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The Tax Practice of IIT Chicago-Kent College of Law
The Tax Practice of IIT Chicago-Kent College of Law

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The U.S. Tax Court: Different than any Other Judicial Forum

Posted on in Tax Court

U.S. Tax Court, tax law, Chicago Tax Lawyers"I guess you will have to go to jail. If that is the result of not understanding the Income Tax Law I shall meet you there. We shall have a merry, merry time, for all of our friends will be there. It will be an intellectual center, for no one understands the Income Tax Law except persons who have not sufficient intelligence to understand the questions that arise under it." Senator Elihu Root, commenting on the complexity of the very first income tax law in 1913. The U.S. Tax Court began its existence as the Board of Tax Appeals in 1924, when it was still a part of the Executive branch. In 1942, an act of Congress renamed it "The Tax Court of the United States," but it was still a part of the Executive branch and existed in the same building as the IRS. It wasn't until 1969 that a second act of Congress converted it into a 'legitimate' Court - part of the Judicial branch - and renamed it (again) as the "U.S. Tax Court."  

In 1974 the U.S. Tax Court finally got its own building in the heart of Washington D.C. Despite its centralized location, the Tax Court  "travels", hearing cases in cities all over the country.  In the major metropolitan areas (Los Angeles, New York, Chicago), the Court will visit and hear cases mostly every month, while in less populous locales, the Court will visit once or twice a year (Billings, Anchorage, Knoxville).

Two Kinds of Cases

If the IRS claims that you owe money, but there is no single year for which you owe $50,000 or more, you can elect for your case to be heard under the 'small' tax case procedures of the Court.  As with the non-small ("regular") cases, you'll generally be required to pay a $60 fee when you file your "petition", which is the document on which you make the small case procedure selection. What is the difference between small case and regular Tax Court procedures? In small tax cases, the Court "relaxes" the rules of evidence, so that if it is not economical for you to hire an attorney (i.e., the amount at issue doesn’t warrant legal fees or you simply do not have the resources to pay a representative), you will not be held to the same strict rules of evidence that would otherwise apply.  However, small tax cases, by statute, cannot be appealed; whatever the judge decides, ends the matter with finality. Regular tax cases are, therefore, a much more formal affair.  But, there is no rule that requires you to hire a lawyer, even in a regular tax court case.  Note that the Tax Court has no equivalent of the 'public defender;' if you cannot afford an attorney, one will

Stipulations

Unlike most every other court, the U.S. Tax Court requires the parties to get together and jointly submit facts and documents with regard to which they do not have a dispute. The idea is to make the hearing itself more efficient, recognizing that tax cases often involve voluminous records, the authenticity of which the parties rarely dispute (though each side may interpret the materials very differently).  Accordingly, Tax Court cases involve more participation and cooperation with the opponent than other forums.

Post-Trial Briefs

One of the distinctive characteristics of Tax Court trials is the court’s reliance on post-trial briefs – written summaries of the evidence presented at trial and the legal arguments supporting the parties’ respective positions.  This is most definitely the most important aspect of the proceeding, since it each side’s opportunity and obligation to logically and legally argue their cases to the judge, based on the evidence submitted at trial.  The actual hearing before the judge is really secondary in importance to the result as compared to the post-trial brief’s significance. There are other significant differences between the Tax Court and other forums, many of which are set forth in various informational links on the Tax Court’s own useful website – www.ustaxcourt.gov.  

Nevertheless, there is no doubt that dealing with the IRS on your own – particularly when the end game may involve an appearance before a federal judge in court - can be quite stressful.  At the Chicago-Kent Tax Clinic, we provide free consultations and low-cost representation from lawyers with in-depth experience working both for the IRS and in private practice. We regularly assist clients facing Tax Court by thoroughly examining their cases and determining the best path to a positive resolution. To speak with one of our skilled Chicago tax attorneys, contact us today at 312-906-5041.

Sources:

http://www.taxhistory.org/thp/readings.nsf/ArtWeb/C82515A4B6B7A24C85257D1B0041C86E?OpenDocument

https://www.ustaxcourt.gov/taxpayer_info_start.htm

http://www.irs.gov/irm/part35/irm_35-001-003.html

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