US Tax Courts

us tax court

The Tax Court is a special court of law that exercises judicial power independent of the Legislative and Executive Branches. It is a federal court established by Congress under Article I of the U.S. constitution and is not associated with the Internal Revenue Service (IRS). 

Furthermore, the US tax court focuses on tax-related issues and it has the authority to provide rulings on a wide range of taxation matters, including rules on tax disputes and estate tax. If you want to discover more about how the U.S. tax court works, read on and know the essential things related to your tax issues and petitions. 

What is the Tax Court?

The U.S. tax court was first embodied as the “U.S. Board of Tax Appeals”, established by the Congress in the Revenue Act of 1924 (the Melon Tax Bill). It was founded as an “independent agency in the executive branch of the government” to address the rising complications of tax-related litigation. 

It is the primary court where an individual can bring a petition to contest IRS determination prepaying no portion of the disputed taxes. The jurisdiction of the U.S. Tax Court includes the authority to:

  • Redetermine deficiencies and overpayment in income, estate taxes, and gifts.
  • Redetermine certain taxes on goods of private foundations and foundation managers. 
  •  Redetermine transferee liabilities
  • Make certain types of declaratory judgments
  • Consider Innocent Spouse Relief denials
  • Order abatement of interest
  • Adjust partnership items
  • Award administrative and litigation costs
  • Review passport revocations or denials for unpaid taxes
  • Redetermine worker classification
  • Determine relief from joint and several liabilities on a joint return
  • Review certain collection actions
  • Review awards to IRS whistleblowers who provide details to the Commissioner of Internal Revenue on or after the 20th of December, 2006.

This federal court is composed of 19 presidentially appointed members. Although the Court is physically located in 400 Second Street NW Washington DC, the judges may travel throughout the United States to conduct trials in various designated places, such as: 

  • Jacksonville, Florida
  • Atlanta, Georgia
  • Indianapolis, Indiana
  • Boston, Massachusetts
  • Las Vegas, Nevada 
  • New York City

Furthermore, the U.S. Tax Court has a special small case division. This division has jurisdiction over cases in which the Internal Revenue Service claims that the amount of penalties and taxes for an individual within a tax year is $50,000 or less. As such, the cases that can be adjudicated in the small case division are referred to as “small cases” and will be designated as an “S” case.

Who Can Represent Clients Before the US Tax Court

In filing for a petition to the U.S. Tax Court, a private attorney, a clinic representative, or an individual who is admitted to practice before the Court may represent taxpayers like you. The agreement of representation will be between you and your chosen representative who are independent of the Internal Revenue Service or the Tax Court. 

Furthermore, a licensed lawyer must file an application for admission to practice before the U.S. Tax Court. Meanwhile, a non-attorney must take an examination on top of completing an application. 

They must also be sponsored by two individuals who are admitted to practice before the U.S. Tax Court and each of them must send a letter of recommendation to the Tax Court Clerk. Moreover, all representatives who are admitted to practice before the U.S. Tax Court are subject to the Model Rules of Professional Conduct of the  American Bar Association. 

Can the Judgment of The US Tax Court be Appealed?

Under the Tax Court rules, if you file a petition for an S case, you may not appeal the decision of the tax court judges. However, if you file a petition for a regular Tax Court case, you may appeal the judge’s decision and file a motion for reconsideration with a written opinion within 30 days after such an opinion was mailed. In your written opinion, you must clearly state your disagreement and why would your opinion be merited. 

Generally, the tax court judge who gives judgment to your case will decide the motion for reconsideration. Furthermore, you may appeal the judge’s decision to one of the US Courts of Appeal. But, before you can file for an appeal, you must wait for a decision entered by the U.S. Tax Court. This decision is a judicial determination that disposes of the case you have filed. 

When such a decision has been entered, you must file a notice of appeal within 90 days or 120 days if the IRS files an appeal first. Moreover, you should remember that 90 days does not mean three calendar months. For the update of your case, you may check the U.S. Tax Court’s website at www.ustaxcourt.gov. How much does filing for notice of appeal cost? Well, the filing fee for an appeal to the judge’s decision may depend on the Federal Circuit Court to which the appeal is being filed — but it usually costs $500-$505. 

An Overview of U.S Tax Court Forms

When you have decided to file a petition on the U.S. Tax Court, you need to fill out the appropriate U.S. Tax Court forms related to your case. To give you an overview of what forms should be submitted, here are some of the forms you may encounter in filing for a petition on the U.S. Tax Court:

  • Form 5 (Request For Place of Trial). This form is eligible for eFiling by Pro Se Petitioners and Practitioners (Counsel) if not filed with the petition. Here, you must place an “X” to the box to request the place of trial. 
  • Form 13 (Notice of Intervention). This form is not eligible for eFiling by Pro Se Petitioners but is eligible for the Practitioners(Counsel). Here, you will be required to set the grounds for your intervention and reasons why you agree or disagree with the Petition for Determination of Relief From Joint and Liability on a Joint Return. 
  • Form17 (Notice of Appeal). This form is both eligible for eFiling by Pro Se Petitioners and Practitioners(Counsel). You will submit this form if you want to appeal the decision of the tax court judges during your case’s trial session. 
  • Form 2 (Petition). This form is both eligible for eFiling by Pro Se Petitioners and Practitioners(Counsel). Here, you can choose whether you want to file a petition for an S case (Small Tax case) or a Regular Tax case.  Before filing form 2, you must read the information on every page to properly complete and submit the form to the United States Tax Court 400 Second Street, N.W. Washington, D.C. 
  • Form 4 (Statement of Taxpayer Identification Number). This form is not eligible for eFiling by Pro Se Petitioners and Practitioners(Counsel). Here, you are required to input your information such as your complete name and taxpayer identification number. If the petitioner is seeking relief from joint and liability on a joint return pursuant to Section 6015. Internal Revenue Code 1986, and Rules 320 through 325, you must name the other individual whom the petitioner filed a joint return. 

FAQ

Why would a taxpayer want to file a U.S. Tax Court petition?

Generally, a taxpayer may file a U.S. Tax Court petition in response to certain IRS determinations. When an individual experiences a tax dispute and other tax issues, he or she may contest it and bring it to trial by submitting a petition to the U.S. Tax Court. Besides disputed tax, filing for a petition to redetermine deficiencies and overpayment in income, estate taxes, and gifts may also be possible under the jurisdiction of the U.S. Tax Court. You can also challenge a Collection Due Process hearing at the Tax Court.

Is the US Tax Court part of the IRS?

Definitely not! The United States Tax Court is not a part of the Internal Revenue Service and is in fact, an independent court located in Washington D.C. As such, this court is established by Congress as an independent judicial authority for taxpayers who have disputes against IRS determinations.  

Is it worth going to U.S. Tax Court?

Filing for a petition to the US tax court may take some time and a significant filing fee. However, going to this federal court is worth it when you want to settle tax disputes and other tax issues. When an individual sues IRS in the U.S. Tax Court, he or she has a high probability of at least partial success. In fact, approximately 85% of U.S. tax court cases obtains settlement even before the trial begins.  

Is the U.S. Tax Court a special federal court

The United States Tax Court is a federal trial court of record established by Congress under Article I of the U.S. constitution and is not associated with the Internal Revenue Service (IRS). It focuses on tax-related issues and it has the authority to provide rulings on a wide range of taxation matters, including rules on tax disputes and estate tax. The Court explained that the Tax Court exercises judicial power in much the same way as the federal district courts exercise theirs.

Conclusion

If you want to file a petition to settle your tax dispute and other tax issues, you may submit the required form to the United States Tax Court 400 Second Street, N.W. Washington, D.C. But, before you file for a petition, you should always make sure to submit the appropriate form with the complete information needed in accordance with the tax law. Furthermore, you may also appeal the tax court decisions when you have a disagreement with the judge’s decision regarding your case.

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