And then what happened?
on Jun 10, 2005 at 8:05 pm
Sometimes it’s fascinating to hear what happened on remand from the Supreme Court. The most interesting recent example has to be Ballard v. Commissioner (No. 03-184, decided Mar. 7, 2005), in which the Court held (7-2) that the Tax Court must disclose reports submitted by special trial judges.
The report in this case had not been disclosed to the taxpayers, but the tax court judge had issued a decision against the taxpayers stating that it was adopting the special trial judge’s ruling, which it purported to reproduce. The taxpayers got a leak that, in fact, the special trial judge’s ruling had been very different, and much more favorable to them. The Supreme Court apparently smelled something fishy, granted cert. in the absence of a circuit conflict, and reversed.
On remand, the Eleventh Circuit ordered the report released and it turns out the taxpayers were entirely right — the original special trial judge’s ruling was overwhelmingly favorable to the taxpayers. Among other things, the special trial judge (who heard the witnesses) reached opposite credibility findings to those later made by the tax judge (who didn’t). This has proved to be a huge embarassment to the Tax Court, and especially the particular tax judge in question. For those already steeped in the allegations in the case (which are something of a cause celebre in the tax bar) here is an excerpt from the actual original report, and the key pages are 72-85.
