U.S. Court of Appeals
The first level of appellate courts is the U.S. Court of Appeals, and like the District Court and Court of Federal Claims, the Court of Appeals considers issues in both tax and nontax issues. Generally the Court of Appeals will hear only cases that involve a question of law. Seldom will a circuit court of appeals challenge the trial court's findings as to the facts.
Congress has created thirteen Courts of Appeals; eleven are geographical, in that they are responsible for cases that originate in designated states; one is assigned to Washington D.C.; and one is known as the Court of Appeals for the Federal Circuit. This last court hears tax and other cases that originate only in the Court of Federal Claims. The other Courts of Appeals consider tax and nontax issues brought from the Tax Court or a District Court for an assigned geographic region. The eleven geographical Courts of Appeals are organized into geographical circuits, each of which is assigned a number. Typically a three-judge panel hears a Court of Appeals case. Jury trials are not available in the these courts.
| Circuit | Assigned Jurisdiction |
| First | Maine, Massachusetts, New Hampshire, Puerto Rico, Rhode Island |
| Second | Connecticut, New York, Vermont |
| Third | Delaware, New Jersey, Pennsylvania, Virgin Islands |
| Fourth | Maryland, North Carolina, South Carolina, Virginia, West Virginia |
| Fifth | Canal Zone, Louisiana, Mississippi, Texas |
| Sixth | Kentucky, Michigan, Ohio, Tennessee |
| Seventh | Illinois, Indiana, Wisconsin |
| Eighth | Arkansas, Iowa, Minnesota, Missouri, Nebraska, North Dakota, South Dakota |
| Ninth | Alaska, Arizona, California, Guam, Hawaii, Idaho, Montana, Nevada, Oregon, Washington |
| Tenth | Colorado, Kansas, New Mexico, Oklahoma, Utah, Wyoming |
| Eleventh | Alabama, Florida, Georgia |
| D.C. | Washington D.C. |
| Federal | U.S. Claims Court |
Jurisdiction and Decisions of Appellate Courts:
Decisions by all appellate courts have precedence over trial court decisions. For example, if a Circuit Court has previously ruled on an issue, all the district courts within that circuit must follow that decision in any future cases. The Tax Court will also follow the holdings of a Circuit Court but only for taxpayers residing within the specific geographic jurisdiction of the appellate court. Outside that circuit, the Tax Court may hold differently on exactly the same facts and issues. The Court of Federal Claims is bound to follow only decisions of the U.S. Court of Appeals for the Federal Circuit.
Although trial courts are bound only by the decisions of their own circuit court, they frequently look to other Circuit Court decisions as well as decisions of other trial courts in forming their own opinions. Similarly, each Circuit Court does not need to follow prior decisions of other Circuit Courts but does look to these decisions for guidance.
So, in general, the Court of Appeals decisions most important to a given taxpayer are those issued by the circuit in which they work or live. In addition, Second, Ninth, and Federal Circuit decisions are especially important, because numerous innovative judicial interpretations of the tax law have originated in these circuits, and because their jurisdictions include the two most populous states and the nation's capital.
Locating and Understanding Appellate Court Citations
Court of Appeals decisions are reported in several general and specialized tax publications. All of the decisions of the various Court of Appeals designated for publications are included in West's Federal Reporter, 2d Series, abbreviated F2d. This is considered to be the primary source. Most tax cases from the Courts of Appeals are also published in the United States Tax Cases (USTC) service, published by CCH; and in the American Federal Tax Reports, 2d Series, abbreviated AFTR2d.
Complete citations of decisions rendered by an appellate court (the Courts of Appeals and the Supreme Court) often include a history of the case through the lower courts. In this more elaborate citation, each of the lower-court citations is modified to indicate whether the present case affirmed, reversed, or modified the prior decision.
U.S. Court of Appeals citation
Burns v. US, 284 F2d 436, 61-1 USTC ¶9127, 6 AFTR2d 6036 (6th Cir. 1960), where
Burns is the name of the case
284 is the volume number for the Federal reporter (F2d)
436 is the page number of the volume
61-1 is the volume number of CCH's U.S. Tax Cases (USTC)
¶9127 is the paragraph number in the volume
6 is the volume number of the American Federal Tax Reports (AFTR2d)
6036 is the page number in the volume
6th Cir. is the Appellate Court in which the decision was handed down
1960 is the year in which the decision was handed down