During these initial stages, it can be essential to have representation to assist you with responding to the IRS since information gathering is generally a precursor to future litigation. We can help with everything from responding to an IDR or summons to representing you in a summons interview.

The Notice of Deficiency

Once the IRS has compiled its findings, it issues a “30-day letter,” which contains a computation report of proposed adjustments to your tax return. After receiving a 30-day letter, your attorney may decide that it would be appropriate to file a protest and appeal the proposed adjustments with the Office of Appeals. If no protest is filed, the IRS will issue a statuary notice of deficiency. This is sometimes referred to as a “90-day letter” because a taxpayer that wants to challenge the deficiency in Tax Court has 90 days to do so. It is essential to timely file a petition with the Tax Court since this court allows a taxpayer to challenge the deficiency without paying the proposed liability. If a taxpayer does not file a petition with the Tax Court, the alternative is that they will be required to pay for the tax and then sue for a refund in district court. This can be extremely costly.

Representation before the Office of Appeals

After petitioning the Tax Court, the government answers the petition, and the case will go to the Independent Office of Appeals (assuming that no protest was filed before issuing the notice of deficiency). Again, an attorney specializing in controversial work can present your case to Appeals. Often negotiating a settlement on your behalf without needing more time-consuming and costly litigation.

Litigation before the Tax Court

If the case does not get settled in Appeals, the case will need to be prepared for trial. Taking a case to trial can be challenging and requires professional representation for the best results. The Tax Court expects the parties to work together to draft a complete Stipulation of Facts, and responses to discovery may be in order. In addition, there might be a need to respond to motions, track down witnesses, and locate evidence that is beneficial to the taxpayer’s case. A pre-trial memorandum is required in all cases going to trial. At trial, the judge may expect testimony from the taxpayer and, in some cases, third-party witnesses. After the trial, judges expect the parties to brief the case in detail, laying out its legal position and applying the findings of fact to the relevant law. In addition, the taxpayer may be presented with an opportunity to respond to the government’s brief. Therefore, it is vital to adequately refute the government’s position if the taxpayer wants a chance of prevailing. After deliberations, generally taking months, the judge will rule on the case. In situations where the ruling is unfavorable, it may be prudent to appeal the case.

Professional Help is Invaluable

This entire process is complex from the outside, but with an experienced tax litigator, this process can be relatively straightforward, and these tax matters can be resolved once and for all. At THEVOZ & Partners, we have experienced attorneys that have litigated cases in the Tax Court and can help you with everything from the initial examination through trial and even the collection process, if need be.