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Posted by Dennis Jao

How Does Tax Court Work

How Does Tax Court Work

There are times when the IRS just doesn't listen. If you've fought for your position and know you're right, but the IRS disagrees, you might have a chance to take your case to a US tax court. This will give you the opportunity to file a lawsuit to reverse the IRS decision.

What is the United States Tax Court?

The United States Tax Court is an independent tribunal for taxpayers who challenge certain IRS rulings. These include IRS tax audit disputes, IRS refund disputes, IRS tax collection disputes, and more. It is neither controlled nor related to the Internal Revenue Service.

The United States Tax Court is a federal court. It is a court of record established by Congress under Article I of the United States Constitution. It is an independent judicial body. As a court of record, it keeps a record of all its deliberations. The tax court's authority to settle disputes is called jurisdiction. Usually, a taxpayer may file a petition in tax court in response to certain IRS rulings.

How does it work?

If someone has an alarming auditor's report? And the appellant intends to appeal the case; you may have benefited from exemptions from tax rulings in the form of adjustments, reductions, or exemptions noted by the auditor. But if the appellate body disagrees with the appellant or if marginal relief is awarded, the appellant can appeal to the court. Although there are other courts, the US Tax Court would be an ideal first choice.

Benches of this Court are usually located in the Statehouse of the most populous city in each state. There is no bench of judges except one. In several states, periodic hearings are held every year, except in the summer. However, this may not be the issue in less populated states where hearings may take place a few weeks a year. The president selects judges for terms of more than 10 to 15 years.

Most are lawyers and usually are from the IRS or have previous legal experience. It is excluded from the IRS and gives unbiased decisions in almost all respects. It is divided into two parts:

  1. Small tax disputes totaling less than $50,000 in a tax year.

  2. Regular tax cases for a more significant amount.

Rules of the Tax Court

The rules can be shown by answering a few questions, which are as follows:

1) When does the tax court hear a dispute with the IRS? Who also determines the timing of the dispute?

When the appellant is held for verification, it has two options. Either you agree with the IRS, or you resent it. If you agree, the file is closed. If someone objects, a "Notice of Deficiency" is sent to the plaintiff, which outlines the changes the IRS intends to make to the plaintiff's tax return. The plaintiff has 90 days to file a plea with the tax judge. If the applicant does not file within 90 days, they will provide a tacit consent agreed with the IRS. In other words, the taxpayer files a complaint against the IRS.

2) What is the Tax Tribunal? Is it a single judge or a panel/group of judges?

The court is a panel of 19 judges serving all 50 US states. These cases do not go to a jury.

3) What is the significance of evidence in court?

The plaintiff must present substantial evidence to the tax court to defend his case. For example, suppose the IRS charges the taxpayer for not incurring a certain expense shown on his tax return. In this case, the appellant must provide irrefutable proof that he has incurred such costs. You can bring records to defend your position. Laws have an interpretative character in tax procedures. The IRS can accept them or prove them to be false.

The procedure for tax court

The procedures can be understood by answering a few pertinent questions:

1) Who can challenge my case in court?

A lawyer or CPA used to oversee legal proceedings can defend the case. The appellant may call witnesses to defend his case. He must be a member of the bar.

2) What are the different types of tax jurisdictions? When does the court pronounce the sentence?

Almost all of the procedures in a tax court are similar to those in other types of courts. The only difference is that you don't get a verdict at the end of the case. It can take more than a year to conclude the case.

3) What happens if the appellant loses? Is there any other legal recourse?

In some minor cases, there are no further appeals. In a significant case, the appeal may be filed with the federal appeals court for a particular district of the United States. The deadline for filing a complaint is 90 days.


  • The advantage of filing a court case in tax court is that you do not receive a tax refund if the plaintiff successfully proves their case. In most other cases, when you dispute a case with the IRS, there is some adjustment in the decision regarding the payment amount against your taxes.

  • Judges have years of experience and knowledge in their field, which gives the appellant a fair trial. If the case is a bit complicated, it may be difficult for other courts to reach a verdict without the help of the Tax Court judge.


The IRS only gives you a 90-day window to file a lawsuit in tax court. This disadvantage does not give the plaintiff enough time to gather evidence to make their case.


They provide a credible recourse for someone against the IRS, such as a tax court jury familiar with the court's legal procedures that will render a fair verdict that usually ends up in favor of the taxpayers.



Dennis Jao
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