Posted On: April 9, 2012 by Mitchell A. Port

The Tax Court

The United States Tax Court is a court established by Congress under the Constitution. When the Internal Revenue Service has determined a tax deficiency and has sent the notorious 90-day letter, the so-called Notice of Deficiency, you may dispute the deficiency in the Tax Court before paying any disputed amount.

The Tax Court’s jurisdiction also includes the authority to order abatement of interest, award administrative and litigation costs, review certain collection actions, determine relief from joint and several liability on a joint return, redetermine worker classification, adjust partnership items, redetermine transferee liability, make certain types of declaratory judgments, and review awards to whistleblowers who provide information to the Commissioner of Internal Revenue.

The U.S. president appoints all 19 Tax Court judges. Trials are conducted and other work of the Court is performed by those judges. All of the judges have expertise in the tax laws and apply that expertise in a manner to ensure that you are assessed only what they owe, and no more. The main Court is in Washington, D.C., while the judges travel all over the country to conduct trials in various designated cities such as Los Angeles, San Francisco, San Diego and Fresno (where only small tax cases are heard).

DO NOT miss the filing deadline to start a case in the Tax Court. File your petition early. The Court cannot extend the time for filing which is set by law.

A $60 filing fee must be paid when the petition is filed. Once the petition is filed, payment of the underlying tax ordinarily is postponed until the case has been decided. Keep in mind that interest and some penalties continue to run while your Tax Court case is pending.

If you don’t think you’ll ever appeal your case beyond the Tax Court, then consider using the Court's simplified small tax case procedure. Trials in small tax cases generally are less formal and result in a speedier disposition. In certain tax disputes involving $50,000 or less, you may elect to have your case conducted using this procedure.

Cases are calendared for trial as soon as practicable (on a first in/ first out basis) after the case becomes at issue. When a case is calendared, the parties are notified by the Court of the date, time, and place of trial. Trials are conducted before one judge, without a jury, and you are permitted to represent yourself if you desire. Taxpayers may be represented by practitioners admitted to the bar of the Tax Court.

Most cases are settled by mutual agreement without the necessity of a trial. However, if a trial is conducted, a report is usually issued by the presiding judge laying out findings of fact and an opinion. The case is then closed.

Speak with a tax attorney about your rights in the Tax Court. Call Mitchell A. Port at (310) 559-5259.