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Tax Court Trials in the Fall Will Look Very Different

Posted on June 5, 2020

The Tax Court plans to resume conducting trial sessions in the fall, but it will be implementing several changes that will make those trials different from the court’s previous practice.

“There will be a fall trial calendar. However, there’s going to be travel limitations; the court will not be traveling for its fall trial calendar,” according to Tax Court Judge Ronald L. Buch. “What the court will be doing is it will be conducting remote calendar calls, and to the extent that trials are necessary, remote trials,” he said on a June 4 webcast sponsored by the American Bar Association Section of Taxation.

Buch’s comments follow closely on the heels of the Tax Court’s official pronouncement of remote proceedings. “You're going to start seeing at some point in the not too distant future notices of trial coming out, and we’ll see trial sessions scheduled beginning in probably . . . mid- to late September, and continuing in the time of a fairly typical fall term,” Buch said.

Many of the judges on the Tax Court already use pre-trial-session conference calls between the petitioner, respondent’s counsel, and the court to manage their dockets, Buch said, adding that in the world of remote trials resulting from the coronavirus pandemic, the use of those conference calls will probably increase.

More conference calls will also help narrow the calendar calls that lead off trial sessions in which the court determines which cases are actually ready for trial, according to Buch. Plus, maybe more initial discussions can pull cases off of the trial calendar, he said.

Buch noted that the court’s order regarding remote trials changed several procedures from those normally used for in-person proceedings. He highlighted the requirement for submission of documents and stipulations 14 days before trial.

In more conventional times, documents and stipulations often first appear on the day of trial. However, Buch observed that the early submission is necessary to get all those documents into all parties’ hands electronically.

The platform that the court plans to use for trials (Zoomgov) is not only secure and user-friendly, but it will also allow for breakout sessions separating some of the participants, according to Buch. This will allow petitioners to confer with volunteer and low-income taxpayer clinic practitioners, he said, adding that the court will have more details on those breakout session capabilities soon.

Buch also mentioned the document request changes that the Tax Court made the same day it announced the move to remote trials — the court will now be delivering requested copies via email and placed a cap on the copying fee. While the court incurs some expense to field and fill those document requests, those costs don’t vary much based on the length of the document, so it made sense to cap the fee, he said.

Filing Cabinet

Buch said the court still anticipates rolling out some of the updates to its case management system later this year. Those updates will enable taxpayers to file their petitions electronically, he said.

In the world of paper filing, the court has leaned on its decision in Guralnik v. Commissioner, 146 T.C. 230 (2016), to help petitioners deal with the pandemic-induced closing of the Tax Court building, where it receives mail. In Guralnik, the court held that the last day for filing a petition could fall on a day when the court clerk’s office is unreachable.

Buch said the three-month-and-counting closure of the Tax Court’s building has resulted in a substantial mail backlog. There’s a rumor of a truck-and-a-half full of mail awaiting the court on its reopening, he noted.

While electronic filing will make physical closure of the Tax Court clerk’s office less of a concern, Guralnik won’t be dead letter because it could easily apply if the electronic filing system becomes unavailable, according to Buch.

Plague of Frauds

Later in the webcast, Kathy Enstrom, special agent in charge (Chicago), IRS Criminal Investigation division, addressed the government’s interest in fraud arising from the pandemic relief measures. Those efforts include both the economic impact payments (EIP) and the Paycheck Protection Program (PPP), she said.

The government is pursuing many conventional identity theft cases involving EIP fraud, according to Enstrom. “And we're identifying quite a few leads out there nationwide where multiple checks — and when I say multiple, possibly for one example is a hundred checks — going to the same address,” she said.

Criminal investigators are also pursuing leads involving fraudulent allocation of payment forms, EIPs stolen from the mail, and fraud involving EIPs on prepaid debit cards, Enstrom said.

Like any natural disaster relief measure, the PPP has also drawn its share of fraud, Enstrom said. “We've seen these schemes before, we know how to find them and expose them, and we are prepared and equipped to do just that,” she said.

Those worried about returning their PPP funds after the close of the May 18 safe harbor should know that, without more, such a case doesn’t sound like one that would have much appeal for a criminal jury, Enstrom said. “Now, if the person got the funds on a falsified type of manner, we contacted them, questioned them about it, and then they decided to return the funds. That’s quite a different scenario,” she explained.

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