Facts in Tax Court

Facts are what trials are all about in Tax Court. You frame the issues in your petition, and from then on, you will be trying to establish the facts that the Court will accept into evidence at the trial to prove your case. Your opponent will be doing the same.

Facts Must Be Admitted or Denied

You state in your petition a list of errors the IRS made, and a list of facts on which you rely in determining they made them. The IRS will admit or deny those facts. At the trial you and your opponent will offer fact evidence to support your allegations. Between the time you file your petition and the trial, you both will have the opportunity to obtain evidence through what is called discovery. And in deficiency cases, you will also have an opportunity to negotiate your case with the IRS Appeals Office.

The object of discovery is to find out what the facts are, and on which facts you and the IRS agree and disagree. From that determination you prepare a document called your “Stipulation of Facts” or SOF.

Undisputed Facts Must Be “Stipulated”

The SOF specifies the facts the parties agree on and the documents they agree will be placed into evidence. For those facts and documents on which you can’t agree, the SOF includes them with the objections that the parties have. The Court’s rules require the parties to stipulate to undisputed facts. 

The Stipulation forms the basis for what will happen at the trial. Agreed facts go into evidence immediately at the beginning of the trial. If, after the discovery process, the parties find that there are no real facts in dispute, one or the other of them may move the court for “summary judgment.” That is, may ask the court to apply the law to the agreed facts without the need for a trial.

Trials Are Only to Establish Facts

Remember, trials are simply to establish facts. If there are no facts in dispute, there is no need for a trial.

When there are clear conflicts about the facts, those for which there are objections will be contested at the trial based on the Rules of Evidence and the Court’s Rules. Your goal at the trial is to exclude what the IRS wants to place into evidence against you and to get the facts you are relying on into the record. It’s as simple as that.