Impact of Initial Exclusion from EIP of U.S. Citizens Filing Jointly with Non-Citizen Spouses

We welcome two students from the Georgia State University College of Law Philip C. Cook Low-Income Taxpayer Clinic as guest bloggers, Lauren Zenk and Lauren Heron, for a discussion of the latest developments in stimulus payment legislation as it relates to U.S. citizens who file jointly with non-citizens spouses. The Georgia State Clinic began working with the Harvard Clinic last October to file an Amicus Brief on behalf of the Center for Taxpayer Rights as the amicus. The Center sought to assist low-income taxpayers denied stimulus payments due to the non-citizen exclusion in the initial CARES Act legislation. This brief was mooted by the next round of legislation which provided: 1) U.S. Citizens who elect to file jointly with their non-citizen spouses can receive the stimulus payments for themselves and their eligible children, and 2) the value of the first stimulus payment can be issued as a credit on their 2020 tax return. Still, the initial eligibility exclusion that the clinics were preparing to argue against raises issues that may arise again in the future, and, should that occur, the authors thought that it would be useful to highlight the arguments they were preparing to make.  Keith

Congress enacted the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) to respond to one of the worst public health crises this country has ever experienced. The CARES Act directed the Treasury Secretary to process the payments “as rapidly as possible.” 26 U.S.C. § 6428 (f)(3)(A). Initially excluded from these payments were most taxpayers without a Social Security Number (SSN), which the government argued included U.S. citizens with a SSN who elected to file jointly with their non-citizen spouse.  The result denied millions of American citizens, and their eligible children, benefits they desperately needed. Before the passage of the Omnibus Spending Bill in December of 2020, the U.S. citizens who were initially denied relief only had one identifiable remedy to receive the stimulus payment: file their 2020 tax return separately from their non-citizen spouse and receive the payment as a Recovery Rebate Credit.

However, this remedy would have been inadequate for two compelling reasons: First, filing MFS would cause them to lose favorable tax rates and certain credits available to low-income taxpayers; and second, they would have to wait until 2021 to receive the benefit of the payment during a period where the timeliness of relief was critical. The spending bill addressed the inadequacy of this remedy and provided that the U.S. citizens with non-citizen spouses and their families were “eligible individuals” for the credit. Still, only the U.S. citizen spouse and eligible children are counted for the credit, so these families are still receiving $600 less than similarly situated families. The spending bill also provided for retroactive payments for those families denied the first EIP under the Cares Act.

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The Statutory Ambiguity Question

Litigation was quickly brought to challenge the government’s interpretation in regard to the eligibility of U.S. citizen taxpayers married to non-citizen spouses.  The clinics were preparing to file an amicus brief that would argue against the government’s position that the CARES act excluded this class of U.S. citizens from eligibility.  The clinics approached their arguments from two perspectives: (1) demonstrating that the statutory language at issue was in fact ambiguous and should be read as including this class of taxpayers as being eligible for payments; and (2) specifically illustrating how the government’s interpretation would negatively impact low-income and economically vulnerable taxpayers and conflict the with the CARES Act’s legislative purpose.

The statutory interpretation argument focused specifically on the statutory language in 26 U.S.C. § 6428(g)(1)(B), which the government interpreted as requiring that married spouses filing jointly both have valid social security numbers in order for either to qualify for the stimulus payment.  This interpretation had the effect of punishing mixed-status families by denying American citizens and their eligible children the benefits they deserve.

Section 6428(a)(1) establishes that any individual with a SSN shall be allowed a $1,200 credit. Subsection (d) defines an “eligible individual” as any individual that is not a “nonresident alien individual,” a dependent, or “an estate or trust.” Therefore, any non-dependent with a SSN is plainly recognized as an eligible individual. Subsection (a)(1) states that “[i]n the case of an eligible individual, there shall be allowed as a credit . . . .an amount equal to the sum of . . . $1,200 ($2,400 in the case of eligible individuals filing a joint return).” The subsection’s parenthetical is limited to the narrow case of eligible individuals filing a joint return. The parenthetical does not encompass joint returns where a single party is an eligible individual, such as mixed-status filers. The SSN holder remains recognized as an eligible individual entitled to a credit of $1,200 under § 6428(a) for the purposes of emergency relief and economic stimulus.

Section 6428(g)(1) establishes the requirement that joint returns must include the SSNs of both spouses, but it is ambiguous whether this requirement applies to joint returns where only one spouse has a SSN. The provision states that, “No credit shall be allowed . . . to an eligible individual who does not include on the return of tax . . . (B) in the case of a joint return, the valid identification number of such individual’s spouse.” Subsection (B) presumes that the spouse on the joint return shall have an SSN. Therefore, it overlooks situations where one spouse simply does not have an SSN to provide. The language of section 6428(g)(1) may have been included as an administrative measure to ensure that all relevant information possessed by the tax filers is provided and to prevent $2,400 from going to a pair of an eligible and non-eligible individuals. The government’s reading of (g)(1) as establishing a circumstantial barrier preventing distribution of the payment is not the only possible reading of the section. Rather, the presence of an implicit waiver of subsection (g)(1)’s requirement to provide a spouse’s SSN on the joint return when a spouse does not possess an SSN is a valid interpretation of the passage.

At first blush, it appears that the government could successfully counter this argument by pointing out that the CARES Act expressly provided that members of the armed forces were exempted from the (1)(B) requirement that the other spouse provide a SSN where paragraph (1)(A) is satisfied, allowing these certain families to receive the full $2,400. The government would likely use this carve-out to argue that Congress knew how to make an exception and chose not to do so for the class of taxpayers at issue.  The military exemption does not fully clarify Section 6428(g)(1) as it applies to mixed-status filers. The CARES Act expressly exempts members of the armed forces from the requirements of (1)(B) when at least one spouse satisfies the requirements of paragraph (1)(A). The requirement of (1)(B) refers to joint returns, however, so this “Special Rule” allows military families to receive the $2,400. Section 6428 still ignores the possibility of an eligible individual, who is owed the $1,200 payment, but happens to file a joint return with an ineligible individual.

Courts must do their best, “bearing in mind the fundamental canon of construction that the words of a statute must be read in their context and with a view to their place in the overall statutory scheme,” to enforce the meaning of the statute. Utility Air Regulatory Group, 573 U.S. at 320. When reading subsection (g)(1) in concert with the rest of § 6428, ambiguity is evident.

Why this Still Matters for Low-Income Taxpayers

Thankfully, Congress got around to clarifying the legislative language, which removed any ambiguity and included this class of taxpayers in the class of individuals eligible for economic impact payments.  Whether you call the legislative fix an eligibility extension or a correction ambiguous language, it is difficult to ignore that some families were wrongfully denied relief at the height of the pandemic. The relief given is better late than never, but it still undercuts the initial purpose of the Act. In March 2020, the Bureau of Labor Statistics reported the unemployment rate increased by .9 percent, up to 4.4 percent, which was the largest “over-the-month” increase since 1974.  This statistic reflects 1.4 million Americans who became unemployed as a result of the pandemic outbreak. For these families that may currently be facing unemployment, a tax credit retroactively issued in 2021 is almost without purpose. Further, a Pew Research Center Survey found that lower-income American’s were experiencing job loss at a higher share and that only about one-in-four of these individuals/families said they had funds set aside that could cover three months of expenses in the case of job loss.  While over 130 million individuals did receive stimulus payments, the requirement that both spouses have a social security number allowed otherwise eligible individuals and their eligible children to fall through the cracks at a time where financial assistance is greatly needed, especially by low-income, vulnerable populations.

Had the statutory language not been changed and had the government persisted with its interpretation of the original CARES Act language, the remedy the government proposed for these excluded U.S. citizens and their dependents originally would have been to file their 2020 tax return separately from their non-citizen spouse. This potential remedy, however, would have been insufficient, because it would have placed taxpayers in the position of having to forego other tax benefits in order to obtain the economic impact payments.  The Internal Revenue Code (IRC) incentivizes the MFJ filing status by providing that taxpayers filing separately will often have higher tax rates and will be ineligible for certain deductions, exemption amounts, and credits that are allowed to those filing jointly. These differences can be especially punitive when the taxpayers are low-income. Unfortunately for low-income taxpayers in particular, a married filing separately filing status will reduce or eliminate the impact of the following tax credits and deductions, which low-income taxpayers commonly use. These include the child tax credit, additional child tax credit, exclusion of a portion of Social Security benefits, credit for elderly and disabled, deduction for college tuition expenses, student loan interest deduction, and credits incentivizing investments in higher education like the American Opportunity Credit and Lifetime Learning Credit. In many circumstances, low-income taxpayers rely on these credits to supplement their income and lift them above the poverty threshold and being forced to relinquish these benefits to obtain economic impact payments would have not made economic sense, defeating the CARES Act’s stated purpose.

It is tempting to say that these arguments have only academic interest because all’s well that ends well.  However, we believe that it is important to present these arguments to the practitioner community because of how often this type of statutory language is used and is interpreted by the government to exclude U.S. citizens married to non-citizen spouses from critical government benefits.  For instance, this exclusion was not unique to the CARES Act. In the 2008 global financial crisis, Congress used similar statutory language that the government interpreted as giving tax rebates to most American taxpayers, except for spouses of non-citizens without social security numbers. It does not take much imagination to think that, in the coming years, similar language might once again be used in future stimulus bills.  Finally, this exclusion affects low-income taxpayers who would otherwise be eligible for the Earned Income Tax Credit (EITC). The EITC gives preference to spouses who elect to file MFJ, where both spouses have a valid SSN, and eligible children. These taxpayers are entitled to large refundable credits, sometimes up to around $7,000. However, it has been widely accepted, perhaps uncritically, that this credit is unavailable to U.S. citizens filing jointly with their non-citizen spouse.

Conclusion

In the absence of a judicial venue to raise these sorts of arguments, it is important to raise them for discussion so that policy makers can consider the unintended consequences of their legislation. Hopefully, in the future, Congress and the IRS will take these considerations into account on the front-end of legislation, so vulnerable taxpayers are not excluded from legislation intended to assist families in the midst of economic crises. However, if this type of language is once again used in stimulus payments, we encourage practitioners to not accept the government’s interpretation at face value, as there are sound interpretative arguments that can be made on behalf of these taxpayers who deserve to be included in these stimulus and anti-poverty efforts.

A Second Look at the American Rescue Plan Act

We welcome back guest blogger Omeed Firouzi, who works as a staff attorney at the Taxpayer Support Clinic at Philadelphia Legal Assistance, for a discussion of the latest developments in the IRS position and administration of the part of the act dealing with the exclusion of certain unemployment benefits.  The process of the change in the position at the IRS on how to calculate the unemployment compensation excluded by statute from income provides an interesting process to watch, similar to the process last spring that led to changes in how the Service approached the payment of the stimulus checks.  Keith

Since my last post on the American Rescue Plan Act, the IRS has provided two critical updates regarding the $10,200 unemployment compensation tax forgiveness provision of the law:

  1. A taxpayer’s modified adjusted gross income, for purposes of claiming the exclusion, should disregard the amount of unemployment compensation the taxpayer receives. Therefore, if your unemployment compensation in 2020 is what pushes you above the $150,000 adjusted gross income limit for claiming the exclusion, you can still be eligible for the exclusion. You do not count the unemployment compensation you got in 2020 as part of your income when factoring the exclusion. This IRS interpretation of the statute comes on the heels of a debate within the tax community as to how to read this section of the law. Last week, the IRS took the position in its unemployment compensation exclusion instructions that a taxpayer’s unemployment compensation does count towards the $150,000 income limitation for eligibility. Now, they’re saying otherwise.

A Look at Tax Provisions for Low-Income Americans in the American Rescue Plan Act

We welcome back guest blogger Omeed Firouzi, who works as a staff attorney at the Taxpayer Support Center at Philadelphia Legal Assistance.  Today’s post provides more substantive tax than most.  In the discussion of the tax break for unemployment insurance, Omeed picks up on comments made by frequent commenter Bob Kamman.  Keith

The American Rescue Plan Act, signed into law by President Joe Biden on March 11, 2021, provides immediate IRS-administered relief for millions of taxpayers and creates more potentially long-term changes that will impact low-income and middle-income taxpayers.

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NEW ECONOMIC IMPACT PAYMENTS

Already, the new $1.9 trillion COVID relief law has led to the distribution of $1,400 stimulus payments for millions of Americans. This round of economic impact payments total $1,400 per person, including per adult dependent (a group that was excluded from the first two rounds; undocumented parents can now obtain payments for their children who have Social Security numbers as well).

The income eligibility guidelines are similar to the last two rounds in that the full $1,400 payments go to single filers who make up to $75,000, married filing jointly filers who make up to $150,000, and head of household filers who make up to $112,500. There are smaller payments for single filers who make up to $80,000, married filers who make up to $160,000, and head of household filers who make up to $120,000. Anyone with a Social Security number authorized for work, who is not a nonresident immigrant and not a dependent, can get a payment.

Congress authorized the IRS to look to 2019 and 2020 returns to determine eligibility. This time, Congress also specifically authorized the IRS to make “additional payments,” through rolling eligibility determinations, for individuals who file 2020 returns that make them eligible for additional stimulus payment. Therefore, if a taxpayer has a 2019 return on record right now that makes them eligible for partial or no stimulus payment but then they file a 2020 return that makes them eligible for more stimulus payment, they should get the additional payment.

Beneficiary recipients (Social Security, SSI, VA, RRB recipients) will automatically get payments. The payments are again protected from offset for federal and state tax debts, debts to federal agencies, unemployment overpayments, and child support. Congress was unable to protect the payments from garnishment by private debt collectors but members of Congress are considering introducing legislation to remedy this issue.

Non-filers who don’t receive the aforementioned benefits qualify for these payments as well. If these individuals used the Expedited Filing Portal last year that created 2019 returns, they should get these payments as well – since 2019 return information is used for eligibility. We are still awaiting guidance as to whether such a portal will return this time, particularly in light of President Biden’s January 22 executive action. Already though, the IRS revived the “Get My Payment” tool on its website with an IRS EIP Information Center too (www.irs.gov/eip).

If an individual’s income dropped in 2021 such that they are eligible for more payment now than they were based on current information or if they have a child born in 2021, they can claim the additional stimulus payment as a refund on their 2021 return. Alternatively, if an individual’s 2019 return makes them eligible for payment but a 2020 return would make them ineligible, were it to be filed, they may want to wait to file the 2020 return until they receive the stimulus payment – and the law makes clear they won’t have to pay back any excess.

EXPANDED CHILD TAX CREDIT

One aspect of the American Rescue Plan Act that has gotten significant attention is the expanded Child Tax Credit (CTC). Only for tax year 2021, the law makes the CTC fully refundable and enlarges it to $3,600 for each child 0-5 years old and $3,000 for each child 6-17 years old, including children who are 17.

Notably, the expanded CTC may begin to impact families already starting around this summer. The law authorizes the IRS to make periodic, advance payments of half of the child tax credit from this summer until December 2021. If the payments are distributed monthly, it could mean that families receive $300/month or $250/month – a new monthly child allowance that, if made permanent, has the potential to reduce child poverty in half. The other half of the credit would then be claimed on a 2021 return. Significantly, the law also abolishes the minimum income earnings requirement for receipt of the expanded CTC thus bringing millions more within this safety net’s reach.

Further, the law directs the IRS to develop an “online information portal” where individuals can update their information for purposes of this credit. This portal could be vital because the distribution of the expanded CTC will be based on the most recent return, whether that be 2019 or 2020, available but since the enlarged benefit incorporates potential non-filers, the portal could be useful for them or for individuals whose children are born this year.

The full $3,600 or $3,000 will be available for single filers who make up to $75,000, married couples who make up to $150,000, and head of household filers who make up to $112,500. However, single filers who make up to $200,000 or married couples who make up to $400,000 can still access a $2,000 child tax credit. If one makes less than $40,000 as a single filer, $50,000 as a head of household filer, or $60,000 as a married filing jointly filer, they need not pay back any overpayment on a 2021 return.

UC TAX FORGIVENESS

Weeks ago, Senator Dick Durbin and Congresswoman Cindy Axne’s proposal to exempt from taxation the first $10,200 of unemployment compensation individuals received in 2020 appeared to be a longshot possibility. Negotiations over the federal weekly unemployment supplement and its duration though led to this provision’s inclusion in the final legislation. A major change in the middle of the tax filing season, this aspect of the law will avoid surprise, large tax bills for millions and will boost the finances of those who had tax withheld.

The IRS already has guidance on how to claim this $10,200 exclusion if you have not filed a return but it remains unclear what taxpayers who already filed should do. It is possible taxpayers will have to file superseding or amended 2020 returns. If so, it will be convenient that 1040-Xs can be filed electronically now but nevertheless, it could also add to the backlog of unprocessed returns. It is uncertain if the IRS will instead try to automatically refund individuals but recently, the same Democratic members of Congress who crafted the exclusion wrote to the IRS requesting as much

It should be noted that this tax forgiveness applies per person – so up to $20,400 of UC could be forgiven from tax for a married couple – and only applies for individuals making up to $150,000 in adjusted gross income. But there’s a potentially thorny issue of statutory interpretation at play: does the $150,000 AGI limit include your unemployment compensation in 2020? If a taxpayer received $10,200 in unemployment compensation as part of $150,001 in AGI in 2020, can they exclude the UC or not because their income is too high? If the taxpayer received more than $10,200 in UC (let’s say, $20,000) and that $20,000 put them above $150,000, how much of that is part of AGI that goes into determining eligibility for this forgiveness provision?

The statutory construction here is important as Section 9042 of the American Rescue Plan Act reads that Section 85 of the Code (the section that made unemployment compensation taxable) is amended by adding the special $10,200 tax forgiveness rule “if the adjusted gross income for such taxable year is less than $150,00.” The statute goes on to read “for purposes of [the paragraph describing the forgiveness], the adjusted gross income of the taxpayer shall be determined…without regard to this section.”

So far, in its guidance regarding this new forgiveness, the IRS seems to have taken the position that “without regard to this section” means that all of a taxpayer’s unemployment compensation is included in your AGI. If your AGI is above $150,000, even if without your unemployment compensation in 2020 you would’ve been eligible for this exclusion, you won’t be able to claim it, the Service says. Some observers agree but there appears to be disagreement among tax professionals as to this interpretation, particularly since it would seem to encourage married couples to file separate returns to lower their particular AGIs in order to each claim this benefit. It would be interesting to hear from members of Congress who crafted this language to ascertain their legislative intent.

EXPANDED EITC

For 2021 only, the law triples the maximum Earned Income Tax Credit for childless workers from $543 to $1,502 – a proposal long sought by President Biden’s economic adviser, Jared Bernstein. Childless workers who are not full-time students can now start getting the EITC at  age 19, former foster youth can start getting it age 18, and the upper age limit of 65 is gone – again, all for 2021. The “EITC lookback period” will be applicable for 2021 tax year too so individuals can use 2019 earned income if the latter is higher.

There are a few permanent changes to the EITC though. Married but separated individuals can receive the EITC for themselves (as if they are single essentially) if they meet certain criteria. The married person would have to live with a qualifying child for more than half of the year and not reside with their spouse for at least six months of the year or not live with their spouse by December 31 and have a separation agreement. Another permanent change is an increase in the limit on investment income to $10,000 that individuals can have in figuring EITC eligibility. Also, people are otherwise eligible for EITC can get a single-filer EITC if they are have children who don’t have Social Security numbers.

EXPANDED ACA ASSISTANCE

In addition to the UC tax forgiveness, another major change in the middle of the filing season has to do with Affordable Care Act Premium Tax Credits. For 2020 only, if an individual received more ACA premium tax credits than they should have based on their income and family information, they do not need to pay back the credits on their returns. If a taxpayer already filed their 2020 return, it is possible they may need to file an amended return. Again, this process could add to the processing backlog at the IRS but it will also mean relief for a lot of taxpayers.

Going forward, for 2021 and 2022, the law removes the 400 percent federal poverty line cap for ACA premium assistance. Premium assistance is also now more generous in that premiums for benchmark health plans are capped at 8.5 percent of household income and individuals who make up to 150 percent of the federal poverty line are eligible to pay zero premiums. For 2021 only, individuals who receive unemployment compensation in 2021 are eligible for zero premiums and also get lower out-of-pocket costs.

OTHER ITEMS

The law also expands the child and dependent care credit as it will now be fully refundable for 2021 and will increase to $4,000 for one individual or $8,000 for two or more individuals; the credit will also cover 50% of eligible expenses. Lastly, the law also excludes from taxation any student loan debt cancelation that occurs from December 31, 2020 to January 1, 2026. As such, if the President or Congress does cancel federal student loan debt, federal taxation of canceled debt income in such a scenario would not be of concern to individuals.

All told, these dramatic changes will be enormously impactful in the lives of clients of low-income taxpayer clinic practitioners. Practitioners like me will also surely be navigating questions and concerns about the implementation of these measures. The IRS will certainly have new hurdles to overcome in the process. Ultimately, one thing is clear: these are major changes that require our focus.

Congress Enacts Law of Unintended Tax Consequences

We welcome back occasional guest blogger and frequent commenter, Bob Kamman.  Bob has a practice in Phoenix that provides both representation and return preparation.  Today, he comes to the rescue of the PT team that has struggled to produce content this past week due to other obligations and provides us with insights on some of the quirks created by the legislation designed to provide relief for taxpayers impacted by the pandemic.  Keith

As the latest Covid-relief legislation makes its way through the Congressional meat grinder, a couple of tax inequities continue to be overlooked. Maybe it’s not too late to correct them.

One is mostly of interest to college students and the low-income taxpayer clinics where they may seek help. The other might interest college professors considering a sabbatical year abroad.

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I) The Unemployment Trap

Many people who lost their jobs in 2020 qualified for federally-funded unemployment benefits that were more generous than those allowed by state programs. Recipients were paid $600 a week for up to 17 weeks, in addition to normal state benefits. Even college students with part-time jobs qualified, in many cases. It didn’t matter if they were under 24 years old, and still being claimed as dependents by their parents.

The $600 weekly checks ended on July 31, 2020, and would not resume until this year. Meanwhile, some people had continued eligibility for state benefits, and for other Covid-related compensation.

Enter the dreaded Kiddie Tax.

Since 1986, children with unearned income of more than a certain amount have been taxed on it at the same marginal rate as their parent(s). This prevented high-bracket adults from shifting investment income to their low-bracket kids. But back then, it only applied to children under age 14.

Congress eventually applied the law to older “children,” including full-time students up to age 23 who were not providing at least half of their support with their own earned income. Their earnings are taxed at the usual rates, but their unearned income is taxed at the higher parental rate. And unemployment is considered unearned income.

Tax practitioners this filing season are finding it not unusual for young unemployed college students to bring in Forms 1099-G showing five-figure amounts for unemployment compensation. If federal tax was withheld at all, it was mostly at a 10% rate. If $10,000 was received, $1,000 was withheld. But if the student must use the higher tax rate of, for example, 24%, the tax could approach $2,400 and the balance due IRS even after withholding, nearly $1,400.

If earned at a job and reported on a Form W-2, none of the $10,000 in wages would be taxed because of the $12,400 standard deduction.

Is this what Congress intended? Probably not.

Will it be fixed by pending legislation? Predictions are welcome in the Comments section below.

II. Welfare for Expatriates

If our unemployed students in the example above must pay IRS another $1,400 on their “unearned” unemployment compensation, what will the federal government do with it? Maybe, send it to one of their instructors.

Suppose you have a job offer from the Sorbonne to teach in Paris for a year at a salary of $180,000. Would it help, if the Treasury added another $1,400 tax-free? And that much for your spouse, also. That’s how the “Economic Impact Payments” have worked in the last two rounds.

They are based on AGI, after the exclusion for income earned abroad. That amount in 2021 is a maximum of $107,600. Then the $1,200 and $600 payments were not reduced unless this post-exclusion AGI exceeded $75,000 – or $150,000 on a joint return. All you must do to claim the exclusion is meet the “physical presence test:” stay overseas more than 330 days out of any 12-month period. (You also have to show that you have not kept your “tax home” in the United States, but for many academics those rules are not onerous.)

Paris is too expensive on $180,000 a year? Try Auckland. Cost of living in New Zealand is lower, and there is less virus around once they let you in.

Of course, educators are just a small minority of the Americans who benefit from this loophole. Half a million taxpayers claim the Section 911 exclusion each year, according to IRS estimates based on 2016 returns.

Are Covid disaster-relief payments for well-paid Americans living abroad what Congress intended? Probably not. A bipartisan group of 16 senators in early February sponsored a budget resolution amendment that promised to target stimulus checks to low- and middle-income families. It passed 99-1.

How simple would this be to fix, with a sentence that defines AGI as the amount before the foreign earned-income exclusion? Very.

Will that happen? Again, your predictions are welcome.

Can the IRS Ever Collect on Erroneous EIPs?

The IRS sent out a lot of EIPs this summer, and at a pretty quick clip. While there were certainly issues with people failing to receive the payments that should have (see posts on injured spouse issues here, domestic violence survivors here, and incarcerated individuals here), there were also undoubtedly people that received EIPs who shouldn’t have. The question this post sets out to answer is simply this: for those who shouldn’t have received an EIP what if anything can the IRS do to get the money back? No doubt taxpayers will want to know what to expect on these issues and will expect tax professionals to have a clear answer… you’ll have to read on to determine if there is one.

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If I were to survey the room, I’d bet most people have already made up their minds that there is an easy answer to the title question of this post: “No, the IRS cannot collect on erroneous EIP. Haven’t you read IRC § 6428(e)(1)? If you received too much EIP you just reduce the amount of credit on your 2020 return, but not below zero.”

My dear friends, I’m here to tell you that nothing in life is easy -least of all parsing the language of IRC § 6428. Further, I’m sorry to say, in my opinion IRC § 6428(e)(1) is actually irrelevant to the question of whether the IRS can collect on erroneous EIPs. Lastly, and again with sincere apologies, I regret to inform that if the EIP is a rebate (a big “if”) the IRS can collect on it through the deficiency procedures.

Gasps all around, I’m sure. Let me explain myself.

First off, it is critically important that we are clear what we’re talking about when we talk about EIPs. The term EIP (for our purposes) only refers to the “advanced” payments made in 2020 pursuant to IRC § 6428(f). The payments that people will be claiming on their 2020 returns are not “EIPs” but instead are Recovery Rebate Credits (“RRC”) under IRC § 6428(a). They are separate and distinct credits. Conceptually, you aren’t claiming the “remainder” of your EIP when you file your tax return: you are claiming an entirely different credit that is simply reduced by any EIP you received.

To me, that IRC § 6428 creates two separate credits (and not simply staggered payments of the “same” credit) is uncontroversial despite the unhelpful language on the IRS website. But because it is critical to my analysis I want to drive the point home. I also think it will help lay bare why the IRC § 6428(e)(1) provision has no relevancy to the IRS ability to collect on erroneous EIPs.

Two Credits, One Code Section

We can all agree (I hope) that eligibility for the EIP is based on your 2019 (or 18) information. IRC § 6428(f) makes that pretty explicit, and that is also how the IRS administered the payments. That is in part why people rushed to file 2019 tax returns.

Yet some analyze the EIP as if 2019/18 isn’t the determinant for eligibility, but rather some expedient way of delivering the EIP. In this mistaken conceptualization the IRS just administered a 2020 tax credit based on 2019/18 information because that’s all they had (2020 not being even half-way done when the CARES Act was passed). This mistaken view reads IRC § 6428(f) as paying out some sort of “tentative” credit that the taxpayer then has to reconcile on their 2020 tax return with the “true” credit, since 2020 is the information we really cared about all along. I believe this is why so many people read the “good news” in IRC § 6428(e)(1) to be that if we got too much “tentative” credit we don’t have to pay any back when we claim our “true” credit on the 2020 tax return.

But that’s not how the law is written, and not how the credits work. The EIP is a 2019/18 animal. That is the year it looks at. That is the year it applies to. Allow me to illustrate.

Imagine you weren’t making much money in 2019. Maybe most of the year you were in law school and only after passing the bar in September did you begin making big-law money. Your AGI for 2019 is only $65,000, but by March 2020 you are already way over the AGI threshold for IRC § 6428(a). Nevertheless, you get a full EIP of $1,200 in May 2020. Common wisdom says you “got too much” EIP and will need to reconcile on your 2020 return. You aren’t too worried though, because the reconciliation provision at IRC § 6428(e)(1) protects you from paying back this excess EIP. If not for IRC § 6428(e)(1) you’d be in a bind…

Ah, my dear friend, can’t you see that no reconciliation is even necessary? You received exactly the right amount of EIP (assuming your 2019/18 return was accurate… more on that later). You don’t need to do anything on your 2020 tax return, because the 2020 tax return is only for claiming a wholly different credit -the RCC. Note that the IRS worksheet for the RCC supports this: the moment you determine you are ineligible for the credit based on 2020 information, you stop and do nothing more. Your EIP simply doesn’t matter at that point. See IRS Form 1040 Instructions at page 59.

It might be instructive to compare this to another tax credit where reconciliation actually does occur: the “Premium Tax Credit” at IRC § 36B. Because health insurance premiums are incurred on a monthly basis, the Premium Tax Credit is paid “in advance” as each monthly payment is due. The Premium Tax Credit looks at only one year for eligibility determinations: the tax year you are receiving the payments. Obviously, you cannot know exactly what your AGI (or even filing status) will be at the beginning of 2020, so you provide an estimate and then “reconcile” with the year-end numbers. This is exactly what you would expect with a “tentative” credit that looks at the same tax year for eligibility and advance payments… and this is not at all what happens with IRC § 6428.

So we agree that the law student doesn’t owe any EIP back, not because of IRC § 6428(e)(1), but because you don’t owe money “back” when you get the right amount of it in the first place. But imagine the IRS screwed up and didn’t send this law student their EIP. Can they claim it on their 2020 return? Obviously not, because the 2020 return is (again) for a wholly separate credit (the RCC) that they are not eligible for. The RCC looks at 2020 for eligibility determinations whereas the EIP looks at 2019/18. IRC § 6428(e)(1) only functions to make sure you don’t double-up on the RCC credit if you received an EIP payment (the italicized words will matter more in a moment). The “not below zero” reduction language just makes sure that if your (correct) EIP payment is larger than your (correct) RRC credit you get the full value of the larger of the two.

The RCC is a 2020 tax credit and the EIP, to beat this dead horse, is not.

Great, so the EIP is a Different Credit: Why Does that Matter?

The RCC is a remarkably conventional refundable credit. The RCC can be offset -just like any other tax credit (see Les’ post here). It is subject to math error procedures for certain “math-like” mistakes -just like many other refundable credits listed at IRC § 6213(g)(2). And it is explicitly made part of the definition of a deficiency as a negative tax -just like other refundable credits (see IRC § 6211(b)(4)(A)). Oh, and just like most tax credits it is something you affirmatively claim on your return.

The EIP, on the other hand, is metaphysically a tax-chimera. I have spent many a sleepless night trying to pin down exactly what it is, because “what it is” will drive how or if it can be collected.

First off, it isn’t entirely clear that the EIP is a “refundable tax credit.” Yes, IRC § 6428(b) refers to the refundable credits portion of the Internal Revenue Code. But note that the language of IRC § 6428(b) refers to the credit “allowed by subsection (a).” It does not refer to the credit “allowed by subsection (f)” (the advanced credit) or more broadly the credit “allowed by this section.”

Things get more difficult. The RCC provision (IRC § 6428(a)) provides a “credit” against the tax of 2020. The EIP provision (IRC § 6428(f)) treats the taxpayer as if they made a “payment” against tax for 2019/18…

This tricky distinction between “credit” and “payment” could matter. A lot. It could be the determinant on if the EIP is a “rebate.” That distinction directly touches on the assessment and collection procedures the IRS will need to follow. I will go into it in more detail on a subsequent post. For now, let’s just pretend the EIP is a rebate and go into why that would matter.

Here’s the fun thing about rebates: erroneous ones can be collected through deficiency procedures. Don’t believe me? Look to the definition of “deficiency” for yourself -specifically IRC § 6211(a) and (b)(2). Have Kleenex handy for the tears that statutory language is sure to inspire. But the critical take-away is that you can have a tax return that doesn’t (necessarily) understate tax and still have a deficiency if the IRS were to issue a “rebate” they shouldn’t have. This could happen, for example, if the IRS give you an EITC that you never really claimed and weren’t actually entitled to. In fact, that is the exact example used by the IRM at 21.4.5.5.2(1) (10-01-2020). If the IRS noticed the mistake in time they could issue a notice of deficiency… the rest is well-trodden tax history.

No one claimed the EIP on their 2019/18 return, and yet some may well have received the EIP when they shouldn’t have based on mistakes from their 2019/18 returns. But if EIPs are rebates (again, a big “if”) made by the IRS, the recognition of these mistakes is exactly how they could be subject to the deficiency procedures and assessed like any other tax. And with exactly the same administrative collection options thereafter.

Uh oh…

But maybe it isn’t that bad. Recall, to begin with, the only people to worry would be those that had inaccurate 2019/18 returns resulting in EIPs they shouldn’t have received. If you were eligible based on 2019/18 information you have nothing to worry about. Also, as I will discuss in detail in another post, there are arguments that in some instances the erroneous EIP is not a “rebate” at all, which seriously limits the IRS collection options. Lastly, and importantly, there is the very real possibility that the IRS will simply make the decision not to go after EIPs at all as an administrative matter.

Those are all questions I’ll explore in my follow up post. For now, I’ll be content if only I have convinced you that the answer “the IRS cannot collect EIP because you just reduce it on your tax return” is 100% wrong. I’m afraid nothing in life is that simple.

Some Quick Thoughts on a Key Difference Between the Advance Payment of an EIP and Claiming the 6428 and 6428A Credit on a 2020 Tax Return

We have previously discussed the mechanics of the advance credit, both in the original CARES legislation from last spring and also in the Tax Relief Act legislation from late last year.  For a really good primer on the mechanics of all of this, I recommend the recently retired sage of tax procedure, Carlton Smith So, How Will the “Recovery Rebate” Refunds Work This Time? Part 1 and Part 2.  In this post I will flag how things have changed a bit since Carl’s initial post, and also offer some brief observations on why the current status for individuals who are entitled to receive 6428/6428A credits when they file their 2020 tax returns puts people in a less favorable place than if they were fortunate enough to receive the advance payments.

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As background, individuals who receive an advance payment or payments that exceed the amount of their eligible credit (as later calculated on the 2020 return) will not have to repay any of the payment. If the amount of the 6428 and 6428A credit as determined on the 2020 return exceeds the amount of the advance payment, taxpayers are entitled to claim the difference as a refundable tax credit on their 2020 returns.

There is an uneasy relationship between tax procedure and refundable credits. Typically (and I am simplifying here quite a bit) a refundable credit is treated as a payment for a particular tax year, and a taxpayer will have an overpayment if the sum of their payments and credits exceeds their tax liability for that year. Just because a taxpayer has an overpayment does not necessarily mean a taxpayer gets a refund, however. Section 6402(a) allows (but does not require) the IRS to offset any overpayment of one tax against any other federal tax debt; Section 6402(c), (d), (e) and (f) require IRS (through Treasury) to offset or apply the balance of any overpayment to certain defined other debts, including past due child support, and state income taxes and covered employment compensation debt.

In an off-Code part of the law, the original CARES legislation trumped the offset rules. CARES did not distinguish between advance payments and amounts that would be claimed later on 2020 tax returns. Essentially CARES said that IRS could not exercise its discretion under Section 6402(a) to offset the economic impact payments and amounts later claimed on 2020 returns against past due federal taxes, and also overrode the mandatory offset rules in Sections 6402(d)-(f), but preserved the mandatory offset for past due child support.

Fast forward to December and the Tax Relief Act. 

Sec. 273(b) of the Tax Relief Act retroactively changes the off Internal Revenue Code provision  found in CARES Act Sec. 2201(d). What are the changes? As I mentioned above the original CARES Act provided that BOTH the advanced credit that the IRS distributed in the spring (the original EIP) and any amount of the 6428 credit that was later claimed on the 2020 return was exempt from the IRS applying to past due federal income taxes or to all mandatory offsets (e.g., state tax debt, debt to other federal agencies), except for child support.

First the good news. The TRA provided some additional protection for the second round of EIP’s by providing protection from all offsets, including for past due child support. It also protected the second round of advance payments form bank garnishment or levy by private creditors and debt collectors.

That is the good, at least from the taxpayer perspective. What about the bad? The TRA now provides that the recovery rebate credit a taxpayer claims on a 2020 tax return (under both 6428 and 6428A) loses the protection from discretionary and mandatory offsets under Section 6402. It will also be applied to any unpaid current 2020 tax liability, a necessary step to determine if a taxpayer has an overpayment in the first instance. There is also no protection from garnishment or levy if a taxpayer is lucky enough to get a 6428/6428A fueled refund. So in sum, what IRS refers to as the  “Recovery Rebate Credit” (the amount that is claimed on the 2020 return, rather than the Economic Impact Payments paid out in advance), is subject to ALL offsets, just like any other credit claimed on a tax return that generates an overpayment. 

Conclusion

Congress’ decision to place these benefits in the tax code and also to attempt to ensure that the IRS deliver them to the majority of people before filing a 2020 tax return (or in some instances even in the absence of a return), raises a lot of procedural issues. In this brief post, I did not attempt to exhaustively discuss those issues, but to highlight some differences between the 6428 and 6428A mechanics and typical refundable credits, like the EITC and the Additional Child Tax Credit. The post suggests that there are significant substantive differences between the advance payment mechanism and the typical way that individuals receive benefits by claiming a refundable tax credit on a tax return. This brief discussion may also be of relevance as Congress considers the possibility of using the tax system in additional ways to deliver regular benefits in advance of (or even in the absence of) filing a tax return. How and whether benefits are offset ( and whether the IRS will facilitate or publicize the ability to request a bypass of offsets when taxpayers are experiencing hardship, a topic of recent comments submitted by the ABA Tax Section), as well as what happens when there may be changing circumstances when it is time to reconcile, are issues that will have a material impact on the effectiveness of any program that is tethered to the tax code.

For another day, and another post, are issues relating to how taxpayers prove eligibility for claimed refundable credits, especially given that eligibility proof for a benefit embedded in the tax code typically means a correspondence audit. As Congress possibly looks to the tax system to play a bigger role, how the IRS administers these provisions looms even larger in the welfare of some of the population’s most vulnerable.

My IRS Wishlist for 2021 – Part 1: The mail and return processing backlog

We begin a new year with the IRS pulling off another near-miraculous feat of issuing the second round of COVID-relief stimulus payments almost simultaneously with the President’s signing of the authorizing legislation.  I thought it might be a good time to make up a list of wishes I have regarding tax administration for 2021.  My list has a heavy emphasis on the role the IRS plays in the economic health of our nation; that it is a very major role should be clear to everyone who hasn’t lived under a rock this past year.

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But before I launch into my list, let me do some level setting.  Deep in irs.gov is an interesting webpage IRS Operations during COVID-19: Mission-critical functions continue.  This page is updated periodically with information about the status of return processing, check payment processing, mailing of notices, Power of Attorney processing, and many other items.  Everyone practicing in the field of tax should bookmark this page.

On this page, the IRS informs us that as of November 24, 2020, it had 7.1 million unprocessed individual tax returns and 2.3 million unprocessed business returns in its backlogged mail.  This is an unprecedented number of 2019 returns that have not been processed by the end of the year, and the situation appears to have gotten worse, rather than better, as the year went on.  According to the National Taxpayer Advocate, as of September 19, 2020, the IRS backlog was about 5.8 million pieces of mail, including 2.8 million tax returns.  The IRS says it “expects to issue all refunds for 2019 individual tax returns in 2020 where there are no issues with the return.  For refunds that cannot be issued in 2020 because the tax return is being corrected, reviewed or awaiting correspondence from a taxpayer, the refund will be issued as a paper check in 2021 per our normal processes.”  [Emphasis added.]

Now it is not clear to me why, in the 21st century, the IRS can’t make direct deposits of tax refunds after the filing season for that tax year has passed, e.g., for amended returns that result in a refund.  Maybe it is some programming rule in the submission processing pipeline, or maybe it isn’t the IRS’s problem but some issue with the Bureau of Fiscal Services.  But the problem in the COVID-economy is that many of these taxpayers who filed a 2019 return that has not been processed in 2020 will have moved – even if they aren’t evicted, they may move to less expensive housing, or they may move in with relatives, or they may have become homeless.  So not only will these taxpayers not get a direct deposit, but the paper check, once mailed, will be returned to the IRS.  Taxpayers won’t know anything about this unless they keep checking the “Where’s my refund?” website – the IRS says if a refund check is returned, an option will pop up on that website that allows the taxpayer to enter a change of address.  But even after you enter your address, the check will be mailed yet again, with all the attendant postal service delays. 

So here’s my first wish for 2021: 

The IRS should create a mobile-friendly, multi-lingual digital application for taxpayers to change their address; this application should require only two-factor authentication.

I will save for another day my tirade about the archaic revenue procedure that governs when the IRS is considered to be notified of the taxpayer’s last known address.  I note Keith’s PT post about the Gregory case, in which Keith and his students prevailed against the government on this issue.  It is unconscionable in the 21st century that the IRS should be routinely given 45 days from the date of posting a return to be considered notified of an address change.  Here’s what Rev. Proc. 2010-16 says:

Returns that are not filed in a processible form may require additional processing time.  If additional processing time is required, the 45-day processing period for address changes will begin the day after the error that caused the return to be unprocessible is corrected.

The 2019 return processing delays make glaringly clear the harmful impact of provision and the lack of a quick digital means to update one’s address.  And yes, I know there are legitimate concerns about fraudulent address changes; that is an issue that can be addressed as part of the programming.  But such concerns should not be an obstacle to creating an application that would be available to most, if not all, taxpayers.

Mail delays and my second wish

Now let’s get back to this mail backlog.  The IRS webpage references 2019 returns that have been flagged for further correction, review or taxpayer correspondence (by mail?????).  It states that “[i]f we need more information or need you to verify that it was you who sent the tax return, we will write you a letter.  The resolution of these issues depends on how quickly and accurately you respond, and the IRS staff trained and working under social distancing requirements to complete the processing of your return.”  Now of course, if the taxpayer responds quickly and accurately via the U.S. Postal Service, that response will be sitting in a pile along with the millions of other documents not processed.  The IRS COVID operations website says the IRS is opening mail within 40 days of arrival and is taking 60 days to process (on a first-come, first-served basis).

The Taxpayer Advocate Service has reported that even in “normal” times, the IRS non-identity theft refund fraud filters result in high false positive rates (i.e., the frozen return/refund was actually legitimate) of 81 percent for the period from January 1 to October 3, 2018, and 71 percent from January 1, to October 2, 2019.  [See 2019 NTA Annual Report to Congress, p. 39.]  TAS analysis found that over 75 percent of their cases involving wage verification received in the last week of August, 2019, “waited an average of 141 days from the return filing date for the IRS to screen and determine that it could not verify the information on the returns.  As of October 1, 2019, the IRS had only assigned 36% of those returns to a particular treatment stream for resolution.”  [2019 NTA Annual Report to Congress,  p. 40]

Thus, even before the pandemic, for many taxpayers, the IRS refund resolution processes were overwhelmed and not working.  Can we only imagine what is happening today?  We have not seen the numbers for these returns for the period from January 1 to October 1, 2020 (or December 31, for that matter), but I am willing to bet the backlog is … huge.

Now, what is going to happen to all these taxpayers whose 2019 returns are unprocessed?  First of all, they won’t receive the $600 COVID-relief payments.  Second, when they file their 2020 returns, it is very likely that these returns, too, will be flagged because their 2019 returns have unresolved issues.  This means that two years of refunds, and two rounds of stimulus payments will be frozen.  In. The. Midst. Of. A. Pandemic.

I know the IRS has been working full-tilt trying to get through this nightmare.  But the taxpayers of the United States deserve much more transparency and better information than we are receiving.  We need to know whether the employees who are working in the questionable refund programs are actually working – that is, have they received laptops so they can telework?  Or are there parts of their jobs that require them to be physically present in IRS offices, as the submission processing employees must be?

Which leads me to my second wish for the IRS in 2021:

The Federal government should classify IRS workers whose jobs are related to return and correspondence processing as essential workers and arrange for them to receive the COVID-19 vaccine with the same priority as front-line workers (i.e., after health care workers and nursing homes).

The government can do this – and it should.  I am sure there are many other federal employees in other government agencies who should also be prioritized in this way (umm … meat inspectors in meat processing plants?).  They, too, should be prioritized to receive the vaccine.  But as I said earlier, the IRS’s issuance of tax refunds and stimulus payments in 2020 and refunds and the recovery rebate credits in the 2021 filing season are vital to the economic recovery of hundreds of millions of taxpayers throughout the United States.  To assist that recovery, we need an IRS workforce that is able to do its job.  For it to do its job with the speed and urgency this crisis requires, IRS employees involved in return and correspondence processing and resolution should be prioritized for vaccination.  I hope the incoming Administration makes this a priority.  The taxpayers of the United States will be grateful.

Year in Review – Tax Court Administration

The Tax Court had to close its building in March and cancel the remaining Winter and Spring calendars because of the pandemic. While the judges continued to work, the cases awaiting trial stacked up. The Court also had to confront how it would operate once it began holding trials again. In addition to having to deal with all of the changes required by the pandemic, the Court had also planned to install a new website and system of administration of cases this year adding to the complexities it needed to manage. So, there is much to talk about in reviewing the administration of the Tax Court during 2020.

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Building Closure and Calendar Cancellation

The building closed on March 19, 2020 as a result of the pandemic.  Then, it partially reopened enough to allow outsiders to walk down the hall from the entry point to deliver documents to the clerk’s office, and it closed again. Even though the building was closed for most of the year the judges continued to work and to produce opinions.

In addition to closing the Tax Court building in Washington, the pandemic caused the cancellation of all Tax Court calendars around the county for the remainder of the Winter and Spring trial sessions. When the Tax Court started holding trials again in the fall of 2020, it did so remotely.

The pandemic created an extension of time to file a Tax Court petition. In addition to the extension of the deadline for filing petitions brought on through the Guralnik case by the closure of the clerk’s office and through IRC 7508A though the IRS notice regarding the pandemic it is also possible that an extension of the time to file a petition has occurred through 7508A(d). We will find out the answer in the coming year(s).

Obtaining Documents from the Court

Because the Court building has been closed for most of the year, the ability to access documents filed in Tax Court cases by physically viewing them at the Court has been unavailable. Unlike the federal courts covered by the PACER system, the Tax Court does not make documents filed in its cases electronically available except that it makes electronically available the documents produced by the Tax Court. So, someone interested in seeing a document filed in the Tax Court must physically go to the Tax Court where they can look at one of the two computer terminals in the clerk’s office anteroom which displays all of the documents or request the physical file from one of the clerk’s office employees at the window of that office. Since the public could not access the clerk’s office, this left as the only option for obtaining documents the process of calling the clerk’s office and ordering the documents. For most of 2020 the first two options have been unavailable and from March to May the third one was unavailable as well.

None of these options for obtaining a document exist when the clerk’s office is closed. If the clerk’s office is closed and you wish to see a document filed by a party, you, if you are not a party, simply cannot do it.  While the Tax Court considered itself open and engaged in handling cases during the pandemic, it effectively denied anyone not connected with the Court or a specific case the right to see case documents during the period when its clerk’s office was closed. This creates a frustrating situation for anyone who would like to see case documents and who might be involved in filing briefs or preparing petitions or other documents necessary to move their case forward.

When the clerk’s office reopened after the pandemic created closure, the Court did, however, make it cheaper and quicker to obtain documents when the clerk’s office is open. This is a great first step. I hope the new DAWSON system and reflection on the lack of access to party documents during the clerk’s office closure may create other changes that will open access further. Maggie Goff and I published an article in Tax Notes on May 4, 2020 entitled “Nonparty Remote Electronic Access to Tax Court Records” discussing the legitimate privacy concerns that the Tax Court faces when considering access to the Tax Court records of individuals and suggesting ways to meet those concerns while making documents more available to the public.

In cases involving entities, however, we see no legitimate privacy concerns of general application with respect to the documents filed. Of course, entities can have secrets in need of protection through record sealing. The stated policy reasons for denying electronic access do not apply to cases involving entities. An easy second step to opening up electronic access, at least from a policy perspective though not necessarily an administrative one, would be to remove restrictions in the cases involving entities.

There is a project underway at the Administrative Conference of the United States (ACUS) that deserves some attention on this subject which we will build out to a separate post in the near future. ACUS has recommended that Agencies post their briefs and possibly other documents generated for courts in an easily accessible and cost free manner for all to access. That would close some of the access gap created by the current Tax Court electronic access rules. Follow that project here.

Changes to Admissions Procedures and Rules

The pandemic even changes the process of admission to practice before the Tax Court.

The Court adopted new rules including making permanent the limited entry of appearance rule. It’s not uncommon for the Court to adopt new rules in any year. These rules deal with general court procedures and demonstrate that even while it closed its building it was still working on refining the general rules of practice.

New judges arrived and guidance on remote practice came out.

Trying Cases Remotely

The handling of cases remotely has caused changes in many areas of Tax Court practice. It will be interesting to see how many of these changes have a long term impact and how many fade with the passing of the pandemic.

Subpoenas – New procedures for return of subpoenas discussed here.

Trials have been remote all fall. Most reports I have heard suggest that the trials have gone smoothly. Litigation without the ability to see witnesses in person and without the ability to hand a document to the clerk create some obvious difficulties but so far the Court seems to have surmounted these difficulties to keep the docket moving.

DAWSON

In July the Court adopted a new website.

In November it stopped electronic filing while it migrated to a new filing system named after one of the former judges, Howard Dawson. Every Tax Court practitioner received a new entry path and password to the new electronic filing portal as it reopened on December 28, 2020. Now we will find out how DAWSON works and how much better life is after the creation of the new system. I received my email from the Court on December 27 and filed a document I had been holding for a couple weeks. The filing went smoothly.