Tax Court Judge Can Rewrite Facts of Case That He/She Did Not Hear
The tax court released a 400+ page opinion related to the Supreme Court’s ruling in the Ballard v. Commissioner case today (available here). This case continues the saga of whether the tax court is truly an impartial judicial forum.
The readers of this blog will recall the Ballard case involved the Supreme Court holding that the tax court had failed to follow its own rules and it then tried to downplay the significance of its blatant rule violation.
Specifically, the issue in the Ballard case was whether a judge who did not actually hear the case could re-write a report (four years later!) that summarized the case that was written by the judge that presided over the case. The Supreme Court (citing the tax court's own rules) issued a judicial opinion that clearly and unambiguously says that the answer is “no.” The idea is that the judge that heard the witnesses and saw the evidence presented is in a better position to judge the matter at hand, not a judge who is unfamiliar with the case.
Following the Ballard opinion, the tax court amended its rules of procedure. This amended rule essentially provides that the judge who did not hear the case can “adopt, modify, or reject the” recommendations of the judge who did hear the case and the judge who did not hear the case can correct “manifestly unreasonable findings of fact or [make] additional findings of fact, so long as any additional facts find direct support in the case record.”
In this first case applying this new rule, the tax court now exercises its authority to disregard and supplement the recommendations of the judge who actually heard the case. The court does this by analyzing the words used in the judge’s report and other documentary evidence – in the process disregarding testimony from IRS employees and from the taxpayer that the judge was not present to hear.
I don’t know that I agree with this opinion/rule. Personally, I think that the judge who hears the facts should be the final authority on what the facts are and are not. That is why you have the judge hear the facts in person, rather than just sending in video or audio tapes for the judge to review. The reality is that a lot of what goes on in the courtroom does not get included the record; therefore, a review of the record is inadequate to decide what the facts are in a case.
Also, I think this opinion/rule ignores the role of the courts, including the tax court, to give taxpayers a sense of justice, fairness, and, most importantly, finality. Having a second judge judge and rewrite the facts years after the case is heard will only result in taxpayer confusion and distrust.
After reading this 400+ page tax court opinion I can’t help but think back to something that one of my law professors used to say. The saying went something like this: “if you have to spend hundreds of pages to justify your position, your position is probably wrong.”
The readers of this blog will recall the Ballard case involved the Supreme Court holding that the tax court had failed to follow its own rules and it then tried to downplay the significance of its blatant rule violation.
Specifically, the issue in the Ballard case was whether a judge who did not actually hear the case could re-write a report (four years later!) that summarized the case that was written by the judge that presided over the case. The Supreme Court (citing the tax court's own rules) issued a judicial opinion that clearly and unambiguously says that the answer is “no.” The idea is that the judge that heard the witnesses and saw the evidence presented is in a better position to judge the matter at hand, not a judge who is unfamiliar with the case.
Following the Ballard opinion, the tax court amended its rules of procedure. This amended rule essentially provides that the judge who did not hear the case can “adopt, modify, or reject the” recommendations of the judge who did hear the case and the judge who did not hear the case can correct “manifestly unreasonable findings of fact or [make] additional findings of fact, so long as any additional facts find direct support in the case record.”
In this first case applying this new rule, the tax court now exercises its authority to disregard and supplement the recommendations of the judge who actually heard the case. The court does this by analyzing the words used in the judge’s report and other documentary evidence – in the process disregarding testimony from IRS employees and from the taxpayer that the judge was not present to hear.
I don’t know that I agree with this opinion/rule. Personally, I think that the judge who hears the facts should be the final authority on what the facts are and are not. That is why you have the judge hear the facts in person, rather than just sending in video or audio tapes for the judge to review. The reality is that a lot of what goes on in the courtroom does not get included the record; therefore, a review of the record is inadequate to decide what the facts are in a case.
Also, I think this opinion/rule ignores the role of the courts, including the tax court, to give taxpayers a sense of justice, fairness, and, most importantly, finality. Having a second judge judge and rewrite the facts years after the case is heard will only result in taxpayer confusion and distrust.
After reading this 400+ page tax court opinion I can’t help but think back to something that one of my law professors used to say. The saying went something like this: “if you have to spend hundreds of pages to justify your position, your position is probably wrong.”
Labels: tax court, tax litigation
 
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