Tax court is a special court within the U.S. judicial system that focuses solely on tax-related matters. This court can help resolve disputes between taxpayers and the Internal Revenue Service (IRS), regarding the payment of taxes owed. It is the last court of appeal for taxpayers, so knowing a bit about it can be beneficial if you are ever involved in a tax-related dispute.
What Does Tax Court Do?
The tax court helps to resolve tax-related disputes between taxpayers and the IRS. When there is a disagreement between the two parties, the tax court can issue an injunction to stop a government action or order payment of a refund if an overpayment has been made. The court will also deal with any other issues that arise in relation to taxes, such as over-collection of taxes, lack of collection, and certain related penalties and interest. It is important to remember that the rulings and decisions of the tax court are made solely by the court, not the IRS.
What Are the Benefits of Going to Tax Court?
By going to tax court, you have the ability to argue your case before a judge without first having to go through the IRS administrative process. This can be beneficial to those taxpayers who want to avoid dealing with government bureaucracy and paperwork. Additionally, the judge in the tax court is able to hear testimony from witnesses, review documents, and review evidence in order to make a ruling. This can give taxpayers a more thorough hearing than they may have in other courts.
Examples of Tax Court Matters
Recent tax court cases have ranged from the more typical tax disputes such as denial of deductions or the calculation of tax liabilities, to more complex matters such as disputes over offshore accounts and the classification of certain workers as independent contractors. Taxpayers involved in a dispute with the IRS may also benefit from the tax court’’s expertise on how to avoid penalties and other sanctions.
What Happens After Tax Court?
If the tax court judge makes a decision that is not satisfactory to either the taxpayer or the IRS, an appeal can be filed with the U.S. Court of Appeals. This means that the tax court’s decision is not the final ruling and does not preclude further legal action. Additionally, any punishments or orders issued by the tax court are still enforceable by the IRS until the matter is decided in a different court.
Conclusion
Tax court is a valuable legal institution that helps to resolve tax-related disputes between taxpayers and the IRS. It offers taxpayers an unbiased hearing in an environment that is less formal than some other courts. Knowing what tax court does and how to use it can provide taxpayers with beneficial options when faced with a tax-related disagreement.