Petition of Burson

• Court: Supreme Court of Tennessee
• Citation: 909 S.W.2d 768
• Parties: In re Petition of Charles W. BURSON, Attorney General of Tennessee, and the State Board of Equalization for Determination of Whether Representation of Taxpayers by Registered Appraisers and Other Non-Attorneys (Corporate Employees and CPAs) Before the State and Local Boards of Equalization Constitutes the Practice of Law.
• Decision Date: 11 September 1995

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909 S.W.2d 768 In re Petition of Charles W. BURSON, Attorney General of
Tennessee, and the State Board of Equalization for
Determination of Whether Representation of Taxpayers by
Registered Appraisers and Other Non-Attorneys (Corporate
Employees and CPAs) Before the State and Local Boards of
Equalization Constitutes the Practice of Law. Supreme Court of Tennessee,
at Nashville. Sept. 11, 1995.

ANDERSON, Chief Justice.

The Attorney General and the State Board of Equalization have petitioned this Court for a determination of the constitutionality of Tenn.Code Ann. § 67-5-1514 (1994), which provides that taxpayers contesting the assessment of their real and personal property before boards of equalization may be represented by non-attorney agents. Specifically, the petitioners ask that this Court determine whether the statute violates the separation of powers provisions of the Tennessee Constitution by sanctioning the unauthorized practice of law and thereby infringing upon this Court's inherent authority to regulate the practice of law.

Numerous groups affected by the legislation filed responses to the Attorney General's petition. ¹ After oral argument, this Court determined that the petition could not be resolved solely on the basis of legal issues without an underlying factual foundation. As a result, we appointed Chancellor Robert S. Brandt as Special Master for the purpose of developing a factual record and making findings of fact and conclusions of law.

After an evidentiary hearing, Chancellor Brandt filed a report with this Court, making certain findings of fact and upholding the constitutionality of the statute. Thereafter, parties participating in the hearing before the Special Master were given an opportunity to file briefs in this Court. ² For the reasons articulated below, we adopt and affirm the Special Master's findings of fact. The Special Master's conclusions of law are affirmed as modified.

FACTUAL BACKGROUND

In Tennessee, traditionally, appraisers and other non-attorney agents have appeared before the boards of equalization on behalf of taxpayers. In 1987, however, the Tennessee Attorney General issued two separate opinions ³

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³ that such appearances constitute the unauthorized practice of law.

In an apparent response to those opinions, the General Assembly in 1988 enacted Public Chapter 619, which sanctioned and adopted the traditional practice of non-attorney representation. Taxpayers appearing before boards of equalization to contest the assessment or classification of property by virtue of the 1988 Act codified at Tenn.Code Ann. § 67-5-1514 (1994), ⁴ are now explicitly entitled to be represented by the following non-attorney agents: (1) immediate family members, (2) officers, directors, or employees of a corporation or other artificial entity, or (3) a registered property appraiser who has satisfied certain statutory criteria. Taxpayers may also be represented by certified public accountants if the only issue on appeal is the proper completion of a schedule listing or establishing the value of tangible personal property.

In addition to codifying the traditional practice of non-attorney representation, the 1988 law also establishes a regulatory mechanism which requires that non-attorney agents register with the State Board, and authorizes the Board to institute disciplinary actions.

To implement the regulatory mechanism established by the 1988 law, the State Board of Equalization promulgated rules. Thereafter, those rules were presented to the Attorney General for approval as to legality, as required by law. The Attorney General did not approve the rules, but instead, along with the State Board of Equalization, filed the petition now before us, requesting a determination of the constitutionality of Tenn.Code Ann. § 67-5-1514 (1994). In summary, the petition explained the need for a constitutional determination as follows:

By enacting a statute authorizing non-attorneys to participate in a representative capacity before the state and local boards of equalization, the General Assembly has implicitly determined that such representation does not constitute the practice of law. Therefore, the question instantly presented, according to the petition, is whether the General Assembly is the branch of government empowered by the Constitution and state statutes to make that determination. See Tenn. Const., Art. II, §§ 1 and 2; Tenn. Const., Art. VI, § 1; Tenn.Code Ann. § 23-3-101 (1994); Tenn.Code Ann. §§ 16-3-503 & 504 (1994); and

Tennessee Supreme Court Rules 7, § 1.01; Rule 8, EC 3-5 and Rule 9, § 20.2(e).

Oral argument on the issues raised was held in this Court. Thereafter, we appointed a Special Master, Chancellor Robert S. Brandt, to develop a factual record and requested that findings of fact and conclusions of law be made with regard to the following issues:

(1) The specific acts performed by and the circumstances under which appraisers and other non-attorneys' act, appear and participate' before the State Board of Equalization and county boards of equalization, including all relevant acts prior and subsequent to such hearings;

(2) The legal and factual issues addressed by such non-attorneys as agents for taxpayers in their appearances before said bodies and otherwise; and

(3) The legal and factual issues raised by the petition and responses thereto in the context of proof presented to the master.

After an evidentiary hearing, the Special Master filed a report with this Court, which found, as a matter of fact, that the "services performed by non-attorney agents on behalf of either taxpayers or taxing authorities does (sic) not constitute the practice of law." The Special Master also found that the specific acts performed by attorneys and non-attorney representatives consisted almost exclusively of providing information about property value, and that legal issues are not addressed by taxpayer agents. As a matter of law, the Special Master concluded that the

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General Assembly was acting within its constitutional authority when it adopted Tenn.Code Ann. § 67-5-1514 (1994). A portion of the Special Master's report ⁵ is reproduced below.

SPECIAL MASTER'S REPORT

Part III

THE LEGAL AND FACTUAL ISSUES RAISED

A. Section 1514 does not authorize the practice of law by non-attorneys.

The services performed by non-attorneys on behalf of either taxpayers or taxing authorities does not constitute the practice of law. The Code of Professional Responsibility adopted by the Tennessee Supreme Court provides that "the practice of law relates to the rendition of services for others that call for the professional judgment of a lawyer." Tennessee Supreme Court Rule 8, EC 3-5.

Appraisal appeals are initiated by filing a fill-in-the-blank form with the local board of equalization (Ex. 1 & 2). The only information placed on the form is the identity of the property. No legal training, skill or judgment is required for identifying the property on the form.

The next step is often a conference with the local taxing authority. The taxing authority is represented by the appraiser or a deputy. Appeals often end at this stage because the taxing authority may agree that the information presented on behalf of the taxpayer supports the taxpayer's valuation or because the taxing authority and the taxpayer may agree on a compromise assessment. No legal training, skill or judgment is required to participate in these conferences.

If the case does not end with a conference, a hearing is held before the local board of equalization. The hearings are informal. No rules of procedure or evidence are followed. The hearings are essentially non-adversarial, information gathering sessions.

Very few of the members of the local boards are attorneys. There are no opening statements or closing arguments. There is no direct or cross-examination of witnesses. Information is simply given in narrative form. No legal training, skill or judgment is required to participate in the hearings.

The next step is an appeal to the State Board of Equalization. Taxpayers and taxing authorities can appeal, but appeals by taxing authorities are rare. Once an appeal is requested, the case is assigned to an administrative law judge (ALJ). Hearings before the ALJs [sic] are informal. They do not resemble trials. Information is given in narrative form. Questions may be asked, but not in the form of direct and cross examination. The rules of evidence are not enforced. No legal training, skill, or judgment is required to participate in the ALJ hearings.

A party dissatisfied with an ALJ decision can obtain review by the Assessment Appeals Commission (AAC) of the State Board of Equalization. Requests for review by the AAC are quite informal. The AAC will accept most anything in writing expressing a desire for a review. Fill-in-the-blank forms that contain minimal information about the property are also used (Ex. 9).

Hearings before the AAC are informal. If there is discovery, it usually consists of exchanging papers. Depositions are not taken. Opening statements and closing arguments are not usually made. Most members of the AAC are not attorneys. Much of the information is obtained through questions asked by AAC members. The rules of evidence are not enforced. Information is usually given in narrative form. Questions are asked of people giving information, but it is rarely in the form of direct and cross-examination. No legal training, skill, [or] judgment is required to assist taxpayers or taxing authorities at hearings before the AAC.

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Final review by the State Board of Equalization is discretionary and is seldom granted.

As noted, most of the handful of attorneys who represent taxpayers are also registered agents who appear in that capacity and give information to the board rather than conduct themselves as attorneys.

Little if any of the work done by the Memphis law firm that assists taxpayers...