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August 24, 2020 Pro Bono Matters

Tax Pro Bono Is Easier Than You Think: Virtual Settlement Days and Tax Court Trial Sessions

By Robert Probasco, Director, Tax Dispute Resolution Clinic, Texas A&M University School of Law, and Co-Chair, Pro Bono Committee, Tax Section of the State Bar of Texas

ABA Model Rule 6.1 recommends that every lawyer provide at least 50 hours of pro bono legal services per year, an aspirational goal enthusiastically supported by most state bars. When I started practice in Dallas in 2001, however, there seemed few good opportunities to do that within tax law. I volunteered at local bar programs to do intake and took some cases, but it wasn’t tax-related. I was involved with problems like name changes or uncontested divorces or landlord-tenant disputes. I volunteered occasionally at VITA sites, but preparing simple returns didn’t take full advantage of my legal education and practical expertise.

Calendar Calls and Settlement Days

I finally found something that was more satisfying when our state bar started a Tax Court calendar call program in 2008. Volunteers show up on Monday morning—normally from state bar programs or low-income taxpayer clinics (LITCs)—for local trial sessions to help any unrepresented taxpayers who appear for trial. The tax process and Tax Court procedures are mystifying to most taxpayers, who often are not able to navigate through that complexity by themselves and can’t afford to pay someone to help them with the problem. (Even if a taxpayer could afford to pay an attorney $8,000, it wouldn’t make sense if the deficiency were only $5,000.)

What is a “calendar call”? At the beginning of the trial session, the clerk calls each case remaining on the docket. When each case is called, the parties come to the podium to inform the judge of the status of the case (whether it is ready for trial, how long a trial will likely take, preferred time, etc.) and discuss any pending motions or issues. The purpose of the calendar call is to help the judge schedule hearings and trials during the rest of the week. Instead of going to trial, the case may be continued if additional time is required for the parties to prepare for trial or to allow the parties additional time to seek settlement. Alternatively, the case might be dismissed if the taxpayer has not responded to the IRS or shown up at court.

During the calendar call, the judge offers unrepresented taxpayers an opportunity to meet with a pro bono volunteer. If the taxpayer wishes to do that, often the IRS attorney first meets briefly with the taxpayer and the volunteer to present her understanding of the status of the case and the issues involved. Because the volunteer usually has not entered an appearance or obtained a power of attorney from the taxpayer, the IRS cannot directly share information with the volunteer about the case without the taxpayer’s consent. Frequently, the IRS attorneys bring copies of petitions and/or a pretrial memoranda to court and provide copies to the taxpayers, who can in turn give the copies to the volunteers. Of course, taxpayers also often bring documents relevant to their cases to court.

After an initial meeting with the IRS attorney, the taxpayer and the volunteer meet privately. Volunteers can:

  • review the notice of deficiency or court documents (including pending motions and pretrial memoranda) and explain them or answer questions;
  • get additional information from the taxpayers and evaluate their cases;
  • facilitate discussions by the taxpayers with the IRS attorney;
  • help the taxpayers evaluate any settlement proposals from the IRS;
  • explain the trial process and court procedures; and
  • give taxpayers advice on how to prepare for and conduct a trial.

Volunteers can, if they choose, enter an appearance (or limited appearance) in the case in order to discuss the status of the case with the judge, address a pending motion, request a continuance, or undertake other similar duties of a representative. Sometimes they may even continue representing the taxpayer through trial. Volunteers are not required to enter an appearance, however, and they usually do not. Often, the volunteer’s commitment ends when the calendar call ends, before any hearings or trials.

A few years after our calendar call program was instituted in Texas, we also started working with IRS Counsel on “settlement days.” For those not familiar with them, these are a collaborative effort between the IRS, LITCs, and state bar calendar call programs. They replicate the same type of process as at calendar calls but do it a month or more in advance of the trial session and at a location other than the courthouse. In fact, ours in Dallas were held at a local LITC. It’s a more relaxed, leisurely, and convenient way to accomplish the same things. Even if the parties don’t settle that day, it often starts the process and may lead to settlement before the trial session. You can find additional background information on settlement days in Frank DiPietro’s article “Evolution of Settlement Days” in the Winter 2020 issue of Tax Times.

Both of these are great opportunities to help taxpayers. Even though volunteers may be arguing against the IRS position in a case, both the court and the IRS appreciate the volunteer efforts. They want to get to the right result, whether for or against the government, and participation by volunteers helps make that process work better than it would if most taxpayers tried to represent themselves. So, get involved—you’ll be glad you did.

How Are Calendar Calls and Settlement Days Changing?

The COVID-19 pandemic has changed much of our daily lives, and tax resolution is no different. No one is eager to participate in a large in-person gathering if alternatives are available. Both the IRS (for settlement days) and the Tax Court (for trial sessions/calendar calls) are moving to virtual platforms during the pandemic. Virtual settlement days will be held using either Zoomgov or Cisco WebEx; Tax Court trial sessions/calendar calls will be held using Zoomgov.

The fundamentals of the calendar call or settlement day are still the same—pro bono volunteers assist unrepresented taxpayers in resolving their cases or preparing for trial. The pandemic merely changed the surrounding environment of how, when, and where that takes place. As you might anticipate, these logistical changes can’t always overcome the inherent limitations of virtual meetings, but they can provide other advantages. The biggest advantage is probably the flexibility a virtual meeting offers.

The biggest limitation is probably the relative difficulty of sharing documents through a virtual platform rather than in person. It’s very easy to flip through a physical document that the taxpayer or the IRS attorney has brought to the calendar call or settlement day. It’s possible to do that as well through videoconferencing, but it can be somewhat awkward for those unfamiliar with the platform’s tools. It may also be difficult to do for some unsophisticated taxpayers or effectively impossible if they only have physical documents rather than electronic versions that can be shared during a video conference. The pandemic and inability to meet in person creates that limitation, and unfortunately the virtual platforms cannot entirely erase it.

Questions or Concerns? Here Are Some Answers.

Doesn’t this take a lot of time?

It really doesn’t, unless you decide to enter an appearance and represent the taxpayer for the duration of the case. Often, it’s just a 2- to 4-hour commitment per trial session or settlement day at which you volunteer. In fact, it can take significantly less time than in-person trial sessions or settlement days. For one thing, there is no travel time to get to the courtroom or the site of the settlement day. You volunteer from your home or office.

The calendar call will take place during the work week. But sometimes settlement days will take place at least partly during the weekend; even if they take place during the work week, you generally can schedule appointments ahead of time and only be there for the specific taxpayer(s) you agree to help. That flexibility makes it easier to limit your time commitment and also to fit it around other work commitments.

How do virtual trial sessions or settlement days work?

The Tax Court has a page on its website about Zoomgov proceedings, with FAQs and illustrative videos. It should give you a good feel for the process before you start. The IRS doesn’t have as elaborate a resource yet, but the Office of Chief Counsel is coordinating efforts to ensure a quality program. Those virtual settlement days likely will have a lot of similarities to the Tax Court’s explanations of its process.

Within that infrastructure, much has not changed. Counseling a taxpayer is an informal process. There are no set guidelines or requirements concerning how you conduct that discussion.

I would be willing to volunteer but there are no Tax Court trial sessions or settlement days where I live.

This is the most significant advantage of going virtual. Location doesn’t matter—it’s as close as your computer. Recently in Texas, Houston attorneys assisted taxpayers at a settlement day for Dallas and Dallas attorneys assisted taxpayers at a settlement day for Houston. We even had a volunteer from D.C. who is still a member of the Texas bar! Next month, Texas attorneys will be helping at a Las Vegas settlement day. If you have a computer, camera or webcam, and good Internet connection, you can volunteer anywhere.

But I’m not a tax controversy attorney or am very early in my career. I’m not sure I can advise taxpayers effectively about their Tax Court cases!

That’s an understandable concern, but for several reasons it shouldn’t keep you from volunteering.

You may not be highly experienced at Tax Court litigation, but you already have many of the skills or the knowledge necessary to help these taxpayers. Consider the list above of what a volunteer does at a calendar call or settlement day. Taxpayers may not be able to interpret IRS correspondence or a notice of deficiency effectively and understand what the IRS is saying. But you’re used to reading similar documents and will find it easy to understand and explain. You have experience with interviewing clients to get information and—after understanding what the issues are—will have an idea of what information you need. As a lawyer, one of your foremost skills is communicating effectively with clients and that will enable you to act as a “translator” to help the taxpayer and the IRS attorney discuss the status of the case.

Also, cases brought by unrepresented taxpayers tend not to involve the most complex issues of tax law. If the IRS disallowed itemized deductions or Schedule C business expenses because the taxpayer didn’t substantiate them, or the IRS received W-2s or 1099s that were not included on the return, common sense and a background in tax will give you a good idea of where to start. Legal work often is just general problem-solving, and you already have that skill.

Even for the areas where you feel least comfortable, there are online resources that can provide a quick, basic understanding before you enter the virtual meeting. For example, for Tax Court procedures, many unrepresented taxpayers may not bother looking at the “Guidance for Petitioners” on the Tax Court website or may find it confusing, but you can read it and understand it quickly. You can even browse through the court’s Rules of Practice and Procedure. The vast majority of the court’s rules won’t come up while counseling taxpayers at a trial session or settlement day, so you can focus on a few key questions you might have. The court’s illustrative videos for Zoomgov proceedings are also particularly helpful.

You may also be able to connect with an experienced participant who can be a guide and source of information, both generally and specifically with respect to some of the common issues faced by unrepresented taxpayers—earned income credit, collection due process, innocent spouse, worker classification, cancellation of debt, etc. Check with the tax section of your local bar or state bar, or a local LITC. In my experience, the tax law community is very welcoming. State bar calendar call programs often specifically encourage young attorneys to volunteer and then pair them with more experienced attorneys so that they can observe a session or two to become more comfortable before they take on counseling a taxpayer by themselves.

And if you volunteer, soon you will be one of those experienced attorney volunteers.

What if I work in-house and don’t have malpractice insurance?

I heard a quip several years ago that your chances of being sued for malpractice for pro bono services is roughly the same as your chances of being struck by lightning. That’s probably true, but you still may want the protection of malpractice insurance. It may be a problem, but there may be a solution. For example, for the calendar call program operated by the state bar of Texas, the bar provides malpractice insurance that covers all the volunteers for their participation in the program, even though most of them may already be covered by insurance through their law firm. The cost of the insurance was relatively low; you might be able to persuade your local bar or state bar to cover it in order to meet the needs of their members and promote pro bono.

Be a Volunteer!

I hope I’ve convinced you to volunteer for these pro bono programs. If so, the best place to start is probably to contact the tax section of your local or state bar or a local LITC. They may not have a program, but if not, they likely will be able to point you to someone who does. You can also reach out to someone on the ABA Section of Taxation’s Pro Bono & Tax Clinics Committee.

The Tax Court generally requires participants, through bar-sponsored programs or LITCs, to be admitted to practice before the court. (The court’s requirements for these programs are available on the court’s website.) However, it is relatively simple to apply for admission to the Tax Court bar—see here and here—and while you’re waiting, as noted above, you can probably be involved as an observer. For settlement days, the requirements may be a bit more relaxed.

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