The IRS notifying you that you owe substantial back taxes is a situation most people never want to experience. However, if it happens to you, you may believe the IRS is incorrect and that you do not owe the amount they are claiming. If so, you may dispute the claim of the IRS by going to tax court.
Many people may not have heard of tax court, so it understandable if you are unfamiliar with it. The U.S. Tax Court website supplies some of the basics to inform you about the forum you may use if you decide to contest a claim of owing back taxes.
What is tax court?
The U.S. Tax Court is the place designated by Congress to adjudicate disputes between American taxpayers and the IRS. Like other courts, judges are the ones who decide cases in tax court. These judges have expertise in tax law and receive appointment to the Tax Court by the president.
The U.S. Tax Court resides in Washington D.C. However, this does not mean you would have to go to D.C. to attend your trial. Tax court judges venture to specific cities to conduct tax trials. So chances are that you may not have to travel far in order to attend your trial.
How does tax court handle small cases?
You might not have to worry about a complicated, drawn out court process. If your tax case involves a disputed amount of $50,000 or less, the federal government permits you to take your case through a small tax case procedure. This is a more informal process and may finish up more quickly than a normal tax case. Keep in mind that if you go down this route, you cannot appeal the final decision.
Can I settle a case without a trial?
Even if your case involves a lot of money, it is very possible that your case will not proceed to a full trial. In many cases, parties to a tax case work out the dispute with the IRS and agree to a resolution. If you and your legal team succeed in negotiating a agreement, it would negate the need for a trial to resolve your dispute.