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Tax litigation involves legal proceedings related to federal tax disputes. When facing such disputes with the Internal Revenue Service (IRS), understanding the choice of forum and the unique nature of tax litigation is essential for professionals and business owners. This overview provides insights into the critical aspects of tax litigation and the decision-making process involved in choosing the appropriate court.
Choice of Forum for Suing the IRS
Tax Court
The tax court is dedicated to handling federal tax disputes and offers several benefits for taxpayers. It is known for its familiarity with tax law, offering a more informal atmosphere and not charging filing fees. The tax court’s smaller caseload often results in quicker decision times. Examples of cases suitable for the tax court include being denied a tax refund, IRS audits resulting in additional tax assessments, penalties for late filing or failure to pay taxes, and disputes over incorrect tax notices.
District Court
District courts, which are general-purpose courts, also have jurisdiction over tax disputes. They offer different advantages, such as the ability to award damages in addition to tax refunds and issue injunctions against the IRS. District courts can subpoena third-party witnesses and documents, making them suitable for more complex tax disputes. Situations where suing in district court might be appropriate include seeking damages for wrongful IRS levies, injunctions against IRS actions, complex tax disputes involving multiple issues, or denial of tax exemptions or benefits.
How Tax Litigation Differs from Other Legal Proceedings
Tax litigation is distinct from regular criminal or civil litigation. Governed by specialized tax law, it involves different rules and procedures. The complexity of tax law often makes these cases more intricate than other legal disputes. Additionally, the IRS’s substantial resources can extend the duration of tax litigation, making it more time-consuming.
Deciding whether to sue the IRS in tax court or district court depends on the specifics of each case and the remedy sought. If seeking a simple tax refund, tax court might be the better choice. For cases involving damages or other forms of relief, district court could be more appropriate. It’s important to note that certain circumstances, such as a jeopardy assessment by the IRS, necessitate suing in district court.
Developing The Right Strategy
Tax litigation presents unique challenges and requires careful consideration of the legal options available. Whether you’re dealing with IRS audits, tax notice disputes, or seeking damages for wrongful IRS actions, it’s crucial to consult with a knowledgeable attorney. At Weisberg Kainen Mark, we have extensive experience in guiding individuals and business entities through the complexities of tax litigation. Our approach is tailored to the unique aspects of each case, ensuring our clients understand their options and make informed decisions. If you’re facing a tax dispute and considering litigation, schedule a consultation with us by calling (305) 374-5544. Let’s explore your legal options and strategize the best course of action for your situation.
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