Proposed Changes to Tax Court Rule 24

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On April 21, 2020, the Court issued a Press Release announcing proposed amendments to its Rules of Practice and Procedure and providing for public written comment to be received by May 31, 2020.  On May 18, 2020, the Tax Court issued a follow up press release noting that it’s not receiving mail at the moment since the clerk’s office is closed and directing those seeking to submit comments on recent proposed amendments to the Tax Court’s practice and procedure rules should email the comments to the court clerk at Rules@ustaxcourt.gov.  This makes sense given that mailing your comments to the Tax Court could cause them to arrive after the Court makes its decisions regarding the rule changes.

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So, what rules does the Court want to change?  In the April 21 press release, the Court seeks comments on changes to Rule 24 regarding practice before the Court together with some conforming amendments.  One of the biggest changes concerns limited appearance introduced last fall as an experiment.  The Court has decided that the experiment went well, and it seeks to adopt the limited appearance rules into its permanent rules along with other changes.  The press release contains a track changes copy of Rule 24 as well as a clean copy.  To help you understand the new rule and decide if you want to make comments, here is a clean copy of proposed Rule 24:

Post-Amendment Rule 24

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 related 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 for the procedure for admission to practice before the Court and Rule 201(a) regarding conduct of practice before the Court.

(4) Limited and Special Appearance:

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

(B) Special Appearance: The Court may, in its discretion, temporarily recognize an individual or counsel as the party’s representative, and no separate 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 and, with the permission of the presiding Judge or Special Trial Judge, and under counsel’s direct supervision, 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 member may represent an unincorporated association; and

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

(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 representative or fiduciary, it must also include the authorized representative’s or fiduciary’s name, mailing address, email address (if any), and telephone number.

(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 have entered appearances 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 subparagraph (c)(1) must file a motion requesting leave.

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

(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 Appendix, Form 8.

(2) The substitution of counsel must state that:

(A) substituted counsel seeks to enter 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 subparagraph (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 subparagraph (a), and any related withdrawal of counsel must be undertaken in accordance with subparagraph (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 subparagraph (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.

In addition to the change to allow for limited participation, the Court allows in the rules for counsel to withdraw with a notice rather than a motion if done in time.  Up to this point if you entered your appearance, you had to file a motion in order to withdraw your appearance.  Some practitioners, including me, are reluctant to enter an appearance when a prospective client shows up on our doorstep often after receiving the Tax Court’s stuffer notice alerting them to the possibility of clinic representation.  I do not like to jump into a case until I am comfortable with the client and the issues in the case.  So, I often obtain a power of attorney and work with the Chief Counsel attorney or Appeals under the POA to learn about the case before deciding whether to formally enter an appearance.  The new rule makes me more likely to enter an appearance knowing that I can pull out without having to file a motion and obtain court approval.

The changes to Rule 24 potentially impact anyone who practices before the Tax Court.  Though there is not much time left before the deadline, consider submitting comments if parts of the changes make you more comfortable about practicing in the Tax Court or less comfortable.  I am sure that the Court would appreciate hearing from as many voices as possible.

Comments

  1. Thank you for your analysis of new Rule 24. However, I do not think the proposed addition of (c)(1) to that Rule says what you think it says.

    The proposed rule would allow counsel to withdraw by notice, not motion, if and only if there is more than one counsel representing the taxpayer. If you are the sole representative and you want out, then you must still ask for permission to do so via a motion.

    • I agree with you. I was too quick in my explanation of the way the withdrawal works. The withdrawal by motion only works if there is more than one representative. Thank you for your comment highlighting this problem with the post.

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