Yesterday, we published some data from Carl Smith showing that the service of a new Tax Court petition on the office of Chief Counsel was taking about two months. Following that observation, Carl did some additional digging and found the service time to vary considerably. Below is a chart of his most recent findings. Because of the significant variations in the timing of the service, it is difficult to know what is going on in the Tax Court Clerk’s Office to cause the swings in the timing.
Here are some dockets showing wildly inconsistent dates of petition filing and petition service:
Docket No. Petition Filed Petition Served
14000-20 11/17/20 2/22/21
15000-20 12/28/20 3/4/21
101-21 1/1/21 1/6/21
1000-21 3/4/21 3/5/21
2000-21 1/22/21 3/19/21
3000-21 4/2/21 4/5/21
4000-21 2/5/21 4/14/21
5000-21 2/1/21 4/26/21
6000-21 1/4/21 5/5/21
7000-21 2/25/21 5/13/21
8000-21 3/9/21 5/20/21
Carl speculates that perhaps the Tax Court Clerk’s Office is, on some days, filing petitions and serving them as soon as they come in, but on slow days working through a pile of petitions building up from earlier days, when the office was hit with too many petitions to process? In any event, a Tax Court petitioner at this point may or may not get a multi-month delay in the serving of her petition on the IRS.
The delay can have an impact on petitioners since it impacts when the answer is filed. Petitioners who hear nothing for a long time wonder what has happened to their case. Representatives accustomed to working with their local counsel office to obtain an early resolution of cases with clear cut facts can have trouble doing that quickly since Chief Counsel does not want to abate an assessment until they have been served with a petition. Perhaps the biggest impact is on premature assessments. If the Tax Court delays in sending the petition to the IRS, the IRS does not know that the taxpayer has petitioned and will assess the liability reflected in the notice of deficiency. Unwinding the premature assessment takes time for the people at the IRS and can make taxpayers uncomfortable because they will receive at least the notice and demand letter at a time when they thought that they had forestalled the assessment by filing the petition. We have written about premature assessments previously here. Both of these issues join together if there was a premature assessment but Chief Counsel does not want to abate pending receipt of the petition and a chance to compute its timeliness.
It’s also unclear if the new electronic filing of petitions is somehow impacting the timing of service. The ability to electronically file a petition can give the petitioner certainty of receipt but may change the processing of petitions in a way not readily apparent. Maybe the electronic petitions are the ones that get served on the IRS quickly. The Court, and the Clerk’s office, is still absorbing the changes in the Court’s database system. Perhaps something in the way DAWSON works is causing these issues. We welcome comments from a more knowledgeable source since we are simply speculating based on data that seems at odds with past Tax Court practice and with ordinary case management.