Tax Court Rule Changes

On March 20, 2023, about a year after it published proposed changes to its Rules, the Tax Court published changes to its Rules and much more.  In addition to publishing the updated Rules, it published a discussion of the comments it received in a similar style to publishing comments to a proposed regulation.  This discussion allows commentors, and other interested parties, to better understand the Court’s thinking about the comments and how they influenced, or failed to influence, the changes to the Rules.  On the same web page, it also published complete versions of the eight submitted comments to this Rule change proposal as well as comments submitted in response to proposed Rule changes going back to 2015. 

The collection of past comments as well as the Court’s discussion of the impact of comments should aid future parties seeking to provide meaningful comments to the Court.  The Court also provided a Guide to Rules Amendments and Notes for persons interested in looking at changes to the Rules over time.

All in all, the package of information accompanying the new Rules does an excellent job setting out the Court’s thinking as well as providing resources to parties interested in understanding how the Court reached its conclusions.  You can find the updated version of the Rules here.  Each Rule is available on that page as a separate PDF.  In this post I will discuss some of the new Rules and some of the comments the Court had about its thinking in adopting the new Rules. 

The post is long and the discussion only highlights three of the proposed changes that interested me the most.  The main take away from this post is that the new rules now exist and the Court’s thinking about the rules as well as the commentors suggestions regarding the changes are available through the links above.  The first of the three rules I discuss raises interesting questions resulting from electronic filing, the second continues my long standing complaint about access to the Court’s records and the third addresses the new amicus provisions.


The first of the revised rules I will discuss is Rule 25.  This rule addresses the computation of time for filing a document with the Court including a petition.  The pertinent part of the rule I will discuss provides:


(a) Computing Time: The following Rules apply in computing any time period specified in these rules, in any Court order, or in any statute that does not specify a method of computing time.
(1) Period Stated in Days: If a period is stated in days or a longer unit of time:
(A) exclude the day of the event that triggers the period;
(B) count every day, including intermediate Saturdays, Sundays, and legal holidays; and
(C) include the last day of the period, but if the last day is a Saturday, Sunday, or legal holiday, the period continues to run until the end of the next day that is not a Saturday, Sunday, or legal holiday.
(2) Inaccessibility of the Clerk’s Office: Unless the Court orders otherwise, if the Clerk’s Office is inaccessible on the last day of a filing period, the time for filing any paper other than a petition is
extended to the first accessible day that is not a Saturday, Sunday, or legal holiday. For the circumstances under which the period for filing a petition is tolled when a filing location is inaccessible, see Code section 7451(b).

The Tax Clinic at the Legal Services Center of Harvard commented on this rule expressing a desire for it to discuss what happens if/when the electronic filing system of the Court became unavailable.  It commented:

The Clinic has concerns about the operation of this rule if one or both of the methods of filing a petition become inaccessible.

How does the ability to electronically file petitions interact with physical accessibility to the Clerk’s office? What if a petitioner seeks to file their petition by an unauthorized delivery service or the person sends the petition by courier and the Court is closed due to snow requiring delay of delivery until after the last date to file. Does the fact that the petitioner could have filed electronically mean that the petition is filed late? Does accessibility now turn solely on electronic access?

What if the Court’s electronic access goes down for a portion of a day? How does lost access for a portion of a day impact the determination of accessibility? Does it only matter if the electronic access becomes unavailable at the end of the day leading up to and including 11:59 p.m. Eastern Time

Perhaps these comments provide only hypothetical problems discussed at a law school, but the introduction of electronic filing theoretically available to everyone all the time changes the nature of the timely filing discussion.

The Court’s response to the comments received regarding this change are:

As previously noted, in response to comments, the Court amended paragraph (d) of Rule 10 to include a cross-reference to the definition of “legal holiday” set forth in paragraph (a)(5) of Rule 25.

The Court received a comment inquiring whether and how the availability of and access to the Court’s electronic filing and case management system might impact questions regarding the physical inaccessibility of the Clerk’s Office on the last day of a filing period. The Court’s Rules of Practice and Procedure are not designed or intended to address every possible scenario. The Court will address any issues and disputes that might arise in connection with the application of new paragraph (a)(2) of Rule 25 through case law and similar guidance.

The Court adopted the amendments to Rule 25 as published.

Two recent cases regarding electronic filing and the timeliness of submissions highlight some of the issues that can arise in an electronic filing environment.  These two cases do not involve the electronic filing system “going down” but do point out some issues that arise as petitioners use that system to timely file their petitions.  The first case blogged here involved a California petitioner whose electronically filed petition arrived at the Tax Court two minutes past the Court’s 11:59 PM ET deadline.  The second case is just starting to get going in earnest.  On March 21, 2023 — for the third time in the last year in a Tax Court case — Judge Buch invited an amicus brief (more on that below) in the pro se case of Antwan Sanders, Dk. No. 25868-22.  (The order also, sua sponte, removed the “S” election from the case.)  In his order he attached the Court’s internal electronic file showing the petitioner’s attempt to file electronically and final success immediately after the deadline.  Thus begins the case specific application of the rules regarding electronic filing.  This will be an interesting case to watch.  It raises elements of equitable tolling which will come into play as the post-Hallmark/Boechler cases make their way through litigation but also raises stand alone issues of timeliness of electronically filed petitions.


The second of the revised rules I will discuss is Rule 27 regarding electronic access to Tax Court documents. The Court continues its practice of making it difficult to access public records.  Revised Rule 27 is available here.

The Tax Clinic at the Legal Services Center of Harvard commented:

The Clinic believes that the Court practice unnecessarily restricts access to public documents.

The rule continues a practice that makes it unnecessarily difficulty to access public information. Documents should be available electronically absent a good reason for preventing electronic access. The Court should provide a statement of its policy reasons for preventing the public access to public documents in a reasonable manner.

Rule 27(b)(2) describes public access at the courthouse. This access has been essentially unavailable for over two years but even when available is not something available to 99% of the populace. The rule does not explain the alternate method for obtaining records by calling the Court and ordering documents from the clerk’s office leaving anyone who reads the rule to think that the only way to obtain documents is by a personal visit which, at this time, is impossible.

The Court could adopt practices that would open most of its documents to easy public access over the internet. The Court’s failure to open most documents to access over the internet is difficult to explain solely based on privacy concerns as long as it declines to allow electronic access to entity documents which do not implicate privacy concerns. For a further discussion of concerns on this topic please see and the article cited therein entitled “Nonparty Remote Electronic Access to Tax Court Records.”

The pandemic has changed the way even persons in DC can access Tax Court records. The current system for calling and obtaining records contains some improvements over the prior system but is still somewhat clunky. In addition to making more documents electronically available, the Court might consider allowing requesters to fax in the request. That would avoid calling and leaving a VM message only to have someone from the clerk’s office respond to the call and leave a VM message with the requester and so on. A dedicated fax line or email address could make the intake process go smoother and avoid he problems inherent in relying on phones for communication.

The Court responded:

The Court received comments suggesting that the Court should expand remote electronic access to its docket records, including those of entities, which may implicate privacy concerns different from records of individual taxpayers. Although the Court continues to evaluate options for increased remote access to its docket records, Rule 27 reflects the Court’s current policy balancing the interest in protecting sensitive personal information against the public’s interest in access to the Court’s records.

Despite the Court’s efforts directing parties to protect sensitive personal information, in practice that type of information is routinely embedded in papers filed with the Court. This is true not only in cases involving self-represented parties, but also in cases involving parties represented by counsel. A survey of over 3,000 cases conducted by the Court in 2020 showed the problem to be widespread, affecting over 90 percent of the cases sampled.

The Court believes that additional steps to expand remote electronic access to the Court’s docket records should be measured and take into account the types of personal sensitive information frequently present in those records. The Court’s practice of limiting remote access to electronic files is similar to the treatment of Social-Security appeals and immigration cases under Rule 5.2(c) of the Federal Rules of Civil Procedure and is consistent with the protection of tax information filed with Federal Bankruptcy courts. For additional background on the Court’s policies regarding remote electronic access to its docket records, see Note, 130 T.C. 395-401. The Court adopted the amendments to Rule 27 as published, with additional stylistic amendments to paragraphs (a)(1), (b), and (d).

The Court acknowledged in the first sentence that the privacy concerns of entities differ from those of individuals but fell back on a discussion of Social Security cases which do not involve entities.  It is difficult to imagine the privacy concerns of entities aside from those covered by sealing the record pursuant to the appropriate motion.  Some discussion of the differences between individuals and entities and why the Court protects both equally would go beyond the mere acknowledgement that differences exist.  The Court correctly points out that few pro se petitioners who make up 75% of its docket appropriately redact private information from their submissions and only a small percentage of representatives properly redact.  It is right to seek to protect petitioners but goes too far in doing so.  There are ways to make much of the docket public while still protecting privacy interest. 


The third of the revised rules I will discuss is proposed Rule 152 which changed into Rule 151.1 as a result of suggestions regarding the numbering of the Rules.  This rule is new and not a revision of an existing rule.  It governs the filing of amicus briefs and fills a gap in the Court’s rules.  The new rule can be found here.

Several commenters wrote about the benefits of having amicus appointed in cases in which the Court sought to issue precedential opinions in which the taxpayer was unrepresented.  Caitlin Hird and I made proposals in this regard in an article recently published in the Houston Business and Tax Law Journal.  The Court commented as follows:

Court proposed numbering the new rule governing briefs of amicus curiae as Rule 152, and renumbering existing Rule 152, Oral Findings of Fact or Opinion, as Rule 153. In accordance with comments, and to avoid confusion that might arise in connection with renumbering the Rules, the Court has instead adopted the new rule governing briefs of amicus curiae as Rule 151.1. (All references to comments regarding Rule 151.1 are to comments submitted in response to proposed Rule 152.)

Several commenters suggested that the Court should adopt procedures for requesting an amicus or appointing an amicus or pro bono counsel. The Court appreciates that such procedures could be useful in cases brought by self-represented petitioners presenting unique or novel issues. The suggestion merits further study and potential development.

The Court received a comment suggesting that the Court should provide guidance regarding a request to enlarge the 25-page limit for amicus curiae briefs. The Court has adopted changes to paragraph (d) of Rule 151.1 to address the comment.

Another commenter suggested that the Court should amend Rule 151.1(e) to state that motions for extension of time to file an amicus brief will be freely given. The Court believes that the filing periods set forth in Rule 151.1(e) are adequate and, in any event, Rule 151.1(e) does not preclude an amicus curiae from seeking leave of the Court to file an amicus brief out of time.

The Court received a comment suggesting that Rule 151.1 should be amended to provide that an amicus curiae need not file a motion for leave to file a brief if all the parties to the case consent to the filing of the amicus brief. The Court modeled Rule 151.1 partly on procedures set forth in Rule 29 of the Federal Rules of Appellate Procedure. Until the Court has gained practical experience under new Rule 151.1, and absent a compelling argument for doing so, the Court is not inclined to alter the requirement that an amicus curiae file a motion for leave to file a brief.

Another commenter suggested that Rule 151.1(g) should be amended to require a party filing an objection to a motion for leave to file an amicus brief to specify why the party believes the administration of tax laws would be hindered by allowing the filing of an amicus brief. The Court is satisfied that the requirement that an objection must “concisely state the reasons for such opposition” will suffice to fully inform the Court, the opposing party, and the amicus curiae of the nature of the objection.

Another commenter suggested that Rule 151.1 should be amended to establish a rebuttable presumption that amicus briefs filed on behalf of pro se petitioners are justified. Although such a rebuttable presumption offers some facial appeal, the Court believes it is best to gain practical experience with amicus curiae filings under the new procedures set forth in Rule 151.1 before considering alternatives to those procedures.

The Court otherwise adopted new Rule 151.1 as published with additional stylistic amendments to paragraphs (c)(1) and (e).

As mentioned above, the Court, for the third time in the last 12 months, recently issued an order soliciting amicus briefs.  In addition to the order entered in the Sanders case by Judge Buch, Judge Jones issued an order on March 16, 2023, in the case of Tooke v. Commissioner, Dk. No. 398-21L.  Mr. Tooke is represented by Joe DiRuzzo III who challenges the appointment of Appeals Officers.  I know that the American College of Tax Counsel’s Amicus Committee is considering an amicus here in response to Judge Jones’ request and perhaps others as well.  While this case involves a well represented rather than a pro se litigant, it shows the flexibility of the rule to allow or promote the Tax Court judges to seek a broad range of legal briefs on cases raising certain types of issues.  The third case in the past year in which Judge Buch issued an order calling for amicus briefs is the case of Frutiger v. Commissioner, Dk. No. 31153-21.  The Frutiger case raises the issue of whether the time for filing a petition in the Tax Court in an innocent spouse case is a jurisdictional time period.  Similar to its review of deficiency jurisdiction in the Hallmark case after Boechler, the Court seeks to review its jurisdiction in IRC 6015 cases after the Boechler decision.  The Tax Clinic at the Legal Services Center of Harvard Law School filed an amicus brief on behalf of the Center for Taxpayer Rights in this case in response to the Court’s invitation.

Where is the Tax Court located?

Two academic LITCs have openings for practitioners wishing to transition to academia, beginning in the summer 2023. The Janet R. Spragens Federal Tax Clinic at American University Washington College of Law seeks a Practitioner in Residence with at least 3 years of experience. For more information, see the job posting here. The University of Connecticut School of Law seeks a Teaching Fellow for its Tax Clinic. The job posting is here.

Today’s guest blogger, Ben Chanenson, has his hand in almost every blog post but you never see his name. He is my wonderful research assistant and a 1L at the University of Chicago. He assists in putting together posts, running down facts and the law, and otherwise doing all the things necessary to make the blog work. After reading our posts for most of the past year, he has written his own excellent post raising again the question of where the Tax Court sits within our tripartite system of government. The impetus for today’s post is a recent decision by the Court of Appeals for Veterans Claims – another Article I court which must struggle with its own place in our system. Keith

Next year will mark the centennial anniversary of the Board of Tax Appeals, a predecessor to the Tax Court. Shortly after its creation, J. Gilmer Korner, one of the original members of the Board, explained at the ABA annual meeting where in the government the Board was located. Ninety-nine years later, artificial intelligence can pass law school exams, but we lack a definitive answer on where the Tax Court is located.


The Past:

The Supreme Court held in Freytag v. Commissioner, 501 U.S. 868 (1991) that the Tax Court “exercises a portion of the judicial power of the United States.” In a concurring opinion joined by Justices O’Connor, Kennedy, and Souter, Justice Scalia wrote that the Tax Court “exercises the executive power of the United States.” Decades later, the D.C. Circuit embraced the Freytag concurrence at the expense of the majority and concluded in Kuretski v. Commissioner, 755 F.3d 929 (D.C. Cir. 2014) that the Tax Court was an independent executive branch agency. The next year, Congress passed the Protecting Americans from Tax Hikes Act of 2015 (PATH), where they responded to Kuretski. PATH added the following sentence to 26 U.S. Code § 7441, “The Tax Court is not an agency of, and shall be independent of, the executive branch of the Government.” This language did little to resolve the debate. In fact, shortly after its passage, Professor Bryan Camp wrote in PT that “I don’t see how the new Congressional language changes anything.” Academics, such as Professor Leandra Lederman, continue to write about the problem.

In Battat v. Commissioner, 148 T.C. 32 (2017), the Tax Court held that it was not an executive agency, but the Court did not explain where it was located in the government. Presently, the Tax Court website simply states that the Court “is a court of law exercising judicial power independent of the Executive and Legislative Branches.”

The debate over the location of the Tax Court has even reached the U.S. Court of Appeals for Veterans Claims. Yes, you read that right. In dueling concurring opinions on the proper location of the Court of Appeals for Veterans Claims in Prewitt v. McDonough, 36 Vet. App. 1 (U.S. 2022), Judge Falvey and Judge Jaquith dipped their toes into the over thirty-year odyssey on how to properly situate the Tax Court.

Prewitt v. McDonough:

As part of his appeal of a disability benefits denial, pro se litigant and Vietnam War veteran George D. Prewitt Jr argued that the Court of Appeals for Veterans Claims is “unconstitutionally structured and therefore cannot render a valid decision on his benefits claims.” The Court denied his petition because he failed to “show that he is entitled to extraordinary relief.” 

The Court’s opinion is less than four pages and does not go into depth on the Court’s placement in the government. Judge Falvey and Judge Jaquith believed a more thorough explanation was necessary, so they each filed concurring opinions. Due to the similarities between the Tax Court and the Court of Appeals for Veterans Claims, the concurring opinions touched on not only Freytag but also Kuretski and Battat.

Judge Falvey writes that:

[A] continued reading of Freytag as concluding that we exercise “the judicial power of the United States” does not appear to survive later Supreme Court decisions specifying that only Article III courts possess such power. See Stern, 564 U.S. at 484, 503 (holding that “the judicial power of the United States” may be vested only in Article III courts whose judges enjoy lifetime tenure and salary protections) … And later Supreme Court decisions have confirmed that only life-tenured Article III judges may exercise such power. See Oil States Energy Servs., LLC v. Greene’s Energy Grp., 138 S. Ct. 1365, 1372-73 (2018) (“Congress cannot ‘confer the Government’s “judicial power” on entities outside of Article III.'” (quoting Stern, 546, U.S. at 484)) …

Judge Falvey goes on to criticize the Tax Court’s decision in Battat. 

Much like the Tax Court, this Court exercises a form of administrative “judicial power” in the sense of examining facts and applying law, but not in the sense of Article III’s “judicial power of the United States.” Although the other concurrence relies on Battat v. Commissioner of Internal Revenue, 148 T.C. 32 (2017), to “persuasively rebut[]” Kuretski, post at 23-24, Battat accomplishes no such thing. Putting aside the relative authoritative value of the Court of Appeals for the D.C. Circuit versus the Tax Court, Battat made much the same error that the other concurrence makes here—ignoring the constraints of Article III, Section 1, to assert that an Article I court exercises the judicial power of the United States. See 148 T.C. at 53 (“While the Tax Court exercises a portion of the judicial power of the United States, . . . it has jurisdiction to adjudicate only public rights disputes, . . . and thus does not exercise that portion of the judicial power that is reserved for Article III judges.”). Contra Battat, the Constitution reserves all judicial power of the United States to Article III judges. U.S. CONST. art. III, § 1; Oil States, 138 S. Ct. at 1372-73; Stern, 564 U.S. at 484, 503.

Judge Jaquith responds that:

My colleague also throws shade on Freytag by endorsing the interpretation of it in Kuretski v. Commissioner of Internal Revenue. Rejecting a taxpayer’s erroneous assertion that Tax Court judges exercise Article III judicial power, Kuretski said that the Freytag Court “used the phrase ‘judicial power’ in ‘an enlarged sense,’ not in the particular sense employed by Article III.” 755 F.3d 929, 941, 410 U.S. App. D.C. 287 (D.C. Cir. 2014). The use of the words “in ‘an enlarged sense'” might be a fair characterization of Freytag if Kuretski—and then my colleague—did not define “‘in an enlarged sense'” as encompassing “‘all those administrative duties the performance of which involves an inquiry into the existence of facts and the application to them of rules of law.'” Kuretski, 755 F.3d at 941 (quoting Murray’s Lessee v. Hoboken Land & Improvement Co., 59 U.S. 272, 280, 15 L. Ed. 372 (1855)). That definition distorts and diminishes Freytag. The “enlarged sense” characterization comes from Justice Scalia’s partial concurrence, not the majority opinion. Freytag, 501 U.S. at 909-10 (Scalia, J., concurring in part). The Freytag holding quite specifically and thoroughly sets out that Article I courts, such as the Tax Court, that perform exclusively judicial functions exercise the judicial power of the United States and are “Courts of Law” within the meaning of the Appointments Clause. Id. at 888-92. Freytag thus covers this Court, as we have previously held…

Judge Jaquith argues that by determining that the Court of Appeals for Veterans Claims is located in the executive branch, Judge Falvey is opting for “”doctrinaire reliance on formal categories” over substance by contending that this Court’s status as an Article I tribunal “means that the Court wields executive power” rather than judicial power, and therefore cannot be in the judicial branch.”

As Judge Jaquith sees it, the Court of Appeals for Veterans Claims’:

[C]reation story is the same as that of the federal circuit courts and district courts—by Congress, under Article I—except we were created nearly 200 years later and our creation does not confer Article III’s tenure and salary protection. Proper consideration of this Court’s place in the judicial hierarchy recognizes that it is an inferior court that was created to provide, and actually provides, independent judicial review by Article I judges with statutory tenure and salary protections that approach those for Article III judges. And the difference in such protections is neither corrosive nor branch determinative, but tolerable for a narrower class of cases that warrant special attention. It is the assertion that judges wield executive power, and vice versa, that is the affront to separation of powers.

The Future:

The D.C. Circuit had an oral argument in Crim v. Commissioner last November. Keith wrote about this case last May. In this case, Joe DiRuzzo has asked the Court to overrule Kuretski. We will provide an update when the Court issues a decision, and the seemingly never-ending saga continues.

What Does It Mean When Former Judge Kroupa Shows Up as Senior Judge Kroupa in the Tax Court’s Report to Congress

The Tax Court posted its annual Congressional Budget Justification on February 1, 2023.  One item I perhaps should have noticed before in prior annual reports is that is appears that former/senior Judge Kroupa is listed in the report as a senior judge.  This surprised me.

Les and I wrote several blog posts about former/senior Judge Kroupa during her prosecution and leading up to her plea for tax evasion.  You can find the posts here, here, here and here.  The press release from the US Attorney’s office in Minnesota lays out the details of her “deliberate and brazen tax fraud scheme” in detail.  It explains that her conspiracy to “obstruct the IRS from accurately determining their [she filed a joint return with her then husband] joint income taxes” from 2002 to 2012.


There are some relevant dates to keep in mind for later in the post as you can help me understand former/senior Judge Kroupa’s status.  She was appointed to the Tax Court on June 13, 2003, for a term of 15 years – the normal term for a Tax Court judge.  Note that at the time she began serving as a Tax Court judge her conspiracy had already begun.  A Department of Justice press release states that she was indicted on April 4, 2016, which is slightly more than two years before her 15 year term ended and almost two years after she retired (see below for information about the retirement.)  At the time of her indictment the DOJ press release states that she was 60 years old.  Because she was born on October 12, 1955, she was 58 at the time of retirement. 

Former/senior Judge Kroupa’s Wikipedia page indicates her last day as a judge was June 14, 2014.  It also states without any support:

Although under the Internal Revenue Code section 7447 Kroupa didn’t serve the sufficient amount of time (15 years) and was under 65 (minimum retirement age) she retired rather than resigned from the Tax Court on June 16, 2014. If she had resigned she would not be entitled to collect her salary for life. Retired judges collect full salary for life.

Wikipedia also states that she worked for Chief Counsel, IRS and as an attorney/advisor to Judge Joel Gerber prior to her appointment as a Tax Court judge.  It’s unclear to me if this prior service matters.  At the time of her retirement, she had 11 years of service as a judge.  Notice that her retirement came one day after she reached the 11-year anniversary.

There were six counts in her indictment including one conspiracy count, two tax evasion counts, two false return counts and one count for obstructing the IRS audit.  She pled guilty to count one as part of a plea agreement.  During the plea hearing the judge read to her the six counts.  The quote below is from the conspiracy count to which she pled guilty:

Count 1 of the indictment charges you with conspiracy to defraud the United States in violation of Title 18, United States Code, Section 371. Under this provision it is a crime for two or more people to commit a crime. For you to be convicted of this charge — I’m sorry. It’s a crime for two or more people to agree to commit a crime. So, the agreement is the material piece.

For you to be convicted of this charge the government would have to prove beyond a reasonable doubt four elements: First, that beginning on or before 2004 and continuing at least until in or before 2012, in the state and district of Minnesota, you and Robert Fackler reached an agreement to commit the crime of evading the ascertainment and computation of your joint income taxes as alleged in the indictment; second, that you voluntarily and intentionally joined in the agreement either at the time the agreement was reached or at some later time while the agreement was still in effect; third, that at the time you joined in the agreement you knew the purpose of the agreement; and fourth, while the government was — while the agreement was in effect, a person who had joined the agreement knowingly did one or more acts for the purpose of carrying out or carrying forward the agreement.

Former/senior Judge Kroupa was sentenced to 34 months in prison which began in the summer of 2017.  I have not followed what happened after the sentencing, but she should have been released from the federal penitentiary no later than 2020.

In the Court’s Congressional Budget Justification, it explains why it needs the money it requests.  It states, at page 8 that:

The Court’s FY 2024 budget request includes a total of 46 presidentially appointed judges (a full complement of the statutory 19 presidentially appointed judges, 16 senior judges on recall, and 5 senior judges not recalled) and 6 special trial judges, reflecting an increase of 1 judge from the Court’s FY 2023 planned.

If you go to page 25 of the report, it lists the judges:

If you look at the lists for senior judges, former/senior Judge Kroupa is listed.  If you count the number of senior judges with no asterisk by their name – the judges not serving on recall or subject to recall – there are five judges: Jacobs, Parr, Wells, Chiechi and Kroupa.  These five judges appear to be the five judges mentioned in the quote above and included in the 46 presidentially appointed judges for whom the Court seeks funds for its budget. 

Former/senior Judge Kroupa receives a pension despite her conviction for a tax crime in one of the most sensational acts committed by a Tax Court judge during its 99-year history.  I have to say I am surprised that she is still listed as a senior judge, but I suspect that Tax Court lists her because that’s the appropriate designation and not out a sense of comradery.  It’s not uncommon for retirement eligible federal employees to retire in the face of a potential personnel action that could jeopardize their career and, I suspect, the same is true of private employees.  The statute governing the retirement of Tax Court judges makes no mention of forfeiture of pension because of federal tax or other crimes.

Because I didn’t know why former/senior Judge Kroupa was listed as a senior judge and did not know what that might mean with respect to her future service on the Court, I sent a draft of my somewhat confused and rambling post to the court seeking clarification.  Since the inquiry involved a personnel matter, I didn’t expect too much but had some hope for clarification.  Very quickly I was asked to instead submit questions which I did.  Here are the questions I asked:

Did Judge Kroupa resign?

Was Judge Kroupa removed from office by the president pursuant to IRC 7443(f)?

Looking at the list of senior judges on page 25 of the recent budget submission to Congress:

What causes a judge to be listed as a senior judge serving on recall?

What causes a judge to be listed as a senior judge subject to recall?

What cases a judge to be listed as a senior judge neither serving nor subject to recall?

Under what circumstances does a still living Presidentially appointed judge get totally removed from the list of senior judges?  For example, B. John Williams resigned from the Court in 1990 and is still alive but is not listed as a senior judge.

Do the senior judges serving on recall receive a salary for doing so or a pension or both?

Do the senior judges subject to recall receive a salary for being subject to recall or a pension or both?

Do the senior judges neither serving on recall nor subject to recall receive a salary or a pension?

If a judge resigned from the Court would that judge be listed as a senior judge?  Does it depend on the type of resignation?  If so, what are the different ways a judge can resign and the designations that flow from those different types of resignations?

If the President removed a Tax Court judge pursuant to IRC 7443(f) would the judge appear as a senior judge on the Court’s list of senior judges?

If a judge comes to the end of their 15-year term and does not get reappointed, what must the judge do to be listed as serving on recall or subject to recall?

If a judge comes to the end of their 15-year term or if a judge reaches the age 70, what does the judge do to be listed as a senior judge not serving on recall or subject to recall?

Can a senior judge not currently serving on recall of subject to recall switch their designation by making an election with the Court to start serving on recall or start being subject to recall?  Has a judge ever done that?

The Court responded by telling me to look at IRC 7447. 

Looking at that provision section 7447(a) provides definitions about the court and the term judge that don’t create any controversy. 

Section 7447(b)(1) provides that a judge shall retire at age 70.  A number of Tax Court judges have retired at this age in the past few years.  This provision is not applicable to this situation.  Section (b)(2) provides for age and service time periods for retirement.  A judge can retire with 11 years of service at the age of 69.  This provision does not seem to apply because of former/senior Judge Kroupa’s age at the time of retirement.  Section (b)(3) allows a judge to retire at any age upon completion of their 15 year term if the judge advises the President in writing during a specific window of time of their willingness to be reappointed.  This provision does not apply since former/senior Judge Kroupa did not complete a 15-year term.  Section (b)(4) provides for retirement for any Tax Court judge who becomes permanently disabled.  This section may apply though I cannot say with certainty that it does not.

None of the sections regarding retirement seem to apply with the possible exception of disability.  In the PT blog posts linked above, there is mention in the workup for her sentencing hearing of significant health issues.  Perhaps, those health issues would cause her to qualify for the disability provision in (b)(4).

Section 7447(c) provides for the recalling of Senior Judges stating that individuals who have elected to receive retired pay “may be called upon by the chief judge of the Tax Court to perform such judicial duties with the Tax Court as may be requested….”  I interpret this to mean that a Chief Judge could call upon former/senior Judge Kroupa to perform judicial duties.  That is not at all to suggest that a Chief Judge would call upon her for such duties but merely that she appears to be eligible to be called upon.

Section 7447(d) explains the pay a retired judge will receive.  If I read it correctly, a retired judge who served 10 years or more receives their full salary and

Such retired pay shall begin to accrue on the day following the day on which his salary as judge ceases to accrue, and shall continue to accrue during the remainder of his life.

Section 7447(e) tells a judge how to elect retirement.

Section 7447(f) describes things that can impact retirement pay.  Subsection (f)(1) calls for a forfeiture of one years retirement pay if a recalled judge pursuant to section (c) fails to perform the judicial duties required of them.  Subsection (f)(2) calls for a permanent forfeiture if the judge goes into the private practice of law or accounting in the field of taxation.  Subsection (f)(3) suspends the retirement pay if the judge enters federal service for pay during the time of that paid federal service.  Subsection (f)(4) provides judges with the opportunity to make an election that can allow them to continue to receive a pension when subparagraphs (f)(1) and (2) might otherwise cut it off.

Section 7447(g) coordinates a Tax Court judges retirement as a judge with civil service retirement benefits and generally seems to supplant the civil service benefits with the judicial benefits.

Section 7447(h) describes judges who retire based on permanent disability or who are declared by the President to be retired based on disability. 

Section 7447(i) provides a way for a Tax Court judge to revoke their election to receive retired pay.

Section 7447(j) deals with the Thrift Savings Plan.

After going through the statute as suggested by the Court, I confess I am still confused how former/senior Judge Kroupa retired unless she was disabled.  Nonetheless, she did retire and is treated as a Senior Judge for purposes of reporting her retirement to Congress in the Court’s budget request.  You do not see her listed as a Senior Judge on the Court’s website listing its Senior Judges as the only judges listed there are the ones on recall.  The statute suggests to me that she could be recalled although she is one of several judges who seem to be off of the recall list.

Maybe I am none the wiser having wondered why I was seeing former/senior Judge Kroupa listed in the Tax Court’s report to Congress as a Senior Judge and embarking on a review of a statute that means little to me.  Without detracting from former/senior Judge Kroupa’s ability to receive a federal pension to which she is entitled, it does seem a little odd to see her name in the court’s list of judges given the crime she committed but that seems just to be a quirk of the way the retirement works and the budget requests are made.  I suspect her name will appear for many years to come.  Perhaps it serves as an annual reminder to all tax practitioners to properly report their income and not to serve as the example that she became.

DOJ and Another 3d Cir. Panel Muddy Waters as to Source of Tax Court’s Deficiency Jurisdiction

On March 7, 2023, there was an oral argument before the Third Circuit in Culp v. Commissioner, 3d Cir. Docket No. 22-1789.  Here’s a link to the audioCulp presents the identical issues addressed in Hallmark v. Commissioner, 159 T.C. No. 6 (Nov. 29, 2022) – i.e., whether the deficiency petition filing deadline in the first sentence of I.R.C. § 6213(a) is jurisdictional or subject to equitable tolling.  In December, I did an 8-part post on various things I thought the Tax Court got wrong in Hallmark.

In this post, I wanted to highlight a development in the Third Circuit (caused by the DOJ) in a precedential opinion issued yesterday, Skolnick v. Commissioner, 2023 U.S. App. LEXIS 5502 – i.e., a day after the Culp oral argument. 

One fight in Culp (perhaps the key fight) is whether the first sentence of I.R.C. § 6213(a) contains a clear statement from Congress that the filing deadline therein is jurisdictional.  The Supreme Court has said that filing deadlines are not jurisdictional unless there is a clear statement from Congress making them so.  However, also, the Supreme Court “has often explained that Congress’s separation of a filing deadline from a jurisdictional grant indicates that the time bar is not jurisdictional.”  United States v. Kwai Fun Wong, 575 U.S. 402, 411 (2015) (citations omitted).

In their briefs, the Culps (like the taxpayer in Hallmark) argued, in the alternative, that (1) if the Tax Court’s jurisdiction to hear deficiencies is in I.R.C. § 6213(a)’s first sentence, then there is no clear statement in the sentence making the filing deadline jurisdictional, and (2) I.R.C. § 6214(a), not I.R.C. § 6213(a), is the true source of the Tax Court jurisdiction to redetermine deficiencies, even those not greater than the deficiency set forth in the notice.  Although the Culps need not win the I.R.C. § 6214(a) argument to win their case, certainly, if the jurisdictional grant is held to be in I.R.C. § 6214(a), then Congress has separated the filing deadline from the jurisdictional grant – triggering the Supreme Court’s instruction to treat the filing deadline as not jurisdictional.

For the detailed argument that I.R.C. § 6214(a) provides the basis of the Tax Court’s jurisdiction and the citation of several opinions by three sitting Tax Court judges who signed the Hallmark opinion who have previously stated that I.R.C. § 6214(a) is the source of the Tax Court’s deficiency jurisdiction, see my post on Hallmark here .  Both the Hallmark opinion’s holding and the DOJ’s argument in Culp are that I.R.C. § 6214(a) is only the source of the Tax Court’s jurisdiction to redetermine deficiencies in excess of those set out in the notice, while I.R.C. § 6213(a) is the source of the Tax Court’s jurisdiction to redetermine deficiencies to numbers equal to or below those set out in the notice.

In Skolnick v. Commissioner, a hobby loss case, where the IRS was not arguing for an increased deficiency, a 3-judge panel yesterday wrote:  “The Tax Court had jurisdiction under 26 U.S.C. §§ 6214 and 7442.”  Id., slip op. at 9.  The panel got that sentence from the first page of the DOJ’s Skolnick brief, which stated:  “The Tax Court had jurisdiction pursuant to Sections 6214 and 7442 of the Internal Revenue Code of 1986 (26 U.S.C.) (I.R.C. or Code).”  So much for DOJ consistency on what § 6214(a) does.


The Judges on the Third Circuit panel in Culp are Shwartz, Bibas, and Ambro.  The parties had briefed Culp before Hallmark was decided.  Shortly before the oral argument, the Culp panel asked for letters from the parties and amicus on the impact of the Hallmark opinion on the Culp case.  Keith, Audrey Patten, and I are counsel for amicus, The Center for Taxpayer Rights. 

After reading Hallmark and the letters, the panel was skeptical that the Tax Court got Hallmark right.  Although judges can and do change their minds after oral argument, both I and others took the oral argument as a sign that the panel is now leaning toward holding that the deficiency petition deadline is not jurisdictional and is subject to equitable tolling.  If they do so, this will set up a Circuit split that will take the issues of Tax Court petition deadlines back to the Supreme Court in 2024 or 2025.  Last time, in Boechler v. Commissioner, 142 S. Ct. 1493 (2022), the Supreme Court held the Collection Due Process (CDP) petition deadline is not jurisdictional and is subject to equitable tolling.  My guess is that it’s about 70% likely that the Supreme Court would come to the same conclusions as to the deficiency filing deadline if Culp went up on cert.  Fasten your seatbelts.

The Third Circuit has made previous statements in precedential opinions that I.R.C. § 6213(a) is the source of the Tax Court’s deficiency jurisdiction.  See, e.g., Sunoco Inc. v. Commissioner, 663 F.3d 181, 187 (3d Cir. 2011) (“The Tax Court’s principal basis for jurisdiction is I.R.C. § 6213(a), 26 U.S.C. § 6213(a).  That section of the Tax Code gives the Tax Court jurisdiction to redetermine a ‘deficiency’. . . .”).  Before Skolnick, the Culp panel might have felt bound by those statements, even though they were not based on briefing the issue as between I.R.C. § 6213(a) and I.R.C. § 6214(a), and whether or not either provision of the Code was the source of the Tax Court’s jurisdiction had no impact on how those cases would be decided.  In Steel Co. v. Citizens for a Better Environment, 523 U.S. 83, 91 (1998), the Supreme Court stated that such statements should be considered “drive-by jurisdictional rulings”, entitled to no weight.  

Both the statement in Sunoco and the statement in Skolnick are arguably drive-by jurisdictional rulings.  However, even if they are not, they clearly now set up a precedential-opinion conflict within the Third Circuit as to the source of the Tax Court’s deficiency jurisdiction.  So, the Culp panel is now free to look deeply into this issue and make its own ruling.

Further, Skolnick’s statement that I.R.C. § 6214(a) is the source of the Tax Court’s deficiency jurisdiction undermines any argument that I.R.C. § 6213(a)’s first sentence contains a clear statement that its filing deadline is jurisdictional.

That the Culp panel was concerned about this issue is evident from the following two questions asked by Judge Shwartz at the oral argument:

How is [the argument that 6214(a) gives the Tax Court jurisdiction to redetermine deficiencies] incorrect, when the specific language of 6214(a) says, quote, that the Tax Court shall have jurisdiction to redetermine the correct amount of the deficiency? 

. . . . If it is not in 6214(a) — as Judge Ambro and I are asking you — where is it in 6213 that says that — that gives the Tax Court jurisdiction to review these deficiency notices?

East Coast Bias

The case of Park v. Commissioner, Dk. No. 3312-22S shows a bias in the Tax Court’s electronic filing system that disadvantages petitioners in time zones to the west of Washington, D.C. Think of the Park decision as the Tax Court’s equivalent of the View of the World from 9th Avenue.  It also serves as a reminder of Tax Court practices we have discussed before regarding the policing of cases to determine timeliness discussed here and here, as well as burdens placed by the IRS on electronic tax return filers we have discussed previously here and here. The Parks, who live in California, have their Tax Court case dismissed even though they filed on the 90th day viewed from the lens of California.  It is dismissed because it arrived at the Tax Court two minutes after the East Coast based deadline. Let’s look at the facts in more detail.


The IRS sent the Parks a notice of deficiency (SNOD) on November 29, 2021. The Court says that the SNOD stated the last date to file the petition was February 28, 2022. Note that 90 from November 29 would be February 27. In 2021 February 27 was a Sunday moving the last date to file to Monday, February 28 pursuant to IRC 7503. 

The court states the petition was filed on Tuesday, March 1, 92 days after the mailing of the SNOD. In this case, the Court finds that the filing occurred one day after the last date to file the petition.

After the filing of the petition, the IRS answered the case on April 25, 2022, within the 60-day time period for filing an answer. The parties submitted a proposed stipulated decision on May 11, 2022, which would have resolved the case. The timing of the proposed stipulated decision suggests that the petitioners convinced the respondent very quickly that the notice was wrong. It’s possible that the IRS convinced petitioners that quickly that the notice was right, but in my experience, cases that settle this quickly usually do so because the petitioner provides information that immediately convinces the Chief Counsel attorneys that they do not owe the tax shown on the SNOD. Kudos to the Chief Counsel attorneys for working the case so quickly acknowledging the proper result.

The Tax Court initially filed the stipulated decision but later struck it from the docket and, seven months later, on December 11, 2022, issued an order to show cause why the Court should not dismiss the case for lack of jurisdiction. I don’t know the issue in this case because I have not ordered the documents, but if this were a case in which taxpayers were receiving a refund note that the refund would have been held by the IRS, awaiting the signature of the judge on the decision document. Because the stipulated decision was filed almost immediately after the answer, this case would be on the Court’s general docket, unassigned to a specific judge, and under the office of the Chief Judge.

The parties responded to the order by the end of December. On February 22, 2023, nine months after the parties had reached an agreement in this case, the Court dismissed it. Assuming I am right that the IRS agreed that the taxpayer did not owe the amount set out in the SNOD, the dismissal will not cause the taxpayer problems. The IRS will honor the agreement, which means it will not make an assessment of the deficiency proposed in the SNOD, and it will pay a refund if any is due. So, the taxpayer in this situation will not be harmed by the dismissal.

Why did the court dismiss the case? Under its interpretation of its jurisdiction, whether that’s 6213 or 6214, depending on the judge, the taxpayer must file a timely petition, and the court must dismiss an untimely filed case even where the parties have reached an agreement. The Court explains why it views this petition as late:

On December 30, 2022, petitioners filed a Response to Order to Show Cause, in which they argue that the petition was filed at 12:01 a.m. on March 1, 2022, and the Court should consider that the petition was submitted from the State of California at 9:01 p.m. on February 28, 2022. In addition, Petitioners also argue that they last saved the petition at 8:54 p.m. on February 28, 2022, to their computer and the petition was likely submitted by them before the petition was received by the Court.

In pertinent part, the Court’s DAWSON Petitioner Training Guide, at page 10, states, “The Court MUST receive your electronically filed Petition no later than 12:59 [sic] pm Eastern Time on the last date to file. Petitions received after this time are considered untimely and your case may be dismissed for lack of jurisdiction.” A copy of the DAWSON Petitioner Training Guide is posted in the Rules & Guidance section of the Court’s website at

The Court’s quote from page 10 of its guide contains a misstatement. The guide says the electronic petition must be received not later than 11:59 pm Eastern Time. Notice that the petition must be received by that time. It’s not the time the petitioner sends the petition. I have never checked to see if there was a difference between the time I sent a document to the court and the time the court received it. The docket sheet does not record time down to the minute but lists the day. The “farm” internet I have is quite slow, and sometimes I think documents I send to others or that others send to me are sent by the electronic equivalent of the Pony Express rather than going and coming instantaneously. 

I would certainly never recommend waiting until almost midnight on the day a petition is due in order to transmit a petition for numerous reasons. The electronic submission rule adopted by the Tax Court, however, disadvantages all petitioners who do not live on the East Coast. This rule is not required by the statute or at least not facially required. The Park case is not a good case to challenge this rule, but even if Hallmark correctly states the Tax Court’s jurisdiction regarding timeliness, the Tax Court’s electronic filing rule might not stand up to a challenge based on jurisdiction.

So, the Parks filed two minutes late. The Tax Court took seven months to bring this to the parties’ attention. If the time period is not jurisdictional, the Court does not have to police its docket filings down to the minute. It might still find the Parks lacked a good excuse for filing two minutes late and dismiss their case, but it would only do so if the IRS raised the issue. Is this the way we want the Tax Court to spend its time and the time of the parties?

Is this the way we want to treat taxpayers west of the Eastern Time Zone? The Tax Court wants to promote electronic filing. Kicking out a petitioner who may or may not have transmitted the document before 9:00 PM Pacific Time does not seem like a way to promote electronic filing of petitions. The Tax Court did not choose this rule because it is East Coast centric. It did so to avoid petitioners and practitioners on the East Coast playing games and getting extra time to file based on the time zones in the western United States that can be several hours after the deadline in the east. 

I don’t know if the Court has the IT capability to know the time zone from which a petition is submitted or if it would be comfortable requiring a statement from the petitioner regarding that time zone. A petitioner on the East Coast could get extra time by electronically transmitting the petition to a friend in Hawaii and having them go to the post office or an approved private delivery service and getting the petition date stamped before the end of the 90th day. 

Petitioners need to check to make sure their electronic transmission has appeared on the Court’s docket, but documents are not immediately posted there. It can, at times, take days before a document is posted. What if the Parks transmitted their petition on February 25, 2022, but something in the electronic transmission on their end, the Court’s end, or somewhere in between held up its receipt until March 1? Under the electronic filing rules, the Court would dismiss their case. 

Unlike the electronic filing of a tax return, where you generally get a ping back within a day, (and are given a grace period to perfect a rejected return and still have it treated as timely) it can take longer for a petition to appear as docketed, and the “ping back” that it has been accepted is the docket entry if it is accepted. This has similarities to the problems the IRS creates when it penalizes taxpayers who timely file electronic returns, but something goes wrong in the transmission and their preparer does not inform the taxpayer of the problem, potentially creating large penalties. 

Alleged Monthlong Trip to Mexico To Celebrate Día De Los Muertos Not Enough To Get Extra Sixty Days To File A Petition

In Shead v Commissioner, the Tax Court, by order, dismissed a petition as untimely when the taxpayer failed to prove he was out of the country at the time the IRS mailed the notice of deficiency.  For the reasons discussed below, Keith and I believe that the Court failed to give the petitioner a real opportunity to prove that he was out of the country.  It is our understanding that an LITC is reaching out to Mr. Shead who handled the case pro se up to this point to see if it can assist him in gathering documentation to support a motion for reconsideration.  There may be a follow up post.


Taxpayers have 90 days to timely file a petition to Tax Court in response to a notice of deficiency. The statute gives taxpayers 150 days to file a petition if the taxpayer is out of the country. Case law adds some gloss to the extra sixty-day rule; the notice need not be addressed to a taxpayer residing outside the United States for the 150-day deadline to apply.

And the taxpayer can get the extra sixty days if they are temporarily out of the country when the IRS mails the notice.

This takes us to the recent order in Shead v Commissioner.  In Shead, IRS mailed a notice of deficiency on October 4, 2021. The taxpayer filed a petition with the Tax Court on January 11, 2022, eight days after the 90-day period elapsed. Last December, following the Hallmark Collective decision where the Tax Court confirmed that in its view the 90-day period was jurisdictional and not subject to tolling, the Tax Court issued an order in Shead to show cause why the Court should not dismiss the case for lack of jurisdiction.

Shead responded by claiming that the petition was timely because he was entitled to the extra 60 days to petition the Tax Court. He stated that he was out of the country at the time the IRS mailed the notice. The Tax Court then issued another order, this time directing Shead “to file a response including relevant documents showing proof of travel outside of the United States on October 4, 2021,”  The order did not provide guidance regarding what relevant documents might serve as necessary support.

Shead responded, sending in an affidavit where “he swore that on October 2, 2021, he left the United States with his family and drove to Mexico to celebrate El Día De Los Muertos.” In the affidavit, he swore that he and his family had remained in Mexico until their return to the United States on November 7, 2021.” In addition to the affidavit, the taxpayer included a copy of his passport card.

Judge Choi found that the affidavit and copy of the passport was insufficient to justify finding that Shead was entitled to the extra sixty days. The affidavit, as the order notes, amounts to testimony. While testimony is evidence (despite what IRS often thinks when conducting a correspondence examination), the order found that the supposedly corroborating passport card did not help because it “was not stamped as a paper passport would be” and he failed to provide any other documentation showing he was in Mexico.

In the absence of any documentary evidence corroborating the affidavit, the Tax Court dismissed the petition despite the absence of any evidence contradicting the affidavit.  The Court apparently determined the testimony in the affidavit was not credible without corroborating documentation.  The Court could have held a hearing in order to question the taxpayer further to establish credibility or could have given him direction as to the type of documentation that would support the information in the affidavit.  Instead, it chose simply to dismiss his case giving no credit to his testimony similar to what would happen in a correspondence examination by the IRS. While the dismissal is without prejudice, the chance to get court review of the deficiency is now likely limited via a refund suit.

That seems like a tough outcome, especially as one imagines that if Shead and his family were in Mexico during the festivity, they probably had other evidence that could have tied them to their trip (e.g., social media posts, hotel or VRBO receipts etc). The order is a reminder that while testimony is evidence, in the absence of confirming documentation, a judge may not find it sufficient.  While most cases involving the 150 day rule establishing absence from the United States may be decided by order, there are published opinions that provide guidance regarding the type of information a petitioner could present to satisfy the Court. 

In Smith v. Commissioner, 140 T.C. 48, 50 (2013), the Court applied the 150-day rule (I.R.C. § 6213(a)) in a fully reviewed opinion that collects many of the prior cases regarding this basis for extending the time to file a Tax Court petition.  The case did not discuss the proof submitted as much as the timing of the petitioner’s move to Canada but still provides some instruction on the proof necessary to satisfy the requirement.

In Wade v. Commissioner, TCM 1998-235, the Court had a hearing and did not simply dismiss the case after receipt of an affidavit and an attachment the Court did not find sufficient.  The court found that:

The evidence in this case establishes that petitioner departed on Korean Airlines flight number 11, from Los Angeles, California, to Seoul, South Korea, on March 19, 1997, the day the notice of deficiency was issued. Prior to his departure from the United States, petitioner put his mail delivery on hold at his local post office. Petitioner arrived in the Philippines, his destination on this journey, on March 21, 1997. On April 3, 1997, petitioner left the Philippines and returned directly to the United States. Subsequently, petitioner picked up the notice of deficiency at his local post office on April 7, 1997.

Hat tip to Anna Gooch for bringing this order to our attention. The issue is one that a student raised in my Villanova Tax Procedure class, and Anna has been working with me and Marilyn Ames and attending the class as we prepare to launch a new revised online procedure class next year.

Your Advice is Sought – A Threshold Inquiry for Penalty Abatement

Today’s guest blogger is Joseph Cole, LL.M.  He is an Senior Associate Attorney at RJS Law in San Diego, California.  His practice includes federal and state tax controversy. Taxpayers often argue their accuracy relate penalties should be excused because their accountant made an error while preparing their tax return.  Today’s post discusses how taxpayers must first show they relied on actual professional advice involving professional judgment from an accountant or tax advisor (as opposed to the tax return error being attributed to a clerical-type error) in order to obtain relief from accuracy related penalties. 

The post struck a special cord with me since I recently lost a penalty case, Mulu v. Commissioner, TC Summary Opinion 2023-2 in which the taxpayer did not review the return prepared by a paid but ghosting preparer.  Had my client reviewed the return he could have corrected the incorrect job title placed on the return but would not have been able to understand and fix the incorrect depreciation and business expense claims which caused the liability giving rise to the additional tax, to which he agreed, and the penalty with which he did not agree.  I did not view job title as an important facet of the return but the court did creating a result that surprised me.  Keith

The Tax Court’s recent Patacsil  (Patacsil v. Comm’r, TC Memo 2023-8) illustrates a threshold inquiry a taxpayer may need to overcome when he or she seeks relief from penalties.  The taxpayers in Patacsil sought relief from accuracy related penalties claiming they relied on the advice of their tax advisor.  Judge Holmes’ opinion illustrates that taxpayers may only be eligible for relief when they rely an actual advice from a tax advisor, i.e. professional judgment or analysis of a tax advisor, as opposed to “tax preparation” or clerical tasks associated with a tax advisor’s duties. 


To briefly summarize the Patacsil case, the taxpayers owned several group homes. Some of the properties they owned were lost in foreclosure.   Among other things, the taxpayers claimed NOL carry-forwards, claimed Cancellation of Indebtedness Income (COI) was excluded from income because of insolvency exception, and various Schedule C losses.  (There were some procedural issues raised like implied consent in pleadings I would be remiss if I did not briefly mention).

The Court ruled against the taxpayers on most of the issues that were in dispute.  Among other things, the taxpayers could not exclude COI income for one of the years in question, they could not claim NOL carry-forwards, and could not claim many of their Schedule C deductions.  Like many tax court opinions, the Patacsil opinion ends with a discussion of penalties. 

Like many other taxpayers, the Patacsils sought professional help in preparing their returns.  The Patacsils argued that they should be entitled to relief from accuracy related penalties because they relied on the advice of their tax advisor.  The Tax Court looked to whether the taxpayers received advice from their tax preparer in determining whether they were eligible for relief from accuracy related penalties. 

Tax Accounting, for lack of a better term, comprises of tax advice (i.e., tasks that involve judgment or analysis) and tax preparation (i.e., tasks that are clerical in nature.).  The case law differentiates between tax advice and tax preparation.  (See Woodsum v. Comm’r, 136 TC 585 (2011)).  Advice requires special training.

In Patacsil, the court determined reporting business expenses on a Schedule C may not constitute tax advice because the accountant in the case simply transcribed figures provided by the taxpayers and did not exercise any judgments or perform any analysis regarding the deductions.  The Patacsil decision did grant the Taxpayers relief for accuracy related penalties related to claimed NOL’s because it considered the treatment of NOL’s “tax-law arcana.”  The court did not apply the three part Neonatology Associates test for the Schedule C deductions because the taxpayers did not rely on advice, and the Neonatology Associates test only applies to advice.  (Some Procedurally Taxing posts touching on Neonatology Associates can be found here and here). 

The case law provides lists other tasks that do not constitute advice for penalty relief purposes.  To give some examples, a tax preparer’s failure to report income on a tax return may not constitute advice. (See Woodsum and Viola v. Comm’r, TC Memo 2013-213).  The failure to report income in these cases was deemed to be based on some clerical error rather than specific advice from the tax preparer.  These failures to report income were attributed in part to the taxpayers neglecting to carefully review their return. A tax preparer is not providing advice when the preparer is merely inputting data into software.  (See Pankratz v. Comm’r, TC Memo 2021-26). 

Seeking the services of a professional tax preparer does not make a taxpayer completely immune to potential penalties.  While a taxpayer may rely on their tax preparer’s professional judgment, they may not necessarily rely on their tax preparer’s clerical work if they wish to avoid penalties.  

Tax Court Practice & Procedure Updates from the 2023 ABA Tax Midyear Meeting

On February 10, the Court Practice & Procedure committee of the ABA Tax Section hosted Special Trial Judge Peter Panuthos and Robert Wearing, Deputy Associate Chief Counsel (P&A), for a recent developments session moderated by Allison Baker.


Updates from the Tax Court

Judge Panuthos first presented some figures on Tax Court filings in fiscal year 2022. These can be found in the Court’s 2024 budget justification, which Keith blogged about here. The following charts are reproduced in Keith’s post:

  • Tax Court cases filed and closed
  • Cases filed based on jurisdiction type
  • Percentage of paper and electronic petitions
  • Trial sessions held

I recommend reading that post and Carl Smith’s comment on the categorization of cases.

Judge Panuthos noted that 80% of petitions filed were without counsel. 61% of cases were filed under Regular case procedures and 39% under Small case procedures.

Limited Entry of Appearance: Practitioners can now enter a limited appearance any time after a case is set for trial and before the adjournment of the trial session. See Administrative Order 2020-03, issued May 29, 2020, and revised June 19, 2020. The Order can be found on the Court’s Covid-19 Resources page.

Since 2020 the number of limited appearance filings has grown steadily. About 40 were filed in FY 2022. Judge Panuthos noted that the option is available to paid practitioners as well as pro bono counsel. In cases where the taxpayer has some ability to hire counsel but cannot afford briefing, it may be worth offering “unbundled” representation for the pretrial period and/or the trial session only.

Remote Trial Sessions. Judge Panuthos noted that the Notice Setting Case for Trial invites the parties to file a motion for a remote trial session if they desire one. To date, all such motions have been filed by the petitioner; none have been filed by respondent. The Court has been liberally granting these motions.

Public Access. Judge Panuthos responded to Keith’s post about the removal of one computer terminal in the court’s records room. He explained that between June 2022 and February 2023, only 22 people visited the Tax Court to look at records. According to the Court, there has never been an instance of someone needing to wait to use a terminal. The Court’s intent was not to limit the public’s access; rather, they did not believe there was a need for two computers.

I can understand that rationale – computers do require maintenance, as anyone trying to work on a computer that has not had updates run for months (or years) will find out. Villanova has gradually removed nearly all of its clinic workroom computers over the last five years, for the same reason as the Court removed the second public access terminal.

Judge Panuthos stated that the Court continues to consider ways to expand access to the public, but remains concerned about inadvertent disclosure of confidential information.

Tax Court Rule Changes. Judge Panuthos thanked those who submitted comments on the Tax Court’s proposed rules last spring. The comments were given serious consideration. New rules will be coming “soon” – no date was promised.

Quarterly Webinar. The next quarterly Tax Court webinar will be held on March 16. The topic is expert witnesses. The flyer is here. Register at

Tax Trailblazers. The next Tax Trailblazers webinar will feature Larry D. Bailey. View the flyer and sign up here: Engagement & Outreach | United States Tax Court ( The program is February 22 from 7 to 8:15 PM ET.

Clinic & Calendar Call program. Judge Panuthos thanked ABA Tax Section volunteer attorneys and members of the Pro Bono and Tax Clinics committee for their commitment to improving access to justice in the Tax Court. 126 organizations are currently enrolled in the Court’s calendar call program.  

Updates from the Office of Chief Counsel, IRS

Robert Wearing, Deputy Associate Chief Counsel (P&A) presented highlights from the Office of Chief Counsel’s Fiscal Year 2022 Report to the ABA. The report consists of 27 PowerPoint slides providing a wealth of information. The slide deck can be downloaded here.

Mr. Wearing first noted that the Office of Chief Counsel’s statistics do not perfectly match the Court’s; indeed they never have. It is not clear why there are slight differences.

The docketed inventory numbers show that we may be over the coronavirus-caused backlog, or at least the trend is in the right direction.

It is no surprise that the spike in cases following the pandemic mainly came from service centers. Practitioners have complained about the IRS functions prematurely issuing notices of deficiency (and also making premature assessments). This is likely contributing to the high volume of small dollar cases.

Small dollar cases make up the vast majority of cases petitioned, but 83% of the dollars in dispute come from just 420 cases.

Taxpayers were self-represented in 90.5% of cases petitioned during FY22.

I hope that some feedback loop exists, and there are some incentives or consequences in place for executives in charge of programs like AUR, AQC, and correspondence exam, so that the IRS will put resources into improved service center compliance processes. These processes look cheap, but in reality they often shift work downstream to Chief Counsel, the Tax Court, and calendar call programs.