Since the Tax Cuts and Jobs Act passed earlier this year, we have been continually asked about what recent Tax Court rulings we’ve seen because of this. The truth is, we have not seen any tax court rulings affected by it yet. Because the changes will not set in until January 1, 2019, all current tax court cases are not affected by it.
While we spend the bulk of the year representing our clients in audits, responding to IRS letters, stopping bank levies and wage garnishments, working on Offers in Compromise, preparing tax returns, fixing payroll and sales tax issues, among a plethora of other tax-related items, we only spend a couple weeks per year at Tax Court.
Tax Court only occurs twice per year. It’s important to know very few cases make it to Tax Court; most are settled with the IRS before it gets to that point. Most parties do not want to go to court, because it can be riskier than settling beforehand. You can go to Tax Court if you are called for an audit and disagree with the IRS. If you disagree the IRS sends you a “Notice of Deficiency” or a 90-day letter, stating the adjustments that the IRS wants to make to your return. You have 90 days to file a petition with the Tax Court.