The Tax Court: Fighting the IRS

IRS agents are people who can also commit errors. It is possible that you might need to combat them in court if they don't own up to those mistakes. How can this be done? Is there a price you need to pay?

If you can't agree with the IRS on a resolution, you'll get a Notice of Deficiency. This generally says that you have 90 days to file a response against the resolution in Tax Court. After 90 days, you can no longer appeal or request for an extension, so it's best to act at once, or else the IRS will win and you will need to pay your tax liability. You'll need to settle the tax liability, though you can still sue and receive a refund later. 

The majority of taxpayers in the U.S. opt on bringing the case before the U.S. Tax Court. This court is comprised of 19 judges and was established in 1923. They routinely travel all over the country to address tax cases. All of these judges are tax experts, and the court just deals with tax litigation. These judges give the final word on any case that comes before them.

Numerous people choose to bring their case to the U.S. Tax Court because it is the only court that will essentially make a decision on your case before you even pay the taxes that are in question. In other courts, the taxes need to be settled first before the case can be addressed. Those who cannot pay their tax debts won't have the advantage of the courts. If you're basing your case on details of the tax code and technical facts, this is also the court that you would want your case heard in. These nineteen judges are experts in IRS problems and understand all the tax law details. 

But you won't wish to take your case to the U.S. Tax Court if your case is about fairness, equality, or other more ambiguous criteria. The better option would be to take it to the U.S. District Court. District Court verdicts won't be made by a judge, but rather, a jury of your peers. This court is a more appropriate option if you want the law interpreted in another way. Juries are normally much more sympathetic and receptive to other people who are justly fighting back against the IRS. Tax disputes can be heard in some other courts. However, in the end, the best choice is to file your taxes in a manner that they are less likely to be audited so that you can prevent an IRS issue entirely.

Share on Facebook

Originally posted 2008-09-27 16:53:17. Republished by Blog Post Promoter

• Anyone Else Tired of Hearing the Rich Whining About Taxes? Don't look now but Warren Buffett is at it again. This time he's written an op-ed in the NYT in which he claims it's time "the rich" stop being "coddled" by Congress: "My friends and I have been coddled long enough by a billionaire-friendly Congress. It's time for our government......
• Marginal Tax Rates and You There's a good chance you're paying less in taxes than you think.  Why, you ask?  Because of the difference between your marginal tax rate and your overall tax rate. (Note: these discussions are going to focus on the American tax code, as that's the one with which I'm the most......