Ask any Tax Court lawyer: 9 out of 10 Tax Court cases begin with an IRS audit of the taxpayer’s income tax return. At what point is the taxpayer first presented with the opportunity to dispute the audit in Tax Court? Usually the IRS begins a tax audit of your tax return for one to three years. Your tax audit lawyer then reviews your receipts and checks and bank statements and makes your document submission to the IRS. The IRS audit then reviews your documents and maybe asks for more documents. Once the tax auditor is satisfied with your documents he or she will issue a Form 4549, Report of Income Tax Changes. You are then given 30 days to agree or to appeal. If you agree, you cannot go to Tax Court. However, if you appeal you have kept the case alive and might decide to go to Tax Court.
Let’s say you’re dissatisfied with what IRS appeals has done. Maybe they have increased your tax substantially and added on huge interest and penalty. Maybe they have denied deductions that your tax lawyer says you’re absolutely entitled to. Whatever, you decide to go to Tax Court. In order to file in Tax Court you need one special document to be issued by the IRS. That document is called the Notice of Deficiency. The NOD gives you 90 days within which to file your case in Tax Court.
Now you are ready and able to file your case in U.S. Tax Court.