Question

what are some of the factors to consider when deciding in which court to file a tax-related claim?

Answer 1

Tax related claims can be litigated within the US Tax court, US Court of Federal claims or the federal district courts. Each court has the authority to hear certain types of federal tax matters and this type of authority in legal profession is referred to as Jurisdiction.

Various factors to consider when deciding in which court to file a tax related claim are:

1. Settlement possibilities: Different courts present different opportunities to resolve the claim. Accounting the high cost of litigation, tax payer can settle the claim without going to trial only. In matters presented before US Tax court, IRS Appeals Division has the settlement authority for first 4 months following the issue of notice. Following the lapse of this 4 month period IRS District Counsel assumes control over the case and can be approached for the settlement of the case. For all the matter before district court or Court of Federal claims, settlement procedure is gone through with Tax Division of Department of Justice

2. Expertise of the court: This mainly concerns with what type of issues court commonly hears and thus has the expertise in. Tax court was established by the government to only hear tax cases.and hence the tax court judges are generally tax specialists. Judges in the court of federal claims and federal district courts hear a broad range of matters and thus they are not necessarily experts on tax issues.

3. Legal Precedents: These are the decisions that court has heard and memorialized on similar issues of law which give insight into the likely disposition of similar future case. For instance if a case is brought in tax court, prior decisions of the court will control where the current case presents similar facts as the previously heard case.

4. Jurisdiction of the court: This pertains to the type of issues it has the power to hear. Each federal tax has a specifice jurisdiction to hear a particular type of case at issue or the case will not be heard at all. Court of federal claims and federal district courts have jurisdiction to hear refund suits. Tax court also has limitations in terms of its jurisdiction. Tax court has jurisdiction to review deficiency determination against taxpayers for additional income, estate, gift, excise.

5. Location of the court: This impacts ease of access and logistics of trial, availablity of counsel and witness and cost of litigation

So these are some of the factors which can be considered before deciding in which court to file a tax related claim.