Litigation

Reports and Decisions. The law provides for a report upon any proceeding and a decision thereon. The report of a division contains the findings of fact and opinion of the court in the case. These are generally referred to as published opinions, memorandum opinions, and summary opinions. The court may also render unpublished bench opinions or orders. In deficiency cases, the decision of the court sets forth the deficiency or overpayment determined pursuant to the court’s opinion. In declaratory judgment cases, the decision of the court sets forth the declaration of the court as to an administrative determination by the Commissioner. In certain cases, the decision of the court sets forth the determination of the court as to the employment status, as well as the proper amount of employment tax under that determination.

Case and Proceeding. While the statute refers to a proceeding pending before the Tax Court, the term “case” is used in the Tax Court Rules and by the Office of Chief Counsel.

Trial and Hearing. A case is tried at a trial session. The term “hearing” is used with respect to some intermediary action in a case. Thus, there could be a hearing on a motion at either a motions session or at a trial session.

1.Trial and Hearing Notices. A Notice Setting Case for Trial is issued for each case or group of cases calendared for trial at a trial session. An order setting a case for hearing is issued for each motion or other interlocutory proceeding calendared for hearing at a trial or a motions session.

2. Sessions. The Tax Court conducts trial sessions (which may be regular, small, combined regular and small, or special) and motions sessions.

3. General Docket. All Tax Court cases at issue that have not been calendared for trial, assigned to a judge, or submitted for decision are considered to be on the general docket for the designated place of trial and are available for calendaring at a scheduled trial session at that location. A place of trial may be designated by either the petitioner or the respondent.

4. Calendars for Trial and Motions Sessions. Cases calendared by the court for trial at a designated trial session are listed upon a calendar for that session. A trial session’s calendar will also list cases in which motions are calendared for hearing at a trial session. Motions that are calendared for hearing in Washington, D.C., are listed by case upon a calendar for a specified Washington, D.C., motions session.

5. Unassigned Cases. Unassigned cases are those cases that are at issue (including cases in which there are ending motions for improved pleadings) that have not been assigned to a division of the court for disposition by trial or otherwise, and have not been calendared for trial. Unassigned cases are under the supervision and control of the chief judge of the Tax Court.

6. Assigned Cases. An assigned case is one called from a trial calendar at a trial session of the court which is submitted to, retained by, or taken under advisement by the division of the court conducting the session (i.e., the presiding judge), or one which is specifically assigned to a division of the court by the chief judge.

7. Submitted Cases. A submitted case is one that has been tried or fully stipulated and submitted to the court for opinion and decision.

The petition and certain other documents are served by the Tax Court on the parties. Most documents, however, are served directly by the parties. Each petition filed with the Tax Court (including informal communications treated as imperfect petitions) receives a docket number, which is stamped on the original document and on all copies filed concurrently with the original. Thereafter, on each subsequent pleading or other document filed or lodged with the court, the docket number of the case must appear next to the caption. Effective January 1, 1962, docket numbers assigned to new cases filed with the court began with the number 101-62. The last two digits of the document number indicate the calendar year in which the petition was docketed with the court. Thus (with certain exceptions), the first petition filed each year is numbered 101-XX, with the last two digits (XX) reflecting the year in which the petition is filed.

Any doubt as to whether the initial document received by the court from you is intended to be a petition is usually resolved by the court in favor of filing it as a petition, whether or not the document was accompanied by a filing fee or whether the required number of copies were received by the court.

The court will serve on the respondent a document filed as a petition even though the filing fee has not been paid. In general, the court will not serve upon the opposing party a motion, answer, or other document (other than a petition), unless the required copies are filed with the court. Generally, an original and four copies of papers are required to be filed with the court. See T.C. Rule 23(b). The court, as a general rule, will not duplicate a document for service on the opposing party when sufficient copies have not been supplied to the court together with the original. This general rule is equally applicable to the respondent and to the petitioner.

8. Discovery. Interrogatories and requests for the production of documents and things and responses thereto, will be sent directly by the Field attorney to petitioner or petitioner’s counsel, since these documents are not filed with the court. You also have the right to discovery which you should serve on the Field attorney. The Field attorney will usually wait for a notice of filing or other order directing a response from the court, however, their preparation will have already started. It’s okay to communicate directly with the Field attorney at any time. If the court sets an immediate hearing and the Field attorney is not prepared, they generally request a leave to file a response.

9. Computation of Time. 1. T.C. Rule 25 provides a method for computing time for an act, event, or default from which a designated period of time begins to run. The day of the act shall not be included, and the last day of the period so computed shall be included. If service is made by mail, then a period of time computed with respect to the service shall begin on the day after the date of mailing. Saturdays, Sundays, and all legal holidays shall be counted, with some exceptions. Pursuant to T.C. Rule 25(c), the Tax Court in its discretion may make longer or shorter any period provided by the Tax Court Rules. However, if the period is fixed by statute, the Tax Court cannot extend or shorten the period. The Tax Court, on the first document served upon the respondent, will note thereon the postmark date as shown on the envelope in which the document was mailed to the court and the manner of mailing, i.e., regular, postmetered, registered, or certified mail. If the postmark date is illegible, it will be so noted. If a purported copy of the statutory notice is not attached to the original petition, the court will stamp the notation “Def. Notice NOT Attached to Orig.”

Small Tax Case Procedures

Title XVII of the Tax Court’s rules establishes special procedures to expedite the handling and disposition of Small Tax Cases (“S” cases) in accordance with section 7463. See T.C. Rules 170-175. The rules define the limits of “S” case jurisdiction and establish how “S” cases are handled by the Tax Court and by the parties.

1. Subject to petitioner’s election, a case may be an “S” case if it meets the dollar limitations under section 7463(a) and (f) and section 7436(c)(1) as to the amount of the deficiency in dispute. A petitioner may elect small tax case status in any case in which the amount of the deficiency placed in dispute (including any additions to tax, additional amounts and penalties) or claimed overpayment does not exceed: $50,000 for any one taxable year in an income tax case; $50,000 in an estate tax case; $50,000 for any one calendar year in a gift tax case; $50,000 in employment taxes for each calendar quarter involved in a worker classification case under section 7436; $50,000 for any one taxable period or, if there is no taxable period, for any taxable event in the case of excise taxes under Code chapters 41, 42, 43, or 44 or under chapter 45 (windfall profit tax); claim for relief under section 6015(e) not in excess of $50,000; or an appeal under section 6330 in which the unpaid tax does not exceed $50,000. The deficiency is not added to any claimed overpayment in determining the jurisdictional amount. If the amount of the deficiency stated in the statutory notice exceeds $50,000 but the amount is reduced below $50,000 at the time the petition is filed (e.g., due to concessions by the parties), then the petitioner can elect to have the case designated an “S” case in the petition. T.C. Rules 171 and 295.

2. A qualified petitioner who wishes to have a case handled under the “S” case procedure may so elect at the time of filing the petition or at any time prior to trial. T.C. Rules 172 and 175. Cases classified as “S” cases will be assigned the letter “S” after the docket number. The court occasionally does not honor a request for small tax case status if the deficiency notice or other determination letter is not attached to the petition. If petitioner in this situation elects small tax case status and the case otherwise qualifies, respondent should file a “Notice Regarding Small Tax Case Election” in which it is recited that petitioner elected small case status, and the case qualifies for such status. A copy of the relevant determination letter should be attached as an exhibit to the Notice. In no case may respondent elect small tax case status on behalf of a petitioner or on respondent’s own behalf.

3. A decision entered in a case conducted under the small tax case procedure shall not be reviewed in any other court and shall not be treated as precedent for any other case.

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IRS CIRCULAR 230 DISCLOSURE: To ensure compliance with requirements imposed by the IRS, we inform you that, unless expressly stated otherwise, if any U.S. federal tax advice contained in this communication, (including any attachments) is not intended or written to be relied upon or used, and cannot be relied upon or used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction of matter addressed herein.