Tax Court

When the Commissioner of Internal Revenue has determined a tax deficiency, the taxpayer may dispute the deficiency in the Tax Court before paying any disputed amount.

Tax Court Jurisdiction

The Tax Court’s jurisdiction also includes the authority to predetermine transferee liability, make certain types of declaratory judgments, adjust partnership items, order abatement of interest, award administrative and litigation costs, predetermine worker classification, determine relief from joint and several liability on a joint return, review certain collection actions, and review awards to whistleblowers who provide information to the Commissioner of Internal Revenue on or after December 20, 2006.

Legal Representation is Recommended

Statistics show that taxpayers who go to Tax Court without the assistance of a tax representative almost always lose their cases.

Did you ever wonder why the IRS prevails in trials before the United States Tax Court in 9 out of 10 cases. The more paranoid among us will attribute the IRS’s lopsided success rate to a silent conspiracy between the Court and the government.

But the truth is more benign.

More than 80% of all Tax Court cases are handled pro se (by the taxpayer without the assistance of counsel). This, of course, puts the taxpayer at a decided disadvantage since he is going up against trained lawyers with many years of experience preparing and presenting cases in court.

Indiana University School of Law at Bloomington tax law professor, Leandra Lederman, studied the issue in a report titled, Do Attorney's Affect Outcomes in Tax Court Cases? An Empirical Study.

Not surprisingly, Ms. Lederman, found that the presence of an attorney significantly improved the taxpayer’s financial outcome in tried cases. And the more experienced the attorney, the better the financial outcome for the taxpayer.

Lederman also concluded that the presence of an attorney in Tax Court cases did not affect the time elapsed to trial or settlement. In other words, attorney involvement neither significantly prolonged the dispute nor expedited its resolution but did significantly improve the taxpayer’s financial outcome.

The moral of the story is this:

If you have a meritorious argument, you can almost always resolve the matter with the IRS without having to go to trial provided you present that argument thoroughly, convincingly and eloquently. The idea is to persuade IRS counsel that she stands a good chance of losing the case (called “hazards of litigation”) should she proceed to trial.

We can assure you, IRS counsel do not fear going to trial against pro se litigants. Instead, they lick their chops.

You Have the Right to Tax Representation

If you have been contacted by the IRS or your state's Department of Taxation, or have received tax liens, levies or notices of IRS intention to do so, contact us at 888-466-4706 or fill out our online form without delay to discuss the details of your specific tax situation.