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Tax Court Amends Evidence Rules

On March 28, 2016, the U.S. Tax Court announced interim changes to its Rule of Practice and Procedure to incorporate changes made by Congress at the end of 2015.  The interim changes impact several areas of the Tax Court’s Rules, including the impact of bankruptcy proceedings on the court’s jurisdiction, actions for review of failure to abate interest,  partnership actions and jurisdiction related to passport certification actions. Additionally, the changes amend the rule regarding the application of the rules of evidence in Tax Court proceedings, which is summarized below.

Pursuant to IRC § 7453, the Tax Court has historically followed the rules of evidence as applied by the United States District Court of the District of Columbia in trials without a jury.  Congress’s recent amendment to IRC § 7453 removed the reference to the rules of the United States District Court of the District of Columbia, and added a reference to the Federal Rules of Evidence.

To incorporate Congress’s change, the Tax Court amended Rule 143 regarding evidence that is effective immediately and a final proposed amendment that is subject to public comment.  Tax Court Rule 143 now states that:

Trials before the court will be conducted in accordance with the Federal Rules of Evidence.

The amendment applies to all proceedings commenced after December 18, 2015, and also applies to all other proceedings pending on that date to the extent it is just and practicable.

The effect of the amendment to IRC § 7453 and Tax Court Rule 143 is to extend the so-called Golsen rule (named for Golsen v. Commissioner, 54 T.C. 742 (1970), aff’d, 445 F.2d 985 (10th Cir. 1971)) to evidence issues.  Pursuant to this rule, the Tax Court chooses to follow the case law of the circuit to which a case is properly appealed.  In prior cases and unpublished orders, the Tax Court had cited to both D.C. Circuit opinions and opinions of the circuit where any appeal in the specific case would normally lie in deciding evidentiary issues.  This change may cause controversy where there is a split in the circuits on a particular evidence issue, for example in the case of the attorney-client privilege and the work-product doctrine.  However, the change ensures that, as with other legal issues presented, the court will follow the law of the circuit to which the case is appealable.

© 2020 McDermott Will & EmeryNational Law Review, Volume VI, Number 95


About this Author

Justin Jesse International Tax Attorney McDermott Will Emery Law Firm

Justin Jesse is an associate in the law firm of McDermott Will & Emery LLP and is based in the Firm’s Washington, DC office.  He focuses his practice on U.S. and International Tax.

Andrew R. Roberson tax attorney McDermott Will. Andy handles tax cases in Federal court, United States Tax Court

Andrew R. Roberson is a partner in the law firm of McDermott Will & Emery LLP and is based in the Firm’s Chicago office.  Andy specializes in tax controversy and litigation matters, and has been involved in over 30 matters at all levels of the Federal court system, including the United States Tax Court, several US Courts of Appeal and the Supreme Court. 

Andy also represents clients, including participants in the CAP program, before the Internal Revenue Service Examination Division and Appeals Office, and has been successful in settling tax disputes through the administrative appeals and Fast Track processes.  He has extensive experience in Tax Court practice and procedure, corporate reorganizations, TEFRA, tax accounting and substance/form issues.  Andy is a frequent speaker on tax topics and has authored several articles on tax matters. 

Andy is active in the pro bono community, providing services to low-income individuals in Federal and state tax disputes on issues such as substantiation, deductions and credits, innocent spouse relief and collection matters.  He was recently named 2012 Volunteer of the Year by the Center for Economic Progress.

Kevin Spencer, McDermott Will & Emery LLP , Tax Litigation Attorney

Kevin Spencer is a partner in the law firm of McDermott Will & Emery LLP and is based in the Firm's Washington, D.C., office.  He focuses his practice on tax controversy and litigation issues. 

Kevin represents clients in complicated tax disputes in court and before the Internal Revenue Service (IRS) at the IRS Appeals and Examination divisions.

In addition to his tax controversy practice, Kevin has broad experience advising clients on various tax issues, including tax accounting, employment and...