What should I expect if my dispute with the IRS goes to tax court?

If you're in a dispute with the IRS and you can't seem to reach a resolution, you may find yourself going to tax court. If so, it's important to know what to expect during tax litigation and how to prepare so you can increase your chances of success. It's also a wise idea to seek professional assistance from a tax lawyer.

The majority of tax court cases involving individuals will go to “small” tax court, which is less formal and less complex than regular proceedings. You'll be required to file a petition with the court and pay a filing fee, at which point your case will first be sent before an office of appeals to see if it is still possible to settle outside of court.

If a settlement still cannot be reached, you will receive a Notice of Trial with your court date. You should expect to possibly be called to a meeting with a lawyer for the IRS (you should bring your own attorney as well). This meeting will be for both sides to agree on certain facts of the case that both believe to be true, to eliminate unnecessary stipulation during the court day. Any facts on which you can't reach an agreement will be taken before the judge. 

During the court proceedings, you'll have the burden of proof, so you should be prepared to prove your argument with documentation. You should arrive well-prepared, with detailed outlines and proof, witnesses, statements, and anything else required to thoroughly verify and explain your side of the situation. The court will go into the situation assuming the IRS is correct – that's what burden of proof means – so you will probably have a big job at hand.

It's possible that, should a straightforward resolution not be obvious to the judge, you will be asked to agree to a settlement and/ or a compromise, in which the judge “gives” a bit to both sides, and settles on an amount somewhere in between the two stipulations. You should speak to your lawyer and be prepared to know when it's in your best interests to push ahead with your case versus accept such an offer.