Kenneth W. Guenther and Marva Guenther v. Commissioner of Internal Revenue

We must decide whether ex parte submission of a memorandum by Commissioner’s counsel prior to trial in the tax court sufficiently prejudiced the trial judge’s disposition of the case to entitle taxpayers to a new trial before a different judge.

I

Taxpayers Kenneth and Marva Guen-ther, then married, filed joint federal income tax returns for 1978 and 1979. The Internal Revenue Service audited the returns, uncovered alleged errors, and issued a notice of deficiency. The Guenthers filed a petition with the United States Tax Court seeking redetermination. Their matter was scheduled for trial in Portland on the week of June 10, 1986, before (now Chief) Judge Arthur L. Nims III.

On March 13, 1986, the tax court’s clerk issued a letter to the parties for the June 10 Portland trial session which included the following instructions:

Pursuant to this letter, each party prepared a trial memorandum and mailed it to Judge Nims on May 30, 1986. Only the Guen-thers, however, forwarded a copy of their memorandum to opposing counsel. The Commissioner did not provide the Guen-thers with its memorandum, apparently for two reasons:

(1) Commissioner’s counsel understood the tax court’s practice…