Tax Court

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Definition: Tax Court

A Tax Court is a special court that addresses disputes related to taxes. The court in the US is established so as to provide a forum for organizations to contest tax inaccuracies determined by the IRS (Internal Revenue Service) prior to paying the disputed amount.

Tax courts generally have the authority to hear on a wide range of issues pertaining to taxes. Once the filing is done after paying the fees, then the case is heard by a judge.

The advantages of a tax court are manifold. Typically, over 90% of the tax court cases settle before even going to trial. This implies that the taxpayers who sue the IRS in the Tax Court in the US expect a high chance of success. A tax court petition provides a clue to the IRS that the taxpayer is serious and committed to the goal of having its assessments eliminated using legal means – and so as to control the damage, avoiding a chance on losing revenue, chooses to settle out of court. Possibly the greatest advantages of a tax court is that you aren’t needed to pay the tax beforehand.

As one may expect though, the greatest disadvantage is the waiting period which can vary from 6 months, a year to often much longer.

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