Tax Court

About Tax Court: in the United states, is an independent 19-judge federal administrative agency that functions as a court to hear appeals by taxpayers from adverse administration decisions by the U.S. Internal Revenue Service. The Tax Court does not require the taxpayer to pay the alleged deficiency before suit. An adverse decision may be appealed as of right to the Court of Appeals and in a few cases to the U.S. Supreme Court.

Tax Courts in the United States

Three federal trial-level courts have jurisdiction over tax disputes: the United States Tax Court, the United States District Courts, and the United States Court of Federal Claims. The United States Courts of Appeals are generally the highest appellate-level courts to hear tax cases because the United States Supreme Court hears very few tax cases.

The United States Tax Court

The United States Tax Court, a specialized court that hears only federal tax cases, issues two types of decisions: regular (or reported) decisions and memorandum decisions. Regular decisions concern new areas of tax law or new interpretations of the Internal Revenue Code. Memorandum decisions concern interpretations of facts, not law, and are not officially published. (Beginning in 2001, the Tax Court also issues summary opinions in small cases involving disputes of $50,000 or less. I will not discuss these opinions further because they may not be used as precedent.) The Tax Court is generally a good forum for litigating technical tax issues because tax court judges are tax law specialists. Jury trials are not available in the Tax Court, and the taxpayer need not pay the disputed taxes before instituting litigation. Click on the following link for information on locating regular and memorandum Tax Court decisions.

Before 1943, the United States Tax Court was known as the Board of Tax Appeals, which was in existence from 1924 to 1943. The Board of Tax Appeals also issued both reported and memorandum decisions. Click on the following link for information on locating regular and memorandum Board of Tax Appeals decisions.

The United States District Courts

The United States District Courts’ jurisdiction over tax cases is generally limited to tax refund claims and criminal tax cases. The taxpayer is expected to pay the disputed tax debt before filing suit. The District Court is the only court with tax jurisdiction in which the taxpayer can request a jury trial. Click on the following link for information on locating United States District Court Tax opinions.

The United States Court of Federal Claims

The Court of Federal Claims hears cases involving monetary claims against the federal government. Approximately one quarter of the cases before the Court involve tax refund suits, an area in which the Court has concurrent jurisdiction with the United States District Courts. As with the District Courts, the taxpayer is expected to pay the disputed tax debt prior to filing suit. A taxpayer does not have the right to a jury trial in the Court of Federal Claims. Appeals from the Court of Federal Claims are to the United States Court of Appeals for the Federal District. From 1982 to 1992, the Court was called the United States Claims Court, and from 1956 to 1982, the United States Court of Claims. Click on the following link for information on locating United States Court of Federal Claims opinions.

The United States Courts of Appeals

The United States Courts of Appeals hear appeals from the trial courts discussed above: the United States Tax Court, the United States District Courts, and the United States Court of Federal Claims. The United States Supreme Court hears very few tax cases, and, therefore, the Appeals Courts are often the highest court that most tax cases will reach. It is important to update tax cases in one of the ways discussed on the page linked to below so that you will be aware of any cases appealed to the United States Supreme Court. Click on the following link for information on locating United States Courts of Appeals decisions.