Deck 22 Flashcards
Where can you have tax cases heard under the Federal Court system?
U.S. Tax Court, U.S. District Court, U.S. Court of Federal Claims, U.S. Courts of Appeals, U.S. Supreme Court
What makes a US tax court unique?
Only forum in which taxpayers may litigate without first having paid the disputed tax in full
What makes US District courts unique?
May have a jury trial
Types of trial courts?
US tax court, US district court, and US court of federal claims
Types of appellate courts?
US courts of appeals, US supreme court
If you want to appeal from tax court or the district court,
You are going to go the U.S. courts of appeals
US Court of Federal Claims
Nationwide court; jurisdiction over claims for money damages; follows the decisions of the Federal Court of Appeals, not the geographic courts of appeals
Exceptions to penalty for taxpayers include:
1) tax is no more than $1000 or 2) you paid 90% of the current year’s tax or 3) paid 100% of last year’s tax
Negligence penalty percentage:
20% of tax due
Failure to file penalty:
5% of amount of tax due
Failure to pay penalty:
1/2 of 1% of tax due
Equation for tax due =
Tax liability - tax withheld - tax paid
Best defense to a penalty for understatement of tax:
Must have a reasonable basis
Best defense for substantial understatement of tax and if you disclose the position:
Must have a reasonable basis
Best defense if substantial understatement of tax and no disclosure:
Must have substantial authority
