Rule 295. Small Tax Case Procedure in Actions for Redetermination of Employment Status

(a) Small Tax Case Under Code Section 7436(c) Defined: The term "small tax case under Code Section 7436(c)" for purposes of this Title means a case in which:

(1) The amount of employment taxes placed in dispute is $50,000 or less for each calendar quarter involved;

(2) The petitioner has made a request in accordance with paragraph (b) of this Rule to have the proceedings conducted under Code Section 7436(c); and

(3) The Court has not issued an order in accordance with paragraph (c) of this Rule, discontinuing the proceedings in the case under Code Section 7436(c).

(b) Election of Small Tax Case Procedure in Actions for Redetermination of Employment Status: With respect to classification of a case as a small tax case under Code Section 7436(c), the following shall apply:

(1) A petitioner who wishes to have the proceedings in the case conducted under Code Section 7436(c) may so request at the time the petition is filed. See subparagraph (d)(1) of this Rule.

(2) A petitioner may, at any time after the petition is filed and before trial, request that the proceedings be conducted under Code Section 7436(c). Such request shall contain a statement that the amount of employment taxes placed in dispute is $50,000 or less for each calendar quarter involved.

(3) If such request is made in accordance with the provisions of this paragraph, then the case will be docketed as a small tax case under Code Section 7436(c). The Court, on its own motion or on the motion of a party to the case, may, at any time before the trial commences, issue an order directing that the small tax case designation shall be removed and that the proceedings shall not be conducted as a small tax case under Code Section 7436(c). If no such order is issued, then the petitioner will be considered to have exercised the petitioner's option and the Court shall be deemed to have concurred therein, in accordance with Code Section 7436(c), at the commencement of the trial.

(c) Discontinuance of Proceedings: After the commencement of a trial of a small tax case under Code Section 7436(c), but before the decision in the case becomes final, the Court may order that the proceedings be discontinued under Code Section 7436(c), and that the case be tried under the Rules of Practice other than those applicable to small tax cases under Code Section 7436(c), but such order will be issued only if:

(1) there are reasonable grounds for believing that the amount of employment taxes placed in dispute will exceed $50,000 for each calendar quarter involved; and

(2) The Court finds that justice requires the discontinuance of the proceedings under Code Section 7436(c), taking into consideration the convenience and expenses for both parties that would result from the order.

(d) Pleadings in Small Tax Case Under Code Section 7436(c): (1) Petition: A petition in a small tax case under Code Section 7436(c) shall be commenced in accordance with and shall contain the information required by Rule 291. In addition, such petition shall contain the following:

(A) A request that the proceedings be conducted under Code Section 7436(c); and

(B) A statement that the amount of employment taxes placed in dispute is $50,000 or less for each calendar quarter involved.

(2) Other Pleadings: For provisions relating to the filing of other pleadings, see Rule 175(b) and (c).

(e) Applicable Small Tax Case Rules of Title XVII: Proceedings in a small tax case under Code Section 7436(c) shall be governed by the provisions of the following Small Tax Case Rules of Title XVII (see Rule 170) with respect to the matters to which they apply: Rule 174 (representation); Rule 176 (preliminary hearing); Rule 177 (trial); Rule 178 (transcript of proceedings); and Rule 179 (number of copies of papers).

Effective Date of Amendment

Amendment increasing dollar amount from $10,000 to $50,000 throughout Rule is effective with respect to proceedings commenced after July 22, 1998.