Filing a petition in the U.S. Tax Court may sound intimidating, but the U.S. Tax Court is an invaluable tool for taxpayers to ensure that the results of an IRS audit are fair.
At the conclusion of an IRS audit, assuming you have not already filed an appeal, the Revenue Agent will issue a special notice called a “Notice of Deficiency.” This document gives the taxpayer 90 days to file a petition in the U. S. Tax Court if they do not agree with the results.
After filing a petition and paying your filing fee, your first stop after filing a petition is (again, assuming you did not already file an appeal during the audit) review by the IRS Independent Office of Appeals. IRS Appeals Officers are independent from the IRS and review the case like a judge—the evaluate the merits of both the IRS’s case and the Taxpayer’s case, and either side with one side or try to strike a balance between the two. IRS Appeals Officers can also concede the case entirely or they can offer you a settlement to close the case. If you cannot reach an agreement with IRS Appeals, your next stop is with an IRS Attorney.
The IRS Attorney will also review the case. And, much like IRS Appeals, they may be willing to concede the case or offer a settlement to close the case. The vast majority of cases settle either with IRS Appeals or with the IRS Attorney, but if you cannot reach an agreement the case is calendared for trial.
The U.S. Tax Court conducts hearings all over the country on a set schedule. U.S. Tax Court cases are heard in front of a single judge—there is no jury for U.S. Tax Court cases. The Tax Court Judges allows both sides to present their case, and then issues a decision. The Judge’s decision becomes the final ruling on the case.
Other than allowing up to three additional opportunities to resolve the case successfully (IRS Appeals, IRS Counsel, or the U.S. Tax Court Judge), the U.S. Tax Court also has one critically useful feature. The U.S. Tax Court is the only venue that allows you to challenge the underlying assessment of tax, and does not require you to pay the disputed tax before filing a petition. So the U.S. Tax Court is by far the cheap\est option for disputing a tax assessment.
At Urban Tax Law, if your case is before the U.S. Tax Court, we first file an appearance with the U.S. Tax Court so that all parties know we are the point of contact for you for this case. We review your case in detail, present you with your options, decide on a course of action, and then begin negotiating that option with the IRS. Our goal is always to resolve the case effectively and efficiently.
If you have a case pending with the U.S. Tax Court, or if you received a Notice of Deficiency less than 90 days ago, schedule a consultation and let’s talk about your case.