U.S. TAX COURT & LITIGATION
A statutory notice of deficiency — the ninety-day letter — is the taxpayer’s ticket to the United States Tax Court. It is also a jurisdictional deadline. It cannot be extended by agreement, by hardship, or by the Service. A petition filed on the ninety-first day is dismissed, and the deficiency is assessed.
Ninety days, and not one more.
The petition deadline is jurisdictional. No hardship, no agreement, and no officer of the Service can extend it.
Scheduling does not create an attorney-client relationship. No such relationship exists until the firm has run a conflicts check and both sides have signed a written engagement agreement.
Two of the three courts require the tax to be paid before they will hear it.
WHY THE TAX COURT MATTERS
It is the only federal forum in which a tax deficiency can be contested before it is paid. The alternatives — the federal district courts and the Court of Federal Claims — require full payment of the tax first, followed by a suit to recover it. For most taxpayers that single distinction selects the forum.
WHAT THE TAX COURT HEARS
Its jurisdiction is broader than deficiency cases alone, and several of these routes are the only judicial review a taxpayer will ever get.
Deficiency redetermination
The core jurisdiction. Income, estate, and gift tax deficiencies, contested before payment.
Collection due process
Review of a CDP determination — available only if the hearing was requested inside its thirty days.
Innocent spouse relief
A stand-alone petition, with its own deadline, independent of any deficiency case.
Partnership readjustment
Judicial review of a BBA final partnership adjustment, brought by the partnership representative.
Worker classification
Whether workers are employees, and whether §530 relief applies.
Interest abatement and whistleblower awards
Narrow jurisdictions, and in each the Tax Court is the only court that will hear it.
REGULAR CASE OR SMALL TAX CASE
A taxpayer whose dispute is $50,000 or less for any one year or period may elect small tax case treatment under section 7463. The election trades procedure for speed, and the trade is permanent.
The Federal Rules of Evidence apply. Full pretrial procedure, briefing, and a reasoned opinion. The decision is appealable to the court of appeals for your circuit, and it can be cited. Slower, and the record is built to survive review.
Conducted as informally as orderly procedure permits; any evidence the Court finds probative is admissible, and briefs are not ordinarily required. Faster and cheaper. But under §7463(b) the decision is reviewable in no other court and is precedent for nothing — neither side can appeal it.
Whether to elect is a judgment about the strength of the record and the value of an appeal, and it is made once. The Court may remove the designation where the amount turns out to exceed the threshold, or where the issue warrants a reviewable decision.
HOW A CASE ACTUALLY MOVES
Petition and answer
Filed within the ninety days. The Commissioner answers, and the issues are joined.
Informal discovery and stipulation
The Court expects the parties to exchange informally first and to stipulate everything not genuinely in dispute. Most cases are shaped here.
Trial, briefs, decision
Tried to a judge, without a jury, at a trial session. Then briefs, an opinion, and a decision — appealable in a regular case.
Most petitions never reach trial. They settle with Chief Counsel once the record is developed and the hazards are visible on both sides. That is the ordinary outcome, and it is a better one — but it is available only to a taxpayer whose representative could actually try the case.
WHO MAY APPEAR
Practice before the Tax Court requires admission. Attorneys are admitted on motion. Non-attorneys may be admitted only by passing the Court’s written examination, which few sit and fewer pass. Refund litigation in the district courts and the Court of Federal Claims requires an attorney.
An advisor who cannot appear in the forum where the dispute ends is an advisor who must hand the matter to someone else at the moment it becomes most difficult — and that someone arrives without having built the record.
ADMISSIONS
Paul K. Donovan is admitted to practice before the United States Tax Court, the Supreme Court of the United States, the United States Court of Appeals for the First Circuit, and the United States District Court for the Southern District of Florida, and is a member of the Florida and Massachusetts bars. Further detail appears on the attorney profile.
The detailed procedure is set out in Litigation.
It is the only federal forum in which a deficiency is contested before it is paid.
HOW AN ENGAGEMENT BEGINS
Book a free consultation
Thirty minutes, no charge. Bring the notice — we read it together on that call.
The deadline is identified
Which notice it is, what it asserts, and which forums are still open behind it.
Conflicts check and written engagement
Scope and fee agreed in writing before any work begins.
HOW A CONTROVERSY RESOLVES
The firm takes over
Correspondence with the Service runs through the firm. You stop answering.
The position is built and pressed
Records, authority, and the argument — pressed at the earliest stage that will take it, because that is the cheapest place to win.
Resolution
Closed at examination, settled at Appeals on the hazards, or tried. The firm does not hand the file to anyone to reach the last of those.
If you are holding a ninety-day letter, the date on its face governs everything. Contact the firm through the contact page or call (561) 529-5873. Representative engagements are described on the Experience page.