Tax Court Improvement Act
The Tax Court Improvement Act would broaden tools and flexibility available in the Tax Court to resolve IRS-related tax disputes more efficiently and fairly. Key changes include giving Tax Court judges and designated staff broader authority to issue subpoenas and take depositions before settlement discussions, expanding the role and authority of special trial judges to hear more types of cases and to handle contempt within specified limits, applying a formal disqualification standard to Tax Court judges, and clarifying how equitable tolling (pausing) of filing deadlines can be used in deficiency cases (including when filing locations are inaccessible). Overall, the bill aims to speed settlements, expand judicial oversight and accountability, and ensure fairness in timing disputes. These changes affect how tax disputes move through the Tax Court process, who can oversee or intervene in those disputes, and how time limits for filing petitions can be adjusted when circumstances warrant equitable relief.
Key Points
- 1Subpoenas before hearings to facilitate settlements (Sec. 2):
- 2- Judges or special trial judges can issue subpoenas before hearings to compel attendance and the production of documents or electronic information to aid settlements.
- 3- Allows depositions to be taken before a designated official, with written deposition transcripts.
- 4Special Trial Judges can hear more cases and address contempt (Sec. 3):
- 5- Allows special trial judges, with party consent and under Tax Court rules, to hear proceedings beyond the existing categories.
- 6- Grants special trial judges authority to punish for contempt (misconduct) within limits, using penalties no greater than Class C misdemeanors under federal law, while preserving other sanctions available under law or court rules.
- 7Disqualification standard for Tax Court judges (Sec. 4):
- 8- Applies the general disqualification provisions of 28 U.S.C. Section 455 to Tax Court judges and proceedings, enhancing recusal standards.
- 9Equitable tolling for deficiency cases (Sec. 5):
- 10- The Tax Court may toll (pause) the deadline to file a petition if equity warrants it.
- 11- If a filing location (clerk’s office or official online filing portal) is inaccessible, the filing deadline is tolled for the period of inaccessibility plus 14 days.
- 12- Filing-location definitions and a new exception ensure tolling does not apply to dismissals based solely on not tolling.
- 13- Changes apply to filings after enactment; do not create retroactive benefits for petitions filed before enactment.