A federal tax controversy can be costly. On top of an alleged tax insufficiency or other IRS-determined error, you could face hefty fines and penalties. You have the right to appeal an IRS decision, but taking on the Internal Revenue Service (IRS) is not for the faint of heart. The process established by federal law has strict deadlines and sometimes complicated legal procedures. You need an Indianapolis tax court lawyer to help you navigate IRS litigation waters as safely as possible.
An Indianapolis Tax Court Lawyer Helps You Answer the Question “Should I Go to Tax Court?”
The process for resolving federal tax disputes varies depending on the type of dispute. Your case might belong in the US Tax Court, US District Court in your jurisdiction, the US Court of Federal Claims, or, in some cases, the US Bankruptcy Court. And even before you get to that point, you often have to exhaust certain administrative procedures.
There is no “handbook” for figuring out which direction to go, just the tax code, supporting federal regulations and case law, so you need an Indianapolis tax court lawyer to help you figure out the right path for your case.
The first thing your tax lawyer is likely to do is to ask you about the facts of your case. After defining the legal issues, your attorney can determine which court is the right one for your case, provide you an overview of the general tax litigation process, and advise you on strategies targeted at minimizing your exposure.
Is Federal Tax Court the Right Place for Your Case?
The type of tax issue determines in which court your case should be filed. Some cases, like the following, can only be heard in a federal district court:
- Actions alleging a wrongful levy;
- Action for damages based on the failure of the IRS to release a lien;
- Actions to discharge or enforce liens in favor of the United States; and
- Actions such as partition, quiet title, or foreclosure involving real property in which the United States has a lien.
Other types of cases are only heard in the US Tax Court:
- Certain declaratory actions, such as those involving qualified plans, tax-exempt bonds, or gift valuation;
- Review of the IRS’s refusal to abate interest; or
- Allegation that the IRS denied you due process in a lien or levy case.
In some tax matters, you have an option regarding where to file. When you have a choice of courts, you should understand the difference between tax court and district court matters and the pros and cons of pursuing your case in each one before deciding where to file your case. An Indianapolis tax court lawyer has the experience and knowledge to guide you in these decisions.
Overview of the Tax Litigation Process
The vast majority of tax cases are filed in the US Tax Court. In essence, a taxpayer’s case asks the tax court to rectify an alleged wrong of the IRS. All cases in the US Tax Court are filed by the taxpayer, called a petitioner against the IRS, the respondent. The representative party for the IRS is the IRS Commissioner.
The trigger for the case may be the result of an audit. If the IRS sends you a notice of deficiency (CP3219N Notice), you have 90 days to file a petition in the tax court or lose your right to challenge the deficiency determination. Although you may find a form petition to file, completing the form accurately and filing it properly are critical to your chances of success before the court. Along with the petition, you must also pay a filing fee.
A tax court case follows a similar path to a civil trial, with both informal and formal discovery (exchange of information) in preparation for trial. The information gathered during the discovery process can be useful in negotiating a settlement. Cases involving $50,000 or less may proceed in a less formal small tax case procedure.
If the matter does not settle, the case will be heard by a tax court special judge. The judge will consider the evidence and render a decision, which you should receive in the mail. If you want to appeal that decision further, you may do so (unless it was a small tax case).
How to Prepare for Filing a Petition with the Tax Court
Preparing for filing a petition with the tax court means understanding the entire process and having the resources and professional guidance to help you make informed and strategic decisions about your case.
First, you must ensure that you have fulfilled all conditions necessary for filing a case in the tax court. Sometimes this requires you to have gone through administrative review of one kind or another. For example, if you were denied currently not collectible (CNC) status, you first need to have requested review of that decision. Options for review include going through the Collection Appeals Program (CAP) or requesting a Collection Due Process (CDP) hearing. Whatever the preconditions, failure to complete them will prevent you from pursuing review in the tax court.
Next, you should gather the documentation needed to support your claim on review and undermine the anticipated IRS arguments. The tax court only considers evidence allowable under the Federal Rules of Evidence. This means you must understand legal concepts such as relevance, judicial notice, and hearsay and present your evidence to comport with those requirements.
Finally, you need to have your legal arguments prepared and supported by the Internal Revenue Code, regulations, or case law interpreting them.
When an Indianapolis Tax Court Lawyer Can Help
Being prepared for tax court is a tall order for someone whose profession does not involve studying tax law. Even those professionals often seek guidance from tax litigators for guidance on the best strategies for succeeding in tax court. From choosing the right court to filing, preparing, settling, or trying your case, you benefit from the experienced help of an established tax lawyer. For an experienced federal tax court lawyer in Indianapolis, look no further than Julie A. Camden of Camden & Meridew, P.C. Tax law is her passion. When combined with her litigation skills, Julie is a formidable advocate for taxpayers. To learn more about how this Indianapolis tax court lawyer can help you, call 317-770-0000 or complete this online contact form.