The U.S. Tax Court is a powerful but obscure institution that has been opening itself up to the public, but only very slowly, and it still lags behind other courts on access.

The court hears cases that range from warring spouses to high-stakes challenges by major corporations to the practices of the tax-collecting U.S. Internal Revenue Service.

One case that could be decided any day, for instance, is a dispute involving Medtronic Inc and nearly $1 billion in taxes the IRS says the medical devices maker owes in relation to its Puerto Rican subsidiary.

Another soon-to-be-decided case puts more than $350 million at stake in a fight between PepsiCo Inc and the IRS over how the beverages company financed a 1996 reorganization.

Set up in 1924, the Tax Court makes decisions that shape U.S. tax law and guide corporate America. Yet its steady flow of legal filings is harder to access than filings at other courts.

The Tax Court's orders and opinions are readily available online, but documents filed as part of its proceedings are not. Seeing these filings requires either a trip to the court to search its sole public computer or a request in writing.

By contrast, proceedings of district, appellate and bankruptcy courts are on the Web through the widely used, paid site known as PACER, or Public Access to Court Electronic Records, run by the Administrative Office of the U.S. Courts.

Tax Court officials say they have good reason to be less open to the public. They say they must balance openness with the need to protect taxpayer privacy.

About three-quarters of the court's cases involve small taxpayers representing themselves. Personal tax records are confidential, so the court needs to respect that, Judge Mark Holmes and other officials told Reuters.

"All of our publicly available records, apart from the very occasionally sealed cases, are available here at the courthouse just like in the old days," Holmes, on the court since 2003, said. "There are some problems with that, I understand."

ONLINE in 2008

The court was slow to provide easy access to its opinions and orders on the Internet, doing so only in 2008, years after other courts went online.

In June 2011, the Tax Court put orders issued by the court online in a searchable way, for free, without limits. But that excludes filings from aggrieved corporations or the IRS, including petitions, responses, depositions and the like.

Copies of Tax Court documents cost 50 cents a page - five times the fee charged by PACER.

Sophisticated corporate lawyers have found ways to navigate the system, although some say it still can be frustrating.

"They are moving in a direction of creating greater access, but it is slow and deliberate," said George Hani, a tax lawyer at Miller & Chevalier, who earlier was a Treasury attorney and an IRS counsel.

Given the power of the court, more accountability is in order, said Leandra Lederman, a tax professor at Indiana University who has been a court critic.

"The transparency is a really important policy issue," said Lederman, who clerked at the court.

Lederman said a big improvement would be to put the court under the auspices of the Administrative Office of the U.S. Courts, which would put the court's documents on PACER.

TAX COURT CLASHES

About 90 percent of all so-called IRS deficiency cases - in which the U.S. government says a taxpayer owes money in taxes - go through the Tax Court, according to the IRS.

These cases can have a major impact on tax policy. A case involving employee stock options used by technology company Xilinx Inc that began in Tax Court is seen as guiding IRS policy on tax treatment of subsidiaries.

Tax lawyers say a clash between the IRS and software company Veritas, now part of Symantec Corp, pushed the IRS to settle so-called transfer pricing cases rather than take them to court.

"It is probably the most important court in interpreting tax law, short of the Supreme Court, because our mission is to create a uniform body of precedent for the country as a whole," Judge Holmes said.

The court's primary allure?

In district courts, which are the general trial courts in the United States, a taxpayer must first pay the government the taxes it wants, then dispute the payment and hope for a refund. In Tax Court, a $60 fee gets the taxpayer's case moving and puts any disputed payment on hold.

There are other differences.

A DIFFERENT ARTICLE

The Tax Court began as a board of judges set up as an independent federal agency to hear tax disputes in 1924. In 1969, Congress removed its administrative agency status.

Chief Judge John Colvin is one of 19 presidentially appointed Tax Court judges, who can serve multiple 15-year terms, but are not appointed for life like most other judges.

Colvin was originally appointed by President Ronald Reagan in 1988. Colvin, who was tax counsel for Senate Republicans before joining the court, has been chief judge since 2006.

The Tax Court operates under a different article of the Constitution than most of the judicial branch does. It has its own distinct rules. Here are some of its quirks:

* There are no juries;

* Rules of evidence are less stringent;

* The court is not covered by the rules of civil procedure or the Administrative Procedures Act;

* Court judges travel to dozens of cities to hear cases.

"They sort of exist in their own world," said Richard Pildes, a New York University professor and part of a legal team that successfully challenged the secrecy of some Tax Court proceedings, a case that made it to the Supreme Court in 2005.

In that case, the Supreme Court delved into Tax Court accountability in a dispute over the secrecy of reports by special trial judges, who handle some smaller cases.

The high court ruled that the Tax Court may not exclude the special trial judge findings from the public record, calling the court's policy "idiosyncratic."

"The Tax Court's practice is extraordinary, for it is routine in federal judicial and administrative decision making both to disclose a hearing officer's initial report ... and to make that report part of the record available to an appellate forum," Justice Ruth Bader Ginsberg wrote in a 7-to-2 ruling.

When the actual findings of the special trial judge were made public, the taxpayers were vindicated, said Pildes, the lawyer who represented the plaintiffs.

"That case sent a signal to the Tax Court - if you're going to be a court, you have to act like a court and be transparent in decision making," said Norman Williams, a law professor at Willamette University who follows the court.

(Additional reporting by Lynnley Browning; editing by Kevin Drawbaugh, Howard Goller and Andre Grenon)

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