The IRS possesses such a broad range of powers, many people take their assessments at face value. Taxpayers believe that it’s better to pay whatever amount the agency claims they owe rather than risk the possibility of additional penalties for failing to comply.
However, as with any federal, state or local government entity, the IRS doesn’t always get things right. Computation and calculation errors are relatively common, leading to mistakes that cost taxpayers more money. The agency’s auditors tend to disallow what they deem to be “questionable” deductions on tax returns rather than giving the filer the benefit of the doubt.
Consider Going to Tax Court to Resolve an IRS Dispute
If you disagree with the IRS on a liability you supposedly owe or think they got it wrong on their determination for your tax matter, sometimes your last resort is to take the dispute to tax court.
The U.S. Tax Court is not your average court because your case can only be heard only two times a year. Tax Court judges travel on assignment from Washington, D.C. to a rotation of 75 cities across the country where Tax Court cases are held. Each city is allocated one week in the spring and one week in the fall for all tax court cases.
Since the taxpayer has the burden of proof in any Tax Court situation, they must provide as much credible evidence as possible to support their case. Together with our tax attorneys, you will compile and submit documentation to the Court.
How Does the Tax Court Process Work?
In most situations, a Tax Court case stems from the findings of an IRS audit. The agency will send you a notice stating that you owe a specified amount. If you don’t respond within 30 days or fail to reach an agreement with an IRS Appeals Officer, the agency will then issue a statutory notice of deficiency, colloquially referred to as a “ticket to Tax Court.”
You will then have 90 days from the notification date to file a petition in Tax Court. The government will respond to the petition by filing an answer, and the U.S. Tax Court will add your case to its docket. Your case will then proceed like most other forms of litigation. Your Tax Court attorney will represent you during depositions, file motions and prepare documents on your behalf. If your case proceeds to trial, your attorney will serve as your advocate in court.
After the trial, the Tax Court may require you to file post-trial briefs. The presiding judge—there are no juries in Tax Court—will then render a decision. If you disagree with the judge’s ruling, you can appeal your case to the U.S. Court of Appeals.
If your alleged tax deficiency is $50,000 or less, you have the option to file a small tax case, which entails a faster and less formal process.
You Have the Burden of Proof
In any Tax Court situation, taxpayers are responsible for providing as much credible evidence as possible to support their case. Therefore, you should gather all records that apply to the IRS claim regarding the amount you owe and provide them to your Tax Court attorney right away. The Court must accept any documentation you present and review it before rendering a decision.