United States Tax Court is a trial court with limited jurisdiction. Tax Court has only the power to adjudicate the controversies that Congress expressly and statutorily confers upon it. Tax Court cannot expand its jurisdiction on its own, but it does have the ability to determine whether or not it has jurisdiction over a tax matter.
Jurisdiction of Tax Court is fundamental and must be addressed by the court whenever a party to a case raises the issue.
If Tax Court lacks jurisdiction it cannot rule upon or decide the issue. Once Tax Court determines that it has jurisdiction over the matter it retains jurisdiction, even if one or more parties desire the matter to be removed from its power for most case types.
Tax Court is granted its core authority in Internal Revenue Code §6213 to redetermine a deficiency asserted by the IRS in income tax under Subtitle A, estate or gift tax under Subtitle B and certain excise taxes under Chapters 41,42, 43 and 44.
Jurisdiction of Tax Court generally depends upon:
The IRS issuing a Statutory Notice of Deficiency or Notice of Determination under Internal Revenue Code §6212, with respect to tax deficiencies under Subtitle A or B, or certain excise taxes under Chapters 41, 42, 43 or 44,
The filing a timely petition.
Most employment and excise taxes are not subject to deficiency procedures. Therefore, since no Notice of Deficiency is issued, Tax Court does not have jurisdiction to hear these case types unless the matter relates to a collection action that has been subject to Internal Revenue Service Office of Appeals Collection Due Process procedures and final determination.
The most significant advantage of filing the case to U.S. Tax Court instead of other jurisdictional Courts is that the taxpayer is not required to prepay the proposed deficiency that is related to the disputed liability.
Taxpayers SHOULD NOT make payment to the IRS on the proposed deficiency prior to the filing of a petition to Tax Court unless the purpose is to reduce a deficiency to less than $50,000. to render the case eligible for Small Tax Case procedures.
Taxpayers payment of the full deficiency to the IRS prior to the filing of a petition to Tax Court renders the proposed deficiency as an assessment and subsequently removes Tax Court’s jurisdiction to redetermine the deficiency.
However, taxpayers are permitted to make a deposit to the to the taxpayer’s account to stop the accrual of interest on proposed underpayments without impairing Tax Court jurisdiction relating to the case under Internal Revenue Code §6603.
Interest remains accruing on the underlying tax deficiency during the period in which the case is under review by Tax Court as well as during the period of appeal of Tax Court’s decision, if applicable.
Once the taxpayer’s case petition is filed to Tax Court and the case is docketed by the court, then the taxpayers may make payment in full to the proposed deficiency and file an amended pleading including the request of an overpayment refund in the event that the taxpayer’s position prevails in Tax Court.
Tax Court Judges sit without a jury, there is no trial by jury.
Tax Court Judges are experts in tax laws.
Tax Court docketed cases are subject to review by IRS Office of Appeals. Some types of cases are commonly remanded to Office of Appeals for further review or correction. IRS Office of Appeals retains settlement jurisdiction for the 6-month period following Tax Court petition filing for Regular Tax Cases and for the entire period after petition filing up to 15 days prior to trial for Small Tax Cases.
The timely filing of a petition to Tax Court may, in these circumstances, serve as a benefit to the taxpayer in attempts to resolve the tax controversy with the IRS Office of Appeals prior to the Tax Court case proceeding to trial.
Small Tax Case procedures are available for many case types in which the tax liability including additions to tax and interest is less than $50,000.00. Small Tax Cases are generally conducted under less formal court procedure and generally have relaxed rules of evidence enabling any evidence that is deemed by the court to have probative value admissible. Cases heard before the Court under the Small Tax Case procedures are final decisions and the decision cannot be appealed.
U.S. Tax Court Regular Tax Cases and U.S. District Court decisions can be appealed to the U.S. Courts of Appeal.
U.S. Supreme Court may review an appeal from the U.S. Court of Appeals.
Tax Facts United States Tax Court Practitioner (USTCP) counsels are admitted to the U.S. Tax Court Bar with full capability to directly represent either individuals or business taxpayers and litigate the tax controversy case.
Understand that only State licensed attorneys who are also admitted to the U.S. Tax Court Bar or United States Tax Court Practitioner’s who are also admitted the U.S. Tax Court Bar can legally petition a tax case to Tax Court and directly represent either individuals or business taxpayers!
This fact is of substantial importance for taxpayers!
A tax professional with the designations as Unenrolled Preparer, a preparer with the former registration designation (RTRP), a preparer with current tax year approval (AFSP), an Enrolled Agent (EA) or a Certified Public Accountant (CPA) whom is NOT admitted to the U.S. Tax Court Bar CANNOT directly represent any tax controversy case before the judges of United States Tax Court.
Know that these designated professionals do not possess the qualifications or knowledge necessary of the procedural rules of the court, rules of evidence or rules of ethics to adequately represent a taxpayer before the court.
Know that any advisement received from any of these persons is the unauthorized practice of tax law.
They do not possess the recognized knowledge or qualifications to render proper advisement.
They do not have the authority under the law to sign a Tax Court Petition because they do not hold an active bar license in good standing with the court.
Any Tax Court Petition prepared and filed to the U.S. Tax Court by these designated professionals will be docketed by the court as a Pro Se case.
This means that YOU are self-representing before the court.
If you have received an IRS issued Notice of Deficiency or Notice of Determination, don’t delay contact us today to preserve your rights to have your case properly petitioned to the U.S. Tax Court!
TIME IS OF THE ESSENCE! The petition filing periods are statutory and cannot be extended!
If you received a Notice of Deficiency, then your case petition must be timely filed to Tax Court within 90 days of the date of the notice issuance to preserve your taxpayer right to challenge the IRS asserted deficiency.
If you received a Notice of Determination, then your case petition must be timely filed to Tax Court within 30 days of the date of the notice issuance to preserve your taxpayer right to challenge the IRS determination.
Please contact us, one of our experienced Tax Court Bar licensed United States Tax Court Practitioner (USTCP) counsels will contact you to schedule a consultation to determine the merits of your tax case.