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The Un-Precedented Tax Court: Part I

Posted on May 12, 2015

Today we welcome back guest blogger Andy Grewal. Andy teaches at Iowa and has posted with us before in the only post to date that mentioned polar bears in the title. He has a new article coming out about Tax Court decisions and the weight (or lack thereof) certain decisions carry. He looks at this rather mundane and well discussed issue of the types of Tax Court decisions using a different lens which perhaps will spark some debate. In this first post to introduce this topic he invites readers to help him understand how those who practice in the Tax Court use prior decisional law in briefs or other argumentative documents filed with the Court. I will give my answer at the end of his brief first post. I invite you to answer him by posting in our comments section or by sending him an email directly here.Keith

I’d like to thank Keith Fogg for generously inviting me to again share my research with the Procedurally Taxing community, through this first in a series of posts.  The inimitable PT blog has helped create a bridge between scholars and practitioners, and I hope it many years of success, with perhaps Oliver Olsenultimately taking over operations.   For those who haven’t been paying attention, Oliver is the newest addition to Stephen’s family, and I bet he will capably manage the million-dollar advertising sponsorships that this blog will surely enjoy, assuming Oliver’s artistic older sisterhas not already stolen the show.

Anyway, in my most recent article, “The Un-Precedented Tax Court”, I raise constitutional and practical objections to much of the Tax Court’s work.  Although the court purportedly exercises the judicial power (more on that in a later post), most of its work product is not judge-like.  That is, the Tax Court decides most of its cases as an administrative office would, without setting precedent.   Even a complicated case is far more likely to be decided via a purportedly nonprecedential Memo opinion than via a precedential Division opinion.   And the Tax Court also decides many S cases, with the related opinions (Summary opinions) lacking precedential value.

I think there are serious problems with this, which I’m going to detail over multiple posts.  Because my concerns are already expressed in the formal article, I’m going to use these posts to address the issues in a more conversational way.  I plan to cover various topics, including Memo Opinions, S opinions, Bench opinions, and of course Kuretski.

With this introductory post, I’d also like to solicit blog comments or emails from tax practitioners regarding their views on the weight given to Memo opinions.  The article describes different approaches taken by different Tax Court judges, and I suspect that practitioners may also have different views on the subject.   I’ll cover Memo opinions in further detail in my next post.

Of course I cite to fully reviewed cases whenever possible and to what I call “full TC opinions” since they also carry the undisputed weight of precedent. Sometimes, the only case I find on point is a Memorandum Opinion. When that is the case, I cite to it. The Tax Court did this yesterday in an opinion about attorney’s fees I will cover soon. Sometimes, even though there is a decision with precedent on the issue, a Memorandum Opinion is much more on point. In that case I would cite to the memorandum opinion as well. Sometimes, the only decision on point is a Summary Opinion. I would cite to it in that circumstance even though I realize that it is unlikely the Court would cite to that case in support of its decision. I have never cited to a bench opinion or to an Order though I might if that was the only thing I could find and it was on point. If I find an opinion by the same judge before whom I am trying the case, I almost always cite to any opinion I can find written by that judge thinking that it will be of value to that judge in reacquainting himself or herself with the issue. In the Tax Court on evidentiary matters it was once possible to hear “I will take that into evidence for what its worth.” I do not believe I hear that as much anymore but I think I view citing to on point decisions as something similar to that evidentiary practice. I understand that the Court is not bound by these decisions yet I think it may assist the judge to look at a non-precedential decision and to look at IRS non-binding precedent such as CCAs and PLRs. These writings reflect the thinking of knowledgeable people who approached the issue at some point in the past. Whether binding or not, I think they would be helpful to the person deciding the case. Keith

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