Massachusetts Tax Court Plan Seeks to Reduce Costs, Improve Ease

The Massachusetts Appellate Tax Board, a statewide court for tax appeals, published proposed rules on April 20, 2023, aiming to increase transparency of tax appeals and encourage parties to narrow the contested issues so they can settle or streamline court proceedings.

The ATB will accept public comments through June 4, 2023, and intends to hold public hearings. While the rules as published aren’t final, they present a large step forward for Massachusetts taxpayers and their counsel. A deeper dive reveals that they make ATB litigation much easier and less costly for taxpayers.

Representation in Tax Court

Under the new rules, all parties appearing before the ATB must be represented by a Massachusetts-licensed attorney, or represent themselves. When an ATB pro se litigant is an organization, those who can represent it now include partners of a partnership, officers of a corporation, members of an LLC, and board members of any municipal board. Attorneys not licensed in the commonwealth may appear pro hac vice, if a Massachusetts-licensed attorney acts as their co-counsel in the proceeding.

While the ATB has allowed valuation experts, CPAs, and other consultants to represent litigants, the new rules bring the ATB in line with other Massachusetts courts. This change is likely to create an environment where taxpayers appearing pro se are less procedurally outmatched than they were when facing off against lifelong valuation experts litigating on behalf of the taxing authority.

Additionally, by limiting attorney representation to Massachusetts-licensed attorneys, it’s also more likely that legal costs would be reduced due to the attorneys’ familiarity with local procedures for discovery and motion practice.

Simplified Filing Processes

The new rules also soften the more archaic formalities of law practice by codifying explicit requirements for preparing and filing court pleadings. They also incorporate several examples of statutory forms for petitions. Though attorneys who frequent the ATB have cultivated their preferred forms for pleadings, these were largely unavailable to pro se litigants. This update would allow pro se taxpayers who can’t afford an attorney to access the court.

Moreover, the new rules encourage filing of pleadings by email, other than petitions. Many courts have encouraged electronic filings during the Covid-19 lockdowns and after. This update would codify electronic filing procedures that are much easier to satisfy.

The new rules also allow taxpayers greater freedom in using private delivery services such as FedEx and UPS, without losing protection of the “postmark rule,” which is only available for filings sent through the US Postal Service under the current rules. Typically, a filing is treated as having been timely filed if received on or before the deadline. The postmark rule allows a filing received after the deadline to be treated as timely filed if it’s eventually received and the postmark on the envelope is a date on or before the deadline.

Taken together, these changes would make it easier for taxpayers to prepare and file their own appeal. Giving pro se taxpayers flexibility to use the most convenient delivery service for commencing an appeal and familiarizing taxpayers with e-filing procedures for court filings would take away some of the mystique that has historically come with tax appeals in Massachusetts.

Settlement and Alternative Dispute Resolution

The new rules have incorporated several new requirements for parties to confer and attempt to settle. Historically, parties could settle ATB cases informally or stipulate facts that were no longer in dispute. However, settlement discussions and stipulation of facts were never a formal requirement. The new rules would codify status conference procedures, the ATB’s mediation program (established under the authority of General Law Chapter 58A, Section 8a), and agreed statements of fact.

Discovery is often one of the biggest obstacles for pro se taxpayers, as they usually don’t have the required expertise to know what information is important for their appeal or for the taxing authority’s defense. The new rules require parties to meet and confer in a pre-motion conference before filing discovery motions. Though the permissible scope discovery at the ATB is already more limited than in other Massachusetts courts, forcing a meeting before filing motions may help parties and their attorneys further limit the scope of discovery to only the issues material to the appeal.

Status conferences are used as an opportunity for parties to meet with an ATB commissioner and discuss open issues, outstanding discovery requests, and the current status of settlement discussions. The ATB’s mediation program is a court-supervised mediation that any party may request, but which would only occur if both parties agree to participate. Both types of meetings are used to help resolve appeals without requiring a full hearing. By participating in these discussions, taxpayers could familiarize themselves with court procedures and, hopefully, settle on favorable terms.

Additionally, though it’s common to have stipulations and other agreed statements of facts to narrow the open issues for litigation, the new rules would require that parties agree by stipulation, to the fullest extent possible, to all matters relevant to the appeal. Though not required, taxpayers would be wise to have attorney assistance in drafting a stipulation.

Collectively, these changes would allow the parties to narrow the issues under dispute, settle based on the outstanding issues under dispute, and streamline the hearings for cases that don’t settle.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.

Author Information

Keith E. Phillis is a partner in DarrowEverett’s tax, private wealth services, and energy and natural resources practice groups. He represents a wide range of clients, from individuals to large public and private business entities.