Charles “Chuck” Beaudrot Jr., a 30-year tax law partner at Morris Manning & Martin, will become the state’s first administrative law judge for the new Georgia Tax Tribunal on Jan. 2.
The tribunal, created by the passage of House Bill 100 during the last session of the Georgia General Assembly, replaces the current process, in which taxpayers disputing their bill must take their cases first to the state Department of Revenue and then can appeal to the Office of State Administrative Hearings or superior court.
Under the new process, taxpayers can take their cases directly to the tribunal, although they still have the option to take them to superior court. Taxpayers may also appeal the tribunal decision in superior court, but “the difference is in it’s an appeal on the record not on the facts,” said Beaudrot.
Beaudrot said he envisions modeling the new court’s rules after the United States Tax Court system.
“Everyone I’ve talked to who was involved in the legislation and in the Governor’s office envisages this acting very much like the U.S. Tax Court, which is to say it is going to be prompt,” said Beaudrot, who will be in charge of the court’s operations and administration.
“In the U.S. Tax Court, you get on the docket and you’re up for trial in six months. The goal is to make sure that cases don’t linger, that they move forward, that they are brought to conclusion,” he added. “In the U.S. Tax Court, you’ve got a judgment within 18 months to two years, that’s from docketing to final resolution. I would expect for that to be the same if not, hopefully, quicker.”
One way Beaudrot said he anticipates moving cases forward is by mandating discovery conferences and urging both sides to produce a stipulated set of facts in the case as quickly as possible.
“In the vast majority of tax cases, facts really aren’t in dispute,” Beaudrot said. “Most of the time you can make a decision [because] the question is not what the facts are but the application of the law to the facts. And in that sense it’s a lot more like appellate work.”
While some taxpayers may have preferred appealing disputes to superior courts, the Tax Tribunal aims to bring more certainty to the tax resolution process, Beaudrot said.
“Historically, there’s probably been a little bit of home cooking. If you’re a big taxpayer in Floyd County, you might want to have your case heard in Floyd Superior [Court] because you may get a little more sympathy. On the other hand, you’ve got to get in line behind the speedy trial cases and you may be in front of a judge who hasn’t had to deal with a tax case before.”
The tax court also will be less costly than the current dispute resolution process, Beaudrot said. Currently, taxpayers who choose to appeal to superior court must either pay the tax and sue for a refund or post a surety bond covering the entire amount at issue, including penalty and interest. There is no such requirement by the Tax Tribunal, he said.
“A lot of times there are small cases, I’m talking $10,000 to $15,000. … You can’t afford to litigate it because it’s not worth it,” he said. “A $10,000 issue today is not realistic to go to the revenue department and then to the superior court.”
HB 100 also created a small claims division in which a taxpayer will be represented by accountants rather than attorneys.
Beaudrot said neither he nor other officials have any estimate of how many taxpayer dispute cases the new tribunal is likely to handle. Initially the operation will be small, with Beaudrot as the sole judge and a start-up budget for the remainder of the fiscal year of about $300,000. His staff will consist of a full-time assistant, and he’ll have support from staff attorneys from the Office of State Administrative Hearings.
“We anticipate hiring a clerk as soon as the docket justifies it,” Beaudrot said. As the tribunal grows additional judges may be added, he said.
According to HB 100, “each tribunal judge shall receive an annual salary no less than that of the chief administrative law judge of the Office of State Administrative Hearings.” Beaudrot estimated his salary will be about $143,000 a year, a sum he acknowledged is a pay cut. The Daily Report‘s latest survey of law firm finances said that average profits per equity partner at Morris Manning was $860,000 in 2011.
Before there can be a pipeline for resolving disputes with the state Department of Revenue, Beaudrot has to take care of the details.
“There are a zillion things that need to get done,” said Beaudrot, who will wrap up his practice at the Buckhead firm at the end of the month. “For instance—this is the kind of minutiae you have to think about—we have to have a seal. So what did I do? I looked up seals for the other courts.”
The Tax Tribunal’s seal will likely be similar to the state Supreme Court’s, which bears the arches representing wisdom, justice and moderation.
“Originality in the law should be avoided at all costs,” Beaudrot said, laughing.
In addition to acquiring stationery, door signs and a robe, Beaudrot will have to create a filing fee structure and start building his docket.
At least for the first few months of its operation, the tribunal will be headquartered at 230 Peachtree Street in Atlanta, where the Office of State Administration Hearings is housed. There is the possibility that later on Beaudrot may travel to other parts of the state to hear cases.
Beaudrot, 61, earned his bachelor’s degree in history Duke University and his law degree from Harvard University. He was admitted to the State Bar of Georgia in 1976 and worked as an associate with what was then Kilpatrick, Cody, Rogers, McClatchey & Regenstein before joining Morris Manning three decades ago.
While Beaudrot graduated law school with aspirations of being Perry Mason, he was drafted into working on tax law issues and became enraptured.
“Tax law is analytical and intellectual, and it’s fascinating what comes up,” he said.
Beaudrot is a frequent speaker on tax topics for many professional organizations, such as the Georgia Society of Certified Public Accountants, the Institute for Continuing Legal Education in Georgia and the Georgia Real Estate Tax Conference. He also is an adjunct professor at Emory University Law School’s Center for Transactional Law and Practice program.
“I think I’ve probably done darn near everything a tax lawyer can do,” he said.
In November, Governor Nathan Deal chose Beaudrot over two other candidates suggested by his Judicial Nominating Commission, Saylor Law Firm tax partner Julian Fortuna and Frank O’Connell, director of the Georgia Department of Revenue Office of Tax Policy. Beaudrot will serve a four-year term, after which he may be reappointed.
Beaudrot’s profile at Morris Manning states his practice areas include corporate and partnership tax, transactional tax planning, state and local tax planning and tax controversy work. He is also a partner in the firm’s Real Estate Capital Markets practice and advises clients on tax issues related to partnerships and investment trusts.
While his experience is representing businesses and taxpayers, Beaudrot said he also has a good relationship with the state revenue department and will approach the judgeship from a balanced perspective. He also noted that the revenue department was involved in vetting the legislation that created the tribunal.
“Everyone likes to deal with people who understand the issues, so when they make a decision it’s a good crisp, well-reasoned decision,” Beaudrot said.
Beaudrot said his long-term goal for the court is the establish better legal guidance for resolving tax disputes.
“In Georgia, there is a lot of lore and there is a lot of, kind of, practice, but there’s relatively sparse authority,” he said. “I think one of the thoughts here is that this court is actually going to generate a body of consistent, articulated guidance on issues.”
That’s why Beaudrot said his mantra for being administrative law judge over the tribunal is: focused, precise, narrow.
“You must be aware that what you do may have impacts that you’re not anticipating,” he said. “You don’t want to create problems where problems don’t exist currently.”