On May 6, 2016, the Tax Court issued a press release announcing the next test for admission to the Tax Court for non-attorneys. Here is a prior announcement. Tax Court Rule 200 governs practice before the Court. The general requirement for practice before the Tax Court concerns good moral character and the ability to provide competent representation before the Court. For those meeting the general requirements, there are two paths to admission. First, you can be admitted to practice before the Tax Court pursuant to Rule 200(a)(2) if you are a member in good standing of the Bar of the Supreme Court of the United Sates or of the highest (or other appropriate court) of a State, of D.C., of a commonwealth, territory or possession of the United States. Members of one of these bars represent, by far, the typical member of the Tax Court bar. You must submit an application, a fee and proof of good standing in the appropriate bar. It has been a long time since I became a member of the Tax Court but I remember it as a fairly easy and low cost process.
Even if you are not a member of any bar, it is still possible to practice before the Tax Court using the second path which is available to non-attorneys. This path requires submission of an application and a fee as well but also requires the applicant to take a test. Tax Court Rule 200(a)(3) provides that this test “will be held no less often than every 2 years.” This subsection of the Rules also provides that at least six months prior to the administration of this test the Court will make a public announcement of the upcoming test. Tax Court Rule 200(c) requires that individuals taking the test must be sponsored by at least two persons already admitted to the Court. The sponsor sends the letter shortly after the person passes the exam and provides the Court with “the sponsor’s opinion of the moral character and repute of the applicant and the sponsor’s opinion of the qualifications of the applicant to practice before” the Court.
Why does the Tax Court admit non-lawyers and how hard is it to get admitted?
The reason the Tax Court, among all federal courts, admits non-lawyers to its bar is rooted in history. We have discussed the book before but for any reader interested in the history of the Tax Court the “The United States Tax Court – An Historical Perspective” originally by Harold Dubroff and updated in 2015 by Dean Brent Hellwig of Washington & Lee Law School is the authoritative source. The book is available directly from the Court’s web site and you can read all 953 pages from the privacy of your home computer. It is excellent. It devotes some time to the subject of practice by non-lawyers before the Tax Court.
The Tax Court allows non attorneys to practice before it because it did so when it was first created in 1924. When Congress eventually pulled the rug out from under CPAs in allowing them to automatically practice before the Tax Court, the test was created as a safety valve to allay the concerns over the removal of the right CPAs previously had and which they lost. In 1926 Congress first amended the legislation creating the Tax Court. In doing so, it created a deliberative body more like a court than a “Board.” Persons coming before the Board of Tax Appeals (BTA) after the 1926 amendments participated in a process that essentially paralleled the process of a court. There was some discussion about the appropriateness of having clients represented by CPAs but the rules were not changed and CPAs as well as attorneys could join the Tax Court’s bar in a process similar to the attorney process today.
The next time Congress looked hard at the BTA was 1942. The BTA wanted to become known as a court for several reasons one of which being called a court would make It much easier for it to borrow courtrooms around the country. Congress changed the name from BTA to Tax Court. It also made other changes at that time including limiting practice before the Court to those who were attorneys in good standing or who passed the test Congress order the Tax Court to establish and who otherwise showed themselves to be of good moral character.
The Tax Court has published statistics showing the past success rates for taking thee exam. No law school would want these rates as its bar passage rates. The descriptions I have heard of the exam from those who have taken it have convinced me that it very hard and I might not pass. There are organizations, (more here and here) that assist with exam preparation. One of the members of the pro bono panel at the Harvard Tax Clinic, Charles Markham, is a person who has passed the Tax Court test. At the most recent Tax Court calendar in Boston, Charles tried his first case. He came to calendar call to assist with the cases. One couple needed assistance. I met with them but was unwilling to represent them due to the income guidelines that govern the grant our clinic receives from the IRS pursuant to IRC 7526. The grant requires the clinic to represent individuals whose income falls under 250% of poverty. Although it also allows the clinic to accept as clients 10% of its cases for individuals above that threshold, I try to reserve those cases for ones I think will make a difference in broad legal questions. Despite my reluctance to take the case, Charles jumped in at the last moment and represented them in a trial that day. I feel confident that the petitioners he represented appreciated his efforts and that they benefited from them.
Enrolled agents and CPAs seeking the ability to represent their clients in Tax Court should take note of the upcoming test. My impression is that interest in this test is growing.