| If you have filed a petition in Tax Court to contest a deficiency of $50,000 or less, including additions to tax and penalties, or you claim an overpayment of that amount or less, you have the option of having your case heard under expedited and simplified procedures. These relatively informal procedures may also be used for innocent spouse determinations involving $50,000 or less or disputes continuing from pre-levy administrative due process hearings where the unpaid tax is $50,000 or less.
Under the small tax case procedure, informality is the key. Although the proceedings are still judicial in nature, neither briefs nor oral arguments are required. However, briefs and arguments may be permitted by the Tax Court either on its own motion or upon motion of either party. Strict rules of evidence are not applied. Most taxpayers represent themselves, although they may be represented by anyone admitted to practice before the Tax Court.
So what is the downside of the small tax case procedure? Decisions in these cases are not appealable by either the government or the taxpayer. In order words, the decision is final. In addition, decisions are not precedent for future cases.
If you decide to choose the small tax case route, you have to get the Tax Court's concurrence. The Tax Court is expected to concur unless, before the trial starts, it decides that the case involves a tax policy issue that should be heard under normal procedures. In deciding whether to concur with a taxpayer's request for small case treatment, the Tax Court is expected to carefully consider any of the Internal Revenue Service's objections to the procedure and the financial impact in the form of additional legal fees on the taxpayer. In its motion to deny small tax treatment, the IRS must show that the issue is one of importance that will establish a principle of law applicable to other tax cases.
Once the trial has started but before a decision has become final, the Tax Court is authorized to order the discontinuance of the small case procedure and to order the use of the ordinary rules of practice. This change can only occur if there is a reason to believe that the amount at issue will exceed the cap or that justice required the change despite the possible inconvenience and expense that would result for both parties. Copyright 2010 LexisNexis, a division of Reed Elsevier Inc. |