Tax Court Practice & Procedure Updates from the 2023 ABA Tax Midyear Meeting
On February 10, the Court Practice & Procedure committee of the ABA Tax Section hosted Special Trial Judge Peter Panuthos and Robert Wearing, Deputy Associate Chief Counsel (P&A), for a recent developments session moderated by Allison Baker.
Updates from the Tax Court
Judge Panuthos first presented some figures on Tax Court filings in fiscal year 2022. These can be found in the Court’s 2024 budget justification, which Keith blogged about here. The following charts are reproduced in Keith’s post:
- Tax Court cases filed and closed
- Cases filed based on jurisdiction type
- Percentage of paper and electronic petitions
- Trial sessions held
I recommend reading that post and Carl Smith’s comment on the categorization of cases.
Judge Panuthos noted that 80% of petitions filed were without counsel. 61% of cases were filed under Regular case procedures and 39% under Small case procedures.
Limited Entry of Appearance: Practitioners can now enter a limited appearance any time after a case is set for trial and before the adjournment of the trial session. See Administrative Order 2020-03, issued May 29, 2020, and revised June 19, 2020. The Order can be found on the Court’s Covid-19 Resources page.
Since 2020 the number of limited appearance filings has grown steadily. About 40 were filed in FY 2022. Judge Panuthos noted that the option is available to paid practitioners as well as pro bono counsel. In cases where the taxpayer has some ability to hire counsel but cannot afford briefing, it may be worth offering “unbundled” representation for the pretrial period and/or the trial session only.
Remote Trial Sessions. Judge Panuthos noted that the Notice Setting Case for Trial invites the parties to file a motion for a remote trial session if they desire one. To date, all such motions have been filed by the petitioner; none have been filed by respondent. The Court has been liberally granting these motions.
Public Access. Judge Panuthos responded to Keith’s post about the removal of one computer terminal in the court’s records room. He explained that between June 2022 and February 2023, only 22 people visited the Tax Court to look at records. According to the Court, there has never been an instance of someone needing to wait to use a terminal. The Court’s intent was not to limit the public’s access; rather, they did not believe there was a need for two computers.
I can understand that rationale – computers do require maintenance, as anyone trying to work on a computer that has not had updates run for months (or years) will find out. Villanova has gradually removed nearly all of its clinic workroom computers over the last five years, for the same reason as the Court removed the second public access terminal.
Judge Panuthos stated that the Court continues to consider ways to expand access to the public, but remains concerned about inadvertent disclosure of confidential information.
Tax Court Rule Changes. Judge Panuthos thanked those who submitted comments on the Tax Court’s proposed rules last spring. The comments were given serious consideration. New rules will be coming “soon” – no date was promised.
Quarterly Webinar. The next quarterly Tax Court webinar will be held on March 16. The topic is expert witnesses. The flyer is here. Register at https://bit.ly/ustc031623.
Tax Trailblazers. The next Tax Trailblazers webinar will feature Larry D. Bailey. View the flyer and sign up here: Engagement & Outreach | United States Tax Court (ustaxcourt.gov). The program is February 22 from 7 to 8:15 PM ET.
Clinic & Calendar Call program. Judge Panuthos thanked ABA Tax Section volunteer attorneys and members of the Pro Bono and Tax Clinics committee for their commitment to improving access to justice in the Tax Court. 126 organizations are currently enrolled in the Court’s calendar call program.
Updates from the Office of Chief Counsel, IRS
Robert Wearing, Deputy Associate Chief Counsel (P&A) presented highlights from the Office of Chief Counsel’s Fiscal Year 2022 Report to the ABA. The report consists of 27 PowerPoint slides providing a wealth of information. The slide deck can be downloaded here.
Mr. Wearing first noted that the Office of Chief Counsel’s statistics do not perfectly match the Court’s; indeed they never have. It is not clear why there are slight differences.
The docketed inventory numbers show that we may be over the coronavirus-caused backlog, or at least the trend is in the right direction.
It is no surprise that the spike in cases following the pandemic mainly came from service centers. Practitioners have complained about the IRS functions prematurely issuing notices of deficiency (and also making premature assessments). This is likely contributing to the high volume of small dollar cases.
Small dollar cases make up the vast majority of cases petitioned, but 83% of the dollars in dispute come from just 420 cases.
Taxpayers were self-represented in 90.5% of cases petitioned during FY22.
I hope that some feedback loop exists, and there are some incentives or consequences in place for executives in charge of programs like AUR, AQC, and correspondence exam, so that the IRS will put resources into improved service center compliance processes. These processes look cheap, but in reality they often shift work downstream to Chief Counsel, the Tax Court, and calendar call programs.