Government Transparency: Commissioner of Revenue to be Bound by Tax Court Decisions

On April 2, 2024, Senate File (SF) 4742, as a companion to House File (HF) 4934, was subject to a hearing before the Minnesota House of Representatives. HF 4934, like SF 4725, would amend Minnesota Statutes 2022, sections 270C.07, subdivision 1 and 270.33, to ensure that the Commissioner of Revenue (Commissioner) is bound by Minnesota Tax Court (Tax Court) decisions in situations where the Commissioner opts not to submit the statutorily allowed appeal to the Minnesota Supreme Court. HF 4934 is designed to make clear that the judgements of the Tax Court have precedent that applies to all parties in any litigation before the Tax Court, including the Commissioner. There would be no opportunity for the Commissioner to ignore Tax Court decisions and arbitrarily enforce alternative interpretations of the law.

One of Wagner Tax Law’s attorneys, Ben Wagner, once again had the opportunity to testify regarding the merits of HF 4934. He provided that testimony alongside Mr. Geno Fragnito, Minnesota Society of CPAs, and Ms. Masha Yevzelman, Fredrikson & Byron. Ben’s testimony can be seen below:

It’s true that taxes can be hard, and if the law is uncertain, it becomes difficult to navigate that inherent complexity, which makes it important for all parties to have a clear understanding of what the law is. Taxpayers often rely on Tax Court rulings when considering what position to take on their tax returns. As a result, the Commissioner’s decision to ignore Tax Court decisions created significant confusion and ultimately resulted in two different systems of taxation. One system where taxpayers of means could fight the Commissioner’s arbitrary position and another system where those taxpayers with less means are just forced to accept that erroneous position. Consistent and transparent application of the law is required to ensure that taxpayers are able to comply with those laws. HF 4934 is designed to provide transparency and further clarity to the statues and it would impose some needed accountability on the Commissioner, ensuring a more functional taxing authority moving forward. As Ben noted during his testimony, “This is the government. Do better.”