“The Dark Net? We OWN the Dark Net.” -Charles Rettig, IRS Commissioner, ABA Tax Section Meeting

Charles Rettig, a tall white man with short white hair, wearing a dark suit, lapel pin, and red tie, speaking from a podium before a blue backdrop.

Today’s post by guest blogger Karen Lapekas is a thoughtful reflection on Commissioner Rettig’s remarks given at the ABA Tax Section meeting last week.  I was not at the meeting – I had just returned from international travel and was hunkering down to make sure I did not have COVID – so I am relying on this description, which notes that the Commissioner “called out” tax attorneys for not defending the IRS when politicians and commentators fear-monger about the $80 billion funding in the Inflation Reduction Act.  Now, I find this a very strange reaction.  The Tax Section has written and testified before the House and Senate Appropriations Committees in support of increased IRS funding for as long as I can remember.  Historically and definitely during the recent funding debate, members of the Section have written letters individually, spoken to the media, and spoken to members of Congress and their staff, explaining what happens to taxpayers when the IRS doesn’t get sufficient funding. And here at PT Les, in The Fear Over IRS Funding, called out politicians using inflamed rhetoric to describe the Inflation Reduction Act.

Since 2006, I have been calling for additional funding for the IRS and consistently testified before the Appropriations and tax-writing committees of Congress about this issue.  (See page 442-457 of my 2006 Annual Report to Congress here; it’s also worth reading my 2013 Most Serious Problem on IRS lack of funding.)  Unlike the enforcement-driven debate today, the case I made to Congress was that funding the IRS is a constituent service.  The IRS will do whatever job it is given; even with inadequate funding it will still plow forward – but in that plowing forward, with inadequate funding core services such as answering the phones and core taxpayer rights such as providing prompt appeals hearings and correct, clear, informative notices go by the wayside.  Looked at from that perspective, adequate funding of the IRS – whether for service or compliance activities or information technology – is something every elected official should desire.

So why is this not the case?  First, the IRS collects taxes and has awesome powers to do so.  As a matter of strategy (overrated and even misguided, I think) it believes that the more people fear being audited or face enforced collection, the more they will comply with the law.  So it’s not surprising that people react with fear when they hear the IRS will get more funding.  Second, people tend to remember negative things rather than positive things.  Thus, although the IRS pulled off a near-miracle during COVID distributing Economic Impact Payments, the Advance Child Tax Credit, and other pandemic relief provisions, when asked to think about the IRS, taxpayers are more likely to remember the Tea Party 501(c)(4) debacle of a few years ago or their own negative interaction with the IRS.   Third, in the last three decades the geographic presence of IRS employees in most of the United States has all but vanished.  Taxpayers no longer know IRS employees who are members of their religious organizations or PTAs or gyms.  This makes it easier to see IRS employees as nameless and faceless automatons.

These three tendencies make the IRS an easy target.  How to combat this?  Well, “combat” is not the right approach – that just brings on more yelling.  Being defensive doesn’t help; complaining that people aren’t appreciative enough of all the IRS’s good work isn’t going to win converts either.  I personally agree with Ms. Lapekas that we tax lawyers need to speak up, but we should speak as taxpayers, not tax lawyers.  We should take every opportunity we can to talk to our neighbors, our friends, our colleagues about why taxes matter, why tax compliance matters, and then, and only then, why we need a tax agency that functions well.  Let’s not make the conversation about the IRS – that just triggers negative reactions.  Instead, let’s make the funding conversation about achieving a fair and just tax system, something no one will say they don’t want.  — Nina

Chills ran down my spine when IRS Commissioner, Charles Rettig, said these words about the IRS to a room crowded with hundreds of tax attorneys.

They weren’t chills because I feared an overgrown IRS, but because I hadn’t before truly appreciated how important its work was, how thankful I am for it. Its work is important not only for the collection of 96% of the funds that support this country, but for the work it does in protecting and serving the individuals that call it home.

Yes, the IRS protects and serves. It fights fraud, terrorism, money-laundering, child exploitation, and human trafficking (to name just a few things). It’s in everyone’s best interest to support it, fund it, and work to improve it. And before you dismiss me as a brainwashed civil servant, know that I make a living fighting against the IRS. My career is finding the IRS’s faults and mistakes and exposing them. I pay my bills by fighting the IRS’s wrongs. Am I proud of my work? Hell yes. But what makes me even more proud? Living in a country where it’s possible.

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Chuck (the name he goes by, he reminded us) reminded us that the IRS has tracked and helped seize Russian oligarch’s yachts around the world, took control of Al Qaeda and Hamas websites and diverted donations from those sites to victims of terrorism, and took down the largest child pornography website in the world. The child porn website takedown resulted in the arrest of 337 users within the United States alone.

When Chuck concluded his speech (which went over-time, as usual), I tried to talk to other attorneys about it. Two of them said they didn’t attend the speech because they’d heard him speak many times before and thus (said with a roll of their eyes), had heard his same stories at least twice that many. Another attorney who did attend mentioned that the Commissioner was a great orator, but dismissed the speech as a rah-rah campaign for the IRS. (No, Mr. Rettig is not eligible for re-appointment and by his account is looking forward to returning to his humble public-school, immigrant-raised, military supporting, beginnings in Los Angeles).

Something was different about this speech though. The Commissioner called us out. He criticized us tax practitioners. Repeatedly. Why? Because as the media has excoriated the IRS’s recent $80 billion funding boost and spread fake news about 87,000 new gun-toting agents, we said nothing. Worse, some practitioners rode the media frenzy for personal gain from the hype to spew false information and feed the fire.  Doing so has literally caused increased death threats against IRS employees and put them in harm’s way.  It has certainly eroded the country’s confidence in the second-most important government agency in the United States (the first being the military, Chuck reminded us).

When public confidence in the IRS wanes (even further), voluntary tax compliance wanes. And that hurts all of us.

Why would the Commissioner of the IRS express disappointment in a room full of tax attorneys? Why would he call on private practitioners to speak out IN SUPPORT OF the IRS? We make a living fighting it, after all.

He didn’t say. But I think I know why.

Because we know the truth.

When everyone was seemingly inflamed by the $80 billion infusion into the IRS, there was a group that largely wasn’t. It was tax attorneys. From the most Trump-supporting, die-hard Republicans to the snow-flakiest Democrats; we supported it. All the tax attorneys I know said the same thing about the increased IRS budget. They agreed, “It’s about damn time.”

We didn’t say this publicly, of course. Because if we speak out in support of the IRS our clients would think we wouldn’t put up a bull-dog fight against it. Our clients would be wrong if they thought this. But we fear losing them, nonetheless.

We support increased funding to the IRS because fighting the IRS works. It works because, when the IRS operates properly, taxpayers can win. Yes, tax administration can (and should) be improved. But there are checks and balances in place, opportunities for appeals, IRS employees who care about the right answer (even to the detriment of the government), and laws in place to protect us. If you’re not familiar with tax procedure and if you have not actually fought (and won) countless disputes with the IRS, you wouldn’t know this. You wouldn’t know how much easier it is to achieve “justice” in a fight with the IRS than it is against a state tax, or other government, agency.

When the IRS can answer its phones, it helps taxpayers solve problems. When the IRS has resources to improve its technology and public outreach, it can inform and protect the public against scams. If the IRS is well-funded, it can reach the poor, the elderly, non-English speakers, and members of the military, before financial predators can.

Yes, the Commissioner’s speech was full of his same old stories. We heard ad nauseum about his love for his wife (a refugee from Vietnam, lest anyone forget), his support for the military (even—no, especially—when his son was deployed), and his admiration for his immigrant in-laws (who have notably thrived in this country, despite not speaking English). But these stories are only “old” if you’re sick of hearing about the “American Dream.” I’m not sick of it. I hope I never tire of hearing it. I love hearing that the American Dream is alive and well.

But it’s only alive and well because we have people like “Chuck” at the helm of the IRS. Because we can speak out against the IRS and it listens, and cares. (It really does). The American Dream is alive and well because the IRS Commissioner is (justifiably) so confident in the IRS that he can call out a room full of private tax attorneys and criticize them for their silence when the IRS was under attack.

His rebuke was well-placed.

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.


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.