Similar to the trial court which holds the hearing of criminal cases, the United States Tax Court is a place where disputes and issues related to taxes are solved through a judicial procedure. Taxpayers have many methods in which they can litigate tax related matters, but the Tax Court provides an opportunity where the taxpayers who are not in bankruptcy can fight a case
without having to clear off the disputed tax amount first. The judges at the Tax Court are appointed for a 15 year term and subjected to removal for cause. The court forms an integral part of US government’s legislative branch.
The working of the Tax Court
The Tax Court is a platform for both, the taxpayers as well as the Internal Revenue Service to take their tax issues to the legal system.After the returns of a certain taxpayer have been examined by the IRS, if there arises a dispute over the amount to be paid, the IRS issues a series of written notices. In spite of all these notices, if there is no agreement over the dispute between the IRS and the taxpayer, a formal notice is issued by the IRS.
This notice, known as “statutory notice of deficiency” is the final call for the taxpayer to pay off the tax debts or challenge the notice in the Tax Court by filing a petition to re-determine the deficiency. This petition has to be filed within 90 days of receiving the statutory notice. When a taxpayer wants to challenge the IRS, the rule of the Tax Court says that the IRS Commissioner is sued directly in this case. A petition regarding the same has to be filed by the taxpayer with the court in the stipulated time frame. Unless a decision is reached by the court, the payment of unpaid taxes is postponed. The parties that are involved are allowed to represent themselves in order to fight the case. The taxpayers can hire professional IRS tax attorneys to fight their case.
Non-payment of taxes, penalties and interests are the most common cases where the court comes into play. Apart from that, even tax fraud cases are taken to the Tax Court and can be presided over by a jury of judges if required. There are many other disputes that may arise related to taxes and all of these are resolved in the Tax Court.