Today we welcome first time guest blogger Sherrill L Trovato to provide detailed information about the examination the Tax Court administers to non-attorneys who practice before it. If you go back almost 100 years now to the beginning of the Board of Tax Appeals both attorneys and CPAs could practice before the Board. That changed in 1942 with other changes at the time it changed its name to Tax Court of the United States. The Tax Court sought to become more court like and CPAs were a casualty of that effort. Now, non-lawyers must take a test to earn the right to practice before the Tax Court. The story can be found in Part IV of Dubroff and Hellwig’s book on the history of the Court. An earlier post I wrote several years ago on this exam has proved to be one of our most popular posts of all time. Today we have a real expert on the subject to provide information.
Sherrill passed the Tax Court exam over two decades ago and in 2002 set up a program to teach others how to pass the exam. She also offers other skills classes to Tax Court practitioners. She received her Bachelor of Arts (Business Administration, Accounting), Master of Business Administration (Finance), and Master of Science (Taxation) degrees, all from California State University (Fullerton) between 1988 and 1993. She passed the SEE on her first attempt in 1991 and became an enrolled agent in 1992. She is a Fellow of NTPI (National Tax Practice Institute). In addition to providing education for tax professionals, her Southern California firm offers tax compliance and controversy services through the Tax Court. Keith
Late afternoon on May 6, 2022 the U.S. Tax Court emailed results of the November 17, 2021 nonattorney written admission exam to those candidates who sat for the first ever remote exam after the pandemic postponed the November 2020 exam.
Prior to the November 2021 exam, the Tax Court exam was a biannual 4-hour, handwritten exam, offered only in Washington, DC. In 2016 the exam site was moved from the Tax Court building to the Ronald Reagan Building and International Trade Center.
read more...The exam is difficult for many reasons, including the breadth of information tested. Since 1996 the exam has consisted of 4 parts, each of which must be passed in one sitting with a score of 70% or better:
- 25% (60 minutes) Tax Court Rules of Practice and Procedure
- 25% (60 minutes) Federal Rules of Evidence
- 40% (96 minutes) Federal Taxation
- 10% (24 minutes) Legal Ethics (based on the Model Rules of Professional Conduct of the American Bar Association)
There is no opportunity to hold any passing score to a subsequent exam year and the requirement to pass the entire exam is one reason the exam is so challenging.
For the handwritten exam, scratch paper was provided and non-programmable calculators could be used for calculations. Answers were recorded manually on what was essentially a bluebook (small bound bundles of paper), although in recent years the cover was color-coded by exam part.
For the handwritten exam, the court provided resources that could be accessed including a printed copy of the Tax Court Rules, the Model Rules, and the two volume CCH Internal Revenue Code. The Federal Rules of Evidence were not available. There is not sufficient time to research answers during the exam, so the partial “open book” nature is not very useful.
Prior to 2020, the fee to take the handwritten exam was $75 to the Tax Court. With the anticipated 2020 exam, the exam fee payable to the Tax Court increased to $150. When the exam was offered on a remote basis, each examinee also paid an additional fee of $100 to ExamSoft, the provider of the exam. The ExamSoft platform has been used to administer bar exams, and offers security to maintain integrity of the answer files, plus auditing information for the exam provider.
The 2021 exam started at 12:10 Eastern Time, and was given in 2 sessions of 110 minutes each, with a 15-minute comfort break in between the sessions. Session One covered Federal Taxation and Legal Ethics and Session Two covered Practice and Procedure and Evidence. Once a session ended, it was closed and could not be accessed again.
For the remote exam the Court provided a PDF version of selected provisions from the Internal Revenue Code, Tax Court Rules of Practice and Procedure, and the ABA Model Rules of Professional conduct. The Federal Rules of Evidence were not available.
There were additional technical requirements with the remote exam which required a laptop or desktop computer with an installed or external webcam and an internet connection. Two mandatory mock examinations had to be completed to be eligible to take the nonattorney exam. The mock exam had to be taken on a specific version of the ExamSoft software, but depending upon the date the software was downloaded, many students found themselves with the wrong software version, which created additional confusion and consternation in the days before the exam.
During the exam, examinees had to remain within view of the web camera, and a video file accompanied the exam answers. No scratch paper or external resources could be accessed.
Those who were not successful can obtain a copy of their scores and answers by written request no later than 60 days from the date of the notification. The Tax Court will not reconsider the examination results unless the unsuccessful examinee can demonstrate there is a clerical error in the scoring of the exam; those requests must be received within 90 days of the date of the email. All examination answers are deleted from the Court’s records 120 days after the email, unless there is a reconsideration challenge pending, in which case the answers will be deleted 60 days after the Court takes final action on the request, but not earlier than 120 days after the date of the email.
Successful examinees cannot obtain their answers and scores, and there are no official answers published by the Tax Court, which is another reason this exam is so difficult.
On May 16, 2022 the Tax Court began disseminating exam answers and scores sheets to those who requested them. The score sheets indicate that the 2021 remote exam was still a traditional 4-hour exam, 240 minutes long, yet examinees were only given 220 minutes to complete it (two blocks of 110 minutes each). As in prior exams, in the 2021 exam Substantive Tax was allocated 96 minutes, Legal Ethics was allocated 24 minutes, and both Practice and Evidence were allocated 60 minutes each.
Of the roughly 30 exams I’ve seen to date, it is apparent examinees struggled to achieve passing scores on the Substantive Tax and Legal Ethics (Session One) sections more than Practice and Evidence (Session Two). Many of my students indicated that they ran out of time during Session One and had extra time during Session Two. During the in-person exam an examinee could choose what order to take the exam in, and could move between the parts as needed based on the four hours available; this was not possible during the remote exam.
I know that 15 of my students passed, but as of this writing (5/28/22) the Tax Court has not yet released the total number who passed the 2021 exam.
The pass rate between 2000-2018 ranges from a low of 5.56% in 2004 (4 of 72 examinees) to a high of 18.25% in 2014 (23 out of 126). I took the exam and passed it on my first attempt in 2000, one of 17 who passed that year out of 102 examinees. The Tax Court provides these statistics for 2000-2018 on their website: https://ustaxcourt.gov/resources/practitioner/NonAttorney_Exam_Statistics.pdf.
Under Tax Court Rule 200(c), those who pass must be sponsored by at least two persons admitted to practice before the Court by a sponsor who can state, according to the email sent to successful examinees, “fully and frankly the extent of the sponsor’s acquaintance with you, the sponsor’s opinion of your moral character ad repute, and the sponsor’s opinion of your qualifications to practice before this Court.” The successful examinee must also execute the Practitioner’s Oath before a Notary Public, which can be emailed to the Tax Court Admissions Office, and pay the $50 original admission fee simultaneously with the oath.
In 2013, 2017 and 2019, Tax Court judges personally swore in nonattorneys who were successful on this difficult exam. When I spoke with her May 12, 2022 about the possibility of also recognizing those who passed the 2021 exam, Jennifer Siegel of the Tax Court Public Affairs office said, “Although the Court is holding in-person trial sessions, the main courthouse building is not open for outside visitors, and a group swearing-in ceremony may not be possible. Anyone who passed the 2021 exam who is interested in being sworn in by a Tax Court judge at a local trial calendar can contact Jennifer Siegel, Public Affairs, at 202.521.3355 (or PublicAffairs@ustaxcourt.gov), to discuss that opportunity.”
It is not yet known whether the next exam will be given remotely or return to an in-person model. This should be specified in the press release required under Tax Court Rule 200(a)(3) when the Tax Court announces the date and time of the exam, approximately six months before the exam is held.
