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CHAPTER 5-THE TAX COURT OF THE UNITED

STATES

SUBCHAPTER A-ORGANIZATION, JURISDICTION AND PROCEDURE

Part I-Organization and Jurisdiction

[Section 504 (c) of the Revenue Act of 1942 (56 Stat. 957) reads as follows:

"All references in any statute (except this section), or in any rule, regulation, or order, to the 'Board of Tax Appeals' or to the 'Board' when used in the sense of 'Board of Tax Appeals', or to the 'member', 'members', or 'chairman' thereof shall be considered to be made to The Tax Court of the United States, the judge, judges, and presiding judge thereof, respectively.'

In accordance with this provision, throughout this document the term "The Tax Court of the United States" has been substituted for "the Board of Tax Appeals", "Tax Court" for "Board", "judge" for "member", "judges" for "members", and "presiding judge" for "chairman".]

SEC. 1100. STATUS.

The Tax Court of the United States (hereinafter referred to as the "Tax Court") shall be continued as an independent agency in the Executive Branch of the Government.

SEC. 1101. JURISDICTION.

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The Tax Court and its divisions shall have such jurisdiction as is conferred on them by chapters 1 * * *

SEC. 1102. MEMBERSHIP.

(a) NUMBER. The Tax Court shall be composed of 16 judges.

(g) DISBARMENT OF REMOVED JUDGES.-A judge of the Tax Court removed from office in accordance with subsection (f) shall not be permitted at any time to practice before the Court.

SEC. 1103. ORGANIZATION.

(a) SEAL.-The Tax Court shall have a seal which shall be judicially noticed.

(b) DESIGNATION OF PRESIDING JUDGE.-The Tax Court shall at least biennially designate a judge to act as presiding judge.

(c) DIVISIONS. The presiding judge may from time to time divide the Tax Court into divisions of one or more judges, assign the judges of the Tax Court thereto, and in case of a division of more than one judge, designate the chief thereof. If a division, as a result of a vacancy or the absence or inability of a judge assigned thereto to serve thereon, is composed of less than the number of judges designated for the division, the presiding judge may assign other judges to the division or direct the division to proceed with the transaction of business without awaiting any additional assignment of judges thereto.

(d) Quorum.—A majority of the judges of the Tax Court or of any division thereof shall constitute a quorum for the transaction of the business of the Tax Court or of the division, respectively. A vacancy in the Tax Court or in any division thereof shall not impair the powers nor affect the duties of the Tax Court or division nor of the remaining judges of the Tax Court or division, respectively.

SEC. 1104. OFFICES.

The principal office of the Tax Court shall be in the District of Columbia, but the Tax Court or any of its divisions may sit at any place within the United States. The Secretary of the Treasury shall provide the Tax Court with suitable rooms in courthouses or other buildings when necessary for hearings by the Tax Court, or any division thereof, outside the District of Columbia.

SEC. 1105. TIMES AND PLACES OF MEETINGS.

The times and places of the meetings of the Tax Court and of its divisions shall be prescribed by the presiding judge with a view to securing reasonable opportunity to taxpayers to appear before the Tax Court or any of its divisions, with as little inconvenience and expense to taxpayers as is practicable.

Part II-Procedure

SEC. 1110. FEE FOR FILING PETITION.

The Tax Court is authorized to impose a fee in an amount not in excess of $10 to be fixed by the Tax Court for the filing of any petition for the redetermination of a deficiency.

SEC. 1111. RULES OF PRACTICE, PROCEDURE, AND EVIDENCE.

The proceedings of the Tax Court and its divisions shall be conducted in accordance with such rules of practice and procedure (other than rules of evidence) as the Tax Court may prescribe and in accordance with the rules of evidence applicable in the courts of the District of Columbia in the type of proceedings which prior to September 16, 1938, were within the jurisdiction of the courts of equity of said District.

SEC. 1112. BURDEN OF PROOF IN FRAUD CASES.

In any proceeding involving the issue whether the petitioner has been guilty of fraud with intent to evade tax, the burden of proof in respect of such issue shall be upon the Commissioner.

SEC. 1113. SERVICE OF PROCESS.

The mailing by registered mail of any pleading, decision, order, notice, or process in respect of proceedings before the Tax Court shall be held sufficient service of such pleading, decision, order, notice, or process.

SEC. 1114. ADMINISTRATION OF OATHS AND PROCUREMENT OF TES

TIMONY.

(a) IN GENERAL.-For the efficient administration of the functions vested in the Tax Court or any division thereof, any judge of the Tax Court, or any employee of the Tax Court designated in writing for the purpose by the presiding judge, may administer oaths, and any judge of the Tax Court may examine witnesses and require, by

subpoena ordered by the Tax Court or any division thereof and signed by the judge, (1) the attendance and testimony of witnesses, and the production of all necessary returns, books, papers, documents, correspondence, and other evidence, from any place in the United States at any designated place of hearing, or (2) the taking of a deposition before any designated individual competent to administer oaths under this title. In the case of a deposition the testimony shall be reduced to writing by the individual taking the deposition or under his direction and shall then be subscribed by the deponent.

(b) COMMISSIONERS.-The Presiding Judge may from time to time. by written order designate an attorney from the legal staff of the court to act as a commissioner in a particular case. The commissioner so designated shall proceed under such rules and regulations as may be promulgated by the court.

SEC. 1115. WITNESS FEES.

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(a) AMOUNT. Any witness summoned or whose deposition is taken under section 1114 shall receive the same fees and mileage as witnesses in courts of the United States.

(b) PAYMENT.-Such fees and mileage and the expenses of taking any such deposition shall be paid as follows:

(1) WITNESSES FOR COMMISSIONER.-In the case of witnesses for the Commissioner, such payments shall be made by the Secretary out of any moneys appropriated for the collection of internal-revenue taxes, and may be made in advance.

(2) OTHER WITNESSES.-In the case of any other witnesses, such payments shall be made, subject to rules prescribed by the Tax Court by the party at whose instance the witness appears or the deposition is taken.

SEC. 1116. HEARINGS.

Notice and opportunity to be heard upon any proceeding instituted before the Tax Court shall be given to the taxpayer and the Commissioner. If an opportunity to be heard upon the proceeding is given before a division of the Tax Court neither the taxpayer nor the Commissioner shall be entitled to notice and opportunity to be heard before the Tax Court upon review, except upon a specific order of the presiding judge. Hearings before the Tax Court and its divisions. shall be open to the public, and the testimony and, if the Tax Court so requires, the argument shall be stenographically reported. The Tax Court is authorized to contract (by renewal of contract or otherwise) for the reporting of such hearings, and in such contract to fix the terms and conditions under which transcripts will be supplied by the contractor to the Tax Court and to other persons and agencies. SEC. 1117. REPORTS AND DECISIONS.

(a) REQUIREMENT.-A report upon any proceeding instituted before the Tax Court and a decision thereon shall be made as quickly as practicable. The decision shall be made by a judge in accordance with the report of the Tax Court, and such decision so made shall, when entered, be the decision of the Tax Court.

(b) INCLUSION OF FINDINGS OF FACT OR OPINIONS IN REPORT.—It shall be the duty of the Tax Court and of each division to include in

its report upon any proceeding its findings of fact or opinion or memorandum opinion. The Tax Court shall report in writing all its findings of fact, opinions and memorandum opinions.

(c) DATE OF DECISION.-A decision of the Tax Court (except a decision dismissing a proceeding for lack of jurisdiction) shall be held to be rendered upon the date that an order specifying the amount of the deficiency is entered in the records of the Tax Court. If the Tax Court dismisses a proceeding for reasons other than lack of jurisdiction and is unable from the record to determine the amount of the deficiency determined by the Commissioner, or if the Tax Court dismisses a proceeding for lack of jurisdiction, an order to that effect shall be entered in the records of the Tax Court, and the decision of the Tax Court shall be held to be rendered upon the date of such entry.

(d) EFFECT OF DECISION DISMISSING PETITION.—If a petition for a redetermination of a deficiency has been filed by the taxpayer, a decision of the Tax Court dismissing the proceeding shall be considered as its decision that the deficiency is the amount determined by the Commissioner. An order specifying such amount shall be entered in the records of the Tax Court unless the Tax Court can not determine such amount from the record in the proceeding, or unless the dismissal is for lack of jurisdiction.

(e) EFFECT OF DECISION THAT TAX IS BARRED BY LIMITATION. If the assessment or collection of any tax is barred by any statute of limitations, the decision of the Tax Court to that effect shall be considered as its decision that there is no deficiency in respect of such tax.

(f) FINDINGS OF FACT AS EVIDENCE.-The findings of the Tax Court made in connection with any decision prior to February 26, 1926 shall, notwithstanding the enactment of the Revenue Act of 1926, 44 Stat. 9, continue to be prima facie evidence of the facts therein stated.

(g) PROCEEDING FRIVOLOUS.-Whenever it appears to the Tax Court that proceedings before it have been instituted by the taxpayer merely for delay, damages in an amount not in excess of $500 shall be awarded to the United States by the Tax Court in its decision. Damages so awarded shall be assessed at the same time as the deficiency and shall be paid upon notice and demand from the collector, and shall be collected as a part of the tax.

(h) CROSS REFERENCES.

(1) For special provisions relating to reports of divisions, see section 1118.

(2) For publication of reports, see section 1121.

SEC. 1118. PROVISIONS OF SPECIAL APPLICATION TO DIVISIONS. (a) HEARINGS, DETERMINATIONS, AND REPORTS.-A division shall hear, and make a determination upon, any proceeding instituted before the Tax Court and any motion in connection therewith, assigned to such division by the presiding judge, and shall make a report of any such determination which constitutes its final disposition of the proceeding.

(b) EFFECT OF ACTION BY A DIVISION.-The report of the division shall become the report of the Tax Court within 30 days after such report by the division, unless within such period the presiding judge

has directed that such report shall be reviewed by the Tax Court. Any preliminary action by a division which does not form the basis for the entry of the final decision shall not be subject to review by the Tax Court except in accordance with such rules as the Tax Court may prescribe. The report of a division shall not be a part of the record in any case in which the presiding judge directs that such report shall be reviewed by the Tax Court.

SEC. 1119. PROVISIONS OF SPECIAL APPLICATION TO TRANSFEREES. (a) BURDEN OF PROOF.-In proceedings before the Tax Court the burden of proof shall be upon the Commissioner to show that a petitioner is liable as a transferee of property of a taxpayer, but not to show that the taxpayer was liable for the tax.

(b) EVIDENCE. Upon application to the Tax Court, a transferee of property of a taxpayer shall be entitled, under rules prescribed by the Tax Court, to a preliminary examination of books, papers, documents, correspondence, and other evidence of the taxpayer or a preceding transferee of the taxpayer's property, if the transferee making the application is a petitioner before the Tax Court for the redetermination of his liability in respect of the tax (including interest, penalties, additional amounts, and additions to the tax provided by law) imposed upon the taxpayer. Upon such application the Tax Court may require by subpoena, ordered by the Tax Court or any division thereof and signed by a judge, the production of all such books, papers, documents, correspondence, and other evidence within the United States the production of which, in the opinion of the Tax Court or division thereof, is necessary to enable the transferee to ascertain the liability of the taxpayer or preceding transferee and will not result in undue hardship to the taxpayer or preceding transferee. Such examination shall be had at such time and place as may be designated in the subpoena.

SEC. 1120. PUBLICITY OF PROCEEDINGS.

All reports of the Tax Court and all evidence received by the Tax Court and its divisions, including a transcript of the stenographic report of the hearings, shall be public records open to the inspection of the public; except that after the decision of the Tax Court in any proceeding has become final the Tax Court may, upon motion of the taxpayer or the Commissioner, permit the withdrawal by the party entitled thereto of originals of books, documents, and records, and of models, diagrams, and other exhibits, introduced in evidence before the Tax Court or any division; or the Tax Court may, on its own motion, make such other disposition thereof as it deems advisable.

SEC. 1121. PUBLICATION OF REPORTS.

The Tax Court shall provide for the publication of its reports at the Government Printing Office in such form and manner as may be best adapted for public information and use, and such authorized publication shall be competent evidence of the reports of the Tax Court therein contained in all courts of the United States and of the several States without any further proof or authentication thereof. Such reports shall be subject to sale in the same manner and upon the same terms as other public documents.

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