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What is a Civil Tax Case?

A civil tax case usually starts as what is known as an audit.

What if they think I owe tax?

A taxpayer can go to the IRS Office of Appeals once they file a written protest from a Revenue Agent’s Report sometimes called a Thirty-Day Letter.  It is important to have all of your documents and arguments together early so that the written Protest can be as effective as possible. 

What if I cannot settle with Appeals?

Then you will be issues a Statutory Notice of Deficiency, sometimes called a Ninety-Day Letter. This is your ticket to the United States Tax Court, which is the traditional pre-payment forum for tax controversies. The Tax Court handles a remarkable variety of cases from taxpayers who are representing themselves to the largest and most complicated tax matters involving multinational entities. The Tax Court is very business-like and is nothing like the informal hearing people often expect it to be. Again, being prepared in advance and following the Tax Court’s Rules of Practice and Procedure are the foundation for success in the Tax Court. Experience counts.

If I lose in the Tax Court, then What?

After the tax is assessed, the IRS will come to collect.  Collection is done either by the automated collection system that uses correspondence and telephone communications to collect or it will be assigned “to the field” and you will be contacted by a Revenue Officer, whose job it is to get you to pay.  The IRS has an impressive array of tools, from liens against assets to levies seizing assets to revoking your passport to help encourage your voluntary compliance.  Defending can be tricky and sometimes people paint themselves into a corner by thinking they are saying all the right things.  Once again, experience helps.