The Tax Court is a national Tral court located in Washington, D.C., although its judges travel around the country to hear cases. By statute, the Tax Court is allowed 19 judges. These judges are appointed by the President  with the advice and consent of the Senate, each for a 15-year term. The Code also allows the Chief Judge of the Tax Court to appoint “special trail judges”. Special trial judges hear “small tax cases” – those under a specified dollar limit – as well as other cases, as authorized by statute.

The Tax Court is based in Washington, D.C., but its judges travel to hear cases on regular calendars in various cities around the country, and also may travel additional times or to additional location for “special sessions” of the court, if needed. At trial, the taxpayer  may be represented by anyone admitted  to practice before the Tax Court, which includes non-attorneys who have passed an examination.

I, personally, am not sure why would one hire a non-attorney to represent you in court, but that is a different matter. Make sure you know the difference between CPA, EA and an Attorney when engaging someone to attend to the resolution of your tax problem. If not sure as to what is the difference between these three classes of taxpayer representatives, ask us here info@tax-law-911.com

The IRS is represented in the Tax Court by attorneys from the IRS Chief Counsel’s Office. Several months prior to trial, the Tax Court judge will provide to the parties a notice of the date and location of the trial. The Tax Court must apply the Federal Rules of Evidence to proceedings  other than those conducted under small tax case procedure, which are mor informal. The Tax Court follows its own procedural rules.

Tax Court jurisdiction over federal tax deficiencies is based on a notice of deficiency mailed by the IRS to the taxpayer and a timely responsive petition by the taxpayer. To initiate litigation, the taxpayer must file the petition with the Tax Court, generally within 90 days of the date the IRS mails the notice of deficiency. The taxpayer need not pay the amount  in dispute in order to obtain Tax Court Jurisdiction  – an important difference from tax refund litigation.

Under Code Section 6512(b) the taxpayer can also claim in the petition a refund of an overpayment, which is necessary in any case in which the judgement is not entirely for one party – petitioner or respondent. (In the Tax Court, the taxpayer is the “petitioner”, and the IRS is the “respondent”).

While Federal Rules of Evidence apply in Tax Court, the Tax Court established its own rules of Practice and Procedure. Discovery is somewhat more limited in Tax Court compared to that in the district courts. A key difference between the Tax Court discovery and discovery in other courts is that the Tax Court relies heavily on stipulation of facts. The parties to a Tax Court case are required to stipulate to the facts to the fullest extent possible. This includes stipulation of the evidence, so that key documents such as tax returns typically are attached to the stipulation of facts as exhibits. It is therefore unnecessary for the Tax Court to take the time for the taxpayer to testify in order to lay a foundation for the taxpayer’s return to be admitted as evidence. The Tax Court also encourages the use of informal discovery as much as possible.

The Tax Court issues three types of opinions: Division Opinions, which have precedential value and are officially published; Memorandum Opinions, which have no official precedential value, but are privately published; and Summary Opinions in small tax cases, which have no precedential value, but have been privately published since 2001. It is up to Chief Judge to determine whether to issue a decision as a Division Opinion or Memorandum Opinion. Division Opinions are generally  the Tax Court’s first pronouncement on a question of law, while Memorandum Opinions generally apply clear law to new facts. The chief Judge can also refer a Division Opinion for review by the entire court. A revied case in not retried en banc (i.e., before the entire bench of judges, i.e., all judges actually hearing the case), but rather the Tax Court Judges reconsider the case in conference from the written record. Such opinions are labeled “reviewed by the Court”. Court-reviewed cases are generally ones that: (1) decide legal issues not previously considered by the Tax Court; (2) invalidate a Treasury Regulation; (3) conflict with existing Tax Court case law: (4) involve a legal issue not previously considered by the tax court, and, as written, would conflict with the decision of a Court of Appeals other the one to which appeal would lie; or (5) involve an issue on which the Tax Court was previously reversed by a circuit other than the one to which appeal would lie.

If the taxpayer and the IRS settle a case after it was docketed with the Tax Court, the settlement is entered by the court as a stipulated decision. “In fact, unlike in District Court, once a taxpayer properly commences a case in Tax Court, only the court can remove the case from its jurisdiction. Thus, the Tax Court refuses to allow voluntary dismissal or “removal” to district Court”. Appeals from the Tax Court go to the US Courts of Appeals, just as those from the district courts do. Tax Court appeals are taken to the Court of Appeals for the circuit in which the taxpayer resided at the time he or she filed the Court Petition, and “the principal place of business or principal office or agency of the corporation” in the case of a corporate taxpayer.

The Tax Court has sometimes been accused of bias in favor of the IRS. That may be in part  because the IRS appears before the Tax court  in every case, while most taxpayers are not repeat litigants. Although at one time the Tax Court was located in the same building as the IRS, the Tax Court has had its own building in Judiciary Square since 1974.  Typically, allegations of Tax Court bias focus on the outcomes in Tax Court Cases. More sophisticated analyses compare Tax Court case outcome to those of federal tax cases heard by other courts, and found that no particular trend is discernable.

Much of the Tax Court’s cases caseload consists of cases involving tax deficiencies, with respect to which the taxpayer received a notice of deficiency. A deficiency can generally be understood as un understatement of tax. Another important area of the Tax Court’s jurisdiction is Collection Due Process cases (which the Tax Court Rules refer to as “Lien and Levy Actions”).

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After, we will have, hopefully, resolved your tax controversy problem with the tax court, if we could, needless to say, we will venture to make sure you remain compliant with filing your tax returns every year, if you engage us to do so on your behalf, and work with us in due course consistently and systematically, and in good faith

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