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1 1 (December 2, 2015)

handle is hein.crs/govcduw0001 and id is 1 raw text is: , . ' riE -E 3 $ri h , , U.S. Tax Court: A Brief Introduction December 2, 2015 The U.S. Tax Court is an Article I court created by Congress to hear tax disputes arising under the Internal Revenue Code (IRC). This In Focus provides background information about the court. .C 're. t k. \o -n,-, The entity that eventually became the U.S. Tax Court was created by the Revenue Act of 1924 (P.L. 68-176) as the Board of Tax Appeals. The act established the board as an independent agency within the executive branch. While later renamed the Tax Court of the United States by the Revenue Act of 1942 (P.L. 77-753), this action did not change the court's status as an independent agency. It was not until the Tax Reform Act of 1969 (P.L. 91-172) that Congress established the Tax Court as an Article I court. (For information on Article I courts, see CRS Report R43746, Congressional Power to Create Federal Courts: A Legal Overview, by Andrew Nolan and Richard M. Thompson II.) The statutes providing for the court's organization and related matters are IRC Sections 7441-7479. The court's primary purpose is to provide a forum where taxpayers may challenge determinations by the Internal Revenue Service (IRS) of federal tax deficiencies prior to paying the disputed amount. Taxpayers also have the option of challenging tax deficiencies in U.S. district court, but only after paying the alleged deficiency. The Tax Court consists of 19 judges, including the chief judge. Judges are nominated by the President and confirmed by the Senate for a fixed term of 15 years (although judges may be reappointed). Individuals appointed to the court typically have experience working as government attorneys specializing in tax law. For example, of the 17 active judges on the bench as of November 2015, 16 have experience as attorneys working on tax matters for Congress, the IRS, the Department of Justice, or the Department of the Treasury. Many of the judges, 14 of 17, also worked in private practice as attorneys specializing in tax law. Prior to the expiration of his or her term in office, a judge can be removed by the President for inefficiency, neglect of duty, or malfeasance in office, but only after notice and opportunity for a public hearing. The Tax Court, in addition to using full-time active judges to hear cases, also uses senior status judges. Senior status judges are those judges who have retired from full-time service but continue, on a part-time basis, to hear cases or perform other duties related to judicial administration. A senior status judge may be recalled to hear cases for any period specified by the chief judge. The chief judge may appoint special trial judges to decide certain cases, including those involving disputes of no more than $50,000 and lien and levy proceedings. The chief judge can also authorize a special trial judge to hear, but not decide, other cases. In the 1991 case Freytag v. Comm 'r, 501 U.S. 868, the Supreme Court rejected the taxpayer's argument that this authority was limited to minor and relatively simple cases, holding instead that it applied to any case the chief judge determined was appropriate for a special trial judge to hear. The Court also held that the assignment of a case to a special trial judge did not violate the Constitution's Appointments Clause (Art. II, §2, cl. 2). When a special trial judge is assigned to hear but not decide a case, he or she provides a report to a regular judge. The regular judge may adopt, modify, or reject the special trial judge's recommended findings of fact and conclusions of law, or may order further proceedings. The Tax Court is a court of original jurisdiction. Its jurisdiction is limited to federal tax matters as expressly provided in various statutes. As mentioned, the court provides a forum where taxpayers may challenge the IRS's determinations of federal tax deficiencies prior to paying the disputed amount. Other issues that fall within the court's jurisdiction include the authority to hear cases relating to partnership adjustments; to make certain declaratory judgments; to determine worker classification as an employee or independent contractor; to review IRS denial or failure to rule on relief from joint and several liability; and to review IRS determinations in collection due process hearings. Only taxpayers may file suit in the Tax Court-the government may not. The proceedings are adversarial, with the taxpayer suing the IRS commissioner. Taxpayers may represent themselves or be represented by practitioners admitted to practice before the court. The government is represented by the IRS chief counsel or his/her delegate. The vast majority of cases filed with the Tax Court are settled by mutual agreement between a taxpayer and the government, without requiring a trial. If a trial is conducted, a single judge presides and there is no jury. While the court itself is physically located in .O 'T p\w -- , gn'a', goo mppm qq\ a , q 's I 11LIANJILiN,

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