2019 Tax Court Shutdown: A Year Later, Still Catching Up

December 12, 2019 by 1 Comment
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We welcome back guest blogger Bob Kamman. In this post, Bob investigates what happened to one batch of cases whose trials were postponed due to the last federal government shutdown. This is a timely reminder that disruptions to the system can have significant lingering impacts on some individuals, even if the system as a whole appears to have recovered and moved on. Christine

A federal government shutdown is often just around the corner. So let’s
take a look at how the last one worked out for some Tax Court cases.

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I searched Tax Court orders from January, 2019, during the five weeks that many government offices were closed for lack of funding. I found 31 cases that had been set for trial at the New York City session starting February 11, 2019. The Tax Court pulled the plug on these January 22, 2019. As it turned out, the shutdown ended January 25, 2019, but it would have been difficult for IRS attorneys to get back up to speed, even in two weeks.

Of course, other dockets in other cities were also canceled. This was just one of them.

A year later, how did these cases turn out?

If you guessed that many of them were settled by stipulation when the court reopened, without a trial, you have a good working knowledge of tax litigation.

If you wondered how many have not shown any progress in nearly a year, you share my concerns. More on those, later. But first, here are some details on when the stipulated decisions were entered, and whether petitioners agreed they owed tax and penalties. I have listed them in chronological order, with the name of the first petitioner listed.

  • February 15, Nji Ban, $223 tax owed, no penalties.
  • February 26, Vanessa Smith (innocent spouse), $966 tax owed, no penalties.
  • March 20, Malaika Martin, tax, no penalty.
  • April 5, Michael Fiore, tax and penalty (successful innocent spouse).
  • April 10, Guy Jacono, tax and penalty.
  • April 18, Michael Patriarca, tax and penalty.

On June 5, the Court set October 28 as the new trial date for these cases, which then apparently inspired more stipulated decisions:

  • July 1 and July 2, James Sherlock, two cases, tax and penalty.
  • July 15, Marie Miele, no tax, no penalty.
  • October 18, Jeffrey Farrell, tax and penalty.
  • October 23, Donna Schlenker, tax and Section 6651 penalty (2 cases).
  • October 24, Nirvelyn Jean-Simon, tax, no penalty.
  • December 2, David Nnadika, tax, no penalty after October 28 hearing.
  • December 2, Morris Kromah, tax, no penalty, innocent spouse not assessed.

There were three other rescheduled cases on the October 28 New York City calendar, with these outcomes:

  • Hamid Maksoud: IRS filed a motion for summary judgment. Taxpayer did not appear, and IRS won a decision for tax and fraud penalty.
  • Brian Reis, dismissed November 4 after an October 28 hearing on IRS motion for failure to properly prosecute. Taxpayer did not appear. Tax and Section 6651 penalty assessed.
  • David Stein: Frank Agostino entered an appearance on July 16. On September 16, his motion to continue and consolidate with another case was granted. No new trial date has yet been set.

This list accounts for 18 of the 31 cases I found for the February 11, 2019 New York City calendar. What happened in the other 13?

The wheels of justice turn slowly, and for these petitioners they may not be grinding at all. The last docket entry for these cases, as of December 10, 2019, is the January 22, 2019 order that canceled their February 11 trial.

  • Munr Kazmir and Ansar Batool (three cases total; one in each name, and one joint. They are also represented by Frank Agostino or another lawyer in his firm). Two of these cases were filed in December 2014; the other in November 2016.
  • Junior Burke (the order canceling trial is returned mail, the docket reports). Case filed February 2016.
  • Barbara Reagor, February 2016.
  • Michael Crosby, April 2016.
  • Pressure Controls Inc. (petitioner substituted counsel April 23), August 2016.
  • Jason Voicheck. January 2017.
  • Karen Jones, February 2017.
  • Lawrence Ebert (who won an earlier Tax Court case), April 2017. He had written a letter on March 8, 2019, to the Court that caused another case to be opened by mistake; it was closed.
  • Marvin Boyd, April 2017.
  • Erica Harris-Young, May 2017.
  • Yousef Zaben, June 2017.

All of these cases had been filed at least 20 months before the canceled trial date, and now it has been at least two and a half years. The earliest ones have now been waiting five years for a day in court. Is this any way to run a tax system?

Filed Under: Shutdown Tagged With:

Comments

  1. Carl Smith says
    December 12, 2019 at 9:35 am

    It is not just cases on calendars that were postponed by the Tax Court that were affected by the shutdown.

    While I was acting director of the Harvard clinic during the spring (including, during the shutdown), even though the Tax Court held a March 2019 calendar, when the government reopened, the IRS successfully moved the Tax Court to postpone the several of our cases of that calendar because the IRS said they would not have enough time to prepare after the reopening and before the March calendar.

    And, as the backed-up cases get rescheduled, I believe that the Tax Court is not scheduling cases filed after it reopened for trial sessions as fast as usual. Thus, I would have expected Boston cases filed in the spring of 2019 to be set for the calendar in April of 2020 (i.e., about a year after filing) if the shutdown had not occurred. Yet, I know of three of our cases that have not been so scheduled. Thus, they will likely be first scheduled for the fall of 2020 (the next likely trial session), about 18 months after filing.

    For cities like Boston that don’t have many trial calendars each year, I suspect that it may take the Tax Court a year or so to catch up to where it had been in the average time between filing a petition and being on a trial calendar.

    Now, as we all know, nearly no cases are actually tried in the Tax Court. Nearly all are settled. But, a case not on a trial calendar often sits on someone’s desk, not worked on for settlement, until the case is put on a trial calendar. So, even stipulated settlements are effectively being delayed in many cases where an attorney or Appeals Officer is busy working on other more pressing cases actually on trial calendars..

    Reply

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