We Help With Tax Litigation

The IRS and states can act unreasonably.  They often take positions that are contrary to our tax laws.  In other instances the IRS and states pursue litigation to create government-friendly tax laws or to make an example out of the taxpayer. In these cases it is often necessary to take the IRS or state to court.

Tax Litigation to Obtain a Favorable Outcome

There is a cost to litigating a tax case.  This cost has to be weighed against the amount of tax involved in the matter and the taxpayers goals.  At the end of the day, tax litigation is about trying to secure a favorable outcome.

Filing suit against the government can help with this.  It puts the IRS on notice that the taxpayer intends to enforce his or her rights. It may also allow the taxpayer to have the IRS Office Appeals review and possibly settle the matter. Even absent administrative appeals review, filing suit also allows the IRS’s attorneys to review and possibly settle the case.

The IRS’s attorneys are often more reasonable than the IRS field level personnel, as they are more aware of the fact that the courts often overturn the IRS’s administrative decisions and rule against the IRS. If the IRS’s assessment or position is tenuous or wrong there is a possibility that the IRS attorney will agree to settle the case in the taxpayers favor. There is also a possibility that the IRS will have to pay your attorney fees.

If the case is not settled outside of court, then the taxpayer is afforded the opportunity to present their case in court. The court will then weigh the evidence and determine what the facts are and render an opinion.

In some circumstances, if it is apparent that the IRS’s position was not reasonable then the taxpayer may even be able to recover attorneys fees and litigation costs from the government.

The Steps in Tax Litigation

The court process starts with the filing of a petition or complaint. 

This leads to the discovery phase, where evidence is gathered.  Discovery is the process of asking and receiving information and getting records.

This information and records may result in one or both parties asking for summary judgment based on the evidence available at the time or a judgment based on the application of the evidence to the law. 

If the court hears the case, depending on the court, the case will then be tried and briefed and a court ruling will be issued.

Courts that Hear Tax Cases

There are a number of trial level courts that hear tax matters, including the: U.S. Tax Court, Court of Federal Claims, Federal District courts, and bankruptcy courts.

The type of matters that the court can consider varies greatly. How each court handles particular matters also varies. This presents a unique opportunity to select the most favorable court and forum for different tax matters (click here to read more about these options).

IRS Attorneys

The IRS is represented by its in-house attorneys who work for the IRS Office of Chief Counsel. The IRS Office of Chief Counsel provide advice to IRS employees, such as IRS auditors and IRS appeals officers, and handle tax litigation before the U.S. Tax Court.

The advice function can be from the IRS’s national office or from field attorneys located throughout the U.S. The IRS’s national office is divided into the following practice areas:

  • Corporate
  • Criminal Tax
  • Financial Institutions & Products
  • General Legal Services
  • Health Care Counsel
  • Income Tax & Accounting
  • International
  • Passthroughs & Special Industries
  • Procedure & Administration
  • Tax Exempt & Government Entities
  • Wage & Investment

The IRS’s field offices are divided into the following practice areas:

  • Criminal Tax
  • General Legal Services
  • Large Business and International
  • Small Business/Self-Employed
  • Tax Exempt/Government Entities

The IRS can also be represented by prosecutors who work for the U.S. Department of Justice or U.S. District Attorneys. This typically includes tax litigation before the U.S. District Courts, Federal Claims Court, and U.S. Bankruptcy Courts.

Get Help With Your Tax Case

An experienced tax attorney can help you determine whether you should take you case to court and which court in which to file your case.

We help taxpayers with IRS and state tax court litigation.

Please call us at (713) 909-4906 or schedule an appointment to discuss your tax litigation case.

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