State Bar of Wisconsin

BIENNIAL REPORT OF
THE WISCONSIN TAX APPEALS COMMISSION
FOR THE 1999-2001 BIENNIUM

As required by Wis. Stat. § 15.04(1)(d), this is the report on the operation of the Tax Appeals Commission for the 1999-2001 biennium.

ORGANIZATION

The Tax Appeals Commission is an independent state agency whose organization, powers, duties, and functions are governed by Chapter 73 of the Wisconsin Statutes. As prescribed by Wis. Stat. § 15.03, budgeting, program coordination, and related management functions are performed by the Commission under the general direction and supervision of the Secretary of the Department of Administration.

The Commission consists of three commissioners nominated by the Governor, with the advice and consent of the State Senate, for staggered six-year terms. The commissioners serve on a full-time basis. Every two years, the Governor designates one of the commissioners as Chairperson. As of June 30, 2001, the commissioners and the expiration of their terms of office are as follows:

Commissioner Expiration of term

Mark E. Musolf (Chairperson) March 1, 2003

Don M. Millis March 1, 2005

Thomas M. Boykoff March 1, 2007

(Senate confirmation pending)

The Commission's support staff includes the following four employees in the classified service:

Joseph P. Ziesel Commission Office Management Supervisor

Susan F. Hagen Program Assistant 3 - Computer Operations Manager

(Commission Clerk)

Evie J. Schwartzlow Word Processing Operator 2

Darlene R. Skolaski Secretary

FUNCTIONS

The Tax Appeals Commission is a quasi-judicial state agency whose primary function is to hear and determine disputes between taxpayers and the Wisconsin Departments of Revenue and Transportation. It operates much as the United States Tax Court does on the federal level.

Pursuant to the provisions of Wis. Stat. § 73.01(4), and subject to judicial review, the Tax Appeals Commission is the final authority for the hearing and determination of all questions of fact and law arising in the following areas of taxation: individual income, corporation franchise/income, fiduciary, withholding, gift, sales and use, recycling surcharge, county sales tax, car line, cigarette use, controlled substances, metalliferous minerals occupation, motor fuel and alternative fuel, intoxicating liquor, cigarettes and tobacco products, homestead credit, farmland preservation credit, assessments of manufacturing property, pollution abatement, taxation district appeals regarding the relative value of taxable property in taxation districts of a county, real estate transfer fees, telephone license fees, and electric cooperative association license fees.

Whenever practical, the Commission schedules hearings at locations throughout Wisconsin which are convenient to taxpayers. The majority of hearings are in Madison and Milwaukee. Other hearing locations include Wausau, Waukesha, Appleton, Eau Claire, Green Bay, La Crosse, Fond du Lac, Superior, Oshkosh, Racine, Kenosha, Eagle River, Sparta, Black River Falls, and Ashland.

For the convenience of taxpayers, some hearings are conducted by telephone. This may occur if a taxpayer is handicapped and unable to attend a hearing or lives out-of-state, and is a procedure which obviously saves time and expense for taxpayers and the State. Hearings are usually conducted by one commissioner. Except in Small Claims appeals, decisions are made by a Commission majority after discussion and review of briefs submitted by the parties.

CASE LOAD

A comparison of the number of appeals filed and disposed of in the last five fiscal years is as follows:

Fiscal Year Filed Disposed

2000-01 256 334

1999-00 219 588

1998-99 283 615

1997-98 371 2,165

1996-97 632 1,954

The following table shows the type of appeals filed during the 1999-2001 biennium:

Nature of Appeal FY 1999-00 FY 2000-01

Income & Franchise Tax 133 171

Sales & Use Tax 24 49

Manufacturing Assessments 23 7

Homestead Credit 18 19

Transfer Fee 12 4

Withholding Tax 7 4

Other 2 2

MANAGEMENT OF APPEALS

During the 1999-2001 biennium, the number of appeals pending before the Commission dropped by 28.8%, from 1,554 to 1,107. The most significant factor in this reduction is the resolution of those remaining appeals involving federal retirees. Six years ago, the number of federal retiree appeals was approximately 4,600. Of the 1,107 appeals pending as of June 30, 2001, 797 were federal retiree appeals. The following table reflects by month the number of appeals received by the Commission, the number of appeals disposed of, and the balance of appeals on hand at the end of each month shown:

FISCAL YEAR 1999-2000 FISCAL YEAR 2000-2001

Month Received Disposed Balance Received Disposed Balance

June ('99) 1,554

July 13 29 1,538 26 57 1,154

August 17 27 1,528 26 30 1,150

September 14 17 1,525 24 56 1,118

October 25 20 1,530 35 21 1,132

November 25 14 1,541 21 18 1,135

December 10 21 1,530 24 16 1,143

January 19 7 1,542 26 24 1,145

February 20 22 1,540 13 31 1,127

March 22 20 1,542 14 30 1,111

April 14 15 1,541 18 28 1,101

May 25 234 1,332 17 5 1,113

June 15 162 1,185 12 18 1,107

GOALS AND OBJECTIVES

Appeals filed with the Commission run the continuum from relatively simple, straightforward matters, to matters involving complex legal issues often presenting questions of first impression and voluminous factual records. Anecdotal experience tells us that the Commission's caseload is increasingly dominated by the more complicated appeals. Realizing that different types of appeals require different procedures, the Commission has continued efforts to be flexible in presiding over different types of cases.

With regard to complicated cases, the Commission has implemented procedures such as pretrial mediation conferences to narrow the focus at trial and reduce the number of disputes over tangential factual issues. In addition, the Commission has made an effort to promptly resolve pretrial, non-dispository disputes, such as discovery and evidentiary motions, in order to advance the consideration of the substantive issues.

The Commission seeks to make sure that the complex appeals do not divert the Commission's attention from less complicated, more straightforward appeals. Taxpayers in such cases are entitled to prompt resolution of their appeals. For example, the Commission has changed its procedures to speed the consideration of certain small claims cases.

In response to the budget reductions mandated by the 2001 Wisconsin Act 16, the Commission has not filled a vacancy in the Office Management Supervisor position. The Commission will deal with this reduction in staff by (1) reallocating duties to the three remaining classified service positions and the Commission Chairperson, (2) increasing the automation of certain functions (e.g., calendaring and scheduling), and (3) contracting out for certain services (e.g., the preparation of hearing transcripts). While the budget reductions will present certain challenges, the Commission will continue to provide the taxpayers of the great state of Wisconsin with fair, impartial, and thorough consideration of their tax appeals.

WISCONSIN TAX APPEALS COMMISSION

Don M. Millis, Acting Chairperson