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Tax Court Proposes New Rules of Practice and Procedure

On March 23, 2022, the US Tax Court announced new proposed rules for practicing before it. The Court proposed three new rules, amendments to existing rules and changes to conform the existing rules to various forms. The proposed changes also reflect the Court’s move toward conformity with the Federal Rules of Civil Procedure.

OVERVIEW OF THE NEW PROPOSED RULES

The new rules include Rule 63, Rule 92 and Rule 152. Rule 63 provides rules to parties seeking to intervene in a Court proceeding who have an unconditional right and a conditional right to intervene by a federal statute.

Rule 92 provides rules to identify and certify an administrative record in certain actions. The explanation to the proposed rule states that proposed Rule 92 is meant,

[T]o fill a gap in the Court’s Rules of Practice and Procedure. Although the Court has longstanding Rules governing the submission of the administrative record in declaratory judgment cases, see Title XXI of the Court’s Rules, the Court has not adopted a rule of procedure or a uniform process governing the submission of the administrative record to the Court in other actions where judicial review is normally limited to the administrative record or where judicial review requires an examination of the administrative record and other relevant evidence, as appropriate.

Rule 152 provides a uniform rule for the Court to accept briefs filed by amicus curiae. The explanation to the rule states that proposed Rule 152 is a corollary to Rule 29 of the Federal Rules of Appellate Procedure and Rule 7(o) of the local rules for the US District Court for the District of Columbia. We previously discussed amicus briefs in the Court, and this change is a welcome development to provide specific procedures in the area.

NOTABLE REVISIONS TO EXISTING RULES

Proposed Rule 21, Service of Papers, makes service of pleadings through the Court’s electronic system the default method for serving papers upon the Court and opposing parties.

Proposed Rule 23, Form and Style of Papers, omits all prefixes (e.g., Mr., Ms.) from pleadings. The amendment would also permit the use of a typed written name on a pleading that is filed electronically with the Court to constitute that person’s signature.

Proposed Rule 70, Scope of Discovery, would add the following rule:

Discovery must be proportional to the needs of the case, considering the importance of the issues at stake in the action, the amount in controversy, the parties’ relative access to relevant information, the parties’ resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit.

Additionally, the amendment proposes that any information withheld under a claim of privilege must be expressly made and describe the nature of the documents, communications, etc., not produced to enable the other party the ability to assess the privilege claim. The rule also adds provisions for the return of privileged documents that were inadvertently disclosed to the opposing [...]

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Weekly IRS Roundup April 20 – April 24, 2020

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of April 20 – April 24, 2020. Additionally, for continuing updates on the tax impact of COVID-19, please visit our resource page here.

April 21, 2020: The US Tax Court proposed amendments to its Rules of Practice and Procedure. The proposed amendment to Rule 24 incorporates simplified procedures for the withdrawal and substitution of counsel, and clarifies limitations on counsel’s representation of a party to more closely follow the American Bar Association Model Rules of Professional Conduct. Written comments to the proposed amendments must be received by May 31, 2020.

April 21, 2020: The Treasury Department and the IRS released Revenue Procedure 2020-27 to provide a waiver of the time requirements of IRC § 911(d)(1). The waiver applies to any individual who reasonably expected to meet the eligibility requirements of IRS § 911(d)(1) during 2019 or 2020, but failed to do so because the individual departed a foreign country on or after a specified date due to COVID-19.

April 21, 2020: The Treasury Department and the IRS released Revenue Procedure 2020-20 to address the “substantial presence test” under IRC § 7701(b)(3) and the impact of travel and related disruptions resulting from COVID-19. COVID-19 may have affected the travel plans of foreign travelers who intended to leave the US. The Revenue Procedure provides that when applying the substantial presence test, an alien individual may exclude certain days of physical presence in the United States, including if the individual qualifies for the Medical Condition Exception described in Revenue Procedure 2020-20.

April 21, 2020: The IRS published frequently asked questions (FAQs) titled “Information for nonresident aliens and foreign businesses impacted by COVID-19 travel disruptions.” The FAQs address the impact of COVID-19 travel disruptions on nonresident alien individuals who perform services or other activities in the US and foreign corporations who employ individuals or engage individuals as agents to perform services or other activities in the US may be considered engaged in a US trade or business. The FAQs provides that the affected person may choose an uninterrupted period of up to 60 calendar days, beginning on or after February 1, 2020 and on or before April 1, 2020, during which services or other activities conducted in the US will not be taken into account in determining whether the nonresident alien or foreign corporation is engaged in a US trade or business. However, it must be true that such activities were performed by one or more individuals temporarily present in the US and would not have been performed in the US but for COVID-19 travel disruptions.

April 23, 2020: The Treasury Department and the IRS released proposed regulations addressing how to determine if an exempt organization has more than one unrelated trade or business, and, if so, how to calculate the organization’s unrelated business taxable income.

April 23, 2020: The IRS published FAQs on carrybacks of net operating [...]

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