Tax Court: Perhaps the Less-Known Route to Tax Issue Resolution
When dealing with the Internal Revenue Service, it would probably be fair to say that the phrase, “It’s a pleasure doing business with you,” does not gets used much.
The controversies the IRS raises tend to be focused on extracting money that individual taxpayers don’t believe they owe. They can involve disputed tax issues such as liens or levies. In some instances, especially in recent years, there has been a lot of IRS emphasis on going after Americans alleged to have failed to report assets in foreign bank accounts.
Those in the D.C. area who have never battled the IRS may be of the belief that the issues begin with the agency and get resolved with the agency, meaning that the government always wins. But that is not the case. And to be sure that all options are understood and on the table, it’s important to consult with an experienced tax attorney.
One source of resolution that may not even be on most people’s radar is the United States Tax Court. This is a federal court like others. It is not affiliated with the IRS, though some might think it is because of its moniker.
On average, some 30,000 petitions are reportedly filed with the court every year. The issues that are raised vary, covering everything from challenges of tax deficiencies that the IRS says are owed, to requests to avoid tax liabilities related to jointly filed tax returns.
Most of the cases filed get resolved through settlement before ever going to trial. When they do go to trial, the IRS comes to the table as just one more party to the action.
And, if for some reason a tax-related issue in a case is deemed to fall outside the Tax Court’s jurisdiction, it may still be arguable before another court, such as Bankruptcy Court or the U.S. Court of Federal Claims.
Source:Forbes, “Top 10 Most Litigated Tax Issues,” Kelly Phillips Erb, Jan. 11, 2014
