Question

What are the advantages and disadvantages of choosing the Tax Court to litigate your case against the IRS?

Answer 1

Advantages:

--It is beneficial to go to tax court as the tax payer do not have to pay back taxes if the case is proven to be in his favor. In majority of the cases while dealing with the IRS taxpayer would have some form of compromise on deciding the payment size to be paid against the taxes

-- In the tax court, the regulations governing the evidence are often less strict and open for more interpretation in comparison to other courts or appeals proceedings

-- If the case is very complex, the tax court judges has more expertise compared to other courts to make decisions

-- When it is small case the amount of procedures the tax payer will be actually less compared to the larger case because the setup of system is in a manner that allow smaller cases easier access in the tax court compared to the larger case

Disadvantages:

-- When IRS sends you a 90 day letter the taxpayer is allowed file a suit in tax court within a period of 90 day period.

-- If taxpayers have not prepaid the amount that they owe prior to going to tax court, they will have to pay the interest on the tax. In case the taxpayer prepay too much of the tax liability the 90 day letter many not be issued by IRS and taxpayer would not have the option on filing the case in the tax court

--The tax court may determines tax liability to be higher than it is anticipated as the court has the ability on the determination of the taxpayer's entire liability