New U.S. Tax Court Rules Effective May 5, 2011

On May 5, 2011 the United States Tax Court announced the adoption of amendments to its Rules of Practice and Procedure.  The Rules, as amended, are available on the Court’s web site,  The proposed amendments were originally published on December 20, 2010 with an invitation for public comments.  A number of comments were received by the March 7, 2011 deadline and the amendments as finalized reflect revisions prompted by the comments received.  This article will briefly outline the principal changes made by the amendments and the explanations for the changes.

While many of the amendments are of a technical or clarifying nature, several address more substantive changes in the Court’s Rules.  Among these are amendments addressing the time periods for filing summary judgment motions, Rule 155 computations, motions regarding elections to proceed under the small tax case procedure.  In addition, a new Rule 124 more clearly recognizes the role of voluntary nonbinding mediation as a form of alternative dispute resolution.

The amendments are generally effective as of May 5, 2011.  Certain amendments, however, are effective with respect to specific activities that are initiated after May 5, 2011.[1]

Deadline for Summary Judgment Motions

The Rule 121(a) amendment is designed to clarify the timing for the filing of summary judgment motions.  The new rule provides that such motions may be made at any time beginning 30 days after the pleadings are closed, but no later than 60 days before the first day of the Court’s session at which the case is calendared for trial.  The 60-day limit is intended to allow the Court sufficient time to secure any additional information it deems necessary to decide the motion and to consider action on the motion before trial.

Deadlines for Rule 155 Computations

The Court decided to amend Rule 155 due to its experience with “inordinate delay” [2] on the part of parties filing their computations for entry of decision in accordance with an opinion without the issuance of a court order.  To alleviate the need for court orders, the amended Rule 155 now requires the parties to submit computations within 90 days after the service of the opinion unless otherwise directed by the Court.

Election of Small Tax Case Procedure

The Court has deleted prior Rule 171 and replaced it with a new Rule 171.  The new Rule 171 is designed to replace former Rule 172(b) (and its predecessor Rule 36(c)) which were in effect from 1970 and 1983.  These rules required the Commissioner to file any motion opposing a taxpayer request to elect a small tax case at the time the Commissioner filed an answer in the case.

In 1983 former Rule 172(b) was eliminated “apparently as a result of the Court’s elimination of required answers in small tax cases in 1979.” [3] The Court has decided that since the requirement of answers in small tax cases was reinstated in 2007, citing 130 T.C. 486-487, it is now appropriate to reinstate former Rule 172(b).  Accordingly, new Rule 171(b) is substantially identical to former Rule 172(b).

Additional reasons for the new Rule 171 are the varied jurisdictional dollar limits for small tax case eligibility resulting from the Court’s enlarged jurisdiction.  The Court now has jurisdiction to decide appeals in lien and levy cases as well as requests for relief from joint liability.  The varied jurisdictional dollar limits increase the difficulty for taxpayers in determining whether they may elect the small case procedures in lien and levy actions and actions for determination of relief from joint liability.  The Court explains that the new Rule 171 helps alleviate the consequences of this increased difficulty since if “a taxpayer has incorrectly applied the jurisdictional limits in electing the small tax case procedures, early action on the error is in the interests of the Court and the parties and would assist in the management and the calendaring of the case.”[4]

The remaining changes incorporated in new Rule 171 are intended to clarify that a petitioner may elect to have the proceeding conducted as a small tax case at any time before trial, Rule 171(c) and that absent a Court order removing the small tax case designation, decision or dismissal prior to trial does not invalidate the petitioner’s small tax case election, Rule 171(d).

Alternative Dispute Resolution

The Court has replaced prior Rule 124 with new Rule 124.  New Rule 124 is designed to remove the prior focus on arbitration and elevate mediation as a form of dispute resolution.  The Court noted that in the past twenty years only a few arbitrations were conducted, with substantially more mediations occurring over the same period.

New Rule 124 does not require a joint motion for mediation.  Mediation issues are not limited to factual ones, as opposed to binding arbitration, and the mediation is nonbinding, thus requiring stipulations by the parties.

Warren R. Peterson, a Danville sole practitioner, has been practicing law in one form or another for longer than he cares to remember.  He is presently concentrating his practice in the area of tax conflicts, defending taxpayers in disputes with federal and California state tax authorities.


[1] Amendments to Rule 121 are effective with respect to cases in which the Notices of Trial are issued after May 5, 2011; the amendments to Rule 155 are effective with respect to cases in which entry of decision is withheld pending the filing of computations pursuant to opinions filed or orders issued after May 5, 2011; and new Rule 171(b) is effective with respect to petitions filed after May 5, 2011.


[2] United States Tax Court, Press Release, May 5, 2011, (  p. 14.

[3] Press Release, supra, p. 16.

[4] Press Release, supra, p. 17.

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