Taxpayer, IRS Publication No. 1. The Taxpayer Bill of Rights is divided into four major categories: (1) taxpayer rights and IRS obligations, (2) levy and lien provisions, (3) proceedings by taxpayers, and (4) authority of the Tax Court. Appeal Through the Court System . Taxpayers fi ling a petition with the Tax Court may take their cases to the Small Claims Division if the amount of the de fi ciency or claimed overpayment is not greater than $50,000, but cases brought to the Small Claims Division may not be appealed. Federal Court System . In addition to the Small Claims Division of the Tax Court, there are three other trial courts or courts of original jurisdiction: (1) the U.S. Tax Court, (2) a federal District Court, and (3) the U.S. Court of Federal Claims. Appeals from the Tax Court and the District Court go to the Circuit Court of Appeals and appeals from the Court of Federal Claims go to the U.S. Court of Appeals for the Federal Circuit. Appeals from all Courts of Appeals go to the U.S. Supreme Court. (See Exhibit 9.) Choice of Tax Forum . There are a number of factors to consider in deciding to litigate a case and where to litigate, including (1) jurisdiction, (2) payment of tax, (3) jury trial, (4) rules of evidence, (5) expertise of judges, (6) publicity, (7) legal precedent, (8) factual precedent, (9) statute of limitations, and (10) discovery. ¶2315 Settlement Agreements Form 870, used when a taxpayer and an IRS appeals of fi cer have reached an agreement as to some or all of the issues in controversy, becomes effective as a waiver of restrictions and assessment when received by the Internal
16 CCH Federal Taxation—Comprehensive Topics Chapter 2 © 2010 CCH. All Rights Reserved. Revenue Service; Form 870-AD, used when neither party is willing to concede in full the unresolved area of disagreement and a mutual concession is reached, is effective upon acceptance by or on behalf of the Commissioner of Internal Revenue. ¶2325 Refunds Claims for refunds must be fi led no later than three years from the date the return was fi led or no later than two years from the date the tax was paid, whichever period expires later. ¶2333 Interest on Under/Overpayments Interest is payable on underpayments of tax and on overpayments at an adjustable interest rate based on the federal short-term rate. ¶2355 Statute of Limitations Assessment of any tax must be within three years after the return was fi led or after the due date for fi ling, whichever is later. However, there are some exceptions. ¶2365 Penalties Penalties are treated as additions to federal internal revenue taxes and are therefore not deductible for federal income tax purposes. Delinquency Penalties. There is a penalty for failure to fi le a return on the due tax and also a penalty for failure to pay the amount of tax due on a tax return. The failure to fi le penalty is reduced by the 0.5 percent failure to pay penalty for any month in which both apply.
- Spring '11
- Tax law, Taxation in the United States, ........., U.S. Tax Court