Tax Court
Tax court is a specialized court of law that hears and adjudicates tax-related disputes and issues. When the Commissioner of Internal Revenue has determined a tax deficiency, the taxpayer may dispute the deficiency in the U.S. Tax Court before paying any disputed amount. Most of the cases heard by the Tax Court of Canada are in connection with income tax, goods, and services tax, and employment insurance. The U.S. Tax Court is in Washington, D.C., and has 19 members who are appointed by the U.S. President. The U.S. Tax Court, which is independent of the IRS, hears cases relating to income, estate, and gift tax; it also rules on tax disputes ranging from notices of deficiency and worker classification to reviews of collection actions. The tax court in the U.S. is a federal court that Congress established to provide a judicial forum where an entity could contest a tax deficiency determined by the Internal Revenue Service (IRS) before paying the disputed amount. The Tax Court of Canada, a superior court established in 1983 that is independent of the Canada Revenue Agency and other departments of the Canadian government, hears tax-related cases in Canada.
What Is Tax Court?
Tax court is a specialized court of law that hears and adjudicates tax-related disputes and issues. The tax court in the U.S. is a federal court that Congress established to provide a judicial forum where an entity could contest a tax deficiency determined by the Internal Revenue Service (IRS) before paying the disputed amount.
The Tax Court of Canada, a superior court established in 1983 that is independent of the Canada Revenue Agency and other departments of the Canadian government, hears tax-related cases in Canada.
How Tax Court Works
Tax courts have the authority to provide rulings on a wide range of taxation subjects. The U.S. Tax Court, which is independent of the IRS, hears cases relating to income, estate, and gift tax; it also rules on tax disputes ranging from notices of deficiency and worker classification to reviews of collection actions. When the Commissioner of Internal Revenue has determined a tax deficiency, the taxpayer may dispute the deficiency in the U.S. Tax Court before paying any disputed amount. Most of the cases heard by the Tax Court of Canada are in connection with income tax, goods, and services tax, and employment insurance.
The U.S. Tax Court is in Washington, D.C., and has 19 members who are appointed by the U.S. President. These judges also travel nationwide to conduct trials in various designated cities.
Trials in small tax cases generally are less formal and result in a speedier disposition.
Trial Procedures in Tax Court
To dispute or delay payment of additional or deficient taxes, U.S. taxpayers must file a petition with the U.S. Tax Court within 90 days of a Notice of Deficiency letter from the IRS. A tax court case commences with the filing of a petition, for which a $60 filing fee must be paid. The case is heard by a single judge, and taxpayers may be represented either by themselves or by legal practitioners admitted to the bar of the U.S. Tax Court.
Most cases are settled before trial. However, if a trial is conducted, in due course a report is ordinarily issued by the presiding judge setting forth findings of fact and an opinion. The case is then closed in accordance with the judge's opinion by the entry of a decision. Decisions in regular cases may be appealed to the U.S. Court of Appeals.
For certain tax disputes of $50,000 or less, taxpayers may choose to have their case conducted under the Court's simplified small tax case procedure. Decisions entered in small tax case procedures, however, are not appealable.
Related terms:
90-Day Letter
90-Day Letter is an IRS notice sent after an audit asserting a discrepancy or error in an individual's taxes and they will be assessed unless petitioned. read more
Bankruptcy Court
Bankruptcy court is a specific kind of federal court that deals with bankruptcy. read more
Deficiency
A deficiency is the numerical difference between the amount of tax reported on a tax return and the amount that the IRS determines is actually owed. read more
What Is the Internal Revenue Service (IRS)?
The Internal Revenue Service (IRS) is the U.S. federal agency that oversees the collection of taxes—primarily income taxes—and the enforcement of tax laws. read more
Notice Of Deficiency
A notice of deficiency is a legal determination by the IRS of a taxpayer’s tax deficiency. It is issued when the IRS proposes a change to a tax return because they found that the information reported on a return does not match their records. read more
Petition
A petition is a legal document formally requesting a court order, which, along with complaints, are considered pleadings at the onset of a lawsuit. read more