P-4 (The court system) Flashcards
What are four disagreements a taxpayer may take his case to tax court for?
A taxpayer can take his case to the U.S tax court if he disagree with the IRS over:
1. Income Tax
2. Estate tax
3. Gift Tax
4. Excise tax from Private foundations, public charities, qualified pension and other retirement plans, or real estate investment trust.
When does the District Court and the Court of Federal Claims hear tax cases?
Only after the taxpayer paid the tax and filed a claim for a credit or refund.
Who is the burden of proof generally on?
The burden of proof is generally on the taxpayer.
What does the IRS have the burden of in court proceedings?
The IRS has the burden of initially producing evidence (burden of production) in court proceedings with respect to the liability of any individual taxpayer for any penalty, addition to tax, or additional amount imposed by the tax laws.
The IRS has the burden of proof for any factual issue if the taxpayer has met what 5 requirements?
The 5 requirements include:
1. Introduced credible evidence relating to the issue
2. Complied with all substantiation requirements of the IRC.
3. Maintained all records required by the IRC.
4. Cooperated with all reasonable request by the IRS for info regarding the prep and related tax treatment of any item reported on the return.
5. Had a net worth of $7 million dollars or less, and not more than 500 employees.
If a taxpayer disagrees with the IRS after the appeals conference, what is the next step in the process?
The taxpayer can then take his case to the United States Tax Court, the US district court, or the US court of federal claims.
Who has the burdens of proof and production with respect to a taxpayer penalty if the taxpayer provides reasonable cooperation, adequately substantiates items, and maintains required records?
The IRS has the burden of proof and the initial burden of production.
Generally, the Tax Court hears cases before any tax has been assessed and paid; however, if a taxpayer wants to prevent interest from accruing what must they do?
The taxpayer can pay the tax after the notice of deficiency has been issued and still petition the Tax court for review.
Generally what must a taxpayer do before filing a tax case to the District Court and the Court of Federal Claims?
The taxpayer must pay the tax and file a claim for a credit or refund.
When can a taxpayer file a claim with the IRS for a credit or refund?
If he thinks that the tax paid is incorrect or excessive.
If a taxpayer claim is totally or partially disallowed by the IRS, what should he receive?
If a taxpayer claim for a credit or refund is totally or partially disallowed by the IRS he should receive a notice of claim disallowance.
How long does the IRS have to act on a claim against a totally or partially disallowed credit?
The IRS has 6 months to act from date the taxpayer filed the suit, if the IRS does not act the taxpayer can file suit for a refund.
Give a brief explanation of the step-by-step process that a taxpayer can take if part of their tax return is disallowed?
First the receives the notice of disallowance, then the taxpayer can file an appeal before the IRS appeals office, (this may trigger and Revenue Agent’s adjustment proposal). If no agreement is made, then the taxpayer can take the file a tax action with his choice of three courts:
1. U.S Tax Court
2. U.S District Court or
3. US. Court of Federal Claims
Can decisions made by a tax court pursuant to the small tax case procedure be appealed?
No, decisions entered in Tax Court for cases brought pursuant to the small tax case procedure are not appealable.
How can the taxpayer make the IRS have the burden of proof prior to filing an appeal?
The taxpayer can cooperate with all reasonable requests by the IRS for information regarding the preparation and related tax treatment of any item reported on the tax return.
