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Monday, March 21, 2011

Federal tax disputes: The tax court small case division

For federal tax disputes of $50,000.00 or less in any given tax year, small claims tax court is utilized (public.findlaw.com). State tax disputes may qualify for small claims tax court if the amount is under $7,500.00 depending on the State, and the cap amount may be as low as $3,000.00 to qualify for small claims in some States. (lawsguide.com) The Federal government has a specific court for tax disputes whereas State courts may not.

Useful small tax case links


The statute of limitations applies to small claims tax court disputes meaning disputes must be filed within the pre-determined court time frame with some exceptions Not all small claims tax disputes go to court as they may be settled prior to a hearing and court rulings may be appealed in some cases and in accordance with the court rules. Moreover, before filing a court dispute a tax appeal may be filed with the U.S. Internal Revenue Service for Federal cases.

Filing a dispute involves gathering the necessary tax documents and evidence and filing the required documents with the court. Filing procedure may differ between States but is uniform for the Federal small case division tax court. State tax courts handle tax cases involving State taxes and filing fees differ between the States. Federal tax cases are petitioned through the U.S. Tax court and can be filed for without the assistance of an attorney. State tax disputes can be filed with the State court without an attorney.

According to lawsguide.com, nearly 50% of small claims tax disputes that go to trial have favorable results for the plaintiff. A complete illustration of Federal tax court rules can be obtained from ustaxcourt.gov. A petition to file a small claim tax case with the U.S. tax court is available at taxlawcenter.com and the filing fee at the date of this article is $60.00. Additional filing documents are included on the provided link. In the case of State tax claims, court fees and procedures may be found through investigating the above listed "State small claims link" (ncsonline.org)

Determining whether or not a tax situation is suitable for either IRS appeal, out of court settlement, or Federal or State small claims tax dispute hearings is a matter that varies with each individual case. One may either make a decision to appeal or file personally or with the help of a tax professional or lawyer. Generally, the more evidence one has supporting one's claim, the better one's case will be.

Small claims tax court may be utilized for a number of reasons whether it be in regard to personal taxes, sole proprietorships, small businesses, estate taxes, property taxes or other taxes having to do with the Government. In any case, knowing the rules, tax code, procedures in addition to having supporting documentation is helpful. Supporting documentation may include receipts, invoices, financial statements, bank statements, tax forms or other pertinent documents.

Tax court sources:

1. http://www.ustaxcourt.gov/taxpayer_info_start.htm
2. http://public.findlaw.com/taxes/audits-tax-problems/small-case-tax-court.html
3. http://www.taxlawcenter.com/g0022020.htm
4. http://www.taxlawcenter.com/txctrule.pdf
5. http://www.ncsconline.org/wc/CourTopics/statelinks.asp?id=79&topic=SmaCla
6. http://www.lawsguide.com/mylawyer/guideview.asp?layer=2&article=132
7. http://www.lawsguide.com/mylawyer/guideview.asp?layer=3&article=577
8. http://www.irs.gov/individuals/article/0,id=160726,00.html