I’ll start with the bad news. The U.S. Tax Court is not a fair venue to litigate the limited application or proper enforcement of the income tax laws. The court vigorously suppresses any suggestion that there are limits to IRS authority or that the IRS might be misapplying the law. It does so by any means available except reasoned and researched legal argument. At the mention of certain difficult issues the court simply runs up the “Frivolous” flag and through threats and that application of heavy fines makes sure everyone salutes. When the IRS calls you a “tax protester” the court doesn’t quibble. This is to be expected. If the IRS and the court are indeed misapplying the law, they have been doing it for a long time. If it is true, and I believe it is, they are partners in a massive and shameful fraud. No public agency will ever find itself guilty of such a crime. The good news is that, unlike seeking justice on tax issues in the other federal courts, you may challenge the IRS’s presumptions in Tax Court without first paying the tax. The U.S. Tax Court is a civil court, which means you are simply arguing over the money, and not risking criminal penalties. In pursuing my four cases and seeing dozens of others I’ve learned a great deal that I wish I had known at the start. Most of what I’ve learned has nothing to do with the issues I raised. The purpose of this book is to pass that knowledge along. I hope it will help you avoid my many mistakes and understand the process well enough to successfully plead your own case. I guarantee you will do better than if you had never read this book no matter what kind of issues you are bringing to the court. The main difference between Tax Court and other courts where you might find yourself fighting someone who claims you owe them money is that the “burden of proof” in Tax Court is reversed from cretitor to debtor. In every other judicial venue, the creditor is the plaintiff, and the debtor the defendant. Logically enough, the plaintiff creditor must prove that the defendant owes the debt. He must present undeniable fact evidence of the debt, further evidence that the defendant owes it, and sworn testimony that he has not paid it. The creditor has what is called “the burden of proof.” In Tax Court, the taxpayer is forced to petition the court as the plaintiff. The IRS’s claims enjoy a “presumption of correctness.” Essentially, you have to prove you don’t owe what they say you owe. It’s a heavy burden to bear. The Court will threaten penalties of up to $25,000 for the mere mention of “frivolous” arguments, but will never tell you exactly what you are forbidden to say. The court will interpret the rules in the government’s favor. The government is often not held to them as strictly as you are. They will bend the rules of evidence beyond recognition. Occasionally, though not by any means always, judges are openly hostile. Tax Court judges and the IRS attorneys work for the same employer. Although the judge is theoretically a neutral party, and generally maintains at least a façade of fairness, giving you some lee way because you don’t have a lawyer, he works with your opponents regularly and knows them all. You may get the impression they are on the same side and working against you, and you may be right. More often than not, people pleading their own cases (
Introduction to Tax Court
Introduction to Tax Court
Introduction to Tax Court
I’ll start with the bad news. The U.S. Tax Court is not a fair venue to litigate the limited application or proper enforcement of the income tax laws. The court vigorously suppresses any suggestion that there are limits to IRS authority or that the IRS might be misapplying the law. It does so by any means available except reasoned and researched legal argument. At the mention of certain difficult issues the court simply runs up the “Frivolous” flag and through threats and that application of heavy fines makes sure everyone salutes. When the IRS calls you a “tax protester” the court doesn’t quibble. This is to be expected. If the IRS and the court are indeed misapplying the law, they have been doing it for a long time. If it is true, and I believe it is, they are partners in a massive and shameful fraud. No public agency will ever find itself guilty of such a crime. The good news is that, unlike seeking justice on tax issues in the other federal courts, you may challenge the IRS’s presumptions in Tax Court without first paying the tax. The U.S. Tax Court is a civil court, which means you are simply arguing over the money, and not risking criminal penalties. In pursuing my four cases and seeing dozens of others I’ve learned a great deal that I wish I had known at the start. Most of what I’ve learned has nothing to do with the issues I raised. The purpose of this book is to pass that knowledge along. I hope it will help you avoid my many mistakes and understand the process well enough to successfully plead your own case. I guarantee you will do better than if you had never read this book no matter what kind of issues you are bringing to the court. The main difference between Tax Court and other courts where you might find yourself fighting someone who claims you owe them money is that the “burden of proof” in Tax Court is reversed from cretitor to debtor. In every other judicial venue, the creditor is the plaintiff, and the debtor the defendant. Logically enough, the plaintiff creditor must prove that the defendant owes the debt. He must present undeniable fact evidence of the debt, further evidence that the defendant owes it, and sworn testimony that he has not paid it. The creditor has what is called “the burden of proof.” In Tax Court, the taxpayer is forced to petition the court as the plaintiff. The IRS’s claims enjoy a “presumption of correctness.” Essentially, you have to prove you don’t owe what they say you owe. It’s a heavy burden to bear. The Court will threaten penalties of up to $25,000 for the mere mention of “frivolous” arguments, but will never tell you exactly what you are forbidden to say. The court will interpret the rules in the government’s favor. The government is often not held to them as strictly as you are. They will bend the rules of evidence beyond recognition. Occasionally, though not by any means always, judges are openly hostile. Tax Court judges and the IRS attorneys work for the same employer. Although the judge is theoretically a neutral party, and generally maintains at least a façade of fairness, giving you some lee way because you don’t have a lawyer, he works with your opponents regularly and knows them all. You may get the impression they are on the same side and working against you, and you may be right. More often than not, people pleading their own cases (