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January 14, 2024 Practice Point

Making Your Case in Tax Court

Abigail Burke

The ABA recently posted a virtual CLE presentation titled Making Your Case in Tax Court: Advocacy Tips. The panel was moderated by the Hon. Nannette A. Baker, Chief U.S. Magistrate Judge for the Eastern District of Missouri. The panelists included the Hon. Maurice B. Foley, former Chief Judge of the United States Tax Court, the Hon. Juan F. Vasquez, Senior Judge of the United States Tax Court, Michael J. Desmond, Former Chief Counsel of the Internal Revenue Service, and Maria C. Critelli, Associate at Mayer Brown. This report summarizes some of the tips presented by the panel members.

Use Your Briefing Wisely

Unlike most civil cases in federal district court, discovery in the Tax Court tends to be a cooperative and unsupervised process. Litigants are required to use informal mechanisms, such as Branerton letters, before resorting to formal processes such as motions to compel discovery. In cases where there are no discovery disputes, the Tax Court judge assigned to hear the case will often have no knowledge of the parties, the facts, or the legal dispute until she receives the Pretrial Memorandum, typically due 21 days prior to the first day of a trial session.

At a minimum, the Pretrial Memorandum must summarize the facts of the case, describe the legal issues and authorities, and identify any witnesses who will testify. A strong Pretrial Memorandum will focus on the major issues and apply existing legal authorities to the facts of the case. The panelists were quick to point out, however, that a thorough brief does not necessarily have to be a lengthy brief. Settling minor disputes early so that the briefing can focus on a strong analysis of the outcome-determinant questions is crucial. Furthermore, to the extent that the judge offers any insight or directions regarding the substance of the case or the areas of uncertainty, it is important to address the briefing to those issues.

One of the best ways to improve briefs is to reach out to others for help and advice. Monitor ongoing cases, and if there is litigation involving similar legal issues, reach out to counsel and ask if they are willing to share their briefs. The tax bar is known for its collegiality, and being able to refine a position with others in a similar situation is an invaluable opportunity. Furthermore, after August 1, 2023, the Tax Court will enable public electronic access to certain posttrial and amicus briefs, which can also be a valuable resource.

Stipulate Early and Often

Another area of difference between Tax Court cases and traditional civil litigation is the role of stipulations in the pre-trial process. Stipulations in tax cases are typically more expansive than in other types of civil litigation, and the Tax Court’s Standing Pretrial Order mandates that stipulations of facts and documents be made “to the maximum extent possible.” Some common subjects of stipulation include the authenticity of documents and background information on parties and witnesses. These stipulations streamline the trial process and eliminate the need for testimony to authenticate evidence. Some cases that come before the Tax Court are even fully stipulated, which means that both parties have accepted the same set of facts and requested that the judge rule on the legal issues alone.

The panelists all agreed that it is never too early to starting working on stipulations. Reaching out to the government to discuss stipulations is also a good opportunity to establish a productive working relationship early in the process. Former Chief Counsel Desmond stressed that the primary goal of the government’s attorneys is to reach the right answer under the law, not necessarily to defend every inch of ground in a case. Furthermore, a good relationship with the other side is crucial to the success of the informal processes that drive discovery in the Tax Court: unnecessary conflict only serves to divert valuable resources from the important issues in the case.

Working on stipulations early can also improve the effectiveness of your trial presentation. Stipulations of Facts are typically due 14 days before the first scheduled date of the trial session, and giving the judge sufficient time to review stipulations before trial means that she will be able to devote her attention to listening to your witnesses and evaluating their credibility rather than trying to flip through pages to understand the factual landscape.

Conclusion

While the basic skills required for good advocacy are largely the same across legal disciplines, successfully managing cases before the Tax Court involves a larger degree of cooperation and common ground than other types of civil litigation. It is important to thoughtfully evaluate a client’s case and determine what facts, documents, and positions are truly important to achieving the overarching goals. On other matters, finding common ground might be best.

    Abigail Burke

    Kostelanetz LLP, Washington, DC

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