Sometimes it is necessary for a taxpayer to assert their rights to challenge an IRS determination in federal court. FMH represents clients in all types of tax litigation, including in the U.S. Tax Court, federal district courts, bankruptcy courts, and state courts.
We handle civil and criminal tax cases, trust, estate, and probate litigation. Our clients include a variety of individuals, businesses and tax-exempt organizations.
If your case involves taxes, we can handle it. FMH has handled cases and advised clients in litigation involving a variety of issues, such as
- tax refund suits
- hobby losses
- Employee Retention Credit (“ERC”) matters
- captive and micro-captive insurance companies
- conservation easements
- the economic substance doctrine
- tax return preparer injunctions
- fraudulent transfers
- trust fund recovery penalties
- IRS summons enforcement
- Freedom of Information Act (“FOIA “) litigation, and many others.
U.S. Tax Court
The United States Tax Court is a specialized court based out of Washington, DC that only hears tax cases. Many of the judges are former tax attorneys, and the judges travel around the country and routinely hear cases in cities in Florida (e.g., Tampa and Miami) and other states.
However, it is a court of “limited jurisdiction,” which means that not all tax disputes can go to the Tax Court. For cases that are able to be heard in the tax court, there are normally very restrictive times in which a case must be filed.
Most commonly, taxpayers who are audited by the IRS and receive a “Notice of Deficiency” can challenge the proposed assessments in the Tax Court. It is a “pre-payment” forum, which means that a taxpayer does not have to pay the asserted taxes and penalties before challenging them in the tax court.
The Tax Court also has its own unique rules of procedures and for discovery, which are different than those found in district courts.
District Courts
Tax cases can also be litigated in federal district courts located in various cities around the country.
Some of the common types of cases heard by federal district courts are tax refund suits, cases brought by the United States to reduce tax assessments to judgment, promoter and preparer injunction suits, summons enforcement cases and FOIA litigation. See 26 U.S.C. §§ 7402, 7407, 7408, 7422.
Federal district courts have their own rules of practice and discovery, which differ significantly from the Tax Court. For example, in order to bring a case in district court, taxpayers generally have to pay the taxes that are alleged to be due and file an administrative refund claim with the IRS.
Another difference is that in many instances, taxpayers may be entitled to a jury trial in a district court case whereas Tax Court cases are only decided by judges.
FMH attorneys advise clients on considerations before filing a case, such as whether to file in district court or the tax court. We start preparing our cases before even filing in court to put our clients in the best position at the outset of litigation. And we are there along the way throughout the process, including trial if necessary.
Many clients ask about the process of settling a tax case with the government. This differs between tax court and district court cases, and because the government is a party, it is also very different than what people might have experienced in business litigation in federal or state courts. FMH attorneys have worked for the government and know its internal processes for negotiating and evaluating settlements.
Courts of Appeals
A taxpayer (or the government) as the right to appeal an adverse decision in the tax court or a federal district court to one of the U.S. Circuit Courts of Appeals.
FMH attorneys have extensive appellate experience — both handling circuit court appeals and advising on complex tax issues involved in appeals.
We often help our clients avoid tax litigation altogether, but when litigation is necessary, we are prepared to zealously represent our clients in court.