozen refund or additional withholding resulted in an overpayment, there is no stipulation about that on page 2 of the decision.  It’s not necessary, because if those adjustments created an overpayment, the amount of the overpayment is already stated on page 1 of the decision.  The stipulation only appears if such adjustments reduce the balance due, but still leaves a balance due the government.  I think I noticed and understood that subconsciously but had never thought about it consciously that way.  So . . . “Blinding Flash of the Obvious.”

Above The Line versus Below The Line

I’ve always thought of those terms as differentiating deductions, whether one that reduces gross income to adjusted gross income or one that reduces adjusted gross income to taxable income – where the “line” is adjusted gross income.  You likely do, too.  As it turns out, those terms are also used to differentiate parts of stipulated decisions.  In that case, the “line” is the judge’s signature at the bottom of page 1.  As Judge Lauber explained, only the information “above the line” reflects determinations by the court.  That’s all the court has jurisdiction to decide – the amount of the deficiency, the amount of any penalties, and the amount of any overpayment.  The stipulations on page 2, “below the line,” are simply agreements between the parties.  This was another “Blinding Flash of the Obvious” for me; if you asked me, I might have explained it properly, but I hadn’t really given it much if any conscious thought. 

Most stipulations are routine items.  The court can enter the decision.  Any deficiency stated does not include underpayment interest, which will be assessed as provided by law.  Any overpayment stated does not include overpayment interest, which will be credited or paid as provided by law.  For regular cases, the parties may stipulate that respondent can assess without waiting for the Tax Court decision to become final.  And there may be stipulations of “prepayment credits” that reduce the amount owed by the petitioner but do not create an overpayment.

Since the stipulation that the petitioner relied on was “below the line,” the court (judge) hadn’t even determined that there was a deposit.  This was the court’s first reason for rejecting the petitioner’s argument – not only was there no overpayment, but also the court had not made a determination even about the existence of the deposit.

But All Is Not Lost!

The petitioner got no relief from the court, but that’s not the end of the story.  The IRS hadn’t previously paid any interest on the returned $3,473,750.  While arguing the motion to redetermine interest, at least the IRS conceded that the petitioner was entitled to interest on the returned deposit, although at the lower interest rates applicable to section 6603 deposits.  (That rate is 3% less than the rate for overpayments; from the fourth quarter of 2011 through the first quarter of 2016, it was 0%.)  The IRS said that meant the interest payable would be $218,122 instead of the $1,267,323 that petitioner had claimed.  At least it’s something.

For me, this “simple” dismissal for lack of jurisdiction in a memorandum opinion was a very good explanation/reminder/Blinding Flash of the Obvious!

Happy Thanksgiving Taxatturkeys

Depositions in Tax Court

Unlike in district court where depositions play an integral role in litigation, depositions in Tax Court occur with much less frequency.  The Tax Court recently issued an order allowing the IRS to take the depositions of two witnesses via Zoom in the case of Oconee Landing Property, LLC et al v. Commissioner, Dk. No. 11814-19 (Nov. 8, 2021).  Since these orders do not come along very often and we have never blogged about depositions in Tax Court, this presents a good opportunity to discuss the issue.


In almost 45 years of practice before the Tax Court, I have never taken a deposition.  When I worked for Chief Counsel, I was deposed a couple of times in non-Tax Court cases and I have been deposed once since becoming a clinician, but that was because I was serving as an expert witness.  So, my knowledge of depositions is low.  In addition to never conducting a deposition, I do not remember any member of my office taking a deposition in a Tax Court case.  Depositions may have become more frequent since I left Chief Counsel, but I am not convinced that they have.  In an earlier era, it was almost impossible to get one authorized unless you could show the person to be deposed was going to become unavailable, usually because of impending death.  The Tax Court rules have loosened up over the years, allowing depositions in other situations, but the general default is to stipulate rather than to build the case through depositions as would occur in a district court case.

Tax Court Rules

The Tax Court has several rules that address depositions:

Title VII                      Discovery

Rule 74 – Depositions for Discovery Purposes: This rule provides in subsection (b) that a party can take a deposition with the consent of all parties.  Basically, the same group agreement that governs the stipulation process.  The rule contains several sub-rules requiring proof of the agreement and other steps that must be taken.  Subsection (c) allows a party to take a deposition without consent.  This can only happen after the case is set for trial or assigned to a specific judge.  The rule puts restrictions on the situation in which it can occur and provides that taking such a deposition is an extraordinary method of discovery.  The rule sets out the steps the party must take in order to take someone’s deposition and provides a procedure for another party to object.

Title VIII        Depositions to Perpetuate Evidence

Rule 80 – General Provisions: The general provision essentially says to comply with the other paragraphs of this title to the Rules

Rule 81 – Depositions in Pending Cases: The person seeking to take the deposition must file a detailed application, including the questions to be asked if it is a written deposition.  This rule is quite long and contains a process by which the parties can stipulate to an agreement to take the deposition and it covers video recorded depositions.

Rule 82 – Depositions Before Commencement of Case: Taking the deposition requires making an application to the court setting out why you want to do it and alerting the parties that the Tax Court can hold a hearing before it allows the deposition.

Rule 83 – Depositions After Commencement of Trial:  Short and sweet rule that says it’s possible to do this if the court finds it appropriate.

Rule 84 – Depositions Upon Written Questions: Seems a lot like interrogatories to a single individual.  Requires an application to the court attaching the questions.

Rule 85 – Objections, Errors, and Irregularities:  Liberally allows fixing problems if something goes wrong with deposition in the nature of a foot fault.

The Specific Effort to Depose

The case in which the IRS requested the opportunity to take depositions is a conservation easement case.  The IRS seeks to depose James and Mercer Reynolds using the procedures established in Rule 74(c), which creates the most difficult test for the party seeking to take the deposition to overcome.

The property subject to the easement was acquired by the Reynoldses in November 2003. They held the property until 2014, when they contributed it to Carey Station, LLC (CS), in exchange for membership interests in CS, of which they effectively owned 100%.

On December 21, 2015, CS contributed the property to Oconee in exchange for a 99% membership interest in Oconee. Two days later, petitioner purchased a 97% interest in Oconee from CS for $2,440,000. The same day, petitioner made a $1.3 million cash contribution to Oconee.

Eight days later, on December 31, 2015, Oconee donated a conservation easement over the property to the Georgia Alabama Land Trust. The deed of easement was recorded the same day. Oconee at that point was owned 97% by petitioner, 2% by CS, and 1% by Carey Station Manager, LLC.

Oconee timely filed Form 1065, U.S. Return of Partnership Income, for its 2015 tax year. On that return it claimed a charitable contribution deduction of $20,670,000 for its donation of the conservation easement.

The IRS disallowed the claimed charitable contribution deduction, issued a final partnership administrative adjustment (FPAA) and petitioners filed in Tax Court contesting the disallowance and allowing all of us to see their tax situation.

The IRS attorney asked if the Reynoldses would participate in a “transcribed informal interview.”  They declined.  The IRS attorney then sent the Reynoldses notices of deposition and subpoenas to which they objected and which form the basis for this order.  The IRS relies on Tax Court Rule 74(c), which provides that the taking of a deposition of a non-party witness is an extraordinary method of discovery.  The rule permits it when the testimony sought is relevant, the testimony is not privileged and the testimony cannot be obtained informally – back to the Tax Court’s preference for cooperation among parties.

The court finds that the Reynoldses have relevant information that is not privileged.  As the owners of the property for 10 years prior to the multiple transfers at the end of 2015, the court presumed they participated in the negotiations leading to the transfer and that they would know whether the purchase was arm’s length.  I am not reading all of the responses filed in this case so I cannot say with certainty why the Reynoldses would not cooperate informally.   They may not have the same incentive to get to the right tax answer that the government should have.  The court notes that in addition to providing information regarding the value of the property, they could also provide background regarding prior efforts to sell the property.

Basically, the Reynoldses seemed to say that the IRS was not trying hard enough to get the information it wanted from them informally.  The court found that their rebuff of the IRS request to informally sit down and talk in a transcribed interview opened the door to the deposition request, even pointing out that the IRS did not ask that the interview be conducted under oath.  In effect, though the Court does not cite to this case, the IRS met its Branerton responsibility with the informal request.  The Reynoldses counter that responding to the deposition will be unduly burdensome and expensive.  The court doesn’t mention that they should be good for some attorney’s fees based on the benefit from the conservation easement but instead points out that the deposition will take place over Zoom, cutting their cost and time to attend.

I am not sympathetic with the Reynoldses and perhaps that colors my view of their arguments.  If they want the IRS and the court to be able to get to the bottom of their tax issue, an issue they created and a petition they filed, they should cooperate in providing information.  Perhaps they are concerned that the more the IRS and the court know about the details of the conservation easement, the less likely they will walk away from the Tax Court case with the claimed benefits.  Kudos to the Chief Counsel attorneys for trying to gather this information which will assist in better framing the case for the court.

A case like this seems to make it easy for the Tax Court to order depositions, but the relative ease with which Judge Lauber gets to what seems to be the obviously right conclusion is not necessarily the norm in Tax Court.  Because the Tax Court has a long history of being reluctant to grant depositions, I am not surprised that the Reynoldses make these arguments.  As I said at the start, my knowledge of depositions in the Tax Court is limited and not first-hand knowledge.  I hope that the outcome here has become or will become normative.  The information is needed, though it’s easy to understand why the Reynoldses may not want to provide it.

Briefs in the Boechler Case

The Boechler case involves the issue of whether the time period for filing a Tax Court petition in a Collection Due Process case is jurisdictional or a claims processing rule.  Last week I provided a link to the excellent brief written on behalf of the petitioner.  Also last week, the Supreme Court set the oral argument in this case for January 12, 2022.

Yesterday, seven days after the filing of the petitioner’s brief, amicus briefs were due in support of the petitioner.  Four amicus briefs were filed in support of petitioner’s position that the time period is not jurisdictional.  For those following this issue, the briefs are provided here.

The Tax Clinic at the Legal Services Center of Harvard Law School filed an amicus brief on behalf of the Center for Taxpayer Rights and the National Consumer Law Center.  This brief focuses on the issue of equitable tolling.

Skadden Arps filed a brief on behalf of Federal Tax Clinics, Legal Aid Groups and Tax Professors.  This brief argues that treating the time period as jurisdictional undermines Congressional intent and disproportionately harms low income taxpayers.

The National Taxpayer Union Foundation and National Federation of Independent Business Small Business Legal Center filed an amicus brief arguing that tax exceptionalism is an anachronism and that even if tax law is special the result should be greater tax protection through doctrines such as equitable tolling.

Regular Guest Blogger and procedural expert Lavar Taylor filed an amicus brief arguing that tax exceptionalism should not prevent equitable tolling, the IRS has argued for and received equitable tolling beneficial to it, and many statutory deadlines in the Code are amenable to equitable tolling and CDP especially so.  Lavar also spends time pointing out the impact of the lack of equitable tolling on individuals living abroad given the extremely short time for filing the petition in CDP cases and the mailing issues for those overseas.

What’s in a Name?

Identifying and addressing implicit and explicit biases are necessary to ensure that every taxpayer and tax professional recieves the benefits of “The Right to Quality Service” and “The Right to a Fair and Just Tax System.”  This free ABA outreach event at the ABA’s 38th National Institute on Criminal Tax Fraud and the Eleventh Annual National Institute on Tax Controversy will start by reviewing how tax professionals can identify bias.  The panelists will then discuss the role of the Taxpayer Advocate Service, the IRS Office of Equity, Diversity & Inclusion and the United States Tax Court in ensuring that taxpayers and tax professionals receive the full measure of procedural and substance due process necessary to protect civil rights – including the rights of disabled and Limited English Proficiency taxpayers.  You can RSVP for the event by clicking or emailing Frank Agostino at  For more information about the National Institute click or email Donna Prather Williams, Meetings Manager, ABACLE,

Chief Counsel Notice CC-2022-001 tells us to look for a new name on some documents coming out of that office.  A little over a year after the election and more than 300 days since inauguration, the new administration has not appointed anyone to serve as the new Chief Counsel.  So, the top non-political appointees continue to run the agency.  The former Chief Counsel resigned, as per tradition, when the new administration began.  The team in place at the top of Chief Counsel is quite good and quite experienced but there is some benefit to having a political appointee in place rather than individuals who must essentially work two jobs for extended periods of time.

Perhaps it’s difficult to replace the Chief Counsel because it took so long for Congress to approve the prior Chief Counsel.  Through no fault of his own, the prior Chief Counsel, Michael Desmond, had his nomination held up for quite some time as described here and here despite the fact that he was a former guest blogger for PT and had many other qualifying years of experience.  It’s not easy to put your professional life on hold for such a long period only to find your nomination is delayed because a Senator is unhappy about an IRS regulation you had nothing to do with.  Maybe the administration cannot find someone willing to go through the process or maybe it’s not trying.

Over at the Department of Justice Tax Division it seems that the White House, no matter who occupies it, no longer wants to appoint a leader.  Chief Counsel Notice CC-2022-002 tells us to look for a new name on some documents coming out of that office. The acting head, Dave Hubbert, is fantastic.  When I was District Counsel in Richmond, he was my lawyer as the head of the civil trial section of the Tax Division that covered Virginia.  I could not have asked for a better lawyer to handle the cases coming out of my office.  He is undoubtedly doing a great job running the Tax Division, but it’s now been seven and a half years since there was a political appointee at the Tax Division.  Why is it so hard to find someone to do this job?


This leads back to the Chief Counsel Notice.  The subject of the notice is the new signature block, but the legal substance of the notice concerns the time period that limits having someone carry the title as Acting Chief Counsel (or Acting Deputy Attorney General.)  The notice explains the law:

Principal Deputy Chief Counsel and Deputy Chief Counsel (Technical) William M. Paul assumed the position of Acting Chief Counsel on January 20, 2021 upon the resignation of former Chief Counsel Michael J. Desmond. See Chief Counsel Notice 2021-003, Chief Counsel Signature Block (January 19, 2021); Chief Counsel Notice 2017-002, Designation of the First Assistant to the Chief Counsel (December 29, 2016). By operation of the Vacancies Reform Act of 1998 (5 U.S.C. § 3345, et seq.), Mr. Paul’s 300-day tenure as Acting Chief Counsel expires as of November 16, 2021. In addition, under the Vacancies Reform Act, no one may serve as Acting Chief Counsel until a nominee has been named by the President. Therefore, as of November 17, 2021, and until a nominee for Chief Counsel is named by the President, there will be no Acting Chief Counsel for the Internal Revenue Service. Instead, the duties and responsibilities of the Chief Counsel will be shared between the Principal Deputy Chief Counsel and Deputy Chief Counsel (Technical), and the Deputy Chief Counsel (Operations) for matters under their respective jurisdictions. Upon the nomination of a candidate for Chief Counsel by the President, the Principal Deputy Chief Counsel and Deputy Chief Counsel (Technical) will resume the position of Acting Chief Counsel.

In Chief Counsel’s Office the structure at the top has two deputies immediately under the political appointee, each controlling a portion of the workforce.  Mr. Paul, the Principal Deputy Chief Counsel and Deputy Chief Counsel (Technical), heads the part of Chief Counsel principally targeted at producing guidance.  Most of the employees in the National Office would eventually report up the management chain to him.  Ms. Drita Tonuzi, the Deputy Chief Counsel (Operations), heads the part of Chief Counsel that principally handles litigation.  Some of the National Office employees and essentially all of the field office employees report up the management chain to her. 

Since the clock has run on the current period during which someone can carry the title of Acting Chief Counsel, the Notice basically explains that they will each get their names on the signature block as the representative of the agency depending on the correspondence or other matter needing a formal signature.  Because Ms. Tonuzi heads up litigation, her name will now appear in documents signed by Chief Counsel in the Tax Court.  Because some documents were signed prior to November 17, 2021, using the former signature block, the Notice provides:

If a Tax Court document has been signed by a petitioner or petitioner’s representative (e.g., stipulated decision, stipulation of facts, or joint motion), but has not been sent to or e-filed with the Tax Court before November 17, 2021, the document need not be re-executed.

When Chief Counsel’s office writes to the leaderless (from a political appointee perspective) Tax Division, the person whose name appears on the correspondence will depend on which division of Chief Counsel sends the letter.  If sent by one of the divisions reporting to Mr. Paul, his signature will appear.  If sent by a division reporting to Ms. Tonuzi, her signature will appear.  I suspect the Tax Division will see many more letters with her signature because of the nature of the work referred to the Tax Division.  If regulatory guidance is issued, Mr. Paul’s name will appear much more frequently, though not exclusively.

Maybe it doesn’t matter that many readers will start to see a lot more of Ms. Tonuzi’s name until the President decides to appoint someone to become Chief Counsel, but sometimes knowing why you see a particular name provides a bit of comfort.  As long as you see these names, you also know a job opening exists for which you might want to apply.  Maybe someday the administration will appoint a new Chief Counsel, and a new head of the Tax Division at the Department of Justice.

Cursive! Foiled Again

Bob Kamman provided another Tax Court order worth a brief mention but mostly worth the great title that he also provided.  Here, the parties use the wrong font for the petitioner’s signature and the Court sends the decision back to be redone.

While this may seem picky, there’s a slippery slope that the Court avoids with the seemingly picky enforcement of the rules.  Before the adoption of the font rules but faced with a page limitation, I know of one Chief Counsel attorney who submitted a brief with a small font and narrow page margins in order to express the full merits of the government’s case.  Actions like that cause reactions and the order today keeps the parties from moving away from strict guidelines designed to make the rules the same for everyone.  While it may not really matter whether the font used is cursive or not, once the Court stops policing this type of font fault others will surely follow.

Decision documents are almost always prepared by IRS Chief Counsel attorneys.  So, that part of this wrong use of the font surprises me a bit.  Because these documents are almost always prepared by one party and because that party knows the rules even though many petitioners and petitioners’ counsel do not, the standardization usually occurs through this process.

In my first year of practice before the Tax Court as a new Chief Counsel attorney, I had a decision document returned for a different though still memorable reason.  This was back before computers and easy to correct documents, though the mistake had nothing to do with computers and everything with me, and I suspect my secretary, not exactly knowing what we were doing as we were both too new to do anything other than follow the example in the book we were provided without thinking about spacing. 

I submitted a decision document in which the typed name of the judge came either immediately below or almost immediately below the last line of the decision.  No room really existed for the judge to sign above their name.  The document came back to me to prepare another decision document that had sufficient room for the judge to sign in the normal spot and not place their signature below their name or to the side of their name or write their signature in microscopic letters.  In the process I learned the reason for the decision document and that the fact that the petitioner and my boss had signed it was not the end of the line.  A good lesson that typing the document inaccurately seared into my memory.

Here is the order returning the decision document that contained the offending font:

Magda Helene Polack,  Petitioner


Commissioner of Internal Revenue. Respondent

Docket No. 22554-21S


On November 10, 2021, the parties filed a proposed stipulated decision for the Court’s consideration. Upon review thereof, the Court notes that petitioner’s signature on the proposed decision was made using cursive font, which is not acceptable by the Court. Information regarding acceptable imaged or digitized signatures is available on the Court’s website under the “Case Management” section of the “Frequently Asked Questions About DAWSON” available at

For cause, it is

ORDERED that the parties’ proposed stipulated decision, filed November 10, 2021, is hereby deemed stricken from the Court’s record in this case. It is further

ORDERED that, on or before December 14, 2021, the parties shall file a revised proposed stipulated decision.

(Signed) Maurice B. Foley

Chief Judge

Senators Question Commissioner About Company Offering Fee-Based Access to IRS Phone Lines

It is not news to our readers that the IRS struggles to answer the calls it receives. This frustrates taxpayers and practitioners alike. It interferes with the IRS’s ability to serve taxpayers and impedes taxpayers from understanding and meeting their responsibilities. To help address this problem, a private company, enQ, offers a fee-based service that “drastically reduces the hold time in reaching an IRS agent.”

How does it do this? According to its web-site, it was founded by an MIT trained engineer and “employs proprietary breakthrough patented technology.” The service offers a number of fee-based plans that range from about $100 to $300 a month. While directed at practitioners, it is also available to taxpayers.  To obtain a detailed understanding of the way the service works read the Forbes post cited below.  Essentially, the person who buys the services gets to jump the line of persons waiting to talk to the IRS by riding the coattails of a robo-call.

The service is controversial.


At Forbes in Is A Private Company’s Automated Dialing Making It Impossible To Reach The IRS?Amber Gray-Fenner wrote a terrific blog post that discusses the service and situates the controversy. As Amber notes, the service implicates issues of fair play and access.

Should phone access to the IRS be dependent on resources and ability and willingness to pay?

Earlier this week Senators Cassidy, Menendez, Young and Warner wrote a letter to Commissioner Rettig. The senators criticize the service and question whether the robo-call approach that enQ apparently uses reduces the quality of phone service for those who do not use the service. The senators also question whether the Service could use Section 7212 to address the problem. That is a criminal statute used when there is an attempt to interfere with administration of internal revenue laws. As the senators explain, “being able to call the IRS is a free, public service that should be available on an equal basis. Paying to receive preferential access to the IRS should not be permitted.”

While criminal prosecution seems a bit far-fetched, the letter highlights how the IRS inability to answer phone calls is inconsistent with fundamental taxpayer rights. The bottom line is that there should not be a need for a service like enQ. The letter ends with a request for the IRS to take steps that would limit the need and demand for the service:

Finally, we ask that you take necessary action to dramatically improve the quality of service called for in the Taxpayer Bill of Rights. Hold times should be measured by minutes, not hours. The percentage of calls answered should be in the high double-digits, not the high single-digits. Improving service should be an utmost priority to the IRS.