(Part 2 of Tax Court)
Special Note: As of this post, May 19, 2020, Tax Court trials are on hold until July 3rd. In addition, all mail is being held right now, so any mail sent may be returned as undeliverable. You can resend documents to the Court again as soon as they announce reopening.
What happens at Tax Court stays at Tax Court. Well, not really. There are documented steps along the way. Last week we talked about all of the steps that happen leading up to a Tax Court trial. This week, we cover what happens during and after your Tax Court trial.
Good Morning, Happy Tax Court Day
You walk into the Tax Courtroom. You’re on time, even early! You take a seat and wait, and then Calendar Call begins. The trial clerk, a Tax Court employee, will announce the names of each case that is not settled. They call your name, and you stand up. You state your name, and then the attorney representing the IRS will do the same. The Judge asks a few questions, then you sit back down and wait for the other names to be called. Then, the Judge starts scheduling cases for specific times and days. You don’t have any scheduling restrictions, but if you did, you knew you could have requested a time and date for the Judge to try to accommodate. If that had happened, you wouldn’t have had to be here at all!
But What if You Hadn’t Shown Up Today?
If you knew ahead of time that you weren’t ready…
You could have filled out a motion for continuance asking the Judge to postpone. In this case, it’s also a good idea to ask the IRS attorney if they will agree to a request of continuance. If they object, this is something to note to the Tax Court.
If you and the IRS are in agreement about the facts and documents you want to record, you could ask the IRS attorney if your case can be fully stipulated. This means that your case would be submitted without a trial, and the Judge will make a decision solely based on the tacts and documents stated without your presence.
If you simply decided to sleep in or not show up...
If you were expected to be there and didn’t come, your case will be dismissed for failure to prosecute, and the decision may be entered against you. After all of the time and energy you’ve spent to attend Tax Court, you definitely don’t want to lose your case this way.
Was I Supposed to Come Alone?
If you filed a joint petition with your spouse, you need to be there. If either of you fails to attend, the person who didn’t attend forfeits their opportunity to testify and present other evidence. What’s more, the Judge may enter the same decision for both of you even if only one of you is present! Sometimes, though, life is crazy and only one person can make it. If you know this in advance, you can request the Judge to excuse one spouse’s absence.
We’re Here, What Happens Now?
It’s the morning of your trial, and you’re in the Tax Courtroom bright and early. The trial clerk calls your case, and you and the IRS attorney state your names. The Judge may ask a few questions here, and then you’re invited to an opening statement. In an opening statement, you state the facts and laws and how you think the Judge should rule. You go first, as typically the petitioner does. These opening statements are not under oath, hence they cannot be considered by the Judge unless you prove your statements with evidence when you do go under oath. You kick yourself mentally for forgetting that you could have had the option to give your opening statement under oath to avoid repetition later.
Now Presenting - The Witnesses!
Typically, the petitioner is the first witness, so you come forward. In this case, you’re the only witness, too! Witnesses present new info to Judges that allows the Judge to fact find and clarify anything murky. Next, the IRS attorney will conduct a direct examination of the witnesses and ask questions. In the cross-examination, you then ask the IRS attorney questions. You play the Law and Order theme song in your head while this occurs. The Judge asks questions throughout this process, too.
Once the trial is over and the record is closed, no more evidence can be submitted. The Judge will only consider evidence admitted into the record, so you’ve made sure that you brought all relevant documents that were not in the stipulation of facts.
Waitin’, Waitin’, Waiting for the World to Change
Your case may not be immediately settled. Sometimes during or after the trial, the parties or the Judge will suggest the parties converse about the goals of the settlement. Some parties realize that their evaluation of the merits have changed, so new settlement discussion opportunities arise.
After the Trial
The Judge files your post-trial briefs or allows the parties to make oral arguments, file memoranda, or statements of legal authority. A port trial belief is a legal document where the party presents their proposed factual findings and legal arguments. In your case, this happens, and you now wait for a final answer.
What Can Happen Next
Deciding the case has no fixed time frame, and you know there are a few things that can happen here:
This is an oral opinion the Judge gives at the end of a regular or S case trial. The Tax Court will send you a copy of the transcript with the opinion after the trial, and you can also see this through the Docket Inquiry System. A bench opinion cannot be relied on as precedent, meaning similar cases may have different outcomes. If no Bench Opinion is diffused, the Judge may go to D.C. to review the testimony and exhibits of your case in order to issue an opinion.
This happens in S cases only, and also cannot be relied on as precedent. If the Judge issues a summary opinion, it cannot be appealed.
Tax Opinion or Memorandum Opinion
These are issued in non-S cases that have no novel issues in particular. Typically these cases have laws settled or are completely factually driven. Memorandum opinions are cited as legal authority, and you can appeal them. They are cited as
Petitioner] v. Commissioner, T.C. Memo [year issued - #]
Tax Court Opinion
These are also issued in a non-S case where there are important legal issues or principles to keep in mind. They are also cited as legal authority and can be appealed. You’ll see these citations as:
[Petitioner] v. Commissioner, [Volume of Tax Court Reports] T.C. [page of volume] (year issued)
Win or Lose?
In your case, the Judge issued a Tax Court opinion. Tax Court will send you a copy of this opinion in the mail, and they’ll also post the resort on the website on the same day. This opinion breaks down the conclusions reached from the trail, and then a final decision will be entered that is consistent with the opinion.
You can’t appeal an S case, but in a non-S case, you can appeal the decision or file a motion for reconsideration 30 days after the opinion is mailed. A motion for reconsideration explains what parts you disagree with and reasons why your disagreement has merit. Then, the Judge will decide if your case is worthy of the motion for reconsideration.
Hooray, You Won!
In your case, you did an amazing job presenting your facts, and the Judge reached a great solution for you! You take a deep breath and relish in the moment.
Other Tips from the Tax Court Website
Do organize all your papers and documents and bring them with you.
Do present your facts and state your position to the Judge.
Do respect the Judge and the Tax Court.
Don’t bring food or chew gum in court.
Do turn off cell phones and other electronic devices in the courtroom.
Don’t argue with a witness, but do ask questions.
Don’t argue with the IRS attorney, but do state your position to the Judge.
Thanks for going on this journey with us! If you have any more questions about Tax Court, or you want some help preparing, contact us at Practical Accounting Solutions!
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Disclaimer: The views presented in this post are meant as educational resources and should not be taken as direct advice for your personal finances or small business. Should you have questions regarding a post relating to your specific finances, please contact us at firstname.lastname@example.org.