Smart Solutions For Federal Tax Issues
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The U.S. Tax Court

On Behalf of | Jul 12, 2022 | Tax |

After an audit, those who experience disagreements with the Internal Revenue Service may appeal the decision. Despite the taxpayer’s belief that the evidence submitted to the IRS reveals the agency’s actions were in error, the IRS might not overrule the initial decision on the appeal. So, a Texas resident might decide to address the matter in tax court.

The purpose of the U.S. Tax Court

Taxpayers who file a lawsuit in U.S. Tax Court may worry about fairness and think the court is another subset of the IRS. That is not the case. The U.S. Tax Court is an independent judicial authority established by Congress. The primary purpose of the federal Tax Court involves settling disputes between the taxpayer and the Internal Revenue Service. Cases heard in this court do not go to a jury, as only a judge presides over the matter.

Tax Court presents an alternative to filing a case in the District Court system. Those who do not receive a favorable decision in Tax Court could file litigation in two other courts: the U.S. District Court or a U.S. Court of Federal Claims.

Points about the U.S. Tax Court

Tax litigation heard in the U.S. Tax Court might lead to a settlement that reduces the debt owed by the taxpayer. The settlement would bring a close to the matter, and the IRS might be more agreeable to a settlement in some cases than continuing to argue in court. Of course, each individual lawsuit has its particulars.

Tax Court has a reputation for leniency, which may sound like positive news to a taxpayer fighting the IRS’s decision-makers. Regardless, the taxpayer would likely need to present compelling evidence to support a case.