What is Tax Court? Overview & Functionality

Tax disputes are a common occurrence in the world of finance, often requiring specialized legal intervention for resolution. One such avenue is tax court, a dedicated forum for tackling tax-related conflicts. This article delves into the intricacies of tax court, exploring its functions, procedures, and significance in the financial landscape.

Tax court stands as a distinct legal entity tasked with addressing disputes and issues revolving around taxation. In the United States, it operates as a federal court, established by Congress to provide taxpayers with a means to contest tax assessments or deficiency notices issued by the Internal Revenue Service (IRS). Conversely, the Tax Court of Canada serves a similar purpose north of the border, functioning as a superior court independent of the Canada Revenue Agency.

Tax courts wield authority over a diverse spectrum of tax-related matters, encompassing income tax, estate tax, and various disputes arising from tax assessments. In the U.S., the Tax Court functions autonomously from the IRS, ensuring impartiality in resolving disputes. Its jurisdiction extends to cases involving notices of deficiency, worker classification disputes, and reviews of collection actions. Similarly, the Tax Court of Canada presides over cases related to income tax, goods and services tax (GST), and employment insurance.

Initiating a tax dispute or seeking a delay in tax payment entails filing a petition with the Tax Court within 90 days of receiving a Notice of Deficiency from the IRS. Upon filing, a nominal fee is required, and the case is assigned to a single judge for adjudication. Taxpayers may represent themselves or enlist legal practitioners admitted to practice before the U.S. Tax Court. While most cases are settled prior to trial, those proceeding to trial culminate in a report issued by the presiding judge, along with findings of fact and an opinion. Decisions rendered by the Tax Court may be subject to appeal to the U.S. Court of Appeals.

Tax Court adjudicates various tax matters, including income tax, estate tax, and disputes over IRS determinations such as notices of deficiency.

Taxpayers in the U.S. typically have 90 days from the date of receiving a Notice of Deficiency from the IRS to file a petition with the Tax Court.

Yes, decisions rendered by Tax Court can generally be appealed to the U.S. Court of Appeals, providing an avenue for further review if necessary.