U.S. Tax Court Representation
The U.S. Tax Court is the only forum where a taxpayer can challenge a proposed IRS deficiency without first paying it. A timely Tax Court petition stops assessment, stops collection on the disputed amount, and forces the IRS to prove its case in front of a judge.
Tax Court has a 90-day petition deadline (150 days if the Notice of Deficiency was mailed to a foreign address). Miss the deadline by one day and the deficiency is assessed, you owe the tax, and your only remedy is to pay and sue for refund in federal District Court or the Court of Federal Claims. The deadline cannot be extended.
When to File a Tax Court Petition
A Statutory Notice of Deficiency, also called a 90-day letter or ticket to Tax Court, triggers the petition deadline. The notice will state the proposed adjustments, the resulting tax, and the right to petition Tax Court.
Collection Due Process (CDP) determinations also lead to Tax Court jurisdiction. After a CDP hearing, the taxpayer has 30 days to petition Tax Court for review of the determination.
The Tax Court Process
After the petition is filed, the case is assigned to IRS Counsel and pretrial proceedings begin. Most Tax Court cases settle before trial through IRS Appeals, where a settlement officer is authorized to consider hazards of litigation and reach a compromise.
If the case proceeds to trial, the taxpayer typically bears the burden of proof on factual issues, with some exceptions under IRC Section 7491. Tax Court trials are bench trials decided by a Tax Court Judge or Special Trial Judge.
Small case (S case) procedures are available for disputes of $50,000 or less per tax year. S cases are less formal but decisions cannot be appealed.
What Tax Court Cannot Do
Tax Court cannot hear refund claims for already-paid tax, employment tax disputes for individual employees, or many state tax issues. Tax Court also cannot order the IRS to take action outside the deficiency itself, though Collection Due Process review is available.
If you have already paid the tax and want a refund, the dispute belongs in federal District Court or the Court of Federal Claims, not Tax Court.
Serving California Communities
Valley Tax Law represents clients throughout the Central Valley and Central Coast. Schedule a consultation at any of our offices, or by phone.
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