What the U.S. Tax Court is (and When Your Case Belongs There)
The United States Tax Court is an Article I trial court of national jurisdiction that hears federal tax disputes before you have to pay the asserted tax deficiency, penalties and interest. Its judges are appointed for 15-year terms; the Court sits in many cities and conducts in-person and remote (ZoomGov) sessions. In deficiency cases, you can petition the Tax Court within 90 days of a Statutory Notice of Deficiency (150 days if the notice is addressed to you outside the U.S.), which preserves your right to prepayment review. The Court also hears other case types, including Collection Due Process (CDP) determinations, innocent spouse petitions, and certain whistleblower award disputes. Proceedings are governed by the Court’s Rules and the Federal Rules of Evidence.
A crucial timing nuance: after Boechler (2022), the 30-day CDP petition deadline is not jurisdictional and is subject to equitable tolling. By contrast, the Tax Court has held that the 90-day deficiency deadline is jurisdictional and not subject to equitable tolling (Hallmark Research Collective, 2022). Several Courts of Appeals (including the Third, Second, and Sixth Circuits) have since held the 90-day deadline non-jurisdictional and subject to equitable tolling, creating a venue-dependent split; regardless, you should never rely on tolling—file on time.
The Tax Court is a prepayment forum. You petition first and litigate without paying the deficiency up front. Most decisions (except “small tax cases,” discussed below) are appealable to the appropriate U.S. Court of Appeals; whistleblower award cases have special venue rules.
Starting a Case: Notices, Deadlines, eFiling, and “Small Tax Case” Elections
A deficiency case begins when the IRS issues a Statutory Notice of Deficiency. To invoke Tax Court jurisdiction, you must file a petition by the 90th (or 150th) day. Petitions may be e-filed on the Court’s DAWSON system or filed by mail; the filing fee is $60. If mailing, the “timely mailed–timely filed” rule under IRC § 7502 can preserve timeliness based on a proper postmark. For many non-deficiency determinations (e.g., CDP), the petition window and standard of review differ. The Tax Court’s website provides how-to-file guidance, Rules, and the fee schedule.
You may elect small tax case (“S-case”) procedures when the amount in dispute does not exceed $50,000 for any year/period (and the Court accepts the election). S-cases use simplified procedures and are generally faster and less formal, but decisions are not appealable. Choose the “S” route only after weighing the trade-off between speed and the loss of appellate review.
Beyond deficiency and CDP, the Court has jurisdiction to review specific whistleblower award determinations. Such petitions must be filed within 30 days of the determination and appeals from Tax Court whistleblower decisions typically go to the D.C. Circuit. The Tax Court’s 2024 opinions reiterate that whistleblower cases review award determinations—not the target taxpayer’s liability.
What Happens After You File: Pleadings, Discovery, Stipulations, and Trial
Once your petition is docketed, IRS Chief Counsel files an Answer; in many cases, docketed disputes are also referred to Appeals for settlement consideration while the case is pending. If the case proceeds, you will receive a Notice Setting Case for Trial and a Standing Pretrial Order. The Court expects a Pretrial Memorandum, exhibits, and—critically—comprehensive stipulations of all non-privileged facts and documents. Failure to stipulate can lead to sanctions or deemed admissions. Trials are bench trials; the Federal Rules of Evidence apply, and the Court’s Rules govern pretrial conferences, continuances, motions, and sanctions.
Tax Court practice emphasizes informal discovery first (often referred to as “Branerton” practice), followed by formal discovery (interrogatories, production, depositions) if needed. The Court’s Rules require the parties to confer and stipulate to the fullest extent possible; standing pretrial orders and Rule 110 conferences help narrow issues. Noncompliance can trigger Rule 104 sanctions.
Burden of proof is generally on the taxpayer. In certain circumstances, it can shift to the IRS under IRC § 7491(a) if the taxpayer introduces credible evidence and meets recordkeeping/cooperation requirements; for penalties, the IRS bears the burden of production under § 7491(c) and must show timely supervisory approval under § 6751(b) (per Graev/Chai). These proof rules are outcome-determinative and should be addressed in pretrial strategy and stipulations.
At trial, the judge receives stipulated exhibits and testimony. After trial, the Court may order post-trial briefing. In many cases, the Court issues an opinion followed by a Rule 155 computation process to finalize the deficiency and penalties consistent with the opinion.
Standards of Review, Settlements, Decisions, and Appeals
In deficiency cases, the Court generally conducts a de novo trial on the merits (you are not limited to the administrative record). In CDP cases, the standard of review is typically abuse of discretion (unless the underlying liability is properly at issue, in which case the review of that issue is de novo). Many appellate courts limit CDP review to the administrative record, and the Tax Court follows the venue’s controlling precedent (Golsen rule). Understanding your circuit’s stance on the scope of review is essential in building the record at Appeals.
Most Tax Court cases settle, often after docketing, based on hazards of litigation assessments. Settlements are formalized in stipulated decisions. If you lose (or partially lose) in a regular case, you may appeal to the appropriate U.S. Court of Appeals; S-case decisions are final and not appealable. Venue and special rules apply in certain case types (e.g., whistleblower appeals).
Deadline discipline remains critical. For deficiency cases, the safest course is to treat the 90/150-day period as jurisdictional and immutable, notwithstanding developing circuit law; for CDP, Boechler recognizes equitable tolling, but timely filing avoids costly threshold fights. Filing electronically on DAWSON or using a provable, compliant mailing method minimizes risk.
High-Risk and Privilege Considerations (Eggshell Issues Still Matter in Court)
Tax Court litigation often follows civil examinations. If facts suggest potential criminal tax exposure (e.g., badges of fraud), treat the matter as an eggshell or reverse-eggshell situation: do not default back to the original preparer to “explain” numbers, because communications with non-lawyer preparers are generally not privileged in criminal tax contexts and can be compelled. Manage all strategy through counsel; when specialized accounting is needed, use a Kovel engagement so that forensic accounting support operates within attorney-client/work-product protections while you still produce the facts and records the IRS is entitled to obtain. (These privilege rules operate alongside the Court’s evidentiary regime; the Federal Rules of Evidence apply in Tax Court.)
Contact the Tax Law Offices of David W. Klasing if You Are Facing Federal Tax Court Litigation
In Tax Court, substance, process, and presentation all matter. At the Tax Law Offices of David W. Klasing, our dual-licensed Civil and Criminal Tax Defense Attorneys & CPAs build your case for the forum you actually face: we preserve jurisdiction by filing a timely, technically correct petition (DAWSON or paper) and select the proper procedural posture (regular vs. “S” case) based on your objectives—including the consequences for appeal rights under IRC § 7463 and the Court’s Rules. From day one, we plan for the burdens of proof and penalty approval requirements (IRC §§ 7491 & 6751(b)), structure the stipulation and informal discovery process to ensure your best facts are in the record, and align your file with the Federal Rules of Evidence that the Court will apply.
Once docketed, we manage the Standing Pretrial Order and pretrial conferences, prepare a persuasive Pretrial Memorandum, and drive comprehensive stipulations that avoid needless disputes (and sanctions) while preserving crucial objections. If settlement is prudent, we negotiate directly with Chief Counsel—and, where appropriate, with Appeals under the docketed-case settlement procedures—using a hazards-of-litigation analysis tailored to your likely appellate venue. We account for circuit-specific rules that can materially affect outcomes, such as differing interpretations of Collection Due Process (CDP) review scope and the evolving law on whether petition-filing deadlines are jurisdictional or subject to equitable tolling. If a trial is necessary, we present a clean evidentiary record and handle Rule 155 computations to lock in the correct outcome.
Do not let avoidable timing or record-building missteps decide your case. If you have received a Statutory Notice of Deficiency, a CDP Notice of Determination, an innocent spouse determination, or a whistleblower award determination, contact the Tax Law Offices of David W. Klasing for a confidential, reduced-rate initial consultation. Call (800) 681-1295 or reach us through our online contact form HERE today.
