If you and the IRS do not agree on your tax situation or tax debt, you are entitled to take your case to the United States Tax Court, the United States Court of Federal Claims, or the United States District Court to properly resolve your case.
Because your case will be handled through the courts, most professionals believe that you may get the most fair review and determination on your tax dispute.
For court proceedings resulting from tax disputes since July 22, 1998, the IRS has the burden of proof for any factual issue. That means that the IRS has to prove that they are right. This can be a huge advantage for taxpayers in that there is no automatic assumption of tax liability against the taxpayer if the taxpayer has introduced credible evidence to support their factual position.
The key to a quick and successful Tax Court proceedings is to organize and collect all available records and documents that will support your case. Even if you don't have the documents in your possession, your attorney can obtain certain required documents through discovery and other court implemented procedures to reconstruct the true picture of your case. Most experienced tax lawyers believe that the court system offers the most fair and cost effective outcome for most tax problems.Recovering Costs for Lawsuit And Fees
Some people are concerned with costs and expenses related to pursuing their case through the court system. Surprisingly, legal costs involved in the Tax Court process can be much lower than those in other court proceedings.
In addition, you are entitled to recover reasonable litigation and administrative costs including attorney fees, expert fees, costs of studies and analysis, engineering reports and so on. These fees are recoverable if you are the prevailing party in the lawsuit as long as you exhaust all administrative remedies within the IRS and meet certain other basic conditions.