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Texas Tax Court Litigation Lawyers: Your Guide to Legal Support | Booth P.C.

Understanding Tax Court Litigation in Texas

Tax Litigation keeps the parties honest and is check on the power of the IRS. Without tax litigation, there would be no way to resolve tax disputes that the parties can’t settle with the IRS. Tax litigation in Texas, whether before the United States Tax Court or Federal Courts, is the primary way tax controversies are decided when audits or administrative appeals fail to resolve your dispute with the IRS.

Booth P.C. is premier Houston, Texas Tax Controversy and Litigation law firm. With over 15 years of significant Courtroom experience- including trials, hearings, motions, and depositions- with both the Internal Revenue Service and the United States Attorney’s Office, Booth P.C. will be a zealous advocate for you or your business. Booth P.C. has significant experience dealing with IRS Audits, IRS Collection, IRS Appeals, and United States Tax Court and United States Federal District Courts regarding Tax Disputes. Contact us today for your individual or Business Tax Litigation needs.

What Is Tax Court Litigation, and How Does It Apply to Texas Taxpayers?

Tax Court Litigation (and District Court Litigation) is generally the final step in the Federal tax controversy process. Whether you are an individual or business, an experienced tax attorney with an eye toward litigation is critical to your success. Booth P.C. is experienced in all aspects of Tax Controversies and can represent you in both the U.S. Tax Court and the Federal District Courts.

Pre-Controversy- Filing of a return

In Tax controversy litigation, you should think about the end at the beginning. A seasoned Tax attorney who is proficient in Federal Tax Law will consider potential IRS challenges to positions taken on your tax returns. Careful consideration of the position taken on your return often determines whether cases have a successful resolution.

Notice of Deficiency or Notice of Determination

When the Internal Revenue Service completes its audit or examination, it will send you a Notice of Deficiency or Notice of Determination. A Notice of Deficiency will include the additional amount of tax, penalties and interest that the IRS has determined that you owe, along with the legal basis for the determination of that deficiency. A Notice of Determination is sent to you by the IRS most often when the IRS is attempting to collect a tax debt that you may owe. When the Internal Revenue Service send you a Notice of Deficiency or Notice of Determination, it is critical that you contact an experienced tax attorney as soon as possible to represent you and protect your interests. Generally, you only have 90 days from the date of the Notice of Deficiency or Notice of Determination to sue the IRS and file a petition with the United States Tax Court.

The majority of Federal Tax litigation occurs in the U.S. Tax Court, primarily because it is a “pre-payment” forum. This means that the U.S. Tax Court handles disputes with the IRS before taxes are paid and individuals and businesses in Texas can pursue cases in the U.S. Tax Court. This allows you or your business to retain financial flexibility while challenging the IRS.

Federal District Court or Court of Federal Claims

While the majority of Tax controversy and litigation occurs in the United States Tax Court, the Federal District Courts and Court of Federal Claims are also avenues to dispute IRS decisions. The most common lawsuit in Federal Court is a Tax refund suit, where a taxpayer is suing the Internal Revenue Service to recover taxes previously paid to the IRS. Federal Courts also hear injunction lawsuits, IRS summons enforcement lawsuits, and IRS Notice validity challenges (these notices are distinct from the notices mentioned above.)

The U.S. Tax Court Process: How Cases Are Litigated in Texas

Although based in Washington, D.C., the U.S. Tax Court “Rides the Circuits”, meaning it travels to several cities throughout the United States, including several cities in Texas. Currently, the U.S. Tax Court travels to the following Texas cities: Houston, Dallas, San Antionio, El Paso, and Lubbock. Litigating a case before the U.S. Tax Court includes several very strict procedural and strategic steps, the most basic of which are:

  1. Filing a petition. This petition will explain the errors you believe the IRS made in your case. The deadline for filing is typically 90 days after receiving a deficiency notice. In this petition, you will list the issues the IRS has raised that you want the Court to decide. Commonly litigated issues in the U.S. Tax Court include:
  • IRS deficiency notices (unpaid income tax claims);
  • IRS Collection determinations;
  • Disallowed deductions orcredits;
  • Limited Payroll and employment tax disputes; and
  • Penalty disputes.

Possible Appeal if necessary.If the Tax Court judge decides against you, the case may not be over, depending on the applicable procedures. If your trial was held under “Regular” Tax Court case procedures, you can file an appeal of your case to a Federal Court of Appeals. This is a very complex process frought with procedural and legal requirements that an experienced tax litigation attorney will naviagate on your behalf.

Pre-trial negotiations and settlement opportunities with the IRS.After your petition is filed, you may have an opportunity to speak with the IRS appeals office in an effort to settle your case. Usually, you only have one opportunity to settle your case with the office of appeals, so careful, strategic planning is critical to your success.

Discovery and preparation of evidence.At this stage, you are fully preparing for trial and working with a Tax attorney is critical. You will ask the IRS for documents it has that may help prove your case, and you will be required to respond to the IRS requests for documents. As you gather evidence, you will need to make several decisions about admissibility, privileges, location of evidence, and other matters.

The U.S. Tax Court Trial session.At this stage, you are ready to have your day in Court. You may have pre-trial hearings, including Motion hearings, and the trial of your case will commence with an opening statement and conclude with a closing statement. During the trial you may examine witnesses, experts, and raise defenses. The IRS has attorneys well trained in tax law who will vigorously defend its position as well. Strong legal representation with an experienced tax litigation attorney is crucial.

U.S. Tax Court Procedures: Regular Case or Small Case?

Depending on the amount of the Deficiency in the IRS Notice you received, your case may be eligible for Small Tax Case (“S” Case) Procedures. To elect S Case procedures, you must limit the amount you are disputing to $50,000 or less. Unlike the strict procedural requirements of Regular Tax Court cases, S Cases have relaxed procedural rules and are less formal in certian aspects, but come at a cost: U.S. Tax Court decisions in S Cases cannot be appealed.

Key Considerations in U.S. Tax Court Litigation in Texas

Filing a lawsuit in the U.S. Tax Court can be intimidating for seasoned lawyers without experience litigating Tax and Tax-related cases. This is due to the formality and complexity involved in Federal Court litigation, the nuances of preparing for trial, including the critical importance of gathering accurate records, financial statements, and documentation as evidence.

You must evaluate risks, costs, and potential outcomes before proceeding to trial, including a consideration of settlement without trial. Often times a settlement in the best outcome, as it allows for controlling the risks that area associated with trial. Other considerations include a coherent, detailed, and well-planned legal strategy that minimizes both current and future liability, including IRS penalty considerations.

Most importantly, working with tax lawyer who is a litigator provides the best opportunity for success compared to self-representation. The Internal Revenue Code is over 80,000 pages. The Federal Rules of Civil Procedure and the Tax Court Rules must be strictly followed when litigating before the U.S. Tax Court. There are strict jurisdictional and procedural deadlines that must be met. Trusting an experienced tax lawyer to represent your interests in critical.

How a Booth P.C. Texas Tax Court Litigation Attorney Can Help You

Case Assessment

At Booth P.C., we offer free case assessments. Booth P.C. has a rare level of breadth and experience in all aspects of tax litigation and there is likely no issue that will be unfamiliar to us. We will speak with you to determining the strength of your position and discuss your available and best options.

Representation at all stages

With Booth P.C., you will have exceptional representation at every stage of litigation. Whether filing petitions, negotiating settlements, litigating in court, or filing an Appeal, you will have a trusted advisor and zealous advocate at every step.

Extensive Breadth and Depth of Tax Controversy Litigation experience.

At Booth P.C., our Tax Attorney has over 15 years of experience in all aspects of Tax Litigation, including individual and business disputes. Our Tax Attorney has over 50 Trials in the U.S. Tax Court, received over 40 Opinions, appeared at Hundreds of Motions and Hearing settings, and is intimately familiar with all manner of individual and business tax issues. These issues include unreported income, disallowed business deductions, self-employment taxes, excise taxes, IRS penalties, International and offshore tax, Estate tax, gift tax, refunds, and more. Simply put, if you have an IRS Tax problem, Booth P.C. has the experience and knowledge to protect your rights and will providing peace of mind by handling litigation deadlines and complex courtroom procedures.

Frequently Asked Questions

Do I need to pay the IRS before filing a Tax Court petition in Texas?

No. As a “Prepayment” forum, you can file a petition (lawsuit against the IRS) in U.S. Tax Court before you pay the amount the IRS says you owe.

How long do I have to file a Tax Court petition after receiving an IRS Notice of Deficiency in Texas?

Generally, 90 days, although it depends on several factors, including the type of notice, where you are located (domestic or international)

What types of disputes are commonly handled in Tax Court for Texas taxpayers?

There are usually approximately 25,000 to 30,000 petitions (lawsuits) filed every year with the U.S Tax Court. While the Tax Court has jurisdiction over a large amount of dispute

What is the difference between U.S. Tax Court and Texas state tax disputes with the Comptroller?

There are several differences, but the primary difference is that litigation in the U.S. Tax Court is for disputes against the Internal Revenue Service and is based exclusively on Federal Tax Law (the U.S. Tax Code) while Texas state Tax litigation is based on the Texas Tax Code and includes disputes including Franchise Taxes or Property Taxes.

Can my case be settled with the IRS before going to trial in Texas?

Absolutely. In fact, an experienced Tax Attorney is likely to settle the overwhelming majority the cases they have in the U.S. Tax Court prior to trial.

Do I need an attorney to represent me in Tax Court, or can I represent myself?

You don’t “need” an attorney and can represent yourself before the U.S. Tax Court as a pro se litigant. However, while you can represent yourself, generally you should not. Once you file a petition (lawsuit) in the U.S. Tax Court, your case is assigned to an IRS Attorney, who will zealously represent the IRS in U.S. Tx Court.

What evidence or records should I gather for Tax Court litigation in Texas?

You should gather any and all evidence that proves your case (i.e. that the IRS is wrong). This includes documents in your possession, documents in another person/parties possession, and potentially documents in the possession of the IRS.

How long do Tax Court cases typically take for Texas taxpayers?

Once a petition is filed, case resolution times can vary from a few months if you reach a settlement to many years if there is a trial (not including a potential appeal).

What are the possible outcomes of a Tax Court case in Texas?

There are generally 4 outcomes in a U.S. Tax Court case. You can reach a settlement with the IRS, you can win at trial (ex. you owe nothing/get a refund), you can lose at trial (ex. you owe what the IRS says you owe in the Notice you received), and/or the Court could find partially for you and partially for the IRS.

What happens if I miss the deadline to file my Tax Court petition in Texas?

If you miss the petition filing deadline, what the happens depends on what kind of Notice you received. For example, if you received a Notice of Deficiency, the IRS will assess the amount in the Notice of Deficiency and begin aggressively collecting the amount you owe. Or if you miss the deadline in a Notice of Determination in a Collection case, the IRS will resume aggressive collection.