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The Supreme Court seemed disturbed Tuesday by the secrecy faced by Americans who take tax disputes to the U.S. Tax Court. The justices are considering whether the tax court withholds important information, making it hard for taxpayers who lose to challenge decisions. Taxpayers fighting with the Internal Revenue Service may use traditional courts if they pay the IRS first, then sue to recover the money. The U.S. Tax Court is available to people who want to contest IRS findings before paying any cash. The president names the 19 members. While the official opinions of the court are made public, people are not allowed to see recommendations by specially appointed judges who hold trials in cases involving more than $50,000 and write detailed reports. The attorney for taxpayers challenging the system, Stephen Shapiro of Chicago, said the reports were released for 40 years until the Tax Court changed the rules in 1983. Justice Ruth Bader Ginsburg told a Bush administration lawyer that it appears people are being deceived by the behind-the-scenes work. “I don’t think it’s deceitful,” responded Thomas Hungar, deputy solicitor general. “Misleading,” she said. Justice Sandra Day O’Connor told Hungar: “It’s such a strange procedure. … Wouldn’t you like to see (a report) if it went against you?” Hungar said the Tax Court decided it was more efficient to withhold the reports. Justices heard a pair of appeals that stem from accusations that a real estate executive, Claude Ballard, and a prominent, now-deceased tax attorney with ties to Hollywood, Burton Kanter, were part of a kickback scheme. The IRS sought $30 million in back taxes and penalties. A special trial judge held a five-week trial, then spent four years preparing a confidential report for the Tax Court. The court found the men guilty of tax fraud, though their attorneys claim the trial judge had initially recommended against that and may have been pressured to change the recommendation. Scott Nelson, an attorney with the consumer organization Public Citizen Litigation Group, said the system hides disagreements within the court and makes it difficult for appeals courts to hold the Tax Court accountable. The Supreme Court could rule that the law requires that the reports be made public. Or justices could decide that taxpayers must be given the reports under their Fifth Amendment right not to be “deprived of life, liberty or property without due process of law.” A broad constitutional ruling could affect the inner workings of other courts and judicial boards — and seemed unlikely from a court that does some of its work in secret too. “I don’t see the implications. So I’m nervous,” Justice Stephen Breyer said. O’Connor raised concerns about the privacy of law clerks’ memos to judges. The nine Supreme Court justices all have law clerks, who do research and often help draft opinions. All that material is private. The cases are Estate of Burton W. Kanter v. Commissioner of Internal Revenue, 03-1034, and Ballard v. Commissioner of Internal Revenue, 03-184. Copyright 2004 Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.

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