Originally published in Journal of Accountancy
During the transition to its new eAccess electronic document management system, the Tax Court failed to serve a small number of petitioners with paper or electronic notices of the documents concluding their cases (such as final decisions or orders of dismissal). The Tax Court has notified petitioners in those cases, which were finalized in 2009 and 2010, that they have until May 31, 2011, to file motions to vacate.
Tax Court Rule 21 requires that final decisions be served to petitioners and the IRS by mail, by personal delivery, or electronically if the party has consented in writing. The concluding documents in the affected cases were posted on the Tax Court’s eAccess system, but the petitioners were not served in paper or electronically. The Tax Court became aware of this problem in March 2011, according to Clerk of the Court Robert Di Trolio, when one petitioner notified the clerk’s office that he or she had not received the concluding documents in his or her case.
An investigation by the clerk’s office discovered that petitioners had not been served concluding documents in 284 cases disposed of in 2009 and 2010. According to Di Trolio, 120 of those cases were classified as small tax cases, for which there is no right of appeal. Di Trolio also told the JofA that the eAccess system has been reprogrammed to avoid this problem in the future.
Normally, under Tax Court Rule 162, any motion to vacate or revise a decision must be made within 30 days after the final decision has been made, “unless the Court shall otherwise permit.” On May 6, the Tax Court notified affected petitioners that they can move to vacate their final decisions, but such motions must be made by May 31. The motion must inform the court of the date the petitioner first became aware of the entry of a decision in the case and the petitioner’s grounds for challenging the correctness of the decision.
The petitioner must have independent grounds supporting vacating the decision; the failure to serve the concluding documents is not a reason to vacate a final decision, according to Di Trolio, who also said that, as of May 17, no such motions have been received from any affected petitioners.
In a notice issued May 13 (CC-2011-014), the IRS Office of Chief Counsel told its personnel that before the Tax Court takes action on any motion to vacate, the IRS will have an opportunity to respond. Personnel have been instructed to contact the Office of Associate Chief Counsel (Procedure & Administration) if a motion to vacate is filed in any of these cases.