- 36.2.5.1 Overview of Appeals of Tax Court Cases
- 36.2.5.2 Tax Court Opinions and Decisions
- 36.2.5.3 Finality of Tax Court Decisions and Mandamus
- 36.2.5.4 Interlocutory Appeals from Tax Court Orders
- 36.2.5.5 Entry of Appearance
- 36.2.5.6 Notices of Appeal
- 36.2.5.7 Bankruptcy after Entry of Tax Court Decision or During Pendency of Appeal
- 36.2.5.8 Venue on Appeal
- 36.2.5.9 Record on Appeal
- 36.2.5.10 Refunds and Credits While Appeal is Pending
- 36.2.5.11 Dismissal of Appeals in Tax Court Cases
- 36.2.5.12 Cases Remanded to the Tax Court/Recomputations
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The provisions that follow are generally applicable to all appeals of Tax Court cases. Attorneys/paralegals should consult the more specific provisions of
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CCDM 36.2.6.2.1 for taxpayer appeals
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CCDM 36.2.6.2.2 for Commissioner appeals
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CCDM 36.2.6.2.3 for protective appeals and cross-appeals
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CCDM 36.2.5.4 for interlocutory appeals in Tax Court
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Upon receipt of notification from the Associate Chief Counsel (P&A) that the taxpayer has filed a notice of appeal from the Tax Court's decision, the following action shall be taken:
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If an appeal bond has been filed, the legal and miscellaneous law files shall be immediately forwarded to the Associate Chief Counsel (P&A) by the Area Counsel attorney. No assessment should be made until the decision is final. See CCDM 36.2.5.3, Finality of Tax Court Decisions and Mandamus and CCDM 36.2.6.2.4, Assessment of Tax in Appealed Cases.
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If an appeal bond was not filed, the legal and miscellaneous law files shall be immediately forwarded to the Department of Justice for handling in the court of appeals. The administrative file should be immediately forwarded to Appeals for Transmission to the appropriate Area Director's office for assessment of the deficiency in accord with instructions contained in the notification from the Associate Chief Counsel (P&A).
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Prior to forwarding the files to the Department of Justice or to Appeals, the files will be prepared for closing by the Area Counsel office. See CCDM 36.2.6.5, Closing Procedures Specific to Tax Court Appeals.
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Upon the filing of a notice of appeal by either the taxpayer or the Commissioner, the Area Counsel office will be notified of the appeal in cases where the Area Counsel office recommended appeal. Upon receipt of such notification, the Area Counsel office will immediately forward to the Associate Chief Counsel (P&A) additional parts of the files, if any, remaining in the Area Counsel office, and will notify Appeals of the appeal. Area Counsel should retain the administrative file during the pendency of the appeal if not needed by Appeals.
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When the administrative file is forwarded to Appeals for transmittal to the appropriate Area Director's office for the assessment of any deficiency, include the following under "Remarks" on Form 1734 closing the administrative file to Appeals:
"The taxpayer has filed a notice of appeal from the Tax Court's decision in the above case. The administrative file is forwarded for transmittal to the Area Director for assessment of the deficiency (or deficiencies) with the request that the Area Director forward the administrative file to Associate Area Counsel immediately after the assessment has been made. Attached are two copies of the notification of the appeal from the Associate Chief Counsel (P&A) dated ___. It is further requested that one copy of this notification be forwarded to the Area Director and that you forward to the Associate Chief Counsel (P&A) a copy of your closing memorandum to the Area Director so that the Associate Chief Counsel may be advised when the administrative file is forwarded to the Area Director. " -
If an appeal from the Tax Court decision to a court of appeals is not taken within 90 days after the entry of the decision, the Area Counsel office closes the case and forwards the administrative file to the Chief, Appeals. Appeals will assess any redetermined deficiency, or credit any overpayment determined in the decision.
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It is important to distinguish between Tax Court opinion and Tax Court decision, as the terms are not interchangeable. The parties may not appeal opinions that are usually issued in advance of the decision or order disposing of the case. See CCDM 35.9.1, Tax Court Opinions and Decisions.
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An appeal should be sought only of orders that dispose of the entire matter, of decisions that specify the amount of a deficiency or lack thereof, or that dismiss for lack of jurisdiction. See sections 6863(b)(3)(C); 7481(c); and 7482(a)(3) (interlocutory orders that are reviewable in the same manner as a decision of the Tax Court). See also CCDM 36.2.5.4, Interlocutory Appeals from Tax Court Orders.
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Section 7482(a) confers upon the courts of appeals exclusive jurisdiction to review decisions of the Tax Court. See also Rule 13(a), Fed. R. App. P., and CCDM 36.2.5.6.4, Time for Filing Notice of Appeal.
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Tax Court Orders and Declaratory Judgments - There are exceptions to the rule that an amount of tax be in dispute for appellate review. For example:
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Attorney's fees - See Key Buick v. Commissioner, 613 F.2d 1306 (5th Cir. 1980), for reasons this is appealable.
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A court's order compelling payment of witness fees, redeterminations of certain interest in transferee liability cases, certain prepetition orders (see Tax Court Rule 82), and declaratory judgments.
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Section 7481 governs the finality of a Tax Court decision.
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The decision of the Tax Court will become final 90 days from the date the decision is entered unless either party files a timely notice of appeal. The appeal period may be extended by a motion to vacate or revise the decision or by a motion for litigation costs. See CCDM 36.2.5.6.4.
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Finality of Tax Court decision when case is appealed - Note that a new 90-day period for petitioning for certiorari begins upon the denial of a timely filed petition for rehearing in the court of appeals.
If Then the court of appeals affirms the Tax Court's decision or dismisses the appeal, and a petition for writ of certiorari is not filed by either party within the 90-day period for filing the petition, the Tax Court decision will become final upon the expiration of the certiorari period (90 days from the date the judgment of the court of appeals is entered). See Note 1. the court of appeals affirms the Tax Court's decision or dismisses the appeal, and either party petitions for a writ of certiorari and the petition is denied, the Tax Court decision becomes final upon the denial of the petition. See Note 2. the petition for certiorari is granted and the Supreme Court affirms the Tax Court's decision (which has been affirmed by the court of appeals), the Tax Court decision will become final 30 days from the date of the issuance of the mandate of the Supreme Court. the petition for certiorari is granted and the Supreme Court modifies or reverses the Tax Court's decision (which has been affirmed by the court of appeals), the Tax Court will be required to enter a new decision in accordance with the mandate of the Supreme Court. This new decision will become final upon the expiration of 30 days from the date it is entered, unless within such 30 days either party institutes proceedings to have the decision corrected to accord with the mandate. In the latter event, the decision will become final when it is corrected. the court of appeals modifies or reverses the Tax Court's decision, the Tax Court will be required to enter a new decision in accordance with the mandate of the court of appeals (unless the Supreme Court subsequently reverses the court of appeals). See Note 3. the court of appeals modifies or reverses the Tax Court's decision, the certiorari period has expired and neither party has petitioned for a writ of certiorari, or if certiorari has been denied, the Tax Court will then enter a new decision in accordance with the mandate of the court of appeals. This new decision will become final upon the expiration of 30 days from the date it is entered, unless within such 30 days either party institutes proceedings to have the decision corrected to accord with the mandate. In the latter event, the decision will become final when it is corrected. See Note 4. the Supreme Court grants certiorari and affirms the Tax Court's decision (which was reversed or modified by the court of appeals), the decision, as already entered, will become final 30 days after the issuance of the Supreme Court's mandate. the Supreme Court affirms the court of appeals (which modified or reversed the Tax Court's decision) or itself modifies or reverses the Tax Court decision, the Tax Court will be required to enter a new decision in accordance with the mandate of the court of appeals or in accordance with the mandate of Supreme Court, respectively. This new decision will become final upon the expiration of 30 days from the date it is entered, unless either party institutes proceedings to have the decision corrected to accord with the mandate. In the latter event, the decision will become final when it is corrected. the court of appeals or the Supreme Court remands a case to the Tax Court for a rehearing, the decision entered as a result of the rehearing will become final in the regular manner as if there had been no prior proceedings; i.e., after the expiration of the 90-day appeal period. See Note 5. Note 1. A new 90-day period for petitioning certiorari begins upon the denial of a timely filed petition for rehearing in the court of appeals.
Note 2. Under Supreme Court Rule 44, a taxpayer has 25 days in which to petition for a rehearing of an order denying a petition for writ of certiorari. Supreme Court Rule 44 provides that in the absence of a specific order by the Court or a stipulation by the parties, the mandate of the Supreme Court is not issued until after the expiration of 25 days from the date judgment is entered. Thus, when the court of appeals has affirmed a decision of the Tax Court and the Supreme Court has denied a petition for certiorari, the Tax Court's decision does not become final until 25 days after the date of such denial. See R. Simpson & Co. v. Commissioner , 321 U.S. 225 (1944).
Note 3. Once the judgment of the court of appeals has been entered, either party has 90 days in which to file a petition for a writ of certiorari. For this reason, the entry of the new decision by the Tax Court should be delayed until the certiorari period has expired, or certiorari has been denied, or the Supreme Court has granted certiorari and issued its mandate.
Note 4. The 30-day appeal period applies in the situation described here. See CCDM 36.2.5.6.4.6. See also CCDM 36.2.5.12.
Note 5. The term rehearing encompasses any Tax Court proceedings beyond the mere entry of a new decision. Note, however, that if the case has been remanded for rehearing by the court of appeals, no trial or further proceedings should be instituted until after the certiorari period has expired. See generally CCDM 36.2.5.12 for cases remanded to the Tax Court.
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See CCDM 35.9.1.3.1, Finality of Tax Court Decision, regarding the Tax Court's jurisdiction after its decision becomes final.
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Tax Court Decisions in S Cases. Tax Court Small tax (S) case decisions are nonreviewable. Section 7463(b). Tax Court Rule 172(c), however, provides that the Tax Court's concurrence in taxpayer's S case election does not occur until commencement of trial. This raises a question whether an order of dismissal for lack of jurisdiction in an S case may be appealable. Coordination of the Government's position with the Department of Justice should be sought in any appeal from a dismissal order in a small tax case.
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As a general rule, no motion pertaining to an opinion or decision of the Tax Court should be filed with that court after the decision has become final under the provisions of section 7481, or after a notice of appeal to a court of appeals has been filed by either party. Upon filing of a notice of appeal by either party, the Tax Court gives up its claim to jurisdiction of the case even though the appeal period has not expired.
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As a general rule, once the Tax Court's decision has become final, it may not take further action absent fraud on the court. Lasky v. Commissioner, 352 U.S. 1027 (1957). A party may raise a jurisdictional issue after a decision in the case has become final under section 7481. See Brannon's of Shawnee, Inc. v. Commissioner, 69 T.C. 999 (1978), and 71 T.C. 108 (1978).
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Rule 21 of the Federal Rules of Appellate Procedure describes the procedures for obtaining extraordinary writs. (See the All Writs Act, 28 U.S.C. § 1651(a)). Pursuant to Fed. R. App. P. 14, Rule 21 applies to the review of a Tax Court decision. See also CCDM 36.2.1.2.1, Federal Rules of Appellate Procedure.
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Generally, an interlocutory order is a ruling or an order of the court during the pendency of the litigation not otherwise appealable until after entry of decision.
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Section 7482(a)(2) authorizes appeals from certain interlocutory orders of the Tax Court if application is made within 10 days after entry of the certified order. The court of appeals has discretion whether or not to grant the appeal.
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Neither the application for nor the granting of an appeal stays proceedings in the Tax Court unless a stay is ordered by a judge of the Tax Court or the court of appeals.
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At present, there are no rules of appellate procedure specifically governing interlocutory appeals under section 7482(a)(2). Tax Court Rule 193, Appeals from Interlocutory Orders, refers generally to Fed. R. App. P. 5. Accordingly, it is anticipated that the substantive and procedural requirements under 28 U.S.C. § 1292(b) (which governs interlocutory appeals from federal district courts and is identical in material respects to section 7482(a)(2)), and Rule 5 will, for the most part, carry over and be applied to Tax Court interlocutory appeals under Section 7482(a)(2). See Kovens v. Commissioner , 91 T.C. 74, 77 (1988).
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To be appealable under section 7482(a)(2), the order must include a statement or certification that
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A controlling question of law is present,
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Substantial grounds for difference of opinion are present, and
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An immediate appeal from the order may materially advance the ultimate termination of the litigation.
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Failure to meet any one of the requirements in paragraph (1) is grounds for denial of certification. See Gen. Signal Corp. v. Commissioner , 104 T.C. 248 (1995), aff'd 142 F.3d (2d Cir. 1998); Kovens v. Commissioner, supra.
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The procedure for an interlocutory appeal can only be initiated after the Tax Court makes a ruling or issues an order. Unless the Tax Court issues the prescribed statement sua sponte (see CCDM 36.2.5.4.6) the party wishing to appeal must seek to have the Tax Court amend the order to include the prescribed statement of certification (or issue the ruling with the certification) by filing a motion for certification of question for appeal.
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The appeal is assigned according to subject matter jurisdiction to the appropriate Associate Chief Counsel. Transmittals should indicate any prior or recommended coordination with the appropriate Associate Chief Counsel.
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Some taxpayers, primarily pro se, file an interlocutory notice of appeal from any ruling or order of the court that is neither a final decision nor a dismissal of the case for lack of jurisdiction. If an interlocutory notice of appeal is filed for purposes of delay, it may be appropriate to file a motion for an order directing the clerk to retain the original record to enable the court to try the case and thereby preclude further delay. The Field attorney and his supervisor must consult with the Associate Chief Counsel (P&A) before taking any action on an interlocutory appeal.
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In rare circumstances, and only when it is clearly in the Commissioner's interest to do so, will the Commissioner seek an interlocutory appeal. Authorization for a Commissioner interlocutory appeal must be obtained from the Solicitor General before the Commissioner can file a motion for certification of question for appeal in the Tax Court.
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Since such appeals are rare, the Field attorney wishing to appeal from an interlocutory ruling or order must coordinate the appeal with Division Counsel and the Associate Chief Counsel (P&A). The Field attorney should forward the recommendation to both for review. The recommendation must contain:
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A statement of facts
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A statement of the controlling question of law
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A statement of the reasons why a substantial basis exists for a difference of opinion on the question
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A statement of the reasons why an immediate appeal may materially advance the termination of the litigation
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The assigned Associate Chief Counsel attorney in the office with jurisdiction over the subject matter will review the recommendation and, if concurred in, prepare an appeal letter to the Department of Justice, Tax Division, Appellate Section. The appeal letter must be reviewed and approved by the Associate Chief Counsel with jurisdiction over the subject matter, and the Associate Chief Counsel (P&A), who reviews the letter for procedural concerns.
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Upon receipt of the Solicitor General's authorization, the Associate Chief Counsel attorney in the office with jurisdiction over the subject matter will prepare for filing with the Tax Court the motion for certification of question for appeal. The motion must be reviewed by the Associate Chief Counsel (P&A) and Division Counsel before it is filed with the court. A copy of the motion will be forwarded to the Appellate Section.
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The motion for certification of question for appeal should contain the same items required to be included in the recommendation, see above, and a prayer that the Tax Court amend the subject ruling or order to include the certification of question for appeal. See Exhibit 36.4.1–4.
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If the taxpayer objects to the motion, the Field attorney will, after coordinating with the Associate Chief Counsel attorney in the office with jurisdiction over the subject matter, file a response and argue the motion. The response must be reviewed and approved by the Associate Chief Counsel (P&A) before it is filed with the court.
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After the Tax Court issues its order containing the prescribed statement, the Associate Chief Counsel attorney will notify the Appellate Section, which will prepare and file with the appropriate appellate court the petition for permission to appeal in compliance with Fed. R. App. P 5(b). The content of the petition will be drawn from the appeal letter, the Solicitor General's authorization, and the motion for certification of question for appeal.
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The petition for permission to appeal must be filed with the clerk of the appropriate court of appeals within 10 days after entry of the Tax Court's certified interlocutory order. Timely filing has been held to be jurisdictional with respect to 28 U.S.C. § 1292(b) interlocutory appeals.
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If the court of appeals allows the appeal, it will be treated as a Commissioner appeal from a decision of the Tax Court in accordance with existing CCDM procedures. See CCDM 36.2.6.2.2.
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If the taxpayer files a motion with the Tax Court for certification of a question for appeal under section 7482(a)(2), the court normally should issue a notice setting a time for response or objection.
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Upon receipt of such a motion, the Field attorney will contact and send a copy of the motion to the Associate Chief Counsel (P&A). The Technical Services Support Branch will ensure that the motion is assigned to the proper Associate Chief Counsel.
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As soon as possible after receipt of such a motion, the Field attorney will forward a proposed response or notice of objection for review and filing in the Tax Court, along with a copy of the motion and any other relevant materials. The response should address whether there is substantial ground for difference of opinion, and whether an immediate appeal from the order will materially advance the ultimate termination of the litigation. The attorney in the Associate office with subject matter jurisdiction must coordinate with the Associate Chief Counsel (P&A) and Division Counsel prior to forwarding any response or notice of objection to the Tax Court.
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Our office will normally object to the taxpayer's motion on the ground that it fails to meet the criteria for interlocutory appeal. If the field office believes taxpayer's motion is not objectionable, a proposed notice of no objection should be forwarded to the Technical Services Support Branch. The Technical Services Support Branch will assign it to the Associate Chief Counsel office with jurisdiction over the subject matter for review and coordination. After coordination with the Associate Chief Counsel (P&A), the assigned Associate Chief Counsel attorney must also inform the Department of Justice that there is no objection to the taxpayer's motion.
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If taxpayer's motion for certification of question for appeal is granted by the Tax Court, the taxpayer may, within 10 days of issuance of the Tax Court's order containing the prescribed statement, file a petition with the appropriate court of appeals for permission to appeal.
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Rule 5 of the Federal Rules of Appellate Procedure provides that within seven days after service of the petition for permission to appeal, an adverse party may file an answer in opposition. The Department of Justice will prepare and file the answer. The answer in opposition advises the court of appeals whether it should permit an appeal to be taken from the certified order. Grounds for opposing the petition for permission to appeal are limited to:
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The petition was not timely filed
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Venue is improper
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No controlling question of law is involved
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There is no substantial ground for difference of opinion with respect to the question of law
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An immediate appeal from the order will not materially advance the ultimate termination of the litigation
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If the court of appeals allows the appeal, it will be defended under the procedures for a taxpayer appeal from a decision of the Tax Court. See CCDM 36.2.6.2.1.
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The Tax Court may, on its own motion, enter an order containing a section 7482(a)(2)(A) statement. If taxpayer files a petition in the court of appeals for permission to appeal from such an order, the procedures of CCDM 36.2.5.4.5, Interlocutory Taxpayer Appeals, will apply.
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If the respondent wishes to appeal from such an order, authorization must be secured from the Solicitor General to file a petition for permission to appeal. See CCDM 36.2.5.4.4, Interlocutory Commissioner Appeals. Since the petition must be filed within 10 days, the Field attorney must immediately notify the Associate Chief Counsel (P&A) upon service of such an order, so that coordination with the Department of Justice may be commenced and timely Solicitor General authorization for appeal be sought.
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Neither the application for nor the granting of an interlocutory appeal stays proceedings in the Tax Court unless the Tax Court or appeals court judge orders the stay. The Field attorney may apply to the Tax Court for a stay pending the interlocutory appeal without review by the Associate Chief Counsel (P&A). Informal coordination should be made with the responsible Associate office.
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The Field attorney recommending that a stay order be sought from the appropriate court of appeals should advise the Associate Chief Counsel (P&A) of the reasons for the stay, for coordination with the Department of Justice in the preparation and filing of the motion for stay.
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The Entry of Appearance form is normally filed by the Department of Justice. It is the responsibility of the Associate Chief Counsel attorney/paralegal to confirm with the Department of Justice that this form has been filed with the court.
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Notices of appeal shall be filed with the Clerk of the Tax Court. Section 7483; Fed. R. App. P. 13(a). The courts of appeal have exclusive jurisdiction to review decisions of the Tax Court in the same manner and to the same extent as decisions of the district courts in civil actions tried without a jury. Section 7482(a).
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Notices of appeal shall specify the party or parties taking the appeal; shall designate the decision appealed from; and shall name the court to which the appeal is taken. Fed. R. App. P. 3(c). While not required by Rule 3(c), a statement concerning venue should be included. See Exhibit 36.4.1–5 for a sample Commissioner notice of appeal.
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The Clerk of the Tax Court serves a conformed copy of the Commissioner's notice of appeal on the taxpayer's first attorney of record, if the taxpayer is represented by more than one attorney. If the taxpayer was not represented by counsel in the Tax Court, service is made on the taxpayer. Service on behalf of the Government is accepted by the Docket, Records & User Fee Branch of the Associate Chief Counsel (P&A) and then forwarded to the Technical Services Support Branch in the Office of the Associate Chief Counsel (P&A).
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If the appeal pertains to more than one docket number, a separate notice of appeal is generally filed with respect to each docket. In instances in which two or more dockets were consolidated for trial and opinion in the Tax Court, the appeal will pertain to the specific docket numbers in which the issues to be litigated on appeal are involved. See subsection (2), below, for consolidated appeals. The attorney should check for any necessary protective action with respect to docket numbers not directly involved in the appeal. See CCDM 36.2.6.2.3, Protective Appeals and Cross-Appeals in Tax Court Cases.
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If the appeal pertains to more than one docket number and these docket numbers were consolidated for trial and opinion in the Tax Court, a single notice of appeal pertaining to more than one docket number may be filed. (This procedure does not apply to the extent the appeal is not taken to the same circuit in all dockets or if, because of venue, an appeal is filed to the circuit in which venue lies and the circuit of preferred venue.) If the decisions for the docket numbers on appeal were not entered on the same day, note of this fact should be made in the notice of appeal. The single caption should list the taxpayers' name as shown in the decisions, and the docket numbers that are being appealed.
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The filing of a single notice of appeal pertaining to more than one docket number does not constitute a joint or consolidated appeal under Fed. R. App. P. 3(b). The single notice merely informs the Clerk of the Tax Court and the appellate court that the cases are related and may be processed together.
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See CCDM 36.2.6.2.1 for particular provisions relating to taxpayer notices of appeal.
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See CCDM 36.2.6.2.2 for particular provisions relating to Commissioner notices of appeal.
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Under Section 7483 and Fed. R. App. P. 13(a), a decision of the Tax Court may be reviewed by a court of appeals if a notice of appeal is filed with the Tax Court by either the Commissioner or the taxpayer within 90 days after the decision is entered. The exceptions and qualifications to the general rule are discussed below.
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Cross-appeals are discussed at CCDM 36.2.6.2.3. A cross-appeal may be filed within 120 days after the Tax Court decision has been entered.
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Protective appeals are discussed at CCDM 36.2.6.2.3. It is Service position that both the protective appeal and the appeal of the adverse party in the other docket must be filed within the 90-day period after entry of the respective Tax Court decisions.
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Section 7502, which treats certain documents as timely filed (even though not received within the period prescribed by the Code) if they are timely mailed, applies to notices of appeal filed with the Tax Court. See Treas. Reg. § 301.7502–1 for specific rules applicable thereto.
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If the notice of appeal is timely mailed but improperly addressed and received by the Tax Court after expiration of the appeal period, it is not timely filed. See section 7502(a)(2)(B) .
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Rule 4(a)(1) of the Federal Rules of Appellate Procedure does not apply to the Tax Court.
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A timely filed motion to vacate or revise a Tax Court decision extends the 90-day appeal period.
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Table - effect of motion to vacate or revise on the appeal period:
If Then If the motion is denied, a new 90-day appeal period begins to run from the date of denial of the motion. If the motion is granted, a new 90-day appeal period begins to run upon entry of the new or revised decision by the court. See Fed. R. App. P. 13(a). -
A motion to vacate or revise a decision, with or without a new or further trial, is timely filed if it is filed within 30 days after the decision has been entered, unless the court otherwise permits. See Tax Court Rule 162.
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Table - time period for filing motion to vacate or revise.
If Then the motion to vacate or revise a decision is outside the 30-day period, it is stamped lodged, rather than filed by the court. A motion for leave to file out of time the motion to vacate or revise the decision should accompany the motion to revise or vacate the decision. the motion for leave to file out of time is granted, the motion to vacate or revise the decision will be filed. the court denies a motion for leave to file out of time a motion to vacate or revise a decision, the appeal period is not extended. -
Until a motion to vacate or revise a decision is filed with the court, either within the 30-day period after the entry of decision or upon the granting of a motion for leave to file out of time (which motion, itself, must be filed within the 90-day appeal period), the normal 90-day statutory period for filing an appeal is not extended.
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The filing or denial of a motion to reconsider the denial of a motion to vacate or revise a decision will not suspend or start a new appeal period. Only the granting of the motion and entry of a new holding will have that effect.
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Some courts have held that these motions, filed toward the end of the normal appeal period, with the primary purpose of extending the time for filing an appeal, do not extend the appeal period even though granted by the lower court. See Commissioner v. Realty Operators, Inc., 118 F.2d 286 (5th Cir. 1941).
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A timely motion filed by taxpayer asking for reasonable litigation and administrative costs (including attorneys' fees) after a Tax Court decision has been entered will usually extend the time for an appeal because the court will generally vacate the original decision in order to dispose of the motion and enter a new decision reflecting such disposition. See Tax Court Rules 231 and 232. See also CCDM 35.10, Special Procedures When Attorneys' Fees and Sanctions are Sought. This is in contrast to Fed. R. Civ. P. 58(c)(1), which provides that the entry of judgment may not be delayed, nor the time for appeal extended, in order to tax costs or award fees, except as provided in Rule 58(c)(2).
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For purposes of determining the time when the decision becomes final after an appeal or review by the Supreme Court, there is a distinction between cases remanded for rehearing and cases remanded other than for rehearing, i.e., upon mandate of a court of appeals or the Supreme Court.
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When a case is remanded for rehearing, this generally means that the Tax Court is required under the mandate of the court of appeals or the Supreme Court to hold a further trial in the case or to make further significant findings of fact without trial. See CCDM 36.2.5.12 for provisions regarding cases remanded to the Tax Court.
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Table showing application of 30-day period:
If Then the final appellate action in the case modifies the Tax Court decision such that a new decision must be entered by the Tax Court without the need for any additional action in or by that court (i.e., the case is not remanded for rehearing), the new Tax Court decision will become final upon the expiration of 30 days from the date entered. either party institutes proceedings within the 30-day period to have the new Tax Court decision corrected to accord with the mandate, the new decision will become final when it is corrected. See section 7481(a)(3)(A),(B). a new decision is entered by the Tax Court after the case has been remanded for rehearing, the new decision will become final in the regular manner, i.e., at the expiration of the 90-day appeal period, as if there had been no prior proceedings. See section 7481.
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The circuits do not agree on the appropriate time to appeal Tax Court orders that dispose of one or more but not all years in suit under one docket number.
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Two circuits have adopted the Service's position that a dispositive order or dismissal of one year is appealable even though the Tax Court has not entered a decision with respect to claims for another year or years in that suit. See Inverworld, Ltd. v. Commissioner, 979 F.2d 868 (D.C. Cir. 1992); Wilson v. Commissioner, 564 F.2d 1317 (9th Cir. 1977). For circuits holding that any appeal is premature prior to disposal of the entire case, see Estate of Yaeger v. Commissioner, 801 F.2d 96 (2d Cir. 1986); and Schrader v. Commissioner, 916 F.2d 361 (6th Cir. 1990).
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If in doubt, absent a rule of appealability in the venue circuit, it is necessary to take an immediate appeal to preserve the Service's right of appeal. Section 7459(c) and 7483.
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See CCDM 34.3.1.1.2.
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Except as otherwise provided, in the case of a taxpayer other than a corporation, a Tax Court decision may be reviewed by the court of appeals for the circuit of the taxpayer's legal residence, as of the date the petition for redetermination was filed with the Tax Court.
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If the taxpayer is an estate, venue lies in the court of appeals for the circuit of the legal residence of the executor, executrix, or representative of the estate, as of the date the petition was filed with the Tax Court.
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In the case of a TEFRA partnership or S corporation, venue lies in the court of appeals for the circuit where the principal place of business of the TEFRA entity was located at the time the petition was filed.
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Corporate taxpayers.
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The Tax Court decision may be reviewed by the court of appeals for the circuit in which is located the corporation's principal place of business or principal office or agency as of the date the petition was filed with the Tax Court.
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If the corporation has no principal place of business or principal office or agency in the United States, the decision may be reviewed by the court of appeals for the circuit in which is located the Internal Revenue Office in which the tax return was filed.
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If no return was filed, venue is then with the United States Court of Appeals for the District of Columbia Circuit.
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If for any reason none of the preceding rules applies, then such decision may be reviewed by the United States Court of Appeals for the District of Columbia Circuit. See Section 7482(b).
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See Section 7482(b)(1)(C)-(F) for venue concerning appeals of various declaratory decisions.
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Notwithstanding the general rules stated above, a decision of the Tax Court may be reviewed by any court of appeals designated by the Government and the taxpayer in a written stipulation, if a notice of appeal designating that circuit has been filed. See section 7482.
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If for any reason the taxpayer's legal residence is not established by the record before the Tax Court, this office generally states that it has no objection to review by the court of appeals for the circuit in which taxpayer's asserted residence is located if facts support that assertion. Thus, it is very important when writing or reviewing a brief to be filed in the Tax Court to ensure that the parties have stipulated venue and that an appropriate finding of fact has been requested.
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See CCDM 36.2.6.2.1 for venue provisions particular to taxpayer appeals, and CCDM 36.2.6.2.2 for venue provisions particular to Commissioner appeals.
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If a taxpayer requests that the Government stipulate to a change in venue, the Department of Justice usually requests the views of the Chief Counsel. If there are sound reasons for entering into such a stipulation and there is no decision adverse to the Commissioner on the issue in the circuit where the taxpayer seeks to stipulate venue, and no decision favorable to the Commissioner in the court of proper venue, this office will generally state that there is no objection to the stipulation. See Exhibit 36.4.1–6, Stipulation of Venue.
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Some Tax Court cases involve multiple taxpayers whose appeals would be to different judicial circuits. To avoid the expense and inconvenience to both parties of presenting the same issue in different courts of appeal, the parties will ordinarily agree to stipulate venue in one circuit, unless one of the parties seeks a potential appellate conflict and a possible petition for certiorari with respect to the issue in question.
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When the taxpayer sends a proposed stipulation of venue to the Office of Chief Counsel, the Chief Counsel will forward it to the Department of Justice with his recommendation. Although the Chief Counsel's office has authority to enter into stipulations of venue, it has, as a matter of practice, deferred to the Department of Justice, which will execute the venue documents on behalf of the Government. If, due to the late receipt of a request directly from the taxpayer for stipulation of venue, there is insufficient time to formally clear the matter with Justice, the attorney should advise the taxpayer's attorney to file an appeal both to the circuit of proper venue and to the circuit of preferred venue. After an examination of the law in both circuits, the attorney then makes a venue recommendation to the Department of Justice.
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When a taxpayer appeals to an improper venue, the Service generally will recommend that the Department of Justice not object to transfer of the case to the appropriate venue when it is in the interest of justice to do so. See Becker v. Commissioner, 852 F.2d 524 (11th Cir. 1988)(It is in the interest of justice to transfer appeal to appropriate circuit when time for filing a new appeal has expired); Dornbusch v. Commissioner, 860 F.2d 611 (5th Cir. 1988)(transfer was appropriate remedy when pro se appellant in good faith filed an appeal to wrong circuit); Alexander v. Commissioner, 825 F.2d 499 (D.C. Cir. 1987)(appeal transferred to correct circuit when time for filing a new appeal had expired). If the taxpayer is making frivolous arguments contrary to well-established law, however, an objection should be raised in an effort to have the appeal dismissed. See Dahlberg v. Commissioner (unpublished, per curiam order filed July 6, 1988, D.C. Cir.).
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In a transferee case there may be some question as to which court of appeals is the court of proper venue. Normally, in transferee cases involving individuals who are the transferees or corporations that are the transferees, the rules for determining venue are those set out in paragraph (1) of CCDM 36.2.5.8.1, Stipulating to Venue. In cases where the Commissioner is the appellant, the attorney should file separate protective notices of appeal of the Tax Court's decision to the courts of appeal for the circuits applicable to each taxpayer involved.
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Pursuant to Fed. R. App. P. 10(a), the record on appeal is comprised of the original papers and exhibits filed in the Tax Court, the transcript of proceedings, if any, and a certified copy of the docket entries prepared by the Clerk of the Tax Court, unless only specific papers or exhibits are desired to be designated as the record on appeal. In general, lodged documents and memoranda and briefs are not part of the official record. These documents may, however, be transmitted to the court of appeals (see paragraph (3), below)
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The Tax Court will transmit this complete record in all cases except those in which the record is extremely bulky or in other prohibitive circumstances. In those instances, the court will contact the parties for designations. Then, the assigned attorney in coordination with the Department of Justice will designate or counter designate those parts of the record on appeal deemed necessary to the Commissioner's case. This designation will be filed with the Tax Court and include the following salutation: To the Clerk of the United States Tax Court.
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In some instances it is necessary or desirable to itemize each document included in the record on appeal. This type of designation is particularly