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5 Things to Know About Going to Tax Court

[social_warfare buttons=”Total”]So, you’ve been subject to an audit that didn’t go well for you. You filed an appeal, but the appeal didn’t work out as well as you’d hoped. Maybe the appeals officer didn’t agree with your argument, or he or she reduced your assessed tax burden by less than you’d hoped. You’ve tried all the other avenues, to no avail. You have one option left available to you: going to tax court. If you’re going to tax court, you need to be well-prepared as to what to expect. Here are 5 things you should keep in mind as you move forward.

1. Going to Tax Court Means You Are Suing the IRS

When you file a petition in tax court, you are essentially suing the IRS. This makes sense: if you dispute an audit, you’re disputing an assessment that the IRS made. The IRS will send you a Notice of Deficiency, which lays out what the changes are that the IRS believes need to be made to your tax return. You can either not respond to this Notice, which implies that you agree and will go along with the changes, or you can dispute it in court.

Tax court is a panel of 19 presidentially-appointed judges per state who hear petitions against the IRS. Tax court will give you a forum in which you can answer the IRS’s assertions with evidence of your own. Tax court can be intimidating, since you’ll need to know the ins and outs of your tax assessment and provide a detailed legal brief. There may also be a long wait time. As you might guess, it’s a good idea to have an experienced legal team on your side for the most favorable results.

2. You Will Need to Provide Evidence

You will need to bring credible evidence to show the tax court judges, which means mileage logs, receipts that note how the purchase relates to your career, and other proof of expenditures. The IRS must accept your evidence or provide counterevidence. This is where you’ll really need to be in tune with the rules and regulations and all Tax Court orders and notices.

Evidence includes documents and witness testimonies. Be ready for the judge to ask you for clarification of any pieces of evidence. If, as happens in rare cases, the burden of proof is on the IRS, you’ll need to provide all the documents that can prove that you complied with all requests for documents, witnesses, information, meetings, and interviews.

Be sure to bring copies of all documents and potential pieces of evidence with you, even if you had already submitted them to the IRS. You don’t want to miss any opportunity of adding more proof to your claim.

3. You Can Bring People with You

You should bring a tax attorney who has experience going to Tax Court. You do not have to have a tax attorney or representation through a tax clinic, but it is best if you can have representation with you. Your representative must be admitted to practice before the Tax Court.

You may also bring witnesses who can help your case. These witnesses operate as character witnesses. The best witnesses, of course, are professional colleagues who can attest to your case. These witnesses should be ready to be asked questions by both the IRS lawyer and your lawyer (direct examination and cross-examination).

4. You Have a Good Chance of Success

Most cases in Tax Court are settled in favor of the IRS, since the IRS has, after all, already reviewed your case thoroughly in audit. This hardly spells doom for you, though, as most cases never even make it to the courtroom. The good new is that you can usually expect some form of success. Most cases are settled out of court, which is easier for everyone, including the IRS. More often than not, the IRS would rather settle than risk the cost of a trial.

5. You Won’t Get an Immediate Decision

Unfortunately, you probably won’t get your decision at the end of the trial. It can take up to a year or two to get your decision, depending on the complexity of the case. However, 90 percent of cases are settled out of court, so you may not even have to go to court at all. Remember, while you may win all of your case, you may also win only part of the case. When the Court does make a decision, you will receive your opinion in the mail, although it will also be posted on the Tax Court website the same day it is mailed. If you feel the decision was wrong, you may or may not be able to appeal it, depending on the type of case it is. In a regular Tax Court case, you can appeal, but if you have been granted Small Case status, the ruling is final. This is just one of the reasons it’s a good idea to have a tax attorney on your side.

Contact A NYC Tax Attorney Who Can Help

Dealing with the IRS can be scary and overwhelming, especially if you are also going to tax court. There are tax clinics in most cities that can help you navigate this tough terrain. Your best choice, though, is to choose an experienced and well-respected tax attorney. Fortunately, the tax attorneys of Mackay, Caswell & Callahan, P.C. have the experience you need to get the most favorable outcome.

If you need assistance with tax issues or tax court, we can help. Fill out our online contact form or call 844-MCC-4TAX (622-4829) to speak with an experienced NYC tax attorney that can also help in one of our offices in Albany, Rochester, Syracuse, Utica, and Watertown.