TRAC Report on Fewer Civil Tax Cases in District Courts (1/23/20)

TRAC has this report:  Federal Civil Tax Suits Fall by Half Over Last Decade (TRAC 1/22/20), here.  Note that this report does not include Tax Court proceedings where most civil tax cases occur.  Nor does it include Court of Federal Claims filings where many tax refund suits are brought.

Excerpts;

The latest available data from the federal courts show that during the first quarter of FY 2020 (October 2019 - December 2019) the government reported 158 new civil filings of federal tax suits. According to the case-by-case information analyzed by the Transactional Records Access Clearinghouse (TRAC) at Syracuse University, this number is down by 19 percent over the same period from FY 2019 when the number of civil filings of this type totaled 194. 

If filings continue at the same pace for the rest of this fiscal year, total civil tax filings will be 632, down from 736 during the past fiscal year. Ten years ago during FY 2010 there were a total of 1,205 such suits. 

Federal civil tax suits cover a range of issues. Out of the 158 suits filed during the first quarter of FY 2020, a total of 65 (41%) were suits filed against the United States. See Figure 2. Over half of the suits filed by taxpayers were suits for refunds of taxes or penalties. Taxpayers also sued the Internal Revenue Service IRS to quash summons or to move litigation from the court in which the suit was filed. The remaining 93 (59%) of suits filed during this period were filed by the U.S. Frequently these were specific actions to enforce an IRS summons or a tax lien, but others involved various miscellaneous collection and regulatory matters. 

JAT Comments:

1.  I am not sure what larger lessons can be drawn from these statistics.  Perhaps it only means that, over time, practitioners are trending to the more popular Tax Court and CFC forums because they can usually be tried more efficiently than in district courts.  District courts are the only forum that permits jury trials, which can be a hassle (and foreign country) for most practitioners, even those calling themselves tax litigators.  (Ask your tax litigator the next time you need critical analysis of your forum choices for tax litigation how many jury trials in tax cases he or she has handled.)

2.  Also, I think it is fair to say that, among judges for the various trial fora, district judges (and magistrates where they participate) are the least enthusiastic about tax cases.  (In this regard, perhaps, the Supreme Court may be even less enthusiastic about tax cases, accepting only a limited number per year and where at least Justice Souter quipped that he had to be nice to the Chief Justice: “I have to. Otherwise I get all the tax cases;” and perhaps that lack of enthusiasm is the reason the Supreme Court often gets tax cases so wrong.)  So, practitioners (I among them) may just prefer judges who are more enthusiastic about tax issues.  (I used to tell my Tax Procedure class, somewhat tongue in cheek, that tax issues are too important to have the Supreme Court meddle in them.)