Tax Court Tips From Judge Vasquez

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For the week of October 21 to 25, Judge Juan Vasquez held sessions in the two jurisdictions my clinic covers in order to provide free consultations to unrepresented petitioners. Judge Vasquez had a swing session, covering Kansas City, Missouri, for Monday through Wednesday and Wichita, Kansas, for Thursday and Friday.

On October 22, Judge Vasquez was part of a CLE put on by the Federal Bar Association titled “How to Try Your Best Case Before the Tax Court.” He wound up being the sole judge presenting so with the moderator it became more of an informal question and answer session. Those in attendance included private practitioners, IRS counsel and LITC clinicians.

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Even though the session was less formal, Judge Vasquez did want to incorporate a presentation along the lines of the CLE’s title. Along those lines, he provided 7 tips for improving your case in the Tax Court arena. While I do not presume to speak for him, I will try to provide a summary of his presentation but will take blame for any misstatements.

The pretrial memorandum is the first item mentioned on the list. It is so important because it is your side’s ability to tell the case to the judge regarding the years at issue. You can educate the judge on the facts and the law from your point of view before the trial begins. Since this is a way to state your side’s argument without the other side objecting, it is a wasted opportunity when a party skips the pretrial memo.

Next, submit a timely stipulation of facts. The stipulation of facts is the collection of facts that are not in dispute by the parties, with evidentiary documents supporting those statements. The stipulations often contain statements such as when the petitioner filed tax returns for the years in question, when the IRS mailed a notice to the petitioner, and when the petitioner submitted a petition to the Tax Court that the parties are not arguing about.

I had asked the judge to expand on his comment about the connection between the stipulation of facts and Tax Court jurisdiction.  He pointed out that a notice such as the notice of deficiency or notice of determination is what allows the Court to have jurisdiction to hear the case as that is the supporting document for the petitioner to base the petition of the underlying case upon.  If the petitioner does not agree to a stipulation of facts, that could cause some concern about the Tax Court’s jurisdiction.  It is likely not a large issue since the parties will likely introduce the notice in some other fashion.  Some easier examples are if the petitioner might have attached the notice to the petition or that the IRS generally attaches the complete notice to the answer.

He did bring up a Tax Court Rule 91(f) motion to compel stipulation if a party refuses to comply regarding stipulations. That rule is for formal discovery, though, requiring the submission of the motion 45 days prior to the calendar call. When a petitioner is not compliant on the date of calendar call, the Rule 91(f) motion to compel is not timely.

In the alternative, the parties can submit a case fully stipulated to a judge under Tax Court Rule 122. Keith wrote about the perils of submitting a case fully stipulated here.

The third tip is to let the witnesses testify. If you are building your case on what the witness is saying, you should not have the attorney testifying instead. For example, when an attorney is questioning his or her own witness, do not do that by a series of leading questions. The judge finds that boring. Instead, let the questions be open so that portion of the trial is about the witness’s testimony. Then, you have something to cite to if you need to file a brief following the trial.

If you have a slow witness, you can signal that to the Court if you need to use leading questions. It should not be the default place to start when you are questioning your witness.

Fourth, settle the minor issues. Attorneys often want to argue the major issues and will focus a trial in a clash on the big topics. The judge, on the other hand, needs to make sure everything gets resolved for the issues in the case. He said that judges often have to spend the most time in an opinion making decisions on the minor issues. If counsel does not want to spend time focused on minor issues, they should settle those and get them out of the way for all concerned.

The fifth tip regards using experts. Tax Court Rule 143(g) requires the submission of expert reports 30 days before calendar call. Submitting the reports in a timely fashion allows opposing sides enough time to object before trial so they are not objecting at day 1 of the trial. By not waiting until the last minute, that will help the trial to flow smoothly rather than dealing with objections regarding experts at the start of trial.

Effective cross-examination of the other side’s witness will show the inconsistencies in the other side’s case. It can then become a battle of the experts to show which side has the better expert backing up the case. It is essential for the attorney to read the expert reports for both sides. There have been trials where the attorney was not familiar with the subject an expert would testify on and looked bad when it came to questioning the expert.

Sixth, it is always a good idea to review the Evidence rules on objections and leading questions prior to trial. A quick refresher can be quite handy to stay current and use proper court procedure at trial.

Last, follow the judge’s direction on when to file briefs with the Court. A brief is your last chance to provide to the judge the opinion you want the Court to render. Do not use words like “definitely”, “clearly” or “obviously” when arguing your side of the case. For your requested findings of fact, do not quote to the entire record, but cite a specific page or paragraph in the transcript.

While there were other topics discussed in the informal question and answers, Judge Vasquez’s presentation on trial tips certainly gave those in attendance useful material to use when dealing with Tax Court.

William Schmidt About William Schmidt

William Schmidt joined Kansas Legal Services in 2016 to manage cases for the Kansas Low Income Taxpayer Clinic and became Clinic Director January 2017. Previously, he worked on pro bono tax cases for the Kansas City Tax Clinic, the Legal Aid of Western Missouri Low Income Taxpayer Clinic and the Kansas Low Income Taxpayer Clinic. He records and edits a tax podcast called Tax Justice Warriors.

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