Question

(TCOs 1 and 2) Discuss the advantages and disadvantages of the Small Cases Division of the U.S. Tax Court.

Answer 1

ADVANTAGES OF SMALL CASE TAX COURT:-

1. There is high probability of at least partial success in US Tax courts. This is because the IRS knows that taxpayers who take this route are very serious about getting their assessments reduced or eliminated using any legal means possible, and it doesn't want to take a chance on losing further revenue in court than is forfeited via settlement.
2. Taxpayers who petition for tax courts don’t even need a lawyer.
3. It is not necessary to go through the appeals process before choosing this option.
4. No requirement of the assessed tax before going to the court. All other courts require you to pay tax.

DISADVANTAGE OF SMALL CASE TAX COURT:-

1. The wait time: - The wait time is at least 6 months i.e. the elapse time between the time you file your petition and when you are finally called for trial.
2. Smaller cases often take a year to decide and regular cases can take much longer.
3. Interest continues to accrue upon the unpaid tax balance during the proceedings. However, interest accrual can be stopped by making a payment and labelling the same as a deposit.