Tax Court trials are often short. One reason is the stipulation process. By the time a case is tried, the parties have usually agreed in writing on most of the facts and documents, leaving the judge to hear testimony only on what is genuinely disputed.
That is not a courtesy. It is a requirement, and the Court enforces it.
The stipulation requirement
Tax Court Rule 91(a)(1) requires the parties to stipulate, to the fullest extent to which complete or qualified agreement can or fairly should be reached, all matters not privileged that are relevant to the case. That includes facts, opinions, and the application of law to fact. It specifically includes all facts, all documents and their contents, and all evidence that fairly should not be in dispute.
Two features of the rule surprise people:
- A party may note an objection on grounds of materiality or relevance, but that is not just cause for refusing to stipulate to undisputed facts.
- The duty applies regardless of who bears the burden of proof. You may have to stipulate facts that help the IRS, and the IRS may have to stipulate facts that help you.
Rule 91(a)(2) adds that discovery and admissions are aids to stipulation. Matters obtained through those tools should be set out comprehensively in the stipulation, not left scattered in discovery responses.
What a stipulation looks like
Rule 91(b) sets the form. The stipulation must be in writing and signed by the parties or their counsel. Separate items go in separate numbered or lettered paragraphs. Documents the parties intend to place before the Court must be attached to or filed with the stipulation.
Exhibits are numbered serially and labeled by source: "P" for petitioner, "R" for respondent, and "J" for joint. So 1-J is a joint exhibit, 2-P is offered by the petitioner, and 3-R is offered by the respondent. A first stipulation is usually titled "First Stipulation of Facts," and later ones follow in sequence.
Rule 91(c) says executed stipulations and exhibits must be filed at or before the start of trial unless the Court orders otherwise. A filed stipulation does not need to be formally offered to be considered in evidence.
Objections inside a stipulation
You can stipulate that a document is authentic and what it says while still objecting to its relevance or admissibility. Rule 91(d) says objections should be noted in the stipulation, though the Court will consider objections made at the start of trial or, for good cause, during trial. A typical paragraph might read: "Attached as Exhibit 5-R is a true copy of a letter dated June 3. Petitioner objects to Exhibit 5-R on the ground of relevance."
That approach keeps the stipulation moving without forcing either side to give up legitimate evidentiary objections.
Stipulations are binding
Rule 91(e) says a stipulation is treated, to the extent of its terms, as a conclusive admission by the parties. The Court will not allow a party to qualify, change, or contradict a stipulation except where justice requires. Stipulations are binding only in the pending case and cannot be used against the parties in another case or proceeding.
Here's the part most people miss: because stipulations are binding, wording matters. "Petitioner paid $12,000 to ABC Contracting in 2023" is a different stipulation from "Petitioner paid $12,000 to ABC Contracting in 2023 for repairs to the rental property." The second one concedes the purpose. Draft and review every sentence as if it will be quoted in the opinion, because it may be.
When the other side will not stipulate: Rule 91(f)
If a party refuses or fails to confer about a stipulation, or refuses to stipulate to matters within the rule, the party proposing the stipulation may file a motion to compel under Rule 91(f). The motion must be filed after the notice setting the case for trial is served and no later than 45 days before the call of the case from a trial calendar. It must:
- Identify each matter with particularity in separately numbered paragraphs.
- Set out the exact proposed stipulation for each matter and attach or make available the documents.
- State the sources, reasons, and basis for claiming each matter should be stipulated.
- Show that the other side had reasonable access to those sources and was told the reasons.
The Court then issues an order to show cause. The responding party has 20 days to file a response explaining why the matters should not be deemed admitted. Under Rule 91(f)(3), if no response is filed, or the response is evasive or not fairly directed to the proposal, the matter is deemed stipulated.
Both sides use this. Taxpayers who ignore stipulation requests from IRS counsel can find their case's key facts deemed stipulated against them. Taxpayers can use it, too, when the IRS refuses to stipulate to plainly authentic records.
Stipulations and settlement
The stipulation process is also a settlement tool. As the parties work through which facts are agreed, the real disputes become visible. An issue that looked contested in the pleadings often turns out to depend on a single document or a single question of law. Once that is clear, settlement on the remaining issues usually follows.
For that reason, many experienced Tax Court practitioners treat the first stipulation meeting with IRS counsel as a settlement meeting. Bring the documents, bring the computation, and be prepared to discuss which issues are worth trying.
The limits of a stipulation
A stipulation establishes what it says. It does not prove what it does not say. Rule 149(b) makes the point directly: the filing of a stipulation does not relieve the party with the burden of proof of the need to produce evidence on facts not adequately established by it. If your case depends on the purpose of a payment, and the stipulation only establishes the payment, you still need testimony or documents on purpose. See burden of proof at trial.
Building a stipulation that helps you
- Start early. Begin drafting after the Branerton exchange, not the week before trial.
- Propose the first draft. The party who drafts frames the facts. Offer to prepare it.
- Organize chronologically or by issue. Make it easy for the judge to follow your theory.
- Stipulate authenticity broadly. Bank statements, returns, contracts. Fighting about authenticity of real records wastes credibility.
- Preserve objections in writing. Note them in the stipulation instead of refusing to sign.
- Read the final version word by word. Every sentence is an admission.
Small cases too
The stipulation requirement applies in small tax cases as well. Even with relaxed evidence rules, a good stipulation can reduce an S case trial to a short conversation about the one or two facts that matter.
Let's talk
A stipulation is where most Tax Court cases are actually won or lost on the facts. If IRS counsel has sent you a draft, call (813) 229-7100 before you sign it. Let's talk.