This guide summarizes what you will need to do to prepare a case for the United States Tax Court.
You have Received a Statutory Notice of Deficiency
When you receive a Statutory Notice of Deficiency (90 Day Letter) this is your ticket into the United States Tax Court. You have 90 days from the date of the letter in which to file a case with the Court. There are no extensions of time (some very special circumstances can apply). Why is this important? Because this is the only court that your case can be heard without first paying the tax. In other courts (United States District Court and the Court of Claims) you must first pay the tax or a portion of it and sue for a refund.
Preparation of the Petition
To prepare the petition follow the rules of Court of the United States Tax Court that are provided on the U.S. Tax Courts website. This can be technical and if you are not familiar with the process, I strongly recommend that you hire an attorney to prepare this for you. Once the petition is prepared it must be sent to the Court prior to the expiration of the 90 days. Always send the petition by certified mail or one of the approved mailing services, and request a return receipt.
Next the Government will Answer your Petition
The Answer to your petition is the governments response to your claims made in your petition. They may agree to some points and disagree with others. This puts the case at issue. Once you receive the answer it is your first opportunity to settle the case. You now have the contact information for the IRS attorney that is assigned to your case. Use this information to call them and discuss the idea of a possible settlement. They will normally send your case to IRS Appeals in an attempt to settle the matter. If the case does not settle it will come back to the IRS Attorney to prepare the case for trial. You will have at least a couple more times to attempt to settle the case with the IRS Attorney. Be aware that the further the case moves down the road toward trial, the less likely the IRS will want to settle the case since they have prepared it for trial.
Preparing for Trial
You will definitely want a tax attorney to help you prepare your case for trial. The IRS attorney is too experienced for you to handle a case in pro per in most instances. You will be at a serious disadvantage. The IRS attorney knows the tax law and is experienced at presenting their case at trial.
Again, you will want to have a tax attorney represent you in this phase of the process. Your case will have to be presented properly if you are to have a chance of winning. A tax attorney knows the law as well or better than the IRS attorney and is also experienced at presenting the case for trial. This levels the playing field - it may even cause the IRS to settle before the trial. The more prepared you are for the case the more your case will possibly settle, and if it does not settle your preparation will allow you to present a solid case at trial.