That obliging jurist Judge David Gustafson once again makes the critical point about Tax Court practice and procedure: “The Tax Court exists in order to create a means for resolving tax disputes as inexpensively as possible. In every Tax Court case, the taxpayer’s opponent is his Government. A majority of Tax Court petitioners are self-represented; and many Tax Court cases involve amounts in dispute that are less than the cost of hiring counsel.”. Martin E. O’Neill, Docket No. 31218-12, filed 12/2/13, at p. 1.

 For yet another example of the foregoing, see my blogpost “Another Argument”, 6/7/12. Ailing Dorothy Weaver gets hit with a $1700 penalty because she didn’t call her tax preparer to testify on a trial. How can a self-represented, disabled person know to do this, or be physically able to do this, or to pay an attorney or a USTCP to do this? Judge Kroupa said she couldn’t turn a blind eye to the requirements of law. Maybe not, but it just isn’t fair.

Judge Gustafson refuses to allow IRS to depose Marty O’Neill, even though in the usual Federal (or even State) Court plenary case, party depositions are routine. We all learned on Day One of practice, when you serve the answer, simultaneously serve the notice to admit, the notice to produce, the notice to inspect, the demand for a bill of particulars, and deposition notices of all and sundry.

But that’s not how the Tax Court rules provide, even though “…respondent [IRS] reasonably seeks to take the deposition in order to obtain relevant information, and that the taking of the deposition would contribute to the efficiency of the development of the case and of subsequent settlement or trial.” Order, at p. 1.

Remember, this is the sixty-buck-ticket-to-justice. Judge Gustafson: “And even where (as here) the amount at issue justifies hiring counsel, the prevailing petitioner typically obtains no recovery that might cover litigation costs, and the relevant fee-shifting statute, section 7430, is remarkably stingy. However, the cost of depositions– including the cost of paying counsel to prepare for them and to attend and conduct them, and the cost of paying a court reporter to attend and to provide transcripts–is one of the major expenses of litigation, even for the non-deposing party who is merely defending against the other party’s discovery. It is a cost so significant that it is sometimes virtually disabling and makes litigation impractical.” Order, at pp. 1-2.

As for stingy Section 7430, when was the last time a petitioner got more than a soldier’s farewell from Tax Court in a Section 7430?

So Tax Court Rule 74(c)(1)(A) provides that depositions are allowed only in extraordinary circumstances. And so far IRS’ case seems ordinary. So if Judge Gustafson allows the depositions here, the door would be wide open for depositions in every case.

However, Marty isn’t completely safe at home: “Respondent may renew the motion upon a showing of extraordinary circumstances. Or, if respondent makes documented attempts at discovery but at trial is surprised by petitioner’s testimony, respondent may at that time move for appropriate relief, including negative inferences, the exclusion of evidence, or a continuance.” Order, at p. 2.

Practitioners, read and heed.