I am at times approached by taxpayers who “want to go to court” to challenge their federal income tax[liability. Such taxpayers may be chagrined to learn that while the ability to have a court hear their tax case definitely can lay in their future, there are typically multiple steps that taxpayers must follow before ending up in court. As a prime example, this article will describe how a taxpayer may end up in US Tax Court (“Tax Court”), one of several courts which may hear tax cases.
The Tax Court is the court created by the Untitled States Congress to hear many types of federal tax cases. However, the Tax Court is not empowered to hear all cases at any time. Unlike United States District Courts or most state district courts which have general jurisdiction, the Tax Court has limited jurisdiction. The taxpayer may only file certain cases in Tax Court and at certain times.
Two of the most common Tax Court cases are appeals from increases in tax following an audit (known as a deficiency proceeding) and appeals from Collection Due Process hearings:
- Deficiency proceeding. For additional tax assessed after audit, the IRS usually ultimately sends the taxpayer a Notice of Deficiency (90-day letter). That letter is often referred to as the ticket to Tax Court. The taxpayer is entitled to appeal the assessment to Tax Court and must do so within 90 days or the taxpayer loses the right (subject to some exceptions) to challenge a deficiency in Tax Court. Such appeals cannot be brought to Tax Court at any time the taxpayer wishes, only within 90 days of the mailing of the Notice of Deficiency.
- Collections Due Process appeal. For Collections Due Process proceedings that have first been appealed to the IRS Independent Office of Appeals, the taxpayer may appeal those determinations to Tax Court after Appeals has issued a Notice of Determination. If the taxpayer does not timely appeal the Notice of Determination to Tax Court within 30 days of the Notice of Determination, the taxpayer loses the right to appeal those issues at Tax Court.
Much of the Tax Court docket consists of those two types of appeals, although the Tax Court also has jurisdiction over many other types of tax matters not discussed in this article. The taxpayer must meet the Tax Court’s jurisdictional criteria and bring the case in the time allotted, or the case will be dismissed.
Practice Point: Taxpayers must be aware that they cannot file tax appeals in Tax Court at any time and for any reason. The taxpayer must meet the Tax Court’s jurisdictional requirements.
Taxpayers who have been assessed additional tax or have been given the opportunity for a Collections Due Process hearing may contact Jared Le Fevre to discuss the rights and deadlines for proceeding before the IRS and US Tax Court.
About the author: Jared M. Le Fevre is a tax attorney and partner in the Tax, Trusts and Estates Practice Group of Crowley Fleck PLLP. Mr. Le Fevre represents taxpayers before the IRS, IRS Independent Office of Appeals, U.S. Tax Court, Federal District Court and state tax agencies throughout Montana, Wyoming, North Dakota, Idaho, and Utah. Mr. Le Fevre is involved in federal and state and local tax audits, appeals, and tax resolution throughout these western states. Mr. Le Fevre also advises clients on the tax effects of business and real estate transactions. what effect the notice may have on taxpayer rights.
Information current as of July 21, 2022.
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 Federal District Courts are courts of general jurisdiction. https://www.uscourts.gov/sites/default/files/overview_of_the_judiciary_fy_2021_0.pdf#:~:text=The%20U.S.%20District%20Courts%20are,III%20district%20court%20judgeships%20nationwide (accessed February 21, 2021). Federal District Court does have jurisdictional requirements, as do most courts. Federal District Court has two main subject matter jurisdictions: disputes based on federal law and diversity of litigants based on residence.
 IRC § 6212.
 Before the Notice of Deficiency, if time under the statute of limitations permits, the IRS will send a 30-day letter giving the taxpayer the opportunity to first appeal to the IRS Independent Office of Appeals. If the taxpayer does not appeal in 30 days, the IRS will then send the Notice of Deficiency.
 IRC § 6213(a).
 IRC § 6320(b), IRC § 6330(b).
 IRC § 6320(b), IRC § 6330(d).