Tax Court Litigation
If you are unable to resolve your tax dispute directly with the IRS and have not yet paid the tax due, you may want to consider appealing and litigating the matter in U.S. Tax Court, which was created by Congress to resolve tax disputes between taxpayers and the IRS through independent judicial review.
Taxpayers may petition the U.S. Tax Court to dispute matters including, but not limited to: (i) proposed tax assessments resulting from a Statutory Notice of Deficiency; (ii) certain collection activities (such as levies and liens) for which the taxpayer was denied relief through the Collection Due Process hearing process; (iii) offer-in-compromise request denials; (iv) denial of an innocent spouse relief request; (v) denial of penalty abatement relief; and (vi) worker classification determinations.
Below are a few things to keep in mind about litigating a tax dispute in U.S. Tax Court:
How Long Do You Have to Petition the Tax Court?
The number of days you have to file the petition varies based on the nature of the appeal. For instance, taxpayers have 90 days to appeal a Notice of Deficiency concerning a proposed tax assessment but only 30 days to challenge certain IRS collection actions. The deadlines are firm, and a missed deadline means a lost opportunity to challenge the IRS action in Tax Court. As such, immediately upon receipt, you should carefully review an IRS notice right away to identify the notice issuance date (usually in the upper righthand corner), the number of days to petition the Tax Court, if applicable, and the last date by which the petition must be filed.
Can You Challenge the Assessment Even if You Already Paid the Tax?
If you have already paid the tax (or a portion of it in the case of a divisible tax, such as payroll taxes or certain penalties), you may challenge the assessment by filing a petition with the U.S. District Court or U.S. Federal Court of Claims.
Can You Settle Your Tax Case Without Actually Going to Trial?
Yes, many Tax Court cases settle prior to trial, although sometimes only within days or weeks of the trial date. Once you file a petition with the U.S. Tax Court, and the IRS Counsel files its answer to your petition, the case is oftentimes transferred back to IRS Appeals to allow for another opportunity to settle the case with the IRS Office of Appeals. If settlement is not possible, the case is transferred back to the Tax Court and a trial date is scheduled. Even after the case is scheduled for trial, you can continue to negotiate a settlement with the IRS Counsel.
If you are considering petitioning the Tax Court and need help from an experienced tax attorney, contact us. The Law Office of Cheri P. Wendt-Taczak, LLC would be happy to help by representing you in court or just providing you with brief straightforward advice about tax court litigation.