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Protecting Tax Court Litigants and Revealing Records: A Conundrum for the Tax Court with a Simple Solution.

Posted on July 7, 2022

We have reported before here (reporting on the Estate of Michael Jackson) on a glitch in DAWSON, the Tax Court’s docket system, where the entire docket becomes sealed when the intent is to seal a specific document.  Recently, Chief Judge Kerrigan spoke at the NYU Tax Conference and indicated this glitch has been fixed or almost fixed, and the Court will begin unsealing dockets allowing non-parties to see the docket sheet and to potentially obtain unsealed documents in cases with one or more sealed documents.  Because I did not attend the conference, I am relying on an article in Tax Notes by Nathan Richman for this information.

This post will branch away from the sealing glitch to talk about Tax Court records in general and protecting certain documents currently available to the public.

Unsealing Dockets

It may take longer for some dockets to be unsealed because of their size. For example, whistleblower cases frequently have one or more sealed documents but generally do not have sizeable dockets. Cases involving large corporations, by contrast, may have only one sealed document but typically have huge dockets. Apparently, unsealing a docket takes a bit of effort in cases with hundreds of entries. Of course, some judges will review and unseal their dockets more quickly than others.

General Public Access to Documents

According to Nathan’s article, former Chief Counsel Michael Desmond asked the Chief Judge if the DAWSON developments will lead to a new policy regarding public access to Tax Court documents (similar to PACER and other courts that allow remote electronic access to case documents). The article states:

Kerrigan noted that there’s a kiosk in the court’s Washington courthouse that allows more electronic access than is available to taxpayers using just the court’s website. She said she hopes that will help but that she isn’t sure if the court’s rules committee has rethought its position on remote electronic access.

The “kiosk” is a table in the tiny foyer of the Tax Court’s record office on its ground floor which houses two computer terminals that allow access to essentially all unsealed documents in the Court’s docket at no charge.  Printing was not available the last time I was there, which was pre-pandemic.  Someone using these terminals must take notes on the files they view or order the documents from the clerk’s office on a form which is readily available, but at a cost of $.50 per page capped at $3.00 per document.  Several years ago the Court posted signs warning users not to take pictures of the documents, perhaps in response to an earlier post.

Of course, unsaid in the Chief Judge’s quote regarding the kiosk is the fact that that the Tax Court building has been inaccessible to the public for most of the past two years making access to the terminals impossible. Further, just getting to the Court is expensive and time consuming for most taxpayers and practitioners. I still do not understand why the Court cannot provide access in the same way as PACER so that filings may be accessed wherever the requestor may be. This limitation is especially confounding now that the Court has started embracing the modern era by hosting zoom-based trials. My views are not new; I have written on several occasions about the lack of public access.   

It was interesting to see a quote in the article from the National Taxpayer Advocate, who also seeks greater access:

Afterward, National Taxpayer Advocate Erin Collins told Tax Notes that her lack of access to case dockets beyond what’s now publicly available impedes her statutory duty to report on the most litigated issues in Tax Court. “Furthermore, the whole taxpayer public suffers from the lack of open access to non-sealed filings in the Tax Court,” she said. “I’d encourage the court to use DAWSON to increase electronic access to filings.”

Sealing or Protecting More Documents

As important as access to documents may be, it is even more important that taxpayers know they can seek Tax Court review without fear for their personal safety. Sealing documents filed by individual taxpayers protects the important statutory right to Tax Court review. The sealing process and the general process of deciding what is public plays a critical role in protecting taxpayer rights beyond providing general record access.

Before discussing the importance of circumscribing access to pleadings, let’s look at some history. Back in the pre-DAWSON era when the Court was issuing designated orders, Patrick Thomas wrote a thorough post looking at the levels of sealing, how the Tax Court went about it, and how some other courts considered this issue.  He had some suggestions for the Tax Court on how to approach sealing that still maintain currency.  Commenter-in-Chief Bob Kamman wrote a post on sealing records, particularly with regard to sealing the taxpayer’s address.  His post includes thoughtful comments on the process.  I also thought about that issue in a Tax Notes article linked through this post.  Guest blogger Sean Akins wrote the first post on sealing that we published, and infused it with his knowledge of physics as well as explaining the applicable rules.

Sealing records, particularly protecting a party’s location information, takes on crucial importance when protecting the information of taxpayers who are domestic abuse survivors, whether they are litigating an innocent spouse issue or another matter. Former National Taxpayer Advocate Nina Olson recently participated in a call with a nationwide group of advocates for survivors of domestic abuse talking about the particular challenges their clientele faces.  In preparing this post, I reached out to Nina by email and she responded by writing that the group spent time

discussing the barriers these folks face in receiving the CTC [Child Tax Credit] and RRC [Rebate Recovery Credit], where the abusers have received these payments instead.  As we talked through the ability to litigate these cases, the advocates made clear how many survivors will not seek judicial review because of fear of retribution by the abuser – especially where there are few guarantees of protection of identity/location etc.

Think about it: even the place of trial may reveal the taxpayer’s location. (I save for another day my views on the need for the Court to maintain the availability of zoom trials, which I note are especially important for this cohort of taxpayers.)

Thus I make three recommendations to the Court. First, the Court should require individual litigants to provide their address on a separate form. The Court already requires that petitioners redact their social security numbers and provide it separately on Form 4, Statement of Taxpayer Identification Number, which it shields. At least one LITC has steadfastly maintained that the Court should designate a similar form for taxpayer addresses, and also requiring that addresses, like SSNs, be redacted from the SNOD, NOD, or other notices the petitioner may submit to the Court.

Second, the Court should automatically seal its Application for Waiver of Filing Fee. This Form seeks information that could lead to determining a litigant’s whereabouts. Question 3, for example, asks the litigant to describe real estate that party may own. Presumably, this would include that property’s address. The Form also requests income information by source. There is no need for this information to be viewable by prowlers, be they abusive partners or even strangers. The Court already recognizes the need for some privacy on this Form by requesting that the litigant list, by initials rather than by name, minors who depend on the litigant for support. It’s an easy step for the Court to protect the entirety of this Form and treat it as it does Form 4. And it would not be the only court to protect this piece of litigants’ personal information. The US Court of Appeals for the Federal Circuit protects access to a filed fee waiver form.  (I think the practice of the Federal Circuit, which was reported to me by a former student who is clerking there, is widespread among federal courts.  I sent a message to the PACER administrators seeking clarification but have not had a response as yet.) Alternatively, the Court could adopt the form used by the Court of Veterans Appeals. That Court’s Form 4, Declaration of Financial Hardship, simply asks the litigant to attest that payment of the $50 filing fee would be a financial hardship.

Third, the Court must offer litigants the opportunity to file their pleadings under seal from the very start of a case. A check box on its form petition, and a corresponding amendment to Rule 34, could include a requirement that individual petitioners request that the pleadings remain under seal, much the same way the Court has a case designation checkbox. With over 70% of Tax Court petitions filed pro se, it’s not enough for that the Tax Court’s Rule 103 allows a party to file a motion for a protective order.

We don’t want petitioners to forego their right to obtain significant benefits delivered through the tax system because danger might result if they reveal identifying information as a result of a Tax Court filing.  Creating a process for unrepresented taxpayers in all types of cases to alert the Court to the need for protection of certain information that would otherwise become publicly available could help remove some of the barriers to exercising taxpayer rights. I urge the Court to solicit the expertise of organizations who work with domestic abuse survivors in order to work through these issues and develop effective strategies that safely keep the Court doors open for all litigants.

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