Your ticket to Tax Court is usually one of two notices, either a statutory “Notice of Deficiency” following an audit, or a “Notice of Determination” following a Collections Due Process (CDP) hearing. Receipt of either of these notices allows you to petition the court for a review of the Notice. The Code defines a deficiency at § 6211.1 Deficiency rules and procedures are located in §§ 6212, 6213, 6214, and 6215. The IRC sections dealing with lien and levy actions are located at §§ 6320 and 6330.
A Deficiency notice is the IRS’ claim that you owe more tax. You may challenge your liability for the increase in tax. A Notice of Determination either sustains or denies the validity of a collection action like a lien or a levy following a Collections Due Process Hearing. (CDPH) Generally the amount of the liability is not at issue in a Notice of Determination case.
Your Only Chance to Challenge Without Pre-Paying
If you receive a Notice of Deficiency or a Notice of Determination and miss your deadline for filing the petition with the Tax Court, you have given up your opportunity to challenge the tax liability without first paying it. Any further administrative actions will deal only with collecting the money, not with whether you owe it. You still have the right to challenge your liability for the tax in district court, but you will have to pay it in full first.
You have 90 days from the date of your Notice of Deficiency to file your petition and 30 days from your receipt of a Notice of Determination for a lien or levy due process hearing. Don’t miss your deadline. Count the days carefully and don’t rely on the date printed on the notice itself.
How to Count the Days
The proper way to count the days is to count the date of the notice as “0.” The next day is “1” and so forth until you reach the 90th day (or the 30th). If that day falls on a Sunday or one of the holidays listed on the Tax Court website, you have until the next business day to file.
The date you mail your petition is considered the filing date. Your certified mailing receipt from the U.S. Postal Service or the receipt from Fedex or UPS serves as proof of your timely filing. You don’t need to send certified mail with a delivery receipt. The delivery is presumed, and the delivery receipt will not be useful as proof of delivery because you can’t know if the signer was authorized to sign, or indeed, if a signature will appear on the delivery receipt at all. Don’t lose your mailing receipt, however. If you cut your filing close, you will probably have to prove you mailed it on time. You also want to be sure your mailing receipt notes the contents of the mailed package.
Other Types of Tax Court Cases
There are other sources of Tax Court jurisdiction as well. You can find them outlined in the Internal Revenue Manual at IRM 188.8.131.52. They include, among others, innocent spouse relief claims, various administrative adjustments, jeopardy assessments, administrative cost awards, and a few others. The focus of this book is on Notices of Deficiency and Determination. But the general principles I discuss are applicable to any Tax Court proceeding.