Assignment6Acases[1].LC - Spring 2009 ASSIGNMENT 6A...

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Spring 2009 ASSIGNMENT 6A JUDICIAL INTERPRETATIONS: COURT DECISIONS Objectives : At the end of this assignment, you will be able to Understand the structure of the federal court system that hears tax cases Identify important distinctions between the various courts Recognize citation conventions used for each court that hears tax cases Describe conditions that may cause taxpayers to select one trial court over another Brief a case Assignment 1. Review the Judicial Interpretations material in Chapter 2 of the Pratt-Kulsrud text (pages 2-17 through 2-27 in the 2008 version) 2. Review the PowerPoint slides (two parts) on Oncourse for Assignment 6 3. Research the quiz questions and submit your answers through Oncourse by the due date. Overview When a tax return is examined, the taxpayer does not always agree with the IRS agent, but contests aren’t always rushed to court! Before going to court, a taxpayer normally exhausts all of the administrative remedies that are available—that is, remedies within the IRS. Specifically, taxpayers who do not agree with the outcome of an audit may first choose to challenge the finding by appealing the case within the IRS. To do so, the taxpayer requests a conference with the IRS Appeals Division by filing a written protest . (An oral request is allowed in individual and C corporation cases when the proposed deficiency does not exceed $25,000). The IRS is not required to grant an appellate conference but it normally does unless the taxpayer refuses to comply with the law on the basis of moral ( paying taxes is against my religion ) or political reasons ( my political party, the Anarchists, does not believe in government or taxes ). The IRS Appeals division has authority to settle all cases without regard to the amount of tax involved. In determining whether it will settle or proceed to court, one of the many factors considered by Appeals is whether a hazard of litigation exists. This term relates to the probability that the taxpayer will continue to pursue the case to the trial court level or beyond, as well as to the taxpayer’s chances of winning there. The primary objective of Appeals is to settle cases and keep them from going to court. As a result, Appeals may offer to accept only a percentage of the deficiency proposed by the IRS. Despite the settlement efforts, taxpayers and the IRS do end up in court. More than 50,000 federal court decisions have been issued since enactment of the income tax. Note that judicial decisions are a primary source of tax law . Tax research is essentially legal research, and for this reason it is incumbent upon the tax professional to understand the federal court system . We don’t expect you to be lawyers. We do expect you to understand the basics, as identified in the following questions. Note: Lower court proceedings over a proposed assessment are initiated by the taxpayer.
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This note was uploaded on 06/23/2009 for the course BUPA 551 taught by Professor Susan during the Fall '09 term at IUPUI.

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Assignment6Acases[1].LC - Spring 2009 ASSIGNMENT 6A...

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