Can you sue the IRS? Anyone can sue. The real consideration is which circumstances warrant such action. In many cases, the money and effort put into suing the IRS can end up being greater than the cost of paying the tax bill. If you feel strongly that the IRS has erred in its assessment or you disagree with the final results of an audit and the amount of taxes due plus interest and penalties is great enough, then filing suit against the IRS might be worthwhile.
Taxpayer Bill of Rights
Every US taxpayer has 10 fundamental rights when dealing with the IRS. These are spelled out in the Taxpayer Bill of Rights. Along with rights to quality service and paying no more than the correct amount of tax due is the right to appeal an IRS decision in an independent forum. This right gives taxpayers a “fair and impartial appeal” of most IRS decisions, and generally allows them to take their cases to court.
The IRS offers an independent appeals process. If you decide not to take this route or are unable to reach a settlement with the independent Appeals Office, then you may be able to take your case to court. The US Tax Court, US District Court, and the US Court of Federal Claims all hear tax cases. Each court has specific procedural and jurisdictional requirements when it comes to cases against the IRS.
US Tax Court Petitions
Taxpayers can take their case to US Tax Court if they disagree with the IRS and have received one of the following:
- Notice of deficiency – issued by the IRS when it either hasn’t received your tax return and calculated your tax on its own, or has proposed a change to the return you filed.
- Notice of determination – this is the final notice issued by an IRS auditor after an examination.
- Notice of certification – the IRS issues this notice when taxpayers have a seriously delinquent tax debt.
Each of these notices informs taxpayers of their right to file a petition with the US Tax Court and specifies the timeframe, usually 90 days, within which one must be filed. When filing in US Tax Court, taxpayers generally do not have to first pay their tax bill.
In some circumstances, individuals requesting Innocent Spouse Relief may file a petition in US Tax Court. If the IRS has failed to respond to the initial request for spousal relief within six months of the filing date or has issued a final determination letter denying the request, the spouse seeking relief may file suit in US Tax Court.
Suing in Federal Court
You can file a case against the IRS in US District Court or Federal Claims Court, but usually only after you have fully paid your tax bill and also first filed a claim for a refund of the disputed amount with the IRS. If six months have passed from the date you filed the refund claim and you have not received written correspondence from the IRS, then you can move forward and file suit against the IRS for your refund.
If the IRS sends you a Notice of Disallowment of your refund claim, you also have the right to fight the disallowment by filing a suit in either of the two courts. There is a two-year statute of limitations from the date of the Notice of Disallowment for pursuing the IRS in either US District Court or Federal Claims Court.
Certain types of tax issues can only be heard in US District Court or Federal Claims Court. These include certain employment or manufacturer’s excise tax issues.
Fighting the IRS in court can get complicated and drawn out. It’s best to seek the advice of an experienced tax attorney, who can assess your case, help with filing the petition or lawsuit, and represent you in negotiations or settlements as well as trial if your case goes that far.
Have Questions? Call the Experienced Tax Attorneys at Wiggam & Geer
If you disagree with your Notice of Deficiency or Notice of Determination, or have filed for Innocent Spouse Relief and not heard from the IRS, the experienced attorneys at Wiggam & Geer can help. Our lawyers can evaluate your situation, recommend a course of action, and assist you in the process. Contact Metro Atlanta’s top tax attorney’s by clicking here or giving us a call at (404) 609-1300.