Does the Tax Court's Use of its Golsen Rule in Unappealable Small Tax Cases Hurt the Poor?
Carlton M. Smith
Yeshiva University - Benjamin N. Cardozo School of Law; New York University School of Law
December 29, 2008
Journal of Tax Practice and Procedure, 2009
Cardozo Legal Studies Research Paper No. 249
The U.S. Tax Court has long held that, although it is a national court with its own precedents, where a case before it is appealable to a Court of Appeals that disagrees with it on a legal issue, "efficient and harmonious judicial administration calls for [the Tax Court] to follow the decision of that court." Golsen v. Commissioner, 54 T.C. 742, 756-758 (1970), aff'd on another issue, 445 F.2d 985 (10th Cir. 1971). The logic of the so-called "Golsen rule" is to avoid a wasteful appeal that would result in the Tax Court's decision instantly being reversed; it does not reflect agreement with the court of appeals.
Currently, roughly half of the cases filed in the Tax Court elect small case status under Internal Revenue Code section 7463, which provides for informal procedures and trials and produces opinions that are neither precedential nor appealable. Even though small case rulings cannot be appealed, the Tax Court still apparently applies the Golsen rule in such cases, following the precedent of the Court of Appeals to which the case would be appealable if it were appealable. This article questions the reasoning for this practice and explores unstated reasons for it. The author concludes that the Tax Court should abandon the Golsen rule in small tax cases and instead apply either the precedent of the Tax Court or the precedent of the Circuit Court to which the case would otherwise be appealable if the election had not been made, whichever precedent is more favorable to the taxpayer in the circumstances of the case.
Number of Pages in PDF File: 12
Date posted: December 29, 2008