DAWSON Almost Here

We are now less than a week away from the beginning of the transition at the Tax Court to DAWSON and this deserves another reminder for those who practice in the Tax Court because of the shutdown of the Court’s electronic filing system.

If you are a Tax Court practitioner who has given the Court your current email address, you may have received an email on Friday the 13th directly alerting you to the upcoming shift to DAWSON.

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The email does a good job of explaining what is to happen.  Here’s what I received:

You are receiving this email because you are a member of the bar of the United States Tax Court. This is an official notice from the Court to inform you about our transition to a new Case Management System that begins soon. If you feel you received this message in error, please contact our Admissions Section, at admissions@ustaxcourt.gov.

In December 2020, the United States Tax Court will be launching DAWSON (Docket Access Within a Secure Online Network), the Court’s new case management system. The Court expects DAWSON to be active no later than December 28, 2020.

Beginning at 5:00 PM Eastern Time on November 20, 2020, the current e-filing system will become inaccessible and all electronic files will become read-only. See the October 7, 2020 Press Release for more information.

In early December, a new user name and temporary password for DAWSON will be emailed to this address, along with a link to activate your DAWSON account. You must promptly activate your account. The temporary credentials will expire after 7 days, and if you do not activate your account, you will not have access to your electronic case records.

For more information and updates, including FAQs, please continue to monitor the Court’s website, www.ustaxcourt.gov.

If you are a Tax Court practitioner and did not receive this email, you might want to contact the Admissions Section to make sure that your information at the Tax Court is accurate.  If it is not accurate you will not receive the link to activate DAWSON that the Court will send out next month and that will make it difficult for you to operate in the new environment.

If you want to learn more about DAWSON, you can read the Court’s description here where it announces the coming of DAWSON.  You can also read more about it in my earlier post here.

The FAQs referred to in the email from the Court were recently updated.  There are many FAQs but I want to highlight a few focusing on what is going to happen on November 20:

What happens November 20, 2020?
  • Beginning at 5:00 PM Eastern Time on November 20, 2020, the eAccess system will become “read only”. See this Press Release.
  • Records in the eAccess system—including opinions and orders—will remain visible to parties and the public but no new electronic case filings will be permitted.

I think it’s important to note that you will be able to see documents in the system even though you will not be able to electronically file documents.  This leads to the next important question answered by the FAQs regarding what do you do if you need to file a document during the period of the DAWSON installation:

What if I need to file something after November 20, 2020 and before DAWSON is active?

If you must file something with the Court after 5:00 PM Eastern Time on November 20, 2020 and before DAWSON “goes live” in December, you can do so by mailing your document to the United States Tax Court, 400 2nd Street NW, Washington DC 20217. See this Press Release.

For those of us old enough to have practiced at the Court before the Court adopted the current electronic filing system, things have returned to our youth or maybe our middle age.  It will be more expensive to file documents because of postage.  You may want to spend the extra nickels and send things via certified mail.  Of course, you should already be doing that for the petitions you mail to the Court.  It is also possible under IRC 7502 to send mail to the Court using an authorized private delivery service, but please make sure you use an authorized service as problems, like the situation in Guralnik, can occur when using an unauthorized service and problems in general can occur when mailing without some type of receipt. 

Since many of us have not paper filed in some time, also remember that pursuant to Rule 23(b) you should send the original and one copy of the document you are filing. 

Note that the Court hopes to not issue orders and opinions during the period of Dawson installation.

Will the Court still issue opinions and orders during the time E-Filing is inaccessible?

The Court does not currently anticipate issuing any orders or opinions from 5:00 PM Eastern Time on November 20, 2020, until DAWSON goes live. If circumstances necessitate issuing an opinion or order, the Court will do so.

This might limit the material available on certain blog sites that regularly cover the Tax Court.  So, look for lots of material on refund and bankruptcy cases at this blog site over the next month with an occasional TIGTA or GAO report thrown in for good measure.

Admission to Tax Court, Access to the Tax Court Clerk’s Office and Murdock Award

Two recent announcements from the Tax Court bear mention related to getting into the Tax Court bar and getting into the Tax Court building.  A press release in September announced that Chief Special Trial Judge Carluzzo received the Court’s Murdock Award and that deserves discussion and recognition.

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Attorney Admission

The Court recently revised Form 30.  It uses this form for attorneys seeking admission to practice before the Tax Court.  On May 4, 2020, the Court issued a press release with Form 30 containing the longstanding requirement that the attorney applying for admission to the Tax Court have the admission request notarized.  The Court has revisited its admissions application form to remove the requirement that the applicant have the form notarized and permit the applicant to affirm that the information contained in the form is true under penalties of perjury.  The change permits applicants to apply without having to potentially interact with a third person during the pandemic and conforms to the federal statute allowing a statement of this type to substitute for a notarized statement.

Getting admitted to the Tax Court is an easy and straightforward process for any attorney in good standing of the highest bar of a state.  Basically, you just need to submit a certificate of good standing from your state bar along with the brief application and $50 to become a lifetime member of the Tax Court bar.  Like most things with the Tax Court, it is a bargain compared to other federal courts.  Starting in May 2020 the Court allowed attorneys seeking admission to email the application to the Court’s admissions office.  Payment would occur through Pay.gov the same portal used for paying the fee for documents ordered from the clerk’s office.

Building Entry

On Friday October 30 the Tax Court announced in a press release that delivery of documents to the clerk’s office was suspended.  The press release notes that mailing documents to the Court works and efiling remains available. 

When the Tax Court reopened its clerk’s office this summer, it did not reopen the building.  The announcement reopening the building did not allow persons to deliver documents to the clerk’s office.  We speculated in a post about how the inability to personally deliver documents to the clerk’s office impacted the suspension of time allowed by the case of Guralnik v. Commissioner, 146 T.C. 230 (2016).  The Court then issued a second press release allowing the delivery of documents to the clerk’s office, which opened up the Tax Court building in a small way starting July 10, 2020.

The press release on October 30 closes the door, so to speak, of the Tax Court to any outsider eliminating one possible way to deliver documents to the Court.  Although we speculated on how this closed portal to the clerk’s office might impact time frames based on Guralnik, I would not want to test out the closure of personal access to the clerk’s office as a basis for obtaining more time to file a petition.  In reaching the decision in Guralnik that it would treat the closure of the clerk’s office as a reason for granting a petitioner additional time to file a petition, the Court looked to Federal Rule of Civil Procedure 4 since the Tax Court had no rule regarding closure of the clerk’s office.  We discuss Guralnik generally here, here and here.  FRCP 4 does not address partial closure of a clerk’s office, viz., closure for personal delivery while remaining open for everything else.  I could find no cases on this issue.

For petitioners and practitioners in most of the country the complete closing of the Tax Court building does not matter.  Almost no one outside of Washington physically goes to the clerk’s office to submit documents; however, we know from the recent debates surrounding voting in person that doing something in person rather than by mail permits a finality that mailing delays and can deny.  The complete building closure will protect Court employees as the pandemic ramps up again and will have little impact on the vast majority of those seeking to petition the Tax Court.

Murdock Award

In 2012 the Tax Court presented the Murdock Award to the previous Chief Special Trial Judge Peter Panuthos.  I had the opportunity to go to the ceremony held by the Court on the occasion of the award presentation to Judge Panuthos.  The ceremony and the speakers did a great job of highlighting the important work that Judge Panuthos has done, and continues to do, on the Court for the pro se petitioners and for low income taxpayers in general.  As the announcement mentions, Judge Panuthos was only the 9th recipient of the award.  The Court does not give this award lightly.

I missed the press release issued on September 9, linked above, that the Court has bestowed the award upon Chief Special Trial Judge Lewis Carluzzo and only discovered it in reading the releases for this post.  Because receiving the award is a big deal and because Judge Carluzzo is a very deserving recipient, the granting of the award deserves mention.  In a time when it can be hard to find something good to lift your spirits, the Tax Court has provided an opportunity for feeling that something positive has happened.  I assume that once the Court reopens it will also have a public ceremony honoring Judge Carluzzo, but in the meantime we can honor him in print and with calls and emails of congratulation.

Judge Carluzzo has been on the Court over 25 years after working in Chief Counsel’s Office for almost two decades and creating a distinguished career there before joining the Court.  I knew him first as an attorney in Chief Counsel with a reputation as an outstanding trial lawyer.  As a judge I know him to be a tireless defender of pro se litigants in the path forged by Judge Panuthos.  Judge Carluzzo is always willing to speak to or assist in training of clinicians.  He knows how to run a courtroom in which it is clear who is in charge but also clear that he cares for people appearing before him and wants to get it right.  The Tax Court chose him to feature on its videos demonstrating remote trials.  If you have not had the chance to see him presiding in person, check out the video.

Congratulations Judge Carluzzo on your well-deserved recognition. 

Tax Shelter Investor Relieved of Penalties by Graev

In the latest precedential opinion from the Tax Court on Graev, Oropeza v. Commissioner, 155 T.C. No. 9 (2020), the Court refuses to impose any penalty on the petitioner despite his investment in a tax shelter.  The case receives precedential treatment because it finds yet another way in which the Graev case impacts the IRS as it goes to impose penalties.  Mr. Oropeza, as have several beneficiaries of the Graev precedent, benefits from the age of this case.  The tax year is 2011 and he docketed his Tax Court petition in 2015.  At the time the revenue agent worked this case, Graev had not burned into the IRS consciousness the need to obtain penalty approval prior to sending out the revenue agent’s report.  The statute came into existence in 1998.  So, it’s hard to build up significant sympathy for the IRS regarding the way it handled penalties after Congress had spoken, but timing here does matter.

If you are interested in this case, you should also read the excellent post by Bryan Camp in his Lessons from the Tax Court series.  The IRS has also issued some guidance related to Graev that should be noted.  I was alerted by Jack Townsend of a new IRM provision that provides important guidance to revenue agents in this area:

20.1.1.2.3.1 (10-19-2020)

Timing of Supervisory Approval

For all penalties subject to IRC 6751(b)(1), written supervisory approval required under IRC 6751(b)(1) must be obtained prior to issuing any written communication of penalties to a taxpayer that offers the taxpayer an opportunity to:

  • Sign an agreement, or
  • Consent to assessment or proposal of the penalty

Jack has blogged on this provision and you can find his post here.

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Mr. Oropeza invested in microcaptive insurance.  The upcoming Supreme Court argument in CIC Services presents the same type investment though, as with Mr. Oropeza, the case does not directly involve the taxation of the investment itself.  The revenue agent audited Mr. Oropeza’s return and proposed, in Letter 5153 and a revenue agent report dated January 14, 2015 accuracy related penalties under 6662(a) of 20%.  Prior to the sending of this letter, the immediate supervisor of the revenue agent had not signed the approval of the penalties and did not sign it until two weeks later.

On May 1, 2015, the revenue agent changed his recommendation proposing a penalty under 6662(i) for 40% for a transaction lacking economic substance.  The revenue agent’s immediate supervisor signed the form approving this increase.  A notice of deficiency issued on May 6 focused on the 40% penalty with the 20% penalty as a fallback position. 

Based on Belair Woods, LLC v. Commissioner, 154 T.C. 1, 14-15 (2020) interpreting IRC 6751(b), we know that the 20% penalty will fail because the supervisory approval came after the agent transmitted the IRS position to the taxpayer.  At the time it filed its original brief in the Oropeza case, the government attorneys did not have the benefit of the Belair Woods decision and argued that the notice of deficiency was the appropriate date for determining whether approval of the immediate supervisory had occurred.  The IRS argued that it met the requirement of the statute.  In subsequent briefing on the case, it had the opportunity to address the Belair Woods decision.

At issue here is the impact of 6751(b) on the 40% penalty for which the revenue agent obtained approval prior to notifying the taxpayer.  (Some uncertainty on this issue exists because the immediate supervisor failed to date the approval form as he signed it; however, his testimony supported the fact that he signed on the same day as the revenue agent.  Of course, the date of his signature does not matter given the outcome of the case.)  The IRS argued that imposition of the penalty under IRC 6662(i) represented a separate penalty properly approved before notifying the taxpayer.  The Tax Court decided the case on cross motions for summary judgment.

The IRS argued that Oropeza differed from Belair because the letters offering a conference with Appeals differed slightly.  The Tax Court rejected the attempt to make a distinction based on the type of letter offering an Appeals conference.  It stated:

The Letter 5153 clearly communicated the same message to petitioner: It told him that he could now go to Appeals, but only if he first executed a Form 872 that would give Appeals enough time to consider his case.

So, the IRS communicated the initial determination to the taxpayer in the Letter 5153 and sent it prior to supervisory approval.  Does that lock the IRS into failure on the penalty issue or does the change in penalty position and the obtaining of a signature prior to communication with the taxpayer of the new penalty provide the IRS with a reprieve?

In approaching this issue, the Tax Court stated:

Litigants sometimes refer to section 6662(i) — like section 6662(h), applicable in the case of a “gross valuation misstatement” — as imposing a “40% penalty.” As the statute’s text makes clear, however, section 6662(i) does not impose a distinct penalty. It simply increases the rate of the penalty imposed by section 6662(a) and (b)(6) for engaging in a transaction lacking economic substance.

Given the statutory structure, we think the proper analysis requires that we answer two questions. The first is whether the RAR should be read as asserting a penalty under section 6662(a) and (b)(6) for engaging in a transaction lacking economic substance. If so, that penalty did not receive timely approval. The second question is whether, if the base-level penalty was not timely approved, the IRS can satisfy section 6751(b)(1) by later determining that section 6662(i) applies because the transaction was not disclosed on the return.

The Tax Court examined the IRS communication regarding the 20% penalty, noting that a taxpayer receiving the correspondence from the IRS would struggle to know which of the grounds of IRC 6662 the IRS sought to apply including “a transaction lacking economic substance.”  The IRS argued that while the revenue agent’s report might have been ambiguous, additional evidence shows what it meant.  The Court declines to look behind the information provided to the taxpayer and that information included the possibility that the penalty related to a transaction lacking economic substance.

The Tax Court then looked at IRC 6662(i).  It concludes that this subsection does not impose a distinct penalty but simply increases the rate of the penalties imposed under 6662(a) and (b)(6).  Based on this analysis, the Court finds that 6662(i) serves as something similar to an aggravating factor in criminal law leading to a higher punishment.  It moves from that conclusion to the conclusion that the initial penalty proposed in Letter 5153 operates as the touch point that it must review to determine if the IRS timely approved the penalty.  Looking at the transaction at that point, the IRS fails.

Linking the penalties imposed under 6662 in this way may benefit the IRS if it timely approves the first notice of a 6662 penalty but does not obtain a timely approval of an increase with the categories of 6662 penalties.  Maybe the next case will fall in the IRS’s favor because of this linkage.  There may be other implications of the linkage determined in Oropeza as we look at penalty cases in the future.  Professor Camp’s post does a good job of looking at possibilities and inconsistencies.  This case may have implications that reach beyond mere penalty approval.

The Effect of an Order to Show Cause, Designated Orders August 24-28 and September 21-25, 2020

Docket No. 14410-15, Lampercht v. CIR (order here)

Up until now, I was the only designated orders’ author who had yet to cover this case which has had eight orders designated in it since March of 2018. The case’s recent orders have addressed discovery-related matters, and in this order on petitioner’s motion, the Court reconsiders a previously issued “order to show cause.” It decides to withhold its final ruling in part to allow more time for petitioners to comply, discharge it in part, and make it absolute in part.

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The Tax Court strongly encourages parties to engage in informal discovery, so it is somewhat rare to encounter an order related to discovery.  Tax Court Rule 91(f) allows the Court to issue an “order to show cause” related to stipulations when one of the parties “has refused or failed to confer with an adversary with respect to entering into a stipulation” or “refused or failed to make such a stipulation of any matter.”

The order describes the effect an “order to show cause” has on the parties and the proceedings. The case involves several different types of documents all of which appear to be difficult obtain and some which may not even exist. The first documents addressed by the Court relate to property owned by petitioners in another country. Earlier on, petitioners conveyed that their ability to obtain the documents was symmetrical to the IRS’s ability, so the Court ordered petitioners to execute a waiver which the IRS could use to obtain the documents. Even with the waiver, the IRS was unsuccessful but learned that petitioners could obtain the documents by requesting them from the local authorities where the property is located. As a result, the Court sets a specific date for the petitioners to do this or else the order will be made absolute.

Next, petitioners state that certain business-related records do not exist, and they wish to provide affidavits instead. The IRS challenges the sufficiency of the affidavits, but the Court says the IRS can press his criticisms of petitioners’ explanation at trial and dismisses the “order to show cause” as it relates to these items.

Finally, petitioners contend that they were unable to get necessary records from their bank in order to participate in the IRS’s voluntary offshore disclosure program. The IRS also needs a waiver from petitioners to attempt to obtain the bank records. The petitioners executed a waiver but it was ultimately returned because it was not notarized, and petitioners failed to provide the identity verification requested. The Court makes the “order to show cause” absolute as it relates to this item.

What is the effect of an “order to show cause” being made absolute? In this case, it means that petitioners are precluded from offering any evidence at trial with the respect to the item or the inexistence of the item. In other words, the Court will not allow petitioners to use their alleged inability to the obtain records serve as a reason for their inaction at trial.  

Docket No. 13892-19, Malone v. CIR (order here)

This next order involves the Court’s concern with a petitioner’s capacity to engage in litigation and a conflict that may arise if a certain family member tries to help him.

The tax return at issue in the case is a section 6020(b) substitute for return which didn’t account for any of petitioner’s business expenses. The case was scheduled for trial in June 2020 but was delayed due to Covid-19 and since then parties have kept the Court apprised of their progress in monthly status reports. In the reports, petitioner’s counsel repeatedly states that petitioner has not made much progress with retrieving and organizing documents due to side effects of brain surgery he had in February 2019.

Since the petitioner has not made much progress, the Court is concerned with petitioner’s capacity under rule 60(c). Petitioner’s counsel states that petitioner’s family is helping him gather documents and information but does not identify which family members are assisting him which also raises the potential conflict concern for the Court.

Petitioner may wish to challenge the IRS’s determination of his filing status. This is permitted because a substitute for returns does not constitute “separate” returns for purposes of section 6013(b) (see Millsap v. Commissioner, 91 T.C. 926 (1988)).  The 6020(b) substitute for return used married filing separate status, so the Court speculates that if petitioner challenges his filing status and files a married filing joint tax return, then petitioners’ spouse may have a conflict of interest in helping him gather documents and information, unless his spouse disavows themselves of innocent spouse relief.

Without additional information, the Court isn’t sure that petitioner’s counsel can proceed without the appointment of a representative or if petitioner does not have such a duly appointed representative, a next friend or guardian ad litem.

To resolve their concerns the Court specifically asks whether petitioner was married during the year at issue, and if so, the status of petitioner’s spouse’s tax liability that year, including whether petitioner plans to submit a joint return. The Court also asks whether petitioner’s spouse has a conflict of interest or potential conflict of interest that may prohibit them from acting on petitioner’s behalf.

Docket No. 6341-19W, Sebren A. Pierce (order here)

This order provides the Court with another opportunity to reiterate its record rule and standard of review in whistleblower cases. The Court also cites its Van Bemmelen opinion which Les mentions in his very recent post on the record rule here.

In this designated order, the Court is addressing petitioner’s motion for summary judgement. Petitioner’s case alleged that a certain State had defrauded taxpayers of more than $43 billion in connection with the incarceration of prisoners in that State who were wrongfully prosecuted. The whistleblower office’s final decision rejected the claim “because the information provided was speculative and/or did not provide specific or credible information regarding tax underpayments or violations of internal revenue laws.”

After pleadings were closed, petitioner filed a motion for summary judgment asserting that he is entitled to a whistleblower award of 15% to 30% of the amount and requests an advance payment of $20 million, with any discrepancies in the award amount to be resolved by IRS audit.

The Court goes on to explain that is not how summary judgment works in whistleblower cases. The Court cannot determine that petitioner is entitled to an award and force the IRS to pay up, because it is not a trial on the merits. The Court explains that the de novo standard of review petitioner desires is not possible.

Orders not discussed, include:

  • Docket No. 1781-14, Barrington v. CIR (order here), petitioner’s motion to compel is denied because it is inadequately supported since petitioner cannot yet show that the IRS has failed to respond to formal discovery.
  • Docket No. 18554-19W, Wellman v. CIR (order here) the IRS’s motion for summary judgment in this whistleblower case is granted and petitioner does not object.
  • Docket No. 13134-19L, Smith v. CIR (order here), the IRS’s motion summary judgment is granted in a CDP case where petitioners submitted an offer in compromise but were not current with estimated tax payments.

Navigating Remote Calendar Calls

Two months in to the Tax Court’s new remote practice procedures (blogged by Keith here), there have been by my rough count about 28 calendar calls in 19 cities. Recently I received notices setting cases for trial by Zoom in February, indicating that remote trial sessions will continue for the winter session. This post will describe the new remote calendar call experience and provide some practitioner tips. We welcome others to share their experiences in the comments.

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Accessibility of Remote Proceedings

A recent question from the ABA Tax Section’s LITC listserv is a good place to start:

Our clinic has helped and continues to help a large number of individuals who have no internet access apply for the EIP using the non-filer portal. We are acutely aware of the staggering number of people especially in remote areas who simply have no internet. As we head into our first remote US Tax Court session, I am wondering what people do who either have no internet access or insufficient equipment to access the internet.

What has been the protocol to help those who lack any meaningful access to court because they have no internet access? Is there a protocol that clinics have used?  Is there a protocol that US Tax Court has in place…?

The Tax Court has been sensitive to this issue, but petitioners may not realize this if they only look at their Notice of Trial. The new Standing Pretrial Order says “If you have any concerns about your ability to fully participate in a remote Court proceeding, you should immediately let the Judge know.”

What happens if you let the judge know? It depends somewhat on the judge. Many judges will hold an informal conference call with the parties to discuss technology issues and how the case should go forward. Other judges may issue an order asking for the parties’ written responses. Depending on the circumstances, the case could be continued, or tried by phone, or submitted for decision without trial under rule 122. The court will listen to both parties’ concerns before deciding.

This system does place the onus on the petitioner to reach out to the Court, or at least to Chief Counsel, with any concerns. LITCs can help get the word out that it’s ok for petitioners to ask for accommodations.

What happens if the petitioner does not contact the court ahead of time with technology concerns? Some judges schedule conference calls as a matter of course if a case approaching trial remains unresolved and the petitioner is unrepresented. But some do not, and so the best practice is for petitioners to proactively share their concerns with the court and IRS counsel.

Calendar Call Administrators; Consultation Mechanics

Procedurally, a new feature of remote calendar call is the designation of LITC (or pro bono) calendar call administrators (also called supervisors). Each calendar call now has a designated administrator from the clinic or pro bono contingent as well as from IRS Chief Counsel. The Court shares remote proceeding instructions with the LITCs, which largely summarize the procedures shown in the calendar call videos on the Court’s website and expand on the role of the LITC administrator/supervisor.

The administrators play a “traffic cop” role at the calendar call, remaining in the main courtroom with their videos on to greet new arrivals. If a petitioner wishes to speak to a volunteer, the LITC administrator figures out which volunteers are available, and can escort the petitioner into a breakout room for the meeting. Likewise, if a petitioner wishes to speak with Chief Counsel, the Chief Counsel administrator figures out which attorney is assigned to the case, and can escort the petitioner into a breakout room with that attorney.

It is important that the clinicians and volunteers communicate ahead of time so that the clinic administrator knows about any eligibility or capacity limits. These should include any geographic limitations. At the Philadelphia calendar call on October 5, Judge Leyden had included several cases from her spring 2020 Detroit calendar which had been cancelled. One of those petitioners wanted to speak to a volunteer attorney, and none of the volunteers were from Detroit. Generally speaking, academic clinics do not have strict geographic limitations, whereas nonprofit legal services organizations may have requirements imposed by their grant funding.

The court’s videos and instructions state that volunteers will wait in a breakout room for any petitioners that wish to consult. Some judges have a different practice, however, one that I hope will catch on. At some sessions, students and volunteers have been permitted to remain in the main courtroom instead of waiting in a breakout room. Everyone except the two administrators and the clerk were instructed to keep their cameras off and microphones muted. This worked very well in Philadelphia. I appreciated that it allowed students to observe the interactions between the clerk and administrators and each petitioner who arrived. This also meant that volunteers did not have to keep a separate device connected to the public audio stream, in order to hear what might be going on in the courtroom.

Calendar Call Observations: Everything’s Up to Date in Kansas City

William Schmidt shared this account of the October 5 calendar call in Kansas City:

        As the October 5 virtual calendar call drew closer for Tax Court to hold session in Kansas City, I reached out to Judge Paris’s clerk for a practice session regarding Zoomgov. It turned out to be useful for us to chat about expectations regarding petitioners that were good candidates for advice from the 3 local Low Income Taxpayer Clinics (LITCs). There were 4 cases that she had identified as ones potentially needing assistance from the LITCs.

       To facilitate confidential discussions between such petitioners and LITC personnel, the Tax Court has virtual breakout rooms available. The clerk did a practice session for me regarding the breakout rooms to show me what it would be like to be placed and removed from such a room during the live session.

       When October 5 arrived, the 3 clinics met with the clerk at 9 a.m. This was to facilitate an extra hour for the unrepresented petitioners to talk to the clinicians before the calendar call started at 10 a.m. Central time. However, no petitioners showed up and we made small talk such as reviewing what to expect from the cases at calendar call.

       Once the calendar call started, the petitioners began to appear. I think there was a variety of people appearing electronically by using computer cameras, cell phones, or iPads. There were some delays as the clerk had to identify everyone. She would label the person on the Zoomgov call so you could identify the person’s role (petitioner, LITC, respondent’s counsel, etc.). There were some pauses at that point and later for appearances on the cases as the petitioners had to state their names over the audio. A couple petitioners with iPads had to phone in separately to make appearances. Overall, the technology made things a bit awkward but they eventually worked out.

       One unrepresented person (the intervenor in an innocent spouse case) eventually asked for assistance. Since that individual was a Missouri resident, the director at the University of Missouri-Kansas City LITC met with him in a breakout room and eventually entered an appearance on the case.

       There were 6 cases at calendar call. One was dismissed for lack of prosecution, one was settled (IRS Counsel read the settlement into the record and the parties verbally agreed to the settlement), and the other four cases were continued with joint status reports due in 30 days (innocent spouse, accuracy-related penalties, and substantiation of contract labor and advertising expenses were some of the issues mentioned).

       There was a trial scheduled for October 6 and 7, but the parties filed a stipulation of settled issues and a joint status report. The trial was stricken from the remote trial session and continued. The parties are to file a joint status report or decision by November 6.

Communication, Privacy, and Document Exchange

William provided this tip for communication:

it is best for LITCs or other pro bono attorneys meeting with an unrepresented petitioner in a breakout room should get the phone number of the petitioner in case there is a technical issue that causes someone to be kicked out of the Zoom session.

This is good advice. The Clerk in Philadelphia warned all participants that some people have been kicked out of the session when they’ve attempted to move between the main room and a breakout room.

Privacy has also been raised as a concern for remote proceedings, given the public audio stream on YouTube. The Clerk at the Philadelphia calendar noted that he had the power to mute the public audio stream, and he invited folks to let him know if they needed to share confidential information as part of their case presentation. This seems like a reasonable approach to the problem.

Document review and exchange during calendar call is another concern that has been raised. One of our most useful functions at a calendar call is to quickly review documents from both sides and give an assessment to the petitioner. To state the obvious, this is more difficult over Zoom. At the Philadelphia calendar call on October 5, the chat function in Zoom was disabled, so we could not use that to communicate “on the side” during the calendar call. This is an understandable move by the Court, but it does make document exchange between Chief Counsel and a volunteer more difficult. In the virtual settlement day meetings I attended, the chat function was very useful for sharing documents. At least on Zoomgov, sharing documents through the chat seems much more secure than email, and easier for IRS Chief Counsel attorneys.

Obtaining documents from a petitioner can be much more difficult than obtaining them from IRS Counsel. At the Philadelphia calendar call, one case where the petitioner still needed to provide documents was continued, and I expect this is not unusual. Judge Leyden commended after the session that the hardest part about remote trial sessions is the exchange of documents and submission of last-minute exhibits. Even if the trial is scheduled for several days after the calendar call, it is not easy in many cases for petitioners to provide legible copies of their documents. I have had limited success asking clients to send photographs of their documents – at least half the time they arrive blurry or cropped, and are not usable. Volunteers and clinicians should be prepared to brainstorm creative ways to obtain documents quickly, or to counsel petitioner how to make a reasonable request for additional time. Many judges will continue a case but retain jurisdiction in order to set status report deadlines and keep the case moving forward. This was Judge Leyden’s approach on Oct. 5, and is consistent with how many judges are taking a more active role in their docket this fall, setting frequent status report deadlines even in cases that are not set for trial.

Conclusion

The Tax Court is keeping its docket moving while attempting to ensure that both sides have the opportunity to put on their best case. This is not an easy task. Reaching unrepresented petitioners continues to be a challenge. Both the Kansas City and the Philadelphia calendar calls had several cases dismissed for lack of prosecution. It does not appear to me that more cases were dismissed than last fall, rather it seems to be a continuation of the existing problem.

The Court welcomes feedback on its remote operations. From the Zoomgov Proceedings page:

Recently had a Zoomgov proceeding before the Tax Court? Please share your thoughts on the experience by completing the Zoomgov Proceeding Feedback form.  

I encourage readers to submit their comments below and to the Court as well.

 

Tax Court Finalizes Adoption of New Rules

On April 21, 2020, the Tax Court issues proposed amendments to its rules and solicited comments.  The Court received comments from three sources: 1) the ABA Tax Section; 2) the Office of Chief Counsel and 3) the Tax Clinic at the Legal Services Center of Harvard Law School.  On October 6, 2020, the Tax Court issued a press release putting out the final rules which included some revisions based on the comments.  The final rules are in the body of this post below.

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One of the big changes to the rules is the adoption of limited appearance and special appearance opportunities.  We have written about the limited appearance rule change here, here and here.  The Court has been issuing Administrative Orders concerning limited appearance since 2019 but now puts mention of this opportunity into the rules.  It signals in its comments on the rule changes that it will continue to monitor this practice and we may see more Administrative Orders.

I had the chance last fall to enter a limited appearance on behalf of an individual with whom I had consulted to provide some assistance but who was over the income guidelines set out in IRC 7526 keeping me from taking her as a client because her income slightly exceeded the guideline amount.  The limited appearance I made allowed me to speak for her at calendar call where she moved to dismiss her ex-husband as an intervener in her innocent spouse case for failure to appear at calendar call.  I am sure that she could have explained to the court why it should dismiss her ex-husband but the new rule allowed me to do it for her and that made her much more comfortable.  It may have also allowed the case to move along more efficiently benefiting the government and the Court.

I have not had the chance to make a special appearance but can imagine situations in which that might be useful.  In the remote environment it may be especially useful avoiding the need for a limited appearance in situations in which the appearance is extremely limited.  I would be interested in hearing from anyone out there who has made a special appearance and what make it special.

The Rule changes:

1. Service of papers; cross references corrected

Paragraphs (b)(1) and (4) of Rule 21 are deleted and replaced with the following. [Paragraphs (a), (b)(1)(A) through (D) including the flush language, (b)(2), (b)(3), and (b)(5) remain unchanged and are omitted here.]

RULE 21. SERVICE OF PAPERS

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(b) Manner of Service: (1) General: All petitions shall be served by the Clerk. Unless otherwise provided in these Rules or directed by the Court, all other papers required to be served on a party shall be served by the party filing the paper, and the original paper shall be filed with a certificate by a party or a party’s counsel that service of that paper has been made on the party to be served or such party’s counsel. For the form of such certificate of service, see the Appendix, Form 9. Such service may be made by:

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(4) Change of Address: The Court shall be promptly notified, by a notice of change of address filed with the Court, of the change of mailing address of any party, any party’s counsel, or any party’s duly authorized representative in the case of a party other than an individual (see Rule 24(e)). A separate notice of change of address shall be filed for each docket number. For the form of such notice of change of address, see the Appendix, Form 10.

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Explanation

Rule 21(b)(1) and (4) is amended to remove references to Appendix I and replace them with references to the Appendix. Rule 21(b)(4) is amended to revise the reference to Rule 24 to account for changes to that Rule.

2. Appearance and Representation

Rule 24 is deleted and replaced with the following.

RULE 24. APPEARANCE AND REPRESENTATION

(a) Appearance:

(1) General: Counsel may enter an appearance by signing and filing:

(A) the petition or other initial pleading or document;

(B) an entry of appearance; or

(C) a substitution of counsel in accordance with paragraph (d).

See Rules 22, 23, and 26 relating to signing and filing papers with the Court.

(2) Required Information: Any paper that counsel may use to enter an appearance must include:

(A) the case name and docket number (if any); and

(B) counsel’s name, mailing address, email address (if any), telephone number, and Tax Court bar number.

(3) Counsel Not Admitted to Practice: An entry of appearance filed by counsel not admitted to practice before the Court is not effective until counsel is admitted. Where it appears that counsel who is not admitted to practice can and will be promptly admitted to practice, the Court may recognize that counsel in a pending case. See Rule 200 regarding the procedure for admission to practice before the Court and Rule 201(a) regarding conduct of practice before the Court.

(4) Limited Appearance and Special Recognition:

(A) Limited Appearance: Counsel may file a limited entry of appearance to the extent permitted by the Court.

(B) Special Recognition: The Court may, in its discretion, temporarily recognize an individual as the party’s representative, and no entry of appearance is necessary.

(5) Law Student Assistance: A law student may assist counsel with drafting a pleading or other document to be filed with the Court. In addition, with the permission of the presiding Judge or Special Trial Judge, and under counsel’s direct supervision, a law student may present all or any part of the party’s case at a hearing or trial. A law student may not, however, enter an appearance in any case, be recognized as counsel in a case, or sign a pleading or other document filed with the Court.

(b) Representation Without Counsel:

(1) General: A party that is not represented by counsel may proceed as follows:

(A) an individual may represent himself or herself;

(B) an authorized officer may represent a corporation;

(C) an authorized individual may represent an unincorporated association; and

(D) a fiduciary may represent an estate or trust.

See Rule 60 regarding proper parties and capacity.

(2) Required Information:

(A) The initial pleading or other paper filed by a party must include the party’s name, mailing address, email address (if any), and telephone number.

(B) If the initial pleading or other paper is filed by an authorized officer, authorized individual, or fiduciary, it must also include that person’s name, mailing address, email address (if any), telephone number, and capacity in which that person is appearing.

(c) Withdrawal of Counsel:

(1) Notice of Withdrawal as Counsel: Counsel desiring to withdraw as counsel for a party may file a notice of withdrawal as counsel if:

(A) more than one counsel entered appearances for that party and at least one counsel will continue to serve as counsel for that party;

(B) the notice of withdrawal is filed no later than 30 days before the first day of the Court’s session at which the case is calendared for trial; and

(C) there is no objection to the withdrawal.

(2) Motion To Withdraw as Counsel: Counsel desiring to withdraw as counsel for a party but who is ineligible to do so under paragraph (c)(1) must file a motion to withdraw as counsel.

(3) Motion To Withdraw Counsel by Party: A party desiring to withdraw the appearance of that party’s counsel must file a motion to withdraw counsel by party.

(4) General Requirements:

(A) Any notice or motion under this paragraph must include a statement that counsel or the party provided prior notice of the notice or motion to the counsel’s client or the party’s counsel and to each of the other parties to the case or their counsel and whether there is any objection to the motion.

(B) Any motion to withdraw as counsel or to withdraw counsel must also include the party’s then-current mailing address, email address (if any), and telephone number.

(d) Substitution of Counsel:

(1) No later than 30 days before the first day of the Court’s session at which the case is calendared for trial, counsel who has not previously appeared for a party in that case may enter an appearance by filing a substitution of counsel substantially in the form set forth in the Appendix, Form 8.

(2) The substitution of counsel must state that:

(A) substituted counsel enters an appearance for the party;

(B) current counsel’s appearance is withdrawn for the party;

(C) current counsel provided prior notice of the substitution to the counsel’s client and to each other party or their counsel; and

(D) there is no objection to the substitution.

(3) The substitution of counsel must be signed by current counsel and by substituted counsel, contain the information required by paragraph (a)(2), and be filed by the substituted counsel.

(4) Counsel entering an appearance as substituted counsel within 30 days of the first day of the Court’s session at which the case is calendared for trial must file an entry of appearance under paragraph (a), and any related withdrawal of counsel must be undertaken in accordance with paragraph (c).

(e) Change in Required Information: A party or counsel must promptly notify the Clerk in writing of any change in the information required under this Rule, or of the death of counsel, for each docket number involving that party or in which counsel has entered an appearance.

(f) Change in Party or Authorized Representative or Fiduciary: Where (1) a party other than an individual participates in a case through an authorized representative (such as an officer of a corporation or a member of an association) or through a fiduciary, and there is a change in the representative or fiduciary, or

(2) there is a substitution of parties in a pending case, counsel signing the motion resulting in the Court’s approval of the change or substitution will thereafter be deemed first counsel of record for the representative, fiduciary, or party. Counsel of record for the former representative, fiduciary, or party desiring to withdraw as counsel must file a motion in accordance with paragraph (c)(2).

(g) Limitations on Representation:

(1) Conflict of Interest: If any counsel of record (A) was involved in planning or promoting a transaction or operating an entity that is connected to any issue in a case, or (B) represents more than one person with differing interests with respect to any issue in a case, then that counsel must either secure the client’s informed written consent; withdraw from the case; or take whatever other steps are necessary to obviate a conflict of interest or other violation of the ABA Model Rules of Professional Conduct. See Rules 1.7 and 1.8, ABA Model Rules of Professional Conduct. The Court may inquire into the circumstances of counsel’s employment in order to deter such violations. See Rule 201.

(2) Counsel as Witness:

(A) Counsel may not represent a party at trial if the counsel is likely to be a necessary witness within the meaning of the ABA Model Rules of Professional Conduct unless: (i) the testimony relates to an uncontested issue; (ii) the testimony relates to the nature and value of legal services rendered in the case; or (iii) disqualification of counsel would work substantial hardship on the client. See Rule 3.7, ABA Model Rules of Professional Conduct.

(B) Counsel may represent a party at trial in which another professional in the counsel’s firm is likely to be called as a witness unless precluded from doing so under the ABA Model Rules of Professional Conduct. See Rules 1.7 and 1.9, ABA Model Rules of Professional Conduct.

Explanation

Rule 24 is amended stylistically to enhance its readability; to simplify the procedures governing the appearance, substitution, and withdrawal of counsel representing a party; and to clarify certain limitations on counsel’s ability to represent a party.

Rule 24(a)(1)-(3) and (5) reorganizes portions of former paragraph (a) and lists the methods by which counsel may enter an appearance for a party, identifies the information that counsel must provide the Court, and describes the procedures applicable to counsel not admitted to practice before the Court and law student assistance. This reorganization is largely stylistic. Rule 23(a)(3) requires counsel to provide contact information, including an email address, on any paper filed with the Court. Consistent with that requirement, Rule 24(a)(2) is amended to require counsel entering an appearance in a case to provide an email address. Rule 24(a)(4) is new and recognizes the Court’s practice of permitting limited appearances and specially recognizing counsel or other individuals. In May 2019, the Court adopted procedures governing limited entries of appearance and revised those procedures in May and June 2020. See Administrative Order 2020-03, issued May 29, 2020, and revised June 19, 2020, superseding Administrative Order 2019-01, issued May 10, 2019. The Court intends to maintain flexibility regarding the procedures governing limited entries of appearance and will continue to provide guidance through administrative channels. The Rule is further amended to recognize that judges have the discretion to specially recognize counsel or other individuals in appropriate circumstances. For example, a judge may specially recognize counsel at a trial or hearing solely to receive an oral status report or for the submission of documents related to the disposition of the case.

Rule 24(b)(1) and (2) reorganizes former paragraph (b) and describes scenarios in which a party may proceed without counsel and the information that a representative of a party must provide the Court. The Rule includes a new cross reference to Rule 60, which provides a comprehensive discussion of proper parties and capacity to represent a party. This reorganization is largely stylistic, and no substantive change is intended.

Rule 24(c) is amended to provide a simplified procedure for withdrawal of counsel for a party when more than one counsel entered an appearance for that party and at least one counsel will continue to serve in that capacity. In that circumstance, and if there is no objection, counsel may file a notice of withdrawal no later than 30 days before the first day of the trial session at which the case is set for trial. The notice of withdrawal will be effective when it is entered on the docket record for the case.

Rule 24(d) is reorganized and amended to provide for substitution of counsel, if there is no objection, no later than 30 days before the first day of the trial session at which the case is set for trial. The amendment clarifies that the substitution of counsel must be filed by the substituted counsel and must include the signatures of both the current counsel and the substituted counsel. The Rule further provides procedures to be followed if substituted counsel enters an appearance within 30 days of the first day of the trial session at which the case is set for trial.

Rule 24(e) is reorganized and amended to provide that a party or counsel must promptly notify the Court of any change in the information required by the Rule, including notification of the death of counsel.

Rule 24(g)(1) and (2) reorganizes former paragraph (g). Although the amendment is largely stylistic, new paragraph (g)(2) clarifies the restrictions on counsel’s representation of a party where counsel may be called as a witness in a case in which counsel has entered an appearance.

3. Proceeding to enforce overpayment determination; cross references corrected

Paragraph (e) of Rule 260 is deleted and replaced with the following. [Paragraphs (a), (b), (c), (d), and (f) remain unchanged and are omitted here.]

RULE 260. PROCEEDING TO ENFORCE OVERPAYMENT DETERMINATION

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(e) Recognition of Counsel: Counsel recognized by the Court in the action in which the Court determined the overpayment which the petitioner now seeks to enforce will be recognized in a proceeding commenced under this Rule. Counsel not so recognized must file an entry of appearance pursuant to Rule 24(a) or a substitution of counsel pursuant to Rule 24(d).

Explanation

Rule 260(e) is amended to revise the reference to Rule 24 to account for changes to that Rule.

4. Proceeding to redetermine interest; cross references corrected

Paragraph (e) of Rule 261 is deleted and replaced with the following. [Paragraphs (a), (b), (c), and (d) remain unchanged and are omitted here.]

RULE 261. PROCEEDING TO REDETERMINE INTEREST

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(e) Recognition of Counsel: Counsel recognized by the Court in the action in which the Court redetermined the deficiency or determined the overpayment the interest in respect of which the petitioner now seeks a redetermination will be recognized in a proceeding commenced under this Rule. Counsel not so recognized must file an entry of appearance pursuant to Rule 24(a) or a substitution of counsel pursuant to Rule 24(d).

Explanation

Rule 261(e) is amended to revise the reference to Rule 24 to account for changes to that Rule.

5. Proceeding to modify decisions in estate tax case involving section 6166 election; cross references corrected

Paragraph (e) of Rule 262 is deleted and replaced with the following. [Paragraphs (a), (b), (c), (d), and (f) remain unchanged and are omitted here.]

RULE 262. PROCEEDING TO MODIFY DECISION IN ESTATE TAX CASE INVOLVING SECTION 6166 ELECTION

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(e) Recognition of Counsel: Counsel recognized by the Court in the action in which the Court entered the decision which the petitioner now seeks to modify will be recognized in a proceeding commenced under this Rule. Counsel not so recognized must file an entry of appearance pursuant to Rule 24(a) or a substitution of counsel pursuant to Rule 24(d).

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Explanation

Rule 262(e) is amended to revise the reference to Rule 24 to account for changes to that Rule.

DAWSON is Coming

On October 7 the Tax Court issued a press release announcing that it is about to install and implement its new case management system.  The Tax Court has been talking about its new system for a while now, but the announcement puts a new wrinkle in the situation because of the things the Court and the parties will need to do during the period of installation.  So, even if you do not particularly care that the Tax Court is implementing a new case management system, it’s time to sit up and pay attention so you know what’s happening during the installation process.

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DAWSON is an acronym for Docket Access Within a Secure Online Network and is also a nice tribute to the longest serving judge in Tax Court history, Judge Howard Dawson.  I had my only appearance before Judge Dawson in 1979 in Boise, Idaho.  He was highly regarded then and went on to become a legend at the court.  You can read about him here and here.

The press release informs that public that because of the installation of the new case management system:

To facilitate the transition to DAWSON, beginning at 5:00 PM Eastern Time on November 20, 2020, the current e-filing system will become inaccessible and all electronic files will become read-only. Consistent with current practices, cases will remain electronically viewable. No documents may be e-filed in the current system after that time. The Court does not anticipate issuing any orders or opinions during the time e-filing is inaccessible.

The press release notes that the Chief Judge issued Administrative Order 2020-04 extending the time for the IRS to file answers in all petitions filed between September 21, 202 and October 28, 2020.  It goes on to say that all other documents required to be filed between 5:00 PM ET on November 20, 2020 and whenever DAWSON becomes active must be filed in paper.  The normal rule required leave to file documents in paper is waived during this period.  The Court notes that timely mailing will apply to documents mailed during this period. 

It also acknowledges that going through another period of petitions being filed with the Court without acknowledgement of the filing going to the IRS will trigger another round of premature assessments.  In the notice it cites to the email address created by Chief Counsel, IRS to alert the IRS to a Tax Court filing and the need to abate a premature assessment.  That address is Taxcourt.Petitioner.Premature.Assessment@irs.gov.  It’s nice to see the Court be proactive on this issue and great that Chief Counsel’s office has just set up an address to help in fixing the problem.  Because pro se individuals will struggle to find this address, everyone should keep it in mind when working with a petitioner who files during this period.

Finally, a smaller point to note comes from Judge Buch and Deputy Clerk Jessica Marine, who gave a preview of DAWSON at the Court Procedure and Practice Committee session of the ABA Tax Section Fall Meeting on September 30. They reported that all links (URLs) to Tax Court opinions and orders will be broken after the new system comes in, meaning that existing opinions and orders will have different URLs, and the current URLs will not redirect. So, if you have saved any links to orders or opinions, you may want to download them before the new system goes live at the end of December, or be prepared to run a fresh search when you want to reference the document.

Well, why not do this during 2020.  It’s already a year like no other.  Shutting down the clerk’s office again may be more normal than abnormal in a year like this.  Although the Court does not anticipate issuing opinions or orders during the DAWSON installation period, I can foresee the need for an occasional order.  If you need an order, you should certainly request it.  I do not read the press release as a prohibition against the Court issuing orders. 

Premature Dismissal

I have written before about premature assessments which are one consequence of the closing of the Tax Court clerk’s office during the pandemic.  A separate problem also exists with respect to the timing of appeals from the Tax Court.  So, the pandemic creates problems for cases coming and going in the Tax Court.

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Some problems could result from the closure of the clerk’s office during this period because of the way that appeals from Tax Court cases occur; however, when writing to the circuit courts to explain the problem and urge them not to dismiss appeals that fell due during the period in which IRS Notice 2020-23 extended the period.  In the letter to the circuit courts, the Department of Justice Appellate Section relied on IRC 7508A and the authority of the IRS to extend time frames where an emergency exists to explain to the circuit courts when cases should not be dismissed without a careful review of the dates of filing and how they related to the extension of time granted because of the pandemic.  A copy of the letter from the Tax Section of DOJ to the Second Circuit which was docketed in the appeal of Castillo v. Commission is here

When a taxpayer loses all or part of a Tax Court case and seeks to appeal, the basics of the appeal process are found in IRC 7482 and the specific provision stating that the appeal must be filed in the Tax Court within 90 days of the adverse decision is found in IRC 7483.  Not only does the taxpayer file the appeal with the Tax Court but the taxpayer also pays the filing fee to the Tax Court.  (Unless you can qualify for a fee waive at the circuit court, which is a separate process from requesting a fee waiver with the Tax Court, the taxpayer must pay quite a bit more to appeal than to file the Tax Court case – $505 versus $60.)

The reopening of the Tax Court clerk’s office no doubt caused the clerks not only to find all of the Tax Court petitions filed during the period of the closure of the clerk’s office but also the appeals filed.  The number of appeals filed is not a high number but just as the IRS assessed taxes presuming the taxpayer did not file a Tax Court petition, the circuit courts receiving a notice of appeal that the Tax Court logged in after the pandemic could conclude that the appeal was not timely filed and dismiss it.  This caused the Appellate Section of the Department of Justice to send a letter to the Second Circuit and to the other circuits. 

The letter notifies the Second Circuit of the issue created by the pandemic and of the specific grant of additional time to file the appeal created by Notice 2020-23.  The letter notes that this process is specific to tax and that circuit courts would not be expected to know this nuanced issue regarding tax appeals.

Carl Smith suggested this post to me and provided me with some helpful things to say for which he deserves credit.  He points out that there are many different statutes of limitation (SOLs) for bringing civil and criminal appeals.  For example, the general civil appeals SOL may be found at 28 USC 2107.  Subsection (a) provides the general rule that the appellant has 30 days.  Subsection (b) allows 60 days to appeal when the government is a party.  Subsection (c) allows district courts to extend the SOL under limited circumstances.  In Bowles v. Russell, 551 U.S. 205 (2007), the Supreme Court held that, even though it would not treat the civil appeals filing deadline as jurisdictional if it were applying its current case law on a clean slate, the deadline was still treated as jurisdictional because there were over 100 years of Supreme Court cases holding the filing deadline jurisdictional (a stare decisis exception to the Court’s new rules generally treating filing deadlines as not jurisdictional).

By contrast, the period to file an appeal from the Tax Court is in IRC 7483, which generally provides 90 days from the entry of the Tax Court decision.  Unlike 2107, 7483 does not list any exceptions or extensions.  The Supreme Court has never held the 7483 filing deadline to be jurisdictional, and it is clear that the section’s language would not make it jurisdictional under current Supreme Court case law.  There are some older Circuit court opinions holding the Tax Court appeal filing deadline to be jurisdictional and more recent unpublished Circuit court opinions stating the same, but none discusses the recent Supreme Court case law’s impact on the filing deadline.

There is a special FRAP rule applicable to Tax Court notices of appeal, Rule 13.  FRAP 13(a)(1)(B) provides for a non-statutory extension of the filing deadline as follows:  “If, under Tax Court rules, a party makes a timely motion to vacate or revise the Tax Court’s decision, the time to file a notice of appeal runs from the entry of the order disposing of the motion or from the entry of a new decision, whichever is later.”  In Myers v. Commissioner, 928 F.3d 1025 (D.C. Cir. 2019), the appellate court, sua sponte, raised the question whether it had to dismiss the appeal for lack of jurisdiction because Myers waited to file until after the Tax Court ruled on a post-decision motion to reconsider findings or opinion — at a time beyond 90 days after the decision had been entered.  The D.C. Cir. ultimately held that the appeal was timely because, following the reasoning of another Circuit, motions to reconsider should be deemed the same as motions to vacate for purposes of Rule 13(a)(1)(B).  Had the court not found the filing timely under the rule, it would have had to face the issues (raised by Myers) whether the 90-day period to file the appeal was not jurisdictional, and the DOJ waived any objection as to untimeliness by not raising this issue itself.  The D.C. Cir. deliberately declined to rule on the issue of whether the 90-day filing deadline in 7483 is jurisdictional under recent Supreme Court case law.

The recent Tax Court appeal dismissals for lack of jurisdiction have happened because some Circuits just assume that the filing deadline is jurisdictional and thus the court must independently raise the issue of timeliness.  Since courts of appeals see few Tax Court appeals, they are likely not aware that other provisions of the IRC, such as section 7508A, can provide extensions of the 7483 period — i.e., to look elsewhere before simply assuming all extensions of the 7483 period are located within the statute or Rule 13.

Update on Tax Court from Court Procedure and Practice Committee meeting

As a side note Judge Buch stated on a panel at the ABA Tax Section that the members of the clerk’s office there were working 12 hour days in order to attack the backlog of correspondence waiting for them when they returned.  I understood him to say that the clerk’s office at the Tax Court had worked its way through the backlog and was current.  This is good because he introduced a session on the Tax Court’s new case management system, which will go live in a couple months.  I hope the members of the clerk’s office at the Tax Court were well rested when they returned from the pandemic closure, because they are having to run pretty fast for the remainder of 2020 between catching up on the mail and working through a new management system.