Limited Appearance Rule Expands Access to Representation

We welcome first time guest blogger Attorney Karen Lapekas to Procedurally Taxing. Karen is the pro bono coordinator for the U.S. Tax Court Calendar Call Program for Miami. She was a Senior Attorney at the IRS Office of Chief Counsel before founding her own tax controversy firm. In today’s post Karen describes her experience with the Tax Court’s new limited entry of appearance rule, in a case we blogged here. Karen echoes the sentiments of guest blogger and pro bono attorney James Creech, who in a prior PT post urged the Court to permit limited entries of appearance at Calendar Call. Christine

Years ago, as an IRS Chief Counsel attorney, I watched an attorney file an appearance for a pro se petitioner during a Tax Court calendar call. The attorney had just met his client that morning. While witnessing this, I recall looking to my colleague and whispering, “Is he out of his mind?”  We shook our heads in admiration and disbelief. We understood the scale of the commitment. He was signing up not only for trial, but also for the most dreadful task that followed: preparing and filing briefs.

At that time, the attorney did not have the option of representing the petitioner for a limited amount of time. That was long before the Tax Court’s May 10, 2019 Administrative Order 2019-01. That well-received Order provides a procedure through which practitioners may represent a petitioner during a limited time period within a scheduled trial session.

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The Order provides that, with petitioner’s concurrence, a practitioner in good standing that is admitted to practice before the Court can file a Limited Entry of Appearance. He can do so by filing a form no earlier than the start of a scheduled trial session and by serving it on all parties.

Before the May 10, 2019 Order permitted a limited entry of appearance, a practitioner could enter an appearance in a case only by signing and filing a petition or by filing a standard entry of appearance. T.C. Rule 24. The entry of appearance stayed in effect until the end of the case or until the Court granted a practitioner’s request to withdraw. In other words, once a practitioner was in, he was in for the long haul. He was committed to the case until he filed, and was granted, a motion to withdraw. There was little flexibility for practitioners who wanted to assist a pro se practitioner at trial but could not commit to the unknown amount of work following the trial.

Now, a practitioner can limit his appearance to a specific date or dates during a scheduled trial session. (See Tax Court’s FAQ, here.) The limited appearance automatically terminates at the earlier of the specified day(s) or the end of the trial session (unless the Court directs an earlier termination). It can only be filed in person at the trial session. In fact, the Tax Court will strike any limited entry of appearance forms that are filed electronically or before the start of the trial session. If, after filing the limited entry of appearance, the practitioner wishes to end his appearance even sooner, the practitioner would have to ask the Court for leave to withdraw.

The Limited Entry of Appearance leaves open the possibility for a practitioner to later file a standard entry of appearance. A practitioner who files a standard entry of appearance or who filed a petition in the case cannot later file a limited entry of appearance (unless he was previously allowed to withdraw). Whereas, a practitioner may file a standard entry of appearance after filing a limited entry of appearance. This gives pro bono practitioners the option — but not the obligation — to represent petitioners beyond specific dates during the trial session.

The trial clerk will have copies of the Limited Entry of Appearance form at the trial session. Unlike a standard Entry of Appearance form, the Limited Entry of Appearance is signed by both the practitioner and the petitioner.

Prior to the Tax Court permitting limited appearances, as a pro bono attorney at calendar calls, I often felt like a coach to wary Gladiators before their first battle in the arena. I told them when to arrive, where to stand, how to present their case, and what they needed to prevail. However, at the end of the conversation, I could give no more than a figurative pat on the back and an encouraging “Go get em’ Tiger!” Without being able to actually show up for petitioners in Court, the only “win” I could achieve was mediating a settlement or encouraging them to settle the case on its merits (thus sparing them the time and stress of trial).

Yet, there were cases that needed to go to trial, either because there were sincere questions of fact or law, or because, in my opinion, the IRS was wrong. In those cases, despite urging them to go forward because they “had a good case,” I witnessed many petitioners concede. Without the support of an attorney by their side, they were either intimidated by the trial process or did not believe they could prevail against such a goliath.

The Limited Entry of Appearance form makes it easier for pro bono practitioners to represent petitioners. However, it does not address another problem I personally face as a regular volunteer and the one I overcame the first time I filed the form in Tax Court. That problem? Prejudice.

Being a regular volunteer at calendar calls has its pros. With experience, it becomes easier to approach a pro se petitioner, find the right words to assuage their fears, and pinpoint the sticking point keeping the parties from reaching an agreement. But it has one “con” that I consciously fight: the suspicion that most pro se cases that reach calendar call unresolved only do so because the petitioner either did not participate in the Branerton process or their arguments lack merit. While it’s true that the vast majority of Tax Court cases are decided in favor of the government, in the same way that a judge cannot fairly decide a case with this presumption, a pro bono attorney with this mindset may overlook a meritorious issue and cause a petitioner to be further disillusioned by the process or concede an otherwise winning case.

I am embarrassed to admit that when I first consulted with pro se petitioner, Eberto Cue, at the Miami Tax Court calendar call in November, I was eager to finish quickly and return to the office. Seeing that Mr. Cue had a CDP case and wasn’t disputing the liability, I expected to explain the abuse-of-discretion standard and how difficult it is to overcome. I expected to tell him that the tax lien would not be withdrawn, and he should save his time and concede the case.

However, just two minutes into Mr. Cue’s story, I knew that I would not be going back to the office for several hours, and I knew that Mr. Cue had nowhere else to be that day. Why? Because the IRS’s refusal to withdraw a lien against him caused him to lose his job and he was still unemployed. The IRS refused to withdraw a lien even though it agreed Mr. Cue was “currently not collectible.” Regardless, it insisted that it would only withdraw the lien if Mr. Cue  either paid the balance in full, entered into a full-pay installment agreement of $475 month, or he provide documentation showing he would lose his job if the Notice of Federal Tax Lien was not withdrawn. Mr. Cue provided the documentation demonstrating that he would lose his job. The settlement officer did not seriously consider it.  As of the date of calendar call, the lien remained, effectively preventing Mr. Cue from getting another job in the industry that he loved: banking.

It turns out, Mr. Cue was not optimistic about my meeting with him either. He indicated he had consulted with at least two other attorneys who told him that he should concede the case. He expected that I would try to convince him to do the same. Fortunately, neither of our expectations materialized. I quickly believed in a case that I had expected to dismiss, and Mr. Cue believed in an attorney that he expected would dismiss him.

The most important thing to know about the Limited Entry of Appearance is that it exists. At the November calendar call, that’s all I knew. Though I read the May 10, 2019 Order, I had not read it closely, nor had I brought with me a copy of the Court’s Limited Entry of Appearance form. I did not plan on actually using it — at least, not so soon! (The Tax Court actually does not expect practitioners to bring this form to trial sessions. It is not available on the Tax Court’s Forms page and the copy published with the Order has a watermark, so it can’t be used. The Court will have blank copies available at trial sessions.)

Thus, when Mr. Cue’s case was called for trial, I stood up, admitted my ignorance, but expressed my desire to enter a limited appearance. The form was in my hand in seconds and I was addressing the Court with an opening statement just minutes later. Three days thereafter, Mr. Cue sat in Tax Court and heard the Court conclude his case by reading aloud the following words,

“Therefore, a decision will be entered for the petitioner.”

I can’t say that my representation of Mr. Cue effected the case. But I do believe that having an attorney stand up, believe in him, and support his conviction that he suffered an unwarranted loss due to the settlement officer’s capricious dismissal of his arguments, gave Mr. Cue a bit of confidence to proceed. At the very least, I believe it renewed his confidence that the legal system works, and that justice does prevail, no matter how “small” a matter may seem. The option of filing a Limited Entry of Appearance made that possible.