What is Tax Court?

Congress created the U.S. Tax Court, a unique and specialized federal trial court, to resolve federal tax related disputes between taxpayers and the IRS. 

The Tax Court is officially located in Washington, D.C. with 19 Tax Court judges who travel to trial locations in 60 cities across the country. Tax Court judges are presidential appointees with backgrounds in tax law, often with extensive experience as tax attorneys and advanced degrees in taxation. 

Tax Court Trial Location in Illinois:

Kluczynski Federal Building
230 S. Dearborn Street 
Room 3908
Chicago, IL 60604

How is Tax Court different? 

• More Affordable Option: If a petition with Tax Court is filed ON TIME, a Taxpayer may wait until the Tax Court decision before paying the IRS
• Tax Court cases are decided by Judges with Tax Expertise (no jury)
• All Attorneys must be admitted to Tax Court Bar 
• Tax Court is designed to expeditiously resolve tax cases 
• Tax Court Guidance for Petitioners (How to go to tax court without a lawyer)
• Option for Small Tax Case Procedures on disputes less than $50,000 (less formal proceedings with speedier disposition)
• Many cases are resolved by mutual agreement before going to trial

What types of cases Tax Court hears? 

Most commonly, the Tax Court hears tax deficiency cases, involving the review of an IRS “Notice of Deficiency” following an IRS Audit. 

Additionally, the Tax Court is authorized to oversee claims related to abatement of interest, partnership actions, interest on deficiencies, disclosure actions, estate tax cases, innocent spouse relief, and collection due process determinations. 

Timeline of a Tax Court case following an Audit

1. Receive an IRS Notice of Deficiency 
2. File a Petition BEFORE the deadline (90 days)
3. IRS files an Answer to claim(s) listed on the Petition
4. Transfer of case to Appeals Division for possible settlement
5. Exchange of documents and information with IRS attorneys
6. Court schedules trial and issues “pre-trial order”
7. Preparation of Joint Stipulation of Facts
8. Trial
9. Post-Trial briefs submitted
10. Appeal, if warranted

What happens during the Tax Court trial?

Absent a settlement agreement, the parties will proceed to trial. 

No jury
Trials at the Tax Court are typically heard by a single judge without a jury. 

Burden of proof
Unless otherwise provided by statute or determined by the Tax Court, the petitioner carries the burden of proof on most all issues in Tax Court. The petitioner must show the court by a “preponderance of the evidence” that the IRS’s determinations are erroneous.

Use of stipulation of facts 
Tax Court Rules require the parties to fully stipulate to all undisputed facts, and the authenticity of documents relevant to the issues in the case. See Tax Court Rule 91(a)(1). 

The general aim of the stipulation is to make the trial itself efficient and narrow the matters in dispute for the judge to decide. 

Presentation of evidence through documents and direct/cross examination of witnesses 
A petitioner must present to the Tax Court the documentary evidence confirming their position and, if necessary, call witnesses (fact and/or expert witnesses) to testify at trial to the facts and circumstances relevant to the case.  

In some cases, the only witness at the trial may be the petitioner. Sometimes the IRS does not call any witnesses and usually relies on the stipulation of facts and cross-examination of the petitioner and petitioner’s witnesses, as well as the burden of proof being on the petitioner. 

How does a Tax Court case end? What happens after the trial? 

Post-trial briefs
Most of the time, the Tax Court will require the parties to submit briefs after the trial. The form and content of the post-trial briefs is governed by the Tax Court Rules. In general, briefs contain the summary of the trial testimony, requested findings of fact, any objections the parties may have, and identification and argument of applicable law. 

Issue of opinion and decision
Upon the conclusion of the trial the judge will issue the opinion. Once the opinion is drafted, the chief judge has 30 days to determine if the opinion should be reviewed by the full Tax Court sitting en banc and whether the opinion should be issued as a precedential regular Tax Court opinion or as a nonprecedential memorandum opinion. 

Appeal
A petitioner must wait for a decision to be entered by the Tax Court before filing an appeal. If no appeal is filed within 90 days after the date the decision is entered, the Tax Court’s decision becomes final. 

Appeals from the Tax Court cases are heard by the Court of Appeals for the Circuit determined based on the taxpayer’s residence or principal place of business. As with all federal cases, the court of last resort for tax cases decided by the Tax Court is the U.S. Supreme Court.