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Pro Se Petitions in Tax Court

Posted on Feb. 4, 2022

The National Taxpayer Advocate’s (NTA) annual report has an interesting section focusing on pro se litigation. Perhaps it’s only interesting to me because I run a low income taxpayer clinic (LITC) but I hope that this post will help you consider how it should be of some interest to you even if you represent clients who can pay for their representation.

One thing that surprised me in the annual report was the percentage of pro se cases in the Tax Court. Instead of the approximately 75% of petitions reported by the Tax Court itself, the report places the figure above 80% for most of the past decade and 86% last year. I cannot explain the discrepancy. Looking at the chart provided, the percentage has crept up recently but is not outside of historical norms as calculated by the NTA.

Figure: Screen-Shot-2022-02-03-at-4.56.15-PM.png

In addition to a chart showing percentages, the report also provides a chart showing total cases petitioned by pro se and represented taxpayers.

Figure: Screen-Shot-2022-02-03-at-4.56.46-PM.png

One of the reasons one might care that so many petitioners go to the Tax Court pro se is that a percentage of these cases end up litigated in somewhat one-sided circumstances since most pro se petitioners do not do a great job of presenting their case. The problem with that, aside from the problem it places on the individual pro se litigant, is that some of these litigated cases end up as precedential opinions which impact everyone who has the same issue. While many of the issues brought by pro se petitioners do not impact high income taxpayers or entity taxpayers, some do. It’s for that reason that all taxpayers have a stake in the litigation of pro se taxpayers and a desire to ensure that the Tax Court has the best arguments on the taxpayer’s side for reaching a conclusion. Once the Tax Court renders a precedential opinion, subsequent taxpayers, even when well-represented, will struggle to undo the precedent.

In recent years, the Tax Court has significantly reduced the number of precedential opinions from the levels of the 1970s and 1980s. In a forthcoming article linked below, I display a chart of precedential opinions by year. Just for comparison, in the 1970s the Tax Court averaged publishing almost 200 precedential opinions a year and in the 2010s it averaged about 50 each year. This is an issue Professor Grewal addresses in his article The Un-Precedented Tax Court, 101 Iowa L. Rev. 2065 (2016) which he highlighted for readers of PT in a series of blog posts here, here, here and here. The number of opinions generally is low and precedential opinions quite low, making each precedential opinion all the more important. Over the years 2018 through 2020, pro se petitioners took 137 cases to trial and opinion. The breakdown of these cases is relatively similar to the breakdown of Tax Court cases overall: 65.0% are memorandum opinion cases, 32.1% are summary opinion cases, and 2.9% are published “T.C.” opinions. This means that 2.9% (or four cases) argued by pro se petitioners over the three- year period resulted in a precedential opinion.

In 2021 alone, the Tax Court issued eight precedential opinions in cases in which the taxpayer was unrepresented out of a total of 24 precedential opinions for the year. The precedential opinions were as follows (pro se opinions are marked with an asterisk): Ramey v. Commissioner of Internal Revenue*; Adams Challenge (UK) Limited v. Commissioner of Internal Revenue; Grajales v. Commissioner of Internal Revenue; Wellness v. Commissioner of Internal Revenue; Beland v. Commissioner of Internal Revenue; McCrory v. Commissioner of Internal Revenue*; Mainstay Business Solutions v. Commissioner of Internal Revenue; Rowen v. Commissioner of Internal Revenue; De Los Santos v. Commissioner of Internal Revenue; Mylan, Inc. & Subsidiaries v. Commissioner of Internal Revenue; Stein v. Commissioner of Internal Revenue; Hussey v. Commissioner of Internal Revenue; Garcia v. Commissioner of Internal Revenue*; Belair v. Commissioner of Internal Revenue*, Rogers v. Commissioner of Internal Revenue*; Toulouse v. Commissioner of Internal Revenue; Lissack v. Commissioner of Internal Revenue; Vera v. Commissioner of Internal Revenue*; Leyh v. Commissioner of Internal Revenue*; Insinga v. Commissioner of Internal Revenue; Ruhaak v. Commissioner of Internal Revenue*; McNulty v. Commissioner of Internal Revenue; Sand Investment Co., LLC v. Commissioner of Internal Revenue; Coggin v. Commissioner of Internal Revenue.

I do not know why there were so many precedential opinions in 2021 or so many pro se precedential opinions. Perhaps the pandemic gave the Court more time to write important opinions, perhaps new legislation has resulted in more decisions on previously undecided issues, perhaps the Court is shifting its view of what should be classified as precedential, or perhaps other factors are at play.

Let’s look at the eight precedential opinions of the pro se taxpayers, some of which we have previously blogged. I will discuss the cases in the order in which they were published:

Ramey v. Commissioner, 156 T.C. No. 1 – The Tax Court determined that when the IRS issues a notice of decision rather than a notice of determination and the taxpayer has filed the collection due process (CDP) request late, the Court lacks jurisdiction to hear the case. The taxpayer, a lawyer, represented himself and pegged his arguments to last known address rather than jurisdiction. Nonetheless, the decision expands the Court’s narrow view of jurisdiction to another setting without addressing the Supreme Court precedent on jurisdiction and its impact on the timing of the filing of documents. See post here.

McCrory v. Commissioner, 156 T.C. No. 6 – This is a whistleblower case in which the IRS issued a preliminary determination and the court holds that he cannot petition from such a determination. See post here.

Garcia v. Commissioner, 157 T.C. No. 1 – A passport case in which the Court finds the simultaneous denial or revocation of passports to a married couple can result in a joint Tax Court petition; however, here the husband passed away after filing the petition, rendering his petition moot, and the IRS accepted an offer in compromise for processing from the wife, causing it to send a withdrawal letter to the State Department rendering her case moot. See post here.

Belair v. Commissioner, 157 T.C. No. 2 – Taxpayer requested a CDP hearing under IRC 6320 following the filing of a notice of federal tax lien. The Tax Court granted summary judgment relief to the IRS based on the administrative record rule due to the application of the Golsen rule in the Ninth Circuit.

Rogers v. Commissioner, 157 T.C. No. 3 – Another whistleblower case in which the court finds that the determination letter issued to the taxpayer was not consistent with the regulations and was an abuse of discretion. See post here.

Vera v. Commissioner, 157 T.C. No. 6 – Taxpayer requested innocent spouse relief for year one. IRS denied relief and taxpayer did not petition the Tax Court. Taxpayer submitted another request for innocent spouse relief seeking it for year one and year two. The IRS denied relief again and in the notice of determination listed both years. The Court decided that even though it would ordinarily not have had jurisdiction over year one after taxpayer missed the deadline, the inclusion of year one in the subsequent notice of determination gave the Court jurisdiction over both years.

Leyh v. Commissioner, 157 T.C. No. 7 – The Court determined that the taxpayer could deduct as alimony the health insurance payments he made to provide coverage for his ex-wife.

Ruhaak v. Commissioner, 157 T.C. No. 9 – Taxpayer sent his CDP request form, Form 12153, to the IRS within 30 days of the CDP notice. He checked the box that he wanted an equivalent hearing rather than a CDP hearing; however, the IRS stated that because he made the request within 30 days, it must provide a CDP rather than equivalent hearing. The Tax Court agreed with the IRS. See post here.

You could look at these opinions and say the Tax Court got it right every time. Maybe it did. You will notice among these cases several procedural issues that could impact low income or higher income individuals and that the CDP cases could impact entities as well as individuals. Caitlin Hird, a 3L at Harvard Law School, and I have written a draft paper suggesting (requesting) that when the Tax Court identifies a pro se case as one in which it wishes to enter a precedential opinion that it considers seeking an amicus brief so that the Court will have legal arguments on both sides of the issue. We think such a practice would not only benefit the Court by providing it with a more adversarial situation and benefit the individual taxpayer but also provide a benefit to the downstream litigants who might encounter the same issue but must contend with a precedential opinion in which the Court only heard from the IRS in a meaningful way. You can read a draft of our paper on SSRN here if you are interested.

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