Background

The U.S. Tax Court is an independent federal court that hears disputes between taxpayers and the IRS. It was created to give taxpayers a judicial forum to contest IRS determinations without first paying the tax assessed (U.S. Tax Court: https://www.ustaxcourt.gov/). In my 15+ years as a CPA and financial advisor, I’ve seen clients use Tax Court to stop collection actions, preserve evidence on the record, and obtain definitive rulings that affect future filings.

How and when you can file

  • Trigger: You receive a Notice of Deficiency (often called a “90-day letter”) from the IRS proposing additional tax, penalties, or adjustments.
  • Deadline: You generally have 90 days from the date the notice is mailed to file a petition with the U.S. Tax Court (150 days if the notice was mailed to a person outside the U.S.). Missing this deadline forfeits the automatic right to go to Tax Court. See the IRS and U.S. Tax Court guidance (IRS: https://www.irs.gov/, U.S. Tax Court: https://www.ustaxcourt.gov/).
  • Alternative paths: You can also challenge IRS assessments through administrative appeals (IRS Appeals) or by paying the tax and suing for a refund in U.S. District Court or the U.S. Court of Federal Claims. Each path has different rules, costs, and timing — see our comparison: Tax Court vs. IRS Appeals: Which Path Should You Take? (https://finhelp.io/glossary/tax-court-vs-irs-appeals-which-path-should-you-take/).

Step-by-step process (what to expect)

  1. Read the notice carefully. It explains the adjustments, amounts, and the deadline to petition.
  2. Prepare the petition. The petition must state facts, legal grounds, and the relief sought; follow the Tax Court rules for form and content.
  3. File the petition. Mail or e-file the petition with the Tax Court within the statutory deadline.
  4. Case management. The court issues a trial calendar, discovery may occur, and the parties exchange evidence.
  5. Trial or stipulated decision. Many cases resolve by stipulation, motion, or trial (sometimes by written stipulation).
  6. Decision. The Tax Court issues a written decision. If you lose, you can appeal to the appropriate U.S. Court of Appeals.

Practical note: Small Cases Procedure (Tax Court Rule 170) is available for disputes under the court’s dollar threshold and is simpler, but decisions in small cases are not precedential.

Evidence and preparation

  • Documentation: Organized records—ledgers, receipts, contracts, bank records, and contemporaneous notes—matter. I routinely assemble a chronology and exhibit binder for trials; judges and opposing counsel appreciate clarity.
  • Expert testimony: For complex valuation or specialty matters, qualified experts can materially affect outcomes.
  • Burden of proof: Generally, the IRS must prove the deficiency; however, once the IRS establishes a prima facie case, the taxpayer must rebut it with credible evidence.

When to consider Tax Court (practical criteria)

  • You received a Notice of Deficiency and want to litigate before paying the disputed tax.
  • You need a formal evidentiary record (for precedent or future filings).
  • The issue involves legal questions where a court ruling could benefit other taxpayers.
  • Administrative appeals haven’t resolved the dispute and you want an independent judicial decision.

If you want to try to resolve the matter without litigation, consider an IRS Appeals conference first; our guide on filing a petition after a notice offers a full checklist (Tax Court Basics: Filing a Petition After a Notice of Deficiency: https://finhelp.io/glossary/tax-court-basics-filing-a-petition-after-a-notice-of-deficiency/).

Common mistakes to avoid

  • Missing the 90-day deadline — this is the most consequential error.
  • Relying on memory instead of records: late or reconstructed evidence rarely convinces a judge.
  • Treating Tax Court like a settlement conference: be prepared to litigate if needed.
  • Using the small-case procedure when a precedential ruling matters.

Costs and timing

  • There is no filing fee to submit a petition to Tax Court, but expect legal and professional fees for preparation, discovery, and trial work.
  • Cases range from months to several years depending on complexity, docket backlog, and whether appeals follow.

Brief examples (anonymized)

  • Misclassification of business expenses: I helped a small-business client convert an IRS proposed $50,000 adjustment into a much smaller change by documenting ordinary and necessary expenses and clarifying accounting treatment.
  • Penalty disputes: For a retired couple assessed large late-filing penalties, filing in Tax Court allowed us to present reasonable-cause evidence and secure penalty abatement.

FAQs (short answers)

  • Can I file a petition for any IRS action? No — the Tax Court route is typically available after a Notice of Deficiency; other IRS actions (liens, levies) have separate administrative remedies.
  • Do I need a lawyer? No — taxpayers may represent themselves, but complex cases usually benefit from counsel or experienced tax professionals.

Professional tips

  • Act immediately on receiving a notice: calendar the 90-day deadline and start evidence collection.
  • Create a trial-ready binder: chronological exhibits, key documents, and a succinct statement of facts.
  • Consider settlement offers in parallel with litigation to reduce cost and risk.

Common sources and further reading

Professional disclaimer: This article is educational and not a substitute for personalized tax advice. For guidance about your situation, consult a licensed tax professional or attorney.

(Last reviewed: 2025)