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Changing of the (Special Trial Judge) Guard

Posted on May 25, 2017

At the recent meeting of the ABA Tax Section, Chief Judge Marvel announced that Chief Special Trial Judge Peter Panuthos is stepping down from his position as Chief of the special trial judges and returning to the ranks of “regular” Special Trial Judge.  The Tax Court also posted an announcement of this on its web site.

Replacing Judge Panuthos as Chief Special Trial Judge is Judge Carluzzo.  By chance, both judges, along with former Chief Judge Colvin, were on a panel at the Pro Bono and Low Income Tax Clinics Committee to celebrate 25 years of service by Judge Panuthos in the role of Chief Special Trial Judge.  I want to take this opportunity to join in the celebration of his service and also to look forward to the tenure of Judge Carluzzo as he assumes that role.

Judge Panuthos worked for Chief Counsel, IRS before he was selected as a Special Trial Judge in 1983.  Although he is from New York, he worked in the Boston office and became an assistant district counsel in that office before departing for the bench.  At the time he started in Chief Counsel’s Office, the office had a “home state rule” that prevented attorneys from working in an office located in their home state.  Although I do not remember speaking to him about it, I am almost certain he ended up in Boston because of that rule.

Today, there are five special trial judges.  At the time Judge Panuthos became the Chief Special Trial Judge in 1992 there were almost three times that number.  It is easy to forget today how much TEFRA has changed the Tax Court’s docket.  The tax shelter wars of the 1980s coupled with the need to send a notice of deficiency to each individual partner caused the Tax Court’s docket in the 1980s to balloon to almost three times its current size.  The Court used special trial judges to deal with the expanded docket and has watched their ranks diminish as the number of cases has declined and as the number of senior judges has expanded.

At the ABA meeting, Judge Marvel also noted that Court receipts are down this year and that the Court is closing cases at a faster clip than it receives them.  Since IRS activity drives receipts and since the IRS budget may cause a reduced number of notices of deficiency and determination for the foreseeable future, it seems unlikely that the number of special trial judges will expand unless the Congressional inability to approve judges causes their ranks to swell.  Unlike “regular” Tax Court judges who must go through the Presidential appointment and the Senate approval process, Special Trial Judges are hired by the Tax Court which allows the Court, assuming its budget permits, to fill necessary vacancies as case receipts dictate.

Judge Panuthos has a well-deserved reputation as someone who has championed the cause of the unrepresented.  He has played a giant sized role in making the Tax Court a model among federal courts (and all courts) for its treatment of pro se litigants and for creating an atmosphere of access to justice for unrepresented individuals filing petitions without representation.  His tenure matches almost exactly with the expansion of the earned income credit (EIC) in the mid-1990s with the creation of the welfare to work laws and with the expansion of small case jurisdiction to $50,000 in 1998.  The EIC expansion changed the IRS audit focus and consequently changed the Tax Court’s docket.  With approximately 70% of its petitioners coming into the door unrepresented, the Tax Court more than most federal courts has had to adjust to working with unrepresented individuals and trying to get them positioned to adequately present their cases.

Judge Panuthos has worked closely with low income tax clinics during his tenure as they expanded from about a dozen when he became Chief Special Trial Judge to over 140.  He worked to build the Court’s web site with FAQs and a video to explain what happens during a Tax Court proceeding.  He worked to create the “stuffer” notice alerting unrepresented taxpayers to the clinic resources in their locality.  For this work he has been recognized by the ABA Tax Section as the only judge to receive the Janet Spragens award for Pro Bono Service and by the Tax Court itself with the J. Edgar Murdock award.  Because of the length of his tenure as Chief Special Trial Judge, the significant changes happening to the Court’s docket during that tenure and his remarkable and compassionate response to those changes, he has transformed the position.

Judge Carluzzo will follow Judge Panuthos as the Chief Special Trial Judge.  Those who have heard him speak and who have practiced before him know that he also shares a passion of access to justice.  Judge Carluzzo also worked in Chief Counsel, IRS before moving to the Tax Court.  Because he worked in District of Columbia field office of Chief Counsel which was a neighboring office to the Richmond office where I worked, I knew him as one of the top trial lawyers in the office.  He joined the Tax Court in 1994 so he brings plenty of experience to the position.  In 2008, I started a Tax Court Litigation class at Villanova primarily to teach clinicians working at low income taxpayer clinics who try cases in Tax Court.  Judge Carluzzo has volunteered his time for every class to assist in training clinicians to practice before the Court.  He is a marvelous teacher.  He wants low income taxpayers to be represented, and well represented.  He will continue to tradition that Judge Panuthos has started and will keep the Tax Court in the forefront of access to justice.  We are fortunate that Chief Judge Marvel had the opportunity to fill the position of Chief Special Trial Judge with someone who shares the passion that Judge Panuthos brought for unrepresented petitioners.

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