Supreme Court Requires Tax Court to Include Trial Judges' Reports on Appeal

The Supreme Court ruled in a 7-2 decision that the Tax Court may not exclude from the record on appeal Rule 183(b) reports submitted by special trial judges. The Tax Court's chief judge appoints special trial judges to hear certain cases, but the ultimate decision, when tax deficiencies are greater than $50,000, is reserved for the court itself. Tax Court Rule 183(b) directs the special trial judge to submit a report to the chief judge, who assigns the case to a judge of the court. The Tax Court judge is to give due regard to the report and presume fact-findings contained in the report to be correct. The Tax Court judge may then adopt the report "or may modify it or reject it in whole or in part." After a rule revision in 1983, the reports were no longer included in the record or made public. The taxpayers in the case before the Supreme Court had failed in Tax Court, and believed that the decision -- which said that it agreed with and adopted the opinion of the special trial judge -- did not, in fact, comport with the report of the special trial judge. The appeals court ruled against the taxpayers, holding that the report is protected as part of the court's confidential deliberative process. The Supreme Court reversed, finding that the practice of not disclosing the special trial judge's original report "impedes fully informed appellate review," and ignores the principle that the officer who hears witnesses and sifts through evidence "will have a comprehensive view of the case that cannot be conveyed full-strength by a paper record."