U.S. Tax Court
The U. S. Tax Court is a federal court of limited jurisdiction. Congress established the court under Article I of the U.S. Constitution to hear tax disputes concerning notices of deficiency, notices of transferee liability, certain types of declaratory judgment, readjustment and adjustment of partnership items, review of the failure to abate interest, administrative costs, worker classification, relief from joint and several liability on a joint return, and review of certain collection actions. The Tax Court is located in Washington D.C.; however, the judges travel around the country to hear cases. The Tax Court usually conducts trials in Atlanta a few times each calendar year. It is not unusual to have a regular trial calendar or an S-Calendar each called twice a year in Atlanta.
Typically, a taxpayer begins a case with the Tax Court by filing of a petition. The petition must be timely filed within 90 days (150 days if the notice of deficiency is mailed to a taxpayer outside the United States) after the date of the mailing of the statutory notice of deficiency or final determination in the case of denial of §6015 relief. With respect to appeals of Collections Due Process determinations (§§ 6320 and 6330), the petition to the Tax Court must be fled within 30 days of the determination. No extension of time may be granted statutory notices. Unlike the other tax dispute forums (U.S. District Courts and U. S. Federal Claims Court), the Tax Court does not require the taxpayer to first pay the disputed amount. This is why the Tax Court may be a first choice for many taxpayers. In fact, the Tax Court does not have jurisdiction in deficiency cases if the tax is paid.
The Tax Court does not offer jury trials. All cases are tried before a single judge, and all of the judges have extensive expertise in the federal tax laws. There are regular trial judges and special trial judges. Regular trial judges serve for 15-year terms and are appointed by the President. They hear regular and S cases. The court has its own rules and procedures that supplement the Federal Rules of Civil Procedure. The Tax Court rules are more directed at facilitating a cooperative settlement of disputes. The court is bound by the precedent of the Federal Court of Appeals in the geographic jurisdiction in which the taxpayer is located (the Eleventh Circuit for the Clinic’s taxpayers).
In certain tax disputes involving $50,000 or less for any one year, taxpayers may elect to have their case conducted under the Court’s simplified small tax case procedure. IRC § 7463. These cases are usually heard by special trial judges. Trials under the small tax case procedure generally are less formal and result in a speedier disposition. However, decisions entered under the small tax case procedures are final and are not appeal-able. Most all petitions filed by the Clinic will be under the small case procedure. The Clinic can request that a case be changed from the small case procedure to the regular case procedure up to the time the case is tried.
U.S. Tax Court
400 Second Street, N.W.
Washington, D.C. 20217
Petitioner can request that a Tax Court trial be conducted in any place where the Court hears cases, regardless of where the taxpayer resides or does business. With respect to appeals of Tax Court decisions, Section 7428(b) specifies the proper venue for appellate review. It provides that regardless of where the Tax Court case is tried, an appeal is taken to the Federal Circuit in which the taxpayer resides. This expressly includes appeals from decisions relating to innocent spouse determinations and collection due process cases.
Rule 23: Form and Style of Papers
All papers filed with the Court must have a caption, date and signature
a. Caption – The sample petition in the Clinic forms conforms to the rules.
b. Date – Date of signature must be included on all papers filed with the court.
c. Signature – Original signature of party or party’s representative. Individual’s name rather than firm name must be used. The name, mailing address and telephone number of the party or counsel, as well as the counsel’s Tax Court bar number must be typed underneath the signature.
Style and format:
- Four copies along with the signed original, unless provided otherwise by the Rules, must be included for all papers filed with the Court.
- Papers must be clear and legible.
- Papers must be prepared on opaque, unglazed paper, 8 1/2 inches wide by 11 inches long. Margins are to be no less than 1 inch wide on the sides and no less than 0.75 inches on the top and bottom. Text and footnotes are to be in consistent type no smaller than 12 characters per inch produced by a typewriting element or 12-point type produced by a non-proportional print font. The lines are to be double-spaced for text and single-spaced for indented quotations and footnotes.
- All papers are to be bound together on the upper left-hand side only and shall have no backs or covers.
- All citations of case names shall be underlined when typewritten and in italics when printed.
- The Court may return without filing any paper that does not conform to the requirements of this rule.
Documents on US Tax Court.gov
- Tax Court Forms
- Small Case Procedure (For reference only)
- Rules of Practice and Procedure of the U.S. Tax Court
IRC §6212: Notice of Deficiency
IRC §6213: Restrictions applicable to deficiencies; petition to Tax Court
IRC §7463: Disputes Involving $50,000 or less
Motions practice has evolved with the Tax Court. The court expects the parties to use motions to ask the court for different types of relief and to “clean” up a case procedurally. Regardless in which court system you practice, effectively utilizing motions is essential to effective representation of your client and the efficient handling of matters before that court.
Tax Court Rule 50 states: “An application to the court for an order shall be by motion in writing, which shall state with particularity the grounds therefore and shall set forth the relief or order sought. The motion shall show that prior notice thereof has been given to each other party or counsel for each other party and shall state whether there is any objection to the motion. If a motion does not include such a statement, the court will assume that there is an objection to the motion.”
Set forth below are those motions that are used most frequently in the clinic. The Tax Court requires that a motion include only one matter. Thus, a request for a continuance and to change the place of trial must be the subject of two separate motions.
Motion to Continue
- Send the original and 4 copies of the Motion to Continue with Certificate of Service attached and an original and 2 copies of the cover letter to the Tax Court.
- Send a copy of the above to Respondent’s Counsel.
- In preparing the Motion to Continue and cover letter, include the Clinic Director and if he is not available the Assistant Clinic Director on the Motion and preferably the Associate Clinic Director on the Certificate of Service.
- On the Certificate of Service, include only the Clinic Director or the Associate Director’s signature. The date on the Certificate of Service must be date that the document is actually mailed. If the document is prepared late in the date, date it for the next day. The one signing the Certificate is attesting as an officer of the court that the document was actually mailed on the date specified.Include an exact copy of the signed document, certificate of service and cover letter in the paper office file.
Motion to Change Place of Trial Package
- Motion to Change Place of Trial and Certificate of Service
- Motion to Change Place of Trial and Certificate of Service Cover Letter
Motion to Continue and Change Place of Trial Package
- Motion to Continue and Certificate of Service
- Motion to Continue and Change Place of Trial
- Motion to Continue and Change Place of Trial Cover Letter
Motion to Withdraw as Counsel Package
Filing Petitions and Entries
Petition to U.S. Tax Court
Petitions to the U.S. Tax Court may be filed, if associated conditions are met when a taxpayer wishes to challenge: a proposed deficiency, a denial of Innocent Spouse Relief, a Lien, a Levy. A student who does not timely file a petition when one should have been filed will be subject to the most serious consequences, including a failing grade in the course.
To invoke the jurisdiction of the U.S. Tax Court when challenging a proposed deficiency, there are three prerequisites that must be met: (1) the Commissioner must have determined a deficiency, (2) the IRS must have sent a Notice of Deficiency to the taxpayer and (3) the taxpayer must file a petition in the Tax Court within 90 days from the date the IRS mails the Notice of Deficiency. A taxpayer cannot file a petition until the IRS has sent the Notice of Deficiency to the taxpayer.
For the prerequisites for Tax Court jurisdiction involving Innocent Spouse Relief, Liens, or Levy’s, see the discussions of those topics elsewhere on this website.
Most, if not all, of the petitions sent from the Clinic on behalf of its clients are done under the Small Case Procedure. To qualify for the small case procedure, the amount of the deficiency for any one year may not exceed $50,000. § 7463 Trials in small tax cases generally are less formal and result in a speedier disposition. However, decisions entered pursuant to small tax case procedures are not appealable.
In preparing the petition, the student should ensure that the client has signed a “Consent To Small Case Procedure.” The consent is not sent to the United States Tax Court, but the original remains in the Clinic’s file.
Also, in preparing the petition, the student should determine whether a waiver of the filing fee is possible. The client must pay a $60.00 filing fee unless the client qualifies for a waiver based on income. Review the web site as to the qualifications for the waiver.
As of March 1, 2008, the Tax Court requires that identifying numbers such as the social security number, account numbers and children’s name not be included on any pleadings filed with the Court. However, in order for the Internal Revenue Service to identify the client and locate his or her file, the court requires the completion of a Form 4 which is linked below and which is at ustaxcourt.gov web site.
If the petitioner is seeking relief from joint and several liability under section 6015 (innocent spouse treatment), the petitioner must also include on Form 4 the name and identifying number of the other individual with whom the petitioner filed a joint return. The court will accept the Form 4 beginning immediately in anticipation of the March 2008 Rule change. This change brings the Tax Court into conformity with other courts. It is modeled after Rule 5.2 of the Federal Rules of Civil Procedure which were effective on December 1, 2007.
Filing the Petition
- Original and two copies of the Petition with a copy of the Notice of Deficiency attached to each. Both the Clinic Director and Associate Director sign the petition.
- $60 filing fee in form of check or money order payable to “Clerk, United States Tax Court” or original and two copiesof the Affidavit requesting filing fee waiver.
- Original and two copies of the Request for Place of Trial. Either the Clinic Director or Associate Director signs the Request for Place of Trial.
- Original and two copies of Form 4 – Statement of Taxpayer Identification Number.
- Original and one copy of the Petition cover letter.
- Self-addressed, stamped envelope
Petitions are sent via UPS to:
United States Tax Court
400 Second Street, N.W.
Washinton D.C. 20217
If the taxpayer files a petition, and then asks the Clinic to represent him or her, once the Clinic agrees to represent the taxpayer, we will file an entry of appearance and a certificate of service. The purpose of filing the entry of appearance is to notify both the Court and the Respondent that the Clinic has now officially entered the case. The certificate of service is necessary because the court requires that all pleadings filed with the court be served on the other side.
To Enter an Appearance:
- Prepare an original Entry of Appearance with a Certificate of Service. The clinic director will sign the Entry first and then the associate director will sign it. Then, the associate director will sign the Certificate of Service The date on the certificate must be the day that the certificate is electronically filed with the Tax Court. The associate director will file the Entry electronically. When the confirming e-mail is returned the associate director will place a copy in the student-attorney’s mail box.
- As a courtesy, fax a copy to the appeals officer and to the attorney or paralegal assigned in respondent’s office. Counsel is served electronically officially by the Tax Court. If the client has provided a copy of respondent’s answer, use the address on the certificate of service that respondent sent. If the client does not have a copy of the answer, use the address for the local associate area counsel’s office on the Amicus list of contacts. The student attorney should determine who is assigned the case in counsel’s office by calling the office. You can also determine who is representing respondent by checking the information at www.ustaxcourt.gov and entering the docket number.
- In preparing the Entry of Appearance, include the names of both clinic director and the associate clinic director as both will be entering an appearance.
- On the Certificate of Service, include only the associate director’s signature. The date on the Certificate of Service must be date that the document is actually mailed. If the document is prepared late in the day, date it for the next business day. The one signing the certificate is attesting as an officer of the court that the document was actually mailed on the date specified.
- Include an exact copy of the signed document in the paper office file.
No petition should be filed or appearance entered by the Clinic unless it has first been determined that the taxpayer has some reasonable basis for challenging the deficiency, denial for innocent spouse relief, lien, or levy. If time does not permit this determination to be completed by the due-date for filing the petition, the Clinic may, with the approval of the Clinic Director, Associate Director or Supervising Attorney prepare a petition for the taxpayer’s signature.
Immediately after the issue has been joined by the IRS Counsel filing an answer, the Clinic should request a copy of the IRS’ Administrative file.
The Petition Package
- Petition To-Do List
- Petition cover letter
- Request for Place of Trial
- Form 4 – Statement of Taxpayer Identification Number.
- Consent to small case procedure
- Affidavit requesting filing fee waiver
- US Tax Court Pro-Se Petition Kit (for reference only)
- SB/SE Tax Court Deficiency Case Checklist
Entry of Appearance Package
Handling a Docketed Case
The procedures set forth below will assist you in handling a case docketed in United States Tax Court.
- If the Client files the petition, interview the client to determine what is the issue. Ask the client to send to you all the information they have concerning the tax matter and copies of all the documents the client filed with the United States Tax Court including a copy of the petition, a complete copy of the Notice of Deficiency, including all schedules. Also contac the attorney in the Office of Chief Counsel (see contact information in AMICUS), fax the attorney the POA and request a copy of the Administrative File (see below).
- Go to http://www.ustaxcourt.gov/ and search for the client’s case either by Docket Number or name. Print a copy of the Docket Sheet and save a copy to the client file under IRS/TC.
- A critical determination at the initial stage is what, if any, time limits are present. For instance, if the client filed the petition and if the case is on an upcoming trial calendar consult with the Clinic Director, Associate Director or Supervising Attorney to determine whether to accept the client and whether to request a continuance.To determine if a case is on a calendar, review the Docket Sheet. It will indicate if the case is set for trial and where. In these types of cases, until you understand the issue and believe the client has a good legal argument that is likely to prevail, do not agree to accept the case. It may be advisable to ask the client to ask for a continuance. If it is a first continuance, the Tax Court is liberal in granting the continuance, unless it is within 30 days of trial.
- If the case is a recently filed case, you should plan on sending the Appeals Notebook within 30-45 days of the petition date. If the case cannot be resolved with the Appeals Officer, then it will be transferred back to the Office of Chief Counsel for trial. Sometimes you will be able to resolve the case with the attorney from Chief Counsel’s office via a Counsel Notebook, but that is late in the game such that you are risking having to take the case to trial.Once a petition is filed in U.S. Tax Court, the Office of Chief Counsel files an Answer on behalf of the IRS. After the Answer is filed, the case is automatically forwarded to the Appeals Division of the IRS and assigned to an Appeals Officer for resolution. If we accept the case, we will prepare and send to the Appeals Officer an Appeals Notebook setting forth the facts and evidence in support of our position that the tax should be either reduced or eliminated altogether.
- Once you confirm that the case is docketed with the United States Court, immediately (usually within two weeks of the petition date) contact the Office of Chief Counsel in Atlanta to determine which attorney is assigned the case and to request the administrative file. (The name and contact information of Chief Counsel in Atlanta is posted in AMICUS.) You can request a copy without accepting the prospective client as a client. All that is required is to provide the Chief Counsel attorney or Appeals officer with a copy of the POA. Whether you ask for the administrative file before accepting the client depends on the facts of the case. The complexity of the issues and facts and the extent to which the client and the IRS have dealt before coming to the clinic are determining factors. Discuss this matter with the Clinic Director, Associate Clinic Director or the Supervising Attorney.
- Administrative File – This is a term to describe the information that the IRS has gathered relating to the client. It consist of the tax return for they year at issue, any correspondence between the parties, the examination workpapers (if any), a copy of the 30 day letter and proposed computations (possibly) and a copy of the complete Notice of Deficiency (referred to as the 90 day letter or statutory notice). This file ranges from a few sheets of paper including a print out of the electronic version of the e-filed return to multiple volumes of workpapers and computations depending on the complexity of the issue. This is the government’s case in chief or their side of the story. Having this information and comparing it to the client’s story allows you to determine the correct facts.
- Once the Chief Counsel attorney files the Answer, the attorney sends the Administrative File to the Appeals Office, and in many cases it is then more difficult to track down the file. Another reason to contact the attorney assigned the case is that it provides you the opportunity to introduce yourself and talk generally about the case. For the most part, the attorney is interested in resolving the case and is open to discussing what the case is about. This will assist you in focusing the presentation of your case in the “Appeals Notebook” or “Counsel Notebook”.Usually, the attorney will fax to you the Administrative File if it is a few pages. In some cases, the Administrative File is extensive, and the Counsel Attorney or even appeals officer will be willing to meet with you informally to review the file and copy the relevant parts. Take advantage of this because again it offers you an opportunity to informally discuss the case with them. Remember they are interested in determining the facts of the case and more importantly in resolving the case long before trial. If you are given the opportunity to copy the Administrative File, copy all relevant parts and don’t skimp on copying. Later you may determine that a document or fact is critical that you failed to copy. Always copy the entire Notice of Deficiency and the “filed” return of the client. Generally, the attorney or Appeals Officer will allow you to use their copying facilities.
- After review of the client’s and the IRS’s information, resolve any discrepancies with the client. You are then prepared to draft the Appeals Notebook and submit the accompanying memorandum to the Clinic Director for review. This should be done no less than two weeks prior to when you are intending to submit the Appeals Notebook.
- Scheduling conferences: As indicated above, once Counsel Answers the case (you should receive a copy of the Answer), the case is referred to Appeals. In many cases the Appeals Officer (“AO”) to whom the case is assigned is located outside Atlanta. As a clinic policy, we ask for a face-to-face conference. This causes the case to be transferred to Atlanta. The first letter you or the client receives with have the AO’s name, phone and fax numbers. Contact that AO and request a face-to-face conference. The AO will grant your request unless the client has already had extensive discussions with that AO. Some AOs require a letter and others take your oral request. It is a best practice to always follow up with a letter confirming that you have made a face-to-face request.From the date of the request you generally have 30-45 days to then have the Appeals Notebook ready for a conference with an Atlanta appeals officer. Within a 30 day period contact the attorney who signed the Answer to determine who the Atlanta AO is and make contact with that AO to begin coordinating the conference and submission of the Appeals Notebook.Note the clinic requirement to have the notebook to the appeals officer 7 days before the conference. Prior to the conference follow up to determine if the AO has any questions or wants further clarification of a matter before the conference. Generally, there should be no surprises at the conference as both sides would have ideally provided the other with all the facts.
- When the Tax Court dockets the case (places the case on a Trial Calendar which is usually at least 5 months before the start date), it sends to each petitioner or their representative (Respondent and Petitioner) two items: Order Setting the Case for Trial and the Court’s Standing Pretrial Order. The Standing Pretrial Order sets out specific actions that the parties must complete prior to trial and the time period. If the Clinic did not file the initial Petition, the student attorney must obtain a copy of both these for the specific case either from the client or Counsel’s attorney. These are key documents. Once the student attorney reviews the Standing Pretrial Order, the student attorney must annotate on AMICUS summary and event pages for each case the various time critical dates such as the pretrial memorandum (which is included with the Standing Order) must be served on Respondent 14 days before the first day of the trial session. It also provides specific other instructions. Each judge may also add other requirements for his or her calendar. Linked here is a copy of the Chief Counsel Notice 2011-003.
Reviewing Decision Documents and Stipulations
Upon resolution of the Tax Court case, generally either Appeals or Chief Counsel prepares a Decision Document. Upon receipt of the Decision Document, review it to determine if it is correct. There are three parts to the Decision Document: Caption, Court Order (referred to as above the line) and Stipulation (referred to as below the line). The line refers to the Judge’s signature.
Caption: The name of the case and Docket Number.
Order: The Order portion contains only the amount of the deficiency or overpayment and resolution of any penalties.
Stipulation: There are several standard paragraphs. The first is a statement: “It is stipulated that the Court may enter the foregoing decision.” Here the parties are agreeing or stipulating that the amounts are correct and the parties agree.
The second paragraph is what is referred to as the “waiver paragraph.” It provides that the parties agree to waive the provisions of I.R.C. section 6213(a) which prohibits assessment until the decision of the court is final. This means that without the waiver paragraph the decision is not final for 90 days from the date the judge signs the Decision. The parties normally agree to this waiver so that once the settlement is reached it can be finalized and the IRS can modify the account. There are instances where the taxpayer will owe a substantial amount and as a collection strategy the petitioner will elect to not include this paragraph so as to allow the petitioner more time to work out the financials of payment. However, during this period the interest continues to run.
The standard third paragraph is referred to as the interest paragraph because it contains a statement that interest is in addition to the deficiency if any. While the law is clear that interest continues to run, as a result of prior litigation, the court insists that in the interest of full disclosure the interest paragraph be included.
Not usually included, but optional is a paragraph stating the amount of the tax already paid.
Specifics to review in the Decision Document:
- Compare the caption to the original Petition. The name or names must match exactly or the Tax Court will return the document without filing. The name must match even if there is a misspelling or the name is not correct in the original Petition. If there is an error, alert Counsel or Appeals. The parties may have to file a Motion to Change Caption along with a correct
- Verify that the Docket Number is the same as the Petition.
- Verify the amount of the Deficiency. If there is an overpayment (that is there may be no deficiency but the amount paid was in excess of the amount owed, the overpayment must be stated in the Decision Document. Either Appeals or Counsel should have sent with the Decision Document an explanation of the deficiency and the computations along with an interest estimation. Verify that if there was a split or settlement of issues, that the amounts were computed correctly.
- Verify that all years are the same as the statutory notice and that were petitioned.
- Verify that all penalties and additions to tax were disposed of in the decision as compared to the statutory notice.
- In some instances where there is an overpayment, EITC and other instances, the Decision Document will be accompanied by a second document titled “Stipulation”. In these instances, the accompanying Decision Document will begin “Pursuant to the stipulation of the parties…”.
- If there is no “Stipulation” the Decision Document will begin with, “Pursuant to the agreement of the parties in this case…”
- Verify we have written signed consent from the client to sign the Decision Document for the specific amount.
- After review, send an e-mail to the Clinic Director and include a printed copy with the Decision Documents and/or Stipulations and place in the Clinic Director’s folder in the Clinic Office. There should be 4 copies and all 4 will be signed originally.
- After signing, return to the sender three originals and retain the 4th original in the file as the file copy. Return the decision and/or stipulation with cover letter.
- Notify the client in writing that the decision has been signed. Use the standard letter to client below.
- Once the Decision Document is signed by the judge, the Clinic will be served by the Court with a copy. Usually, upon receipt the student should close the case and send a copy of the Decision Document signed by the judge to the client with the closing letter. In some instances, there may be a reason to keep the file open until the adjustments in the Decision Document are posted to the IRS computer.
- IRS Decision Document Checklist
- Decision Document Letter to Client
- Transmittal Letter to Counsel
- Transmittal Letter to Appeals Officer
Tax Court Calendar Call Procedures
The United States Tax Court acknowledges the important assistance that academic clinics provide to self-represented petitioners. The Court includes information about clinics in mailings to self-represented petitioners and permits students enrolled in academic clinics to participate in Court hearings and trials. In addition, the Tax Court reserves petitioners’ counsel room for persons admitted to practice before the Court, including attorneys associated with tax clinics. Each year this Clinic renews its agreement with the Court. This allows student-attorneys taking the Clinic as a course to participate in representing clients who have a matter before the Court.
The Tax Court has instituted the following procedures relating to clinics:
- A stuffer notice will be sent out to pro se petitioners advising them of the possibility of representation by a low income taxpayer clinic (LITC) near the city they requested as a place of trial.
- The Court will send out to pro se petitioners the stuffer notice twice. In addition to the initial notice, the Court will send one out at the time the case is set for trial. (5 months before calendar call) and 30 days before the calendar call.
- The Court will permit the use of Petitioners Counsel Room.
- Because most pro se petitioners do not know the rules of the court including keeping the Court advised as to their address, a separate change of address form will be sent to each pro se petitioners.
- A fee waiver for is available.
- The Court will ask that the clinic provide a representative at 9 a.m., 1 hour before the calendar call. The new 30-day notice sent by the Court to pro se petitioners will state that the petitioners should arrive by 9 a.m. and that our clinic will have someone there to talk with them.