U.S. Tax Court
The U.S. Tax Court is a specialized trial court that hears only federal tax cases. Tax Court judges are tax law specialists, not generalists and are better able to understand technical issues associated with tax law. The U.S. Tax Court is a national court based in Washington, D.C. however its jurisdiction is not limited to a specific geographic region. Tax Court judges travel throughout the Country and are available to hear taxpayer cases in every major city of the United States several times a year. For a case to be heard, the taxpayer must petition the the court within ninety days of the IRS's mailing of a notice of deficiency (90-day letter) for payment of the disputed amount. This is known as the "administrative procedure and appeals process." Taxpayers cannot request jury trials before this court. Note that the taxpayer does not have to pay the disputed tax liability before the case is heard. However, you can pay the tax after the notice of deficiency has been issued and still petition the Tax Court for review. If you do not file your petition on time (within 90 days) the proposed tax will be assessed, a bill will be sent, and you will not be able to take your case to the Tax Court.
Tax Court Decisions
The U.S. Tax Court issues two kinds of decisions, regular and memorandum. A "regular decision" are those that are presumed to have value as precedents or involve issues that have not previously been considered. Regular decisions are generally regarded as stronger authorities than memorandum decisions. It is also important to note that the IRS will issue an acquiescence or nonacquiescence only for regular decisions. A "memorandum decision" is issued when the chief judge believes that the case is primarily concerned with the application of existing law or an interpretation of the facts. If issues or points of law related to the problem at hand are addressed in both regular and memorandum decisions then both should be considered.
Small Cases Division
The Tax Court maintains a "Small Cases Division," similar to a small claims court. If the amount of the disputed deficiency, including penalties, or claimed overpayments does not exceed $50,000 ($10,000 or less for court proceedings beginning on or before July 22, 1998) a taxpayer may be heard before the Small Cases Division, upon approval of the Tax Court. The purpose of the Small Cases Division is to allow taxpayers to obtain a ruling on their case with a minimal amount of formality, delay, and, expense. However, because small claims cases cannot be appealed, the decisions are not published and cannot be used as precedents in other courts. At any time before a decision is final, the Tax Court may interrupt a small claims hearing and transfer the case to the regular Tax Court for trial. This might occur when important facts or issues of law, more suitably heard in the formal Tax Court, become apparent only after the Small Claims proceedings have begun.
Locating and Understanding Tax Court Decisions
All judicial citations follow the same format: case name, volume number of the reporter in which the case is published, name of the reporter, and the pager of the reporter on which the case begins. Sometimes, the year of the decision or the name of the court is added in parentheses at the end. A reporter is a series of books published by the federal government, the Government Printing Office (GPO), or by a private publishing company that provides the full text of court decisions. The two most common private publishers are the Research Institute of America (RIA, formerly known as Prentice-Hall) and Commerce Clearing House (CCH).
"Regular decisions" of the U.S. Tax Court are published by the GPO in a reporter called Reports of the United States Tax Court, cited as T.C. When the Board of Tax Appeals was in existence it had its own reporter, called the United States Board of Tax Appeals, and was cited as "BTA." The Research Institute of America (RIA) and Commerce Clearing House (CCH) also publish regular Tax Court decisions in separate reporters called Tax Court Reporter. Common tax practice is to cite only T.C., the official GPO reporter.
Tax Court regular decision citation: A. A. Emmerson, 44 T.C. 86 (1965), where
Emmerson is the case name
44 is the volume of the Reports of the United States Tax Court (T.C.)
86 is the Tax Court decision number
1965 is the year of the opinion
Memorandum decisions of the U.S. Tax Court are not published in any government reporter. They are, however, published by RIA and CCH. The RIA reporter is known as RIA Tax Court Memorandum Decisions and is cited as "T.C. Memo" and the CCH reporter is titled Tax Court Memorandum Decisions and is cited as "TCM". Typically memorandum decisions will include a citation to both reporters.
Tax Court memorandum decision citation: Willamette Industries, 41 TCM (CCH)
629 (1980), P-H T.C. Memo ¶ 80,577, where
Willamette Industries is the name of the case
41 is the volume number of the reporter, Tax Court Memorandum Decisions (TCM)
629 is the page number in the reporter
1980 is the year of the opinion
T.C. Memo is the name of the second reporter (either Prentice-Hall or Research
Institute of America)
80,577 is the paragraph number in the 1980 volume
Whenever the IRS loses a decision in a U.S. Tax Court proceeding it will notify the taxpayers as to whether it agrees or disagrees with the decision by issuing an acquiescence or nonacquiescence. A citation in which the IRS has agreed with the decision would look like:
Buse v. Commissioner, 71 T.C. 1129, Tax Ct. Rep. (CCH) 31,631, (P-H) ¶71.99
(1979), acg. 1980-1 C.B. 1, where
Buse is the name of the case
71 is the volume number of the GPO reporter United States Tax Court (T.C.)
1129 is the page number in the reporter
Tax Ct. Rep. refers to the the Tax Court Court Reporter published by CCH and
RIA (formerly P-H)
31,631 is the page number in the CCH reporter
¶71.99 is the paragraph number in the RIA (P-H) reporter
1979 is the year of the decision
acg. indicates that the IRS acquiesced (agreed with the decision)
1980-1 C.B. 1 refers to the Cumulative Bulletin in which the decision is published