The United States Tax Court provides a judicial forum for the resolution of a variety of federal tax disputes, including disagreements regarding the results of an IRS audit. The United States Tax Court is based in Washington, D.C. but holds trial sessions in major cities throughout the country. In California, trial sessions are held in Fresno, Los Angeles, and San Diego. We can represent clients nationwide in any city where the Tax Court holds trial sessions.
A key advantage to litigating a proposed notice of deficiency in the United States Tax Court is the opportunity to litigate a taxpayer’s claim without first paying for the proposed tax or penalty in dispute. Those taxpayers who have the resources to prepay the tax or penalty may take advantage of the United States District Courts to litigate their tax dispute.
In certain situations, taxpayers facing aggressive collection efforts by the IRS may be entitled to a collection due process hearing in the United States Tax Court. Taxpayers would be entitled to dispute the underlying tax liability or penalty in the collection due process case without having first paid for the tax or penalty. Trials before the U.S. Tax Court are subject to evaluation of the evidence supporting the taxpayer’s claim by an independent Tax Court Judge. Taxpayers may offer evidence concerning their tax matters even if that evidence was not submitted during the original income tax audit.
For many taxpayers the potential tax or penalty may involve personal or business financial restructuring or liquidation through a bankruptcy proceeding. The United States Bankruptcy Courts provide a similar forum to the United States Tax Court where prepayment of the tax or penalty is not required. The tax or penalty claim would be litigated in the Bankruptcy forum and the matter would be decided by the Bankruptcy Court Judge. Many Bankruptcy Court Judges have expertise in tax law and will evaluate the tax dispute and evidence the taxpayer provides in defense of the IRS or state tax agency’s claim.
At the state level, tax disputes are litigated in state court which requires prepayment of the tax or penalty. Many taxpayers that simply do not have the resources to prepay the tax liability or penalty have utilized the Bankruptcy laws and restructured the payment of their tax or penalty obligations within the Bankruptcy Courts. These taxpayers often emerge from Bankruptcy with a reduction of tax liability or a feasible plan to address their remaining tax liabilities.
Our office litigates tax cases in various forums including, U.S. Tax Court, Bankruptcy Courts in California and New York, and District Courts in California and New York. While we resolve the vast majority of these cases without trial, we have also taken several cases to trial. We have tried and briefed a variety of tax matters involving factual and legal issues related to proposed income tax deficiencies for individuals and businesses.
The U.S. Tax Court has its own set of rules of practice and procedure that are distinct from the rules in U.S. District Courts, Bankruptcy Courts, or state courts, so it can be advantageous to retain a law firm that is familiar with the rules of each particular forum in addition to the substantive tax law.Contact Us About Tax Court Litigation
For more information or to schedule a consultation with a tax attorney at Advocate Solutions, Inc., call 310.734.2677 or complete the contact us form on this site.