Writing Bar Exam Answers
UNITED STATES TAX COURT
Rule 200(a)(3), Tax Court Rules of Practice and Procedure. Additionally, a nonattorney applicant must satisfy the Court, by means of a written examination given by the Court, that the applicant possesses the requisite qualifications to provide competent representation before the Court.
Reprinted courtesy of the U.S. Tax Court
The following is an internal memorandum exchanged between members of the Teaching Faculty at the Tax Law Institute. It is reprinted here to benefit all bar applicants who will sit for the 2021 Nonattorney Examination, whether they are enrolled in the Tax Law Institute Tax Bar Review, participating in another program or simply engaged in self-study. Hopefully this writing might help some re-focus their thinking in regards to how they are going about preparing for the Nonattorney Exam.
SUBSTANTIVE TAX LAW (40%)
Over the years Michael Stuart and I have come to the conclusion that as the applicants prepare for the Tax Court bar examination that they have one key misunderstanding of the purpose of the examination. It seems that they approach the examination as though three of the four parts are oriented towards the legal profession but that the fourth part, the taxation portion, is oriented towards tax preparation. I have been unsuccessful in the past in communicating to them that the examination, all four parts, is oriented toward the legal profession. Everyone who has come through the program has either been an enrolled agent or a CPA or both. Because they come to the program with an extensive background in tax preparation and possibly audit representation they think they have an understanding of what it takes to pass the examination and therefore focus all of their effort on the other three parts. It is my hope that you will be highly successful in helping them understand that they need to answer the questions on the tax portion of the exam from a legal perspective, not from simply a tax preparation perspective.
Every examination cycle there have been anywhere from 1 to 3 questions on the exam that come directly from opinions issued by the Tax Court. If the student has not read the cases that the questions draw upon then they will be totally unprepared to write an answer for that question. Since the timeframe between examinations is two years, typically the questions drawn from Tax Court opinions that are issued between July 1 of the year prior to the exam year through 30 September of the exam year. For the current examination cycle this would be July 1, 2018 through September 30, 2020. In addition to this memorandum I have attached to the email message a zip file of all Tax Court Opinions from 1 July 2018 through 24 April 2020. Of those opinions there are five cases which are “First Impression” issues. Between now and the end of September there may be others.
It is my personal opinion that there are several reasons why the applicant should be encouraged to read, study and understand Tax Court Opinions aside from the fact that one or more test questions will be drawn from this material. As the only legal training that the majority of the applicants have comes from the lectures and material presented to them by TLI, the more they are exposed to the legal reasoning of the Tax Court judges the greater the probability that their thinking and reasoning process will be influenced by what they are reading, studying and attempting to master. For this reason, I also believe that encouraging the applicants to read the Memorandum opinions is beneficial. Encouraging the applicants to read and understand the legal reasoning behind the decisions should help to shape and mold their reasoning and thinking process to transition from thinking like a tax preparer to thinking like that of a USTCP.
The person grading the tax portion of the examination doesn’t want the applicant to prove that they know how to prepare taxes but rather they are looking for the applicant to tell them that they understand the legal ramifications of a position taken on the tax return and how they are prepared to defend that position from a legal and regulatory standpoint.
It is my intention during the time period that I have been allotted to provide the student with an understanding of the physical demands of the examination. Having to hand write their answers for a period of four hours presents a physical challenge that many people are not up to because, in this day and age of keyboarding everything, that use of pen and paper is becoming a lost art and therefore, without practice in preparation, they will be physically unprepared for the task.
Through the use of several select examples I will attempt to help them grasp the difference between a mindset of tax preparation and a mindset required for legal reasoning and analysis. A basic question that always seems to work effectively relates to unreimbursed employee business expenses. “Prior to Congress enacting the Tax Cut and Jobs Act, what is the legal rationale behind allowing an employee to deduct unreimbursed employee business expenses?” See IRC Sec 162 for additional info.
April 25, 2020
Reprinted courtesy of James H. Chapman ©Copyright 2020, Tax Law Institute. All rights Reserved