FILING A PETITION in Tax Court is the only way you can contest an income tax liability without first paying the tax. If you miss your filing deadline, usually 90 days after the date of the Notice of Deficiency,1 the tax will be assessed under section § 6213(a).2 After that you will only be allowed to contest the method of collection. You will have forfeited your right to contest the liability without first paying it. Not having to pay the tax first makes Tax Court the most accessible of judicial venues for most people. But being able to play without paying has its price. You give up your right to a jury. And your opponent enjoys a presumption of correctness that would exist in no other court. For that and many other reasons it is important to understand the structure of the proceeding and what is happening in each phase.
As a side note, the Tax Court also has jurisdiction to review collection actions as well as deficiencies. Collections are suspended while a collections case is pending in the court, and the court has the authority to order such actions stopped if the IRS continues to attempt to collect. You may move the court to cease any collection action on liens or levies issued after the issuance of a notice and while a case is pending. The motion should ask the court to rescind the lien or refund any moneys levied. Attach an affidavit to your motion describing what the IRS has done. You will have to prove what the IRS has taken if you are looking for a refund. See Tax Court Rule 55.3
Pretrial Memo Form
The court sends petitioners a form when it announces a trial date. that nicely summarizes the structure of a Tax Court case. Unfortunately, this little summary arrives long after the case has begun.
I am referring to the Court’s Pre-trial Memorandum form. You will receive the form along with the announcement of a trial date, usually 4 to 6 months after you petition the court and after any hearing by the Appeals Office. Two weeks before the trial, you are expected to fill it in with basic case information, (names and phone numbers, the docket number, and status of the stipulations, motions you plan to make and so forth). You send the form to the court in preparation for the trial.
But what interests us here is the way the form breaks out the three basic parts of the process—issues, facts, and law. Those three words summarize the structure of a Tax Court case. Unfortunately, I didn’t figure that out until I’d already been through my first case. You don’t have to wait that long.
1 Note the deadline is 30 days after a CDP hearing Notice of Determination. In this type of case issue is how you are going to pay, not how much you owe.