May 30, 2013
Authored by: Kathy Sherby and Stephanie Moll
The U.S. Tax Court recently amended Tax Court Rule 70(c)(4). It now specifically recognizes that the Limitations on Discovery set forth in Tax Court Rule 70(c)(3) does apply to draft reports of any expert witness in a Tax Court case.
Whenever a taxpayer or the government expects to call an expert witness in a Tax Court case, the direct testimony of the expert witness is to be submitted to the Tax Court in written form. This change in Rule 70 now expressly treats the work preliminary to the final report that is filed with the court as having been prepared in anticipation of litigation. Consequently, the drafts of that final report is not subject to discovery.
In addition to this change in Rule 70, the new Rule 70 protects from discovery communication with a non-testifying expert witness, unless the party seeking such discovery can establish “exceptional circumstances” such that it is not practical for the party seeking the discovery to obtain such information.
Further, Rule 70 now protects from discovery communication between a party’s counsel and the testifying expert, except to the extent the communications deal with (1) the expert’s compensation, (2) the facts and data provided by counsel that the expert used to form his opinion, and (3) assumptions provided by counsel that the expert relied on in forming his opinion.
It will be important to keep these new rules in mind when dealing with the expert witness.