Tuesday, May 11, 2004
David Case has published The Tax Court as a Conscientious Objector in Daubert’s War Against Bad Science. Here is part of the Conclusion:
Ten years after Daubert, the Tax Court has not explored the evidentiary and substantive effects of the Supreme Court’s direction that courts must inquire into the logic employed by proposed expert witnesses. Although this has the practical effect of keeping the Tax Court’s decisions relatively well-insulated from disturbance on appeal, it does little to develop any judicial scrutiny of scientific methodologies, and may actually allow relatively flawed methodologies to convince the Service of the veracity of its position or of a taxpayer’s position.
There may be reasons for shunning Daubert analysis and summary judgment at the Tax Court. However, each of these rationales seems to rely on purely ceremonial or symbolic grounds….[T]o spare both the Service and the taxpayer the indignity of a futile trial, and taxpayers as a whole the injustice of taxes calculated by bad science, the Tax Court should pre-screen scientific expert testimony and, if necessary, grant summary judgment if the testimony fails Daubert’s standards for admissibility.
2 responses to “Case on Bad Science in the Tax Court”
How much “science” does the Tax Court actually deal with? Are we talking about appraisers? I believe those folks are artists as much as scientists. And in any event, I believe the Tax Court has written a number of thoughtful Daubert analyses of valuation experts.
The Tax Court has written various analysis of valuation experts, but it has never undertaken the serious Daubert-style analysis of an appraiser that would be required to either present the testimony in a jury in a District court of survive a MSJ anywhere else. Instead, the Court has combined the credibility of the witnesses (and their reports) with a complete analysis of the proffered theory.
Obviously appraisers are probably the most common experts at the tax court. However, the court, in my experience (going from memory here), has dealt with the testimony of psychologists, veterinarians, polygraph-analysis, medical doctors, “industry experts” (people saying “this is how we do it in X industry”), computer programmers, meteorologists, antique dealers (not to set value, but to determine the age of an item), policemen who were offered to show state of mind of a taxpayer, ink-analysis, hand-writing analysis, etc. I also know that one person, at appeals, has offered to produce a ballistics expert to show that two documents were stapled together at a certain time. However, I don’t think that one went to trial.