Tax Litigation

When a tax dispute needs a courtroom

Most tax disagreements never reach a courtroom. They are resolved during an audit, or afterward through the IRS Office of Appeals. But some disputes cannot be settled through those channels, either because the parties see the law differently or because the facts are genuinely contested. When that happens, litigation becomes the appropriate step, and the way a case is prepared and presented can shape everything that follows.

Tax litigation is its own field. It has its own courts, its own procedures, and its own rhythm, and it rewards preparation and a clear understanding of how the government builds its cases. Kathryn Meyer served for more than two decades inside the IRS Office of Chief Counsel, the part of the agency that handles tax litigation for the government. She now brings that perspective to representing taxpayers, drawing on a firsthand understanding of how tax cases are developed and argued from the other side.

The forums where tax cases are decided

One of the first and most consequential decisions in a tax dispute is where to bring it. Federal tax matters can be litigated in more than one court, and each has different rules, timelines, and, importantly, different requirements about whether the tax must be paid first.

The United States Tax Court is the forum most taxpayers use, and its defining feature is that it allows you to dispute a proposed tax before paying it. After the IRS issues a statutory notice of deficiency, you generally have ninety days to file a petition with the Tax Court. This prepayment option is a significant advantage for taxpayers who dispute a liability but are not in a position to pay it and then sue for a refund.

The United States District Court and the United States Court of Federal Claims offer a different route. In those forums, you generally pay the disputed tax first, then file a claim for refund and litigate to recover it. These courts can be the right choice in particular situations, including cases where a taxpayer wants a jury trial, which is available in District Court but not in Tax Court, or where the law in a given area is more favorable in one forum than another. Choosing among these options is a strategic decision that depends on the facts, the amount at stake, the legal issues, and your resources.

The notice of deficiency and the ninety day window

For most taxpayers, the road to Tax Court runs through a document called a statutory notice of deficiency, often referred to as a ninety day letter. The IRS issues this notice when it has determined that additional tax is owed and the matter has not been resolved through examination or appeals. The notice is not a bill, and it is not the final word. It is the taxpayer's ticket to Tax Court.

The ninety day period to file a petition is firm, and it is measured carefully. Missing it generally means losing the ability to dispute the tax without first paying it. Because so much turns on this deadline, recognizing a notice of deficiency for what it is, and acting within the window, is one of the most important moments in a tax dispute. When a petition is filed on time, the assessment is paused, and the case moves into the litigation process.

How a Tax Court case unfolds

A Tax Court case follows a defined path, though most cases settle before reaching trial. It begins with the petition, in which the taxpayer explains the disagreement with the IRS determination. The government, represented by an attorney from the Office of Chief Counsel, files an answer. From there the parties exchange information and work to narrow the issues.

Tax Court has a strong tradition of encouraging the parties to agree on facts that are not genuinely in dispute, through a process of stipulation. This focuses the case on the questions that truly matter, whether they are factual, legal, or both. Along the way, there are often opportunities to resolve the case by settlement, sometimes through renewed discussions with IRS Appeals or with the Counsel attorney assigned to the matter. Many cases conclude at this stage, on terms the taxpayer can evaluate against the risks and costs of going to trial.

If a case does go to trial, it is heard by a judge rather than a jury. After trial, the parties usually submit written briefs, and the judge later issues an opinion. The process is deliberate, and it can take time, but each step is an opportunity to present the taxpayer's position clearly and to hold the government to its burden where the law places it there.

Small cases and regular cases

The Tax Court offers a simplified procedure for smaller disputes, generally those at or below a set dollar threshold for the tax year in question. These small tax cases are less formal, which can make them more accessible for taxpayers with modest amounts at stake. The trade off is that a decision in a small tax case cannot be appealed. Regular cases follow more formal procedures and preserve the right to appeal to a federal court of appeals. Deciding whether to elect small case treatment is one of the early choices in a Tax Court matter, and it depends on the amount involved, the issues, and how much certainty a taxpayer wants about the ability to seek review later.

Who has to prove what

A recurring question in tax litigation is who bears the burden of proof. As a general matter, the taxpayer carries the burden of showing that the IRS determination is wrong, which is one reason documentation and credible testimony matter so much. In certain situations, and when specific conditions are met, the burden can shift to the government. There are also issues, such as some penalties and allegations of fraud, where the government bears a heavier burden. Understanding where the burden lies on each issue is central to building a case, because it determines what must be shown and by whom.

Settlement, appeals within the IRS, and the role of Counsel

Litigation and settlement are not opposites. In tax disputes they often run alongside each other. Even after a case is filed in Tax Court, there is frequently room to resolve it through discussion, whether with the IRS Office of Appeals or with the Chief Counsel attorney handling the government's side. These conversations weigh the strengths and weaknesses of each position and the hazards that a trial would present for both parties.

This is an area where experience with the government's process is especially useful. Having spent years inside the Office of Chief Counsel, Kathryn Meyer understands how the government evaluates a case, what it tends to view as a strong or weak position, and how settlement authority works on the other side. That perspective informs how a case is prepared and presented, and how settlement possibilities are approached, though it never guarantees any particular result.

Refund litigation and collection disputes

Not every tax case begins with a notice of deficiency. Some taxpayers pay a disputed amount and then seek to recover it, which leads to refund litigation in District Court or the Court of Federal Claims. This path requires first filing a claim for refund with the IRS and, if it is denied or goes unanswered, then bringing suit. Refund litigation can be the right approach in certain matters, particularly where a taxpayer prefers a different forum or wants the option of a jury.

Litigation can also arise out of collection. When a taxpayer disputes a lien or levy through a Collection Due Process hearing and is not satisfied with the result, that determination can, in many cases, be reviewed by the Tax Court. These collection cases focus on different questions than a typical deficiency case, often centered on whether a proposed collection action is appropriate and whether the IRS properly considered collection alternatives. They are one more reminder that the courthouse door is open in more situations than many taxpayers realize.

What a taxpayer should weigh before litigating

Litigation is a serious step, and it is not the right answer for every dispute. It takes time, it has costs, and its outcome is never certain. Before filing, it is worth weighing the strength of the legal and factual position, the amount at stake, the likely timeline, and whether the same result might be reached through appeals or settlement with less expense. A candid assessment of these factors is part of what a tax attorney provides, because sometimes the most valuable advice is that a matter is better resolved without a trial.

When litigation is warranted, the goal is to enter it prepared, with a clear theory of the case, well organized evidence, and a realistic view of the risks. That preparation does not promise victory, but it puts the taxpayer's position in the strongest and clearest light the facts allow.

How Kathryn Meyer approaches tax litigation

Kathryn Meyer represents taxpayers who have received a notice of deficiency, who disagree with the outcome of an audit or appeal, or who need to challenge an IRS determination in court. She also advises clients who are weighing whether litigation is the right path at all, since that decision deserves careful thought before a petition is filed.

Her work begins with the record and the deadlines, because tax litigation is time sensitive and the calendar can foreclose options. From there she develops the legal arguments, handles the filings and procedure, and represents clients through the stages of the case, keeping them informed about the choices and the likely path ahead. As a former IRS litigator who spent more than two decades inside the Office of Chief Counsel, she brings a clear understanding of how the government builds and argues tax cases, and she uses that understanding to prepare and present each client's position.

After a decision, and the right to seek review

A Tax Court case does not necessarily end with the judge's opinion. In a regular case, a party who disagrees with the decision generally has the right to appeal to the federal court of appeals for the circuit in which the taxpayer resides. This is one of the reasons the choice between a small tax case and a regular case matters, since the streamlined small case procedure trades away the ability to appeal.

Whatever the outcome, a litigated decision brings a measure of finality that an unresolved dispute lacks. It settles the question for the year at issue and provides a clear basis for handling similar questions in the future. Even when a case does not produce everything a taxpayer hoped for, having the matter decided on a full record, with the government held to its burden where the law requires, is often better than leaving a dispute to linger. Understanding the possibility of appeal, and weighing whether it is worth pursuing, is part of seeing a case through to a considered conclusion.

Discussing your dispute

If you have received a notice of deficiency, are facing a decision about whether to litigate, or are simply unsure how to respond to an unresolved dispute with the IRS, a conversation can help you understand your options and the deadlines that apply. There is no obligation in learning where your case stands and what routes are available to you.