One area that Steve, Les and I have particular interest in is tax clinics and access to representation for lower-income individuals with a tax controversy. I direct the tax clinic at Villanova; Les directed that clinic before me, and years ago Steve was a student attorney in the clinic. Over the past few years, as Chair of the Pro Bono and Tax Clinic Committee of the ABA Tax Section, I have had the opportunity to work with members of the clinic community and the Tax Court, in an attempt to ensure even greater access to legal representation in cases in Tax Court. This past week, the Tax Court announced a number of changes that greatly improve the ability of unrepresented taxpayers to get access to representation. In this post, I will describe these changes, changes that will make the tax system a little less inhospitable to poorer taxpayers.
As with many of our posts, a little context helps. In many areas of the civil justice system, access to legal representation is a major obstacle to balanced and fair application of legal rules to those without resources to pay for private counsel (See the civil Gideon study here). It may come as a surprise to some of our readers, but with the advent of benefits like the earned income credit, the tax system is increasingly a major vehicle for distributing benefits to lower-income individuals. The Service has the unenviable task of administering those programs, including auditing those who claim the earned income credit. Many of those cases end up in Tax Court, and few of those people can afford to pay for counsel. This situation is precisely what led to the formation and growth of federally subsidized low income taxpayer clinics, an issue that I have written about recently (see my article on the History of Low Income Tax Clinics here, which will soon be published in The Tax Lawyer).
While the situation for lower income taxpayers is much better now than it was before the advent of clinics, there still have been obstacles to ensuring that people getting representation, especially in cities where there is no clinic or demand exceeds supply of clinic resources. In early 2013 low income taxpayer clinics and practitioners providing pro bono services achieved an access to justice milestone in Tax Court. See ABA Tax Section NewsQuarterly Winter 2013 p. 10 “An Access to Justice Milestone.” While provision of services in some cities remains somewhat fluid, the efforts of these two groups resulted in the opportunity for every pro se petitioner in the Tax Court receiving notice at the beginning of the case offering the opportunity for representation and coverage at every calendar call across the country. At the beginning of a case the Tax Court makes the effort to provide access to representation for pro se petitioners possible through its practice of sending notice to these petitioners immediately after the filing of the petition of local clinics that have entered into an agreement with the Tax Court. At calendar call the Tax Court works with clinics and local bar groups to provide the opportunity for free last minute assistance.
The complexity of the tax system makes representation critical to a successful outcome for the taxpayer. Cite to National Taxpayer Advocate studies showing the success rate of represented versus unrepresented taxpayers. Approximately 70% of Tax Court petitioners represent themselves. This puts significant pressure on the Court as it seeks to find the “right” answer. By actively working with clinicians and bar groups, the Tax Court has tried to provide access to justice to its many pro se petitioners.
On August 16 the Court announced changes to its procedures in its continuing effort to level the playing field for pro se petitioners. The announcement follows a meeting on April 9, 2013, in this the Court invited members of the Pro Bono and Tax Clinic Committee of the ABA Tax Section including low income taxpayer clinicians and attorneys handling cases on a pro bono basis. Representatives from Chief Counsel’s office also attended the meeting. The Court gave those representing low income taxpayers the opportunity to present ideas on how the Tax Court could improve its practices to provide additional fairness for low income and pro se petitioners.
Six changes resulted from this meeting. These changes will be discussed below in the order in which they appeared in the announcement:
1) New Sample Stuffer Notice – The stuffer notice is the document that the Tax Court stuffs into its letter to new petitioners advising them of the possibility of representation by a low income taxpayer clinic (LITC) in the area of the city in which they requested place of trial. Each pro se petitioner receives a letter describing the local clinic(s). The letter results from an agreement between the Court and LITCs around the country. This year over 80 LITCs, most of which receive funds under IRC 7526, signed up with the Tax Court to allow notification of pro se petitioners of the possibility of representation by the clinic. In the past these stuffer notices varied in content because they were prepared by the clinics. Some clinics prepared their notices with little guidance and experience. In some cities the notice attempted to describe multiple clinics and the drafting of the notice had input from multiple sources. The notices sometimes created confusion. Now the Court has taken on the task of creating a notice that all petitioners will understand. This should help in getting a clear and consistent message to pro se petitioners.
2) Additional Notice 30 Days Prior to Trial – Currently, the Tax Court sends pro se petitioners the stuffer notice twice. It first sends the notice immediately after the filing of the petitioner as described above and then it sends the notice at the time it sets the case for trial five months before the calendar call. Clinicians pointed out to the Court that for many pro se petitioners receiving the last notice informing them of the date and place of the trial five months prior to the trial might leave too much time before the calendar call. Agreeing to send out another notice will cost the Court. Unlike the two existing notices that ride along with letters already part of the Tax Court notice process, the Court will send this notice without tagging it onto other correspondence. Many pro se petitioners do not focus on their Tax Court case until trial approaches. This 30 day notice will give them a reminder close enough to the trial date to allow them to focus on the case and the need for representation. This should improve the ability of clinics to assist this group of individuals.
3) Use of Counsel Room at Selected Cities – Finding a place to meet with the pro se petitioner and conduct a privileged conversation presents a real problem for those seeking to assist them in the Tax Court’s calendar call program. Because the Tax Court borrows courtrooms in many cities around the country and because it does not have a counsel room in other cities where it has a dedicated courtroom, this change will help in the cities where the Court has the ability to provide help. The announcement identifies 20 out of the 75 cities in which the Tax Court holds calendar calls. Many of the cities on the list hold multiple calendars each year. This means the impact of opening up the counsel room to the attorneys coming to calendar call programs has a bigger impact than simply the fraction of 20 over 75. Having access to a counsel room provides needed space for the conversations that must take place at the courthouse because the petitioner remains unrepresented at the time of calendar call. Those of us in the remaining 55 cities without a counsel room can only hope that someday we will not hold these conversations balancing files on our knees while whispering in the hallways of the courthouse.
4) Change of Address Form Provided with Acknowledgment of Petition – Most pro se petitioners do not know the rules of the Tax Court and do not appreciate the need to keep the Court informed of their address. Low income petitioners move with more frequency than the general populace. Providing them with this notice alerts them to the need to keep the Tax Court informed if the petitioner moves. Including the notice in the original notification should add little extra cost. At almost every Tax Court calendar some petitioners have their case dismissed for failure to appear. With every dismissal respondent’s counsel recites the efforts to reach petitioner prior to the calendar call. The address of record for a decent percentage of petitioners does not work. Providing this form should improve the chances of keeping up with these petitioners.
5) Waiver of Filing Fee Simplified – Many pro se petitioners qualify to have the $60 Tax Court filing fee waived. The Tax Court generally waives the fee upon application; however, the form for requesting the waiver intimidates many pro se petitioners who pay the fee rather than seek the waiver. Simplifying the form should help by making this request more accessible. Some states allow public interest lawyers to certify the waiver based on the intake procedures of their office. The Tax Court has not gone so far in this announcement to allow LITCs to certify petitioners as qualifying for the waiver. Perhaps another day.
6) Changes to Clinic Requirements – One of the discussions with the Court during the meeting on April 9 centered on the difficulty of picking up a case at calendar call and providing meaningful advice between the time the case gets called initially and the time of recall. Another problem presented at calendar call in major cities centers on the ability to just get past the security at the entry point and into the courthouse. In some cities the wait can last one hour or more. For pro se petitioners who have not attempted to enter a federal building in the past several years, they can arrive at the building in which the Tax Court holds its calendar call unprepared for the waiting time necessary to get into the building and without a means to alert the Court to this fact.
To provide better assistance to petitioners at calendar call and to give petitioners a better chance to timely appear at calendar call, the discussion centered on having pro se petitioners arrive at court an hour before the calendar call. The Tax Court agreed to ask petitioners to arrive an hour before calendar call and in the letter mailed 30 days prior to calendar call will ask them to arrive at 9:00 AM. In order for the early arrival to provide full benefit, the clinicians and pro bono lawyers who will assist at calendar call must also arrive an hour early. This hour should allow the calendar call to move more smoothly without the interruption of late arriving petitioners and with pro se petitioners better prepared to address the issues in their cases.
The Tax Court should receive kudos for its continuing efforts to assist pro se petitioners by adopting procedures and providing information that will assist these individuals in properly pursuing their cases. LITCs and tax lawyers donating their time make a difference to unrepresented individuals who end up in Tax Court. Without assistance, many of these petitioners cannot successfully present their cases. In many cases the Service is correct but the individual petitioner has no way to comfortably resolve the case with the aid of a representative. Pro se petitioners in Tax Court have a better chance for representation that in any other federal court handling civil matters. The recent changes by the Tax Court continue to improve the process for contesting a tax debt in that forum.