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Posted on June 17, 2022

We have written on more than one occasion about the pre-mature assessment and pre-mature collection problems caused by the delays at the Tax Court in processing cases. The failure to timely notify the IRS of a petition sends the IRS off to assess (and then collect) in deficiency cases or off to collect in CDP levy cases. In this post I will discuss another situation in which not knowing whether a petition was filed created a potentially unnecessary second filing and a proposal for enhancing notification of parties similar to the practice of district courts and some state courts.

Timely Notification and Support for Petitioners Filing Electronic Petitions

An order entered in Foster Drive LLC v. Commissioner, Dk. No. 4094-21 (June 6, 2022) puts on display another potential problem caused when the Tax Court does not timely process petitions. Here, the problem comes up in the context of a TEFRA proceeding.

The Tax Matters Partner (TMP) filed an IRC 6226 proceeding. Because of the delays in processing the petition and assigning a docket number to the case, the partnership could not be certain that the TMP’s petition arrived at the Court on time. This caused a notice partner to file a second petition during the additional time allowed for a notice partner to do so. Almost exactly a year after filing the second petition and after the cases were placed on the Birmingham calendar, the Court noticed the second filing was the filing in the same case in which the TMP had previously filed to contest the determination. This led to an order to show cause why the petition filed by the notice partner should not be dismissed.

In this situation only one case can go forward. It will be the case of the TMP. The notice partner’s case will be dismissed for lack of jurisdiction. When I read the order I thought it provided another example of the extra work triggered when one part of the tax system gets out of whack similar to the problem of pre-mature assessments. In corresponding with it turns out the problem may have resulted from DAWSON more than from COVID.

When electronically filing a petition, something DAWSON allows and a significantly beneficial improvement, individual petitioners must create a separate document for the filing of the social security number but bundle the remainder of the petition package into one PDF document. When filing a partnership petition, all documents should be bundled into one PDF. The instructions do not provide significant detail on this point and it is not covered in the rules. In this case the petition filed by the TMP split the petition and the FPAA. Because the TMP could not confirm with the Court that the failure to remit the documents in a single PDF was “harmless error” it felt it necessary to file the second petition.

Prompt service would have confirmed the acceptance of the petition. In this period when filing petitions electronically remains a novelty and the Court wants to promote filing electronically, perhaps it would be good to have a line into the Clerk’s office to confirm receipt of an electronically filed petition and to confirm it correctness so that petitioners do not need to worry if their petition met the criteria for a properly filed petition. Petitioners long accustomed to filing paper petitions may be more comfortable continuing to file paper petitions without a means of confirming success in filing. The Tax Court does not want to create the same type of problems that the IRS creates by making its rules for electronic filing more difficult than paper filing while purporting to encourage electronic filing. See our discussion here on some of the issues existing in electronically filing a return and how it differs from paper filing.

Allowing a Second Email Address for Service from Court

On a related but separate matter, Jack Townsend forwarded a suggestion from one of his readers that could also enhance the DAWSON system. Many federal district courts and state courts allow parties to provide two email addresses for notices to counsel. This allows counsel to have a second notice come into the office to a legal assistant or to an email address the office uses for all service. If DAWSON allowed counsel to list two email addresses it could avoid some headaches from missed notifications and improve response times.

In Florida, the rule is Fla. R. Jud. Admin. 2.516 (b)(1)(A): “Upon appearing in a proceeding, an attorney must designate a primary e-mail address and may designate no more than two secondary e-mail addresses and is responsible for the accuracy of and changes to that attorney’s own e-mail addresses maintained by the Portal or other e-Service system. Thereafter, service must be directed to all designated e-mail addresses in that proceeding. Every document filed or served by an attorney thereafter must include the primary e-mail address of that attorney and any secondary email addresses. If an attorney does not designate any e-mail address for service, documents may be served on that attorney at the e-mail address on record with The Florida Bar.”

This brief blog post from the Florida Bar discusses the problem when there are too many email addresses allowed. Should the Tax Court adopt a rule allowing two email address, however, it would seem to avoid the problem created in Florida when it allowed an unlimited number.

Section 1 (f) of the U.S. District Court for the Southern District of California’s electronic filing manual states that “Registration constitutes consent to electronic service of documents by e-mail, as provided by the Federal Rules of Civil, Criminal and Appellate Procedure. An attorney may register up to two (2) additional e-mail addresses.” This appears to be standard in federal district courts, however, it is also apparent that some Courts have been lenient in the past and have allowed more than two emails. The U.S. District Court for the District of Arizona sent a notice to attorneys that “Effective March 1, 2018, the Court intends to enforce the additional 2 e-mail address restriction” which indicates that previously attorneys could list more than two email addresses.

I just filed an amicus brief in the Third Circuit. The entry of appearance form for that Circuit provides the opportunity for the original email address and three additional email addresses. A copy of the Third Circuit’s form is attached here.

As the Court continues to improve DAWSON looking for ways to make practitioners, and pro se petitioners, more comfortable with the filing of electronic petitions would benefit everyone.  Separately, allowing parties to designate more than one email address could improve communication at little or no cost.

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