Tax Litigation and Tax Controversy

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Tax Litigation and Tax Controversy

Tax litigation and tax controversy describes the practice of resolving a tax dispute with a taxing authority. Controversies can involve businesses, individuals, trusts, or estates. Tax controversies are typically separated into civil tax defense and criminal tax defense.

About Tax Litigation

For most taxpayers and businesses, the primary goal after receiving notice of a tax issue with the IRS or NCDOR is to resolve it as quickly as possible. However, some individuals may wish to initiate tax litigation. Tax litigation involves suing the IRS with the help of an experienced tax litigation lawyer.

A tax controversy is typically initiated by a taxpayer who claims a refund or contests a tax deficiency. Federal tax controversies may involve discussions with the IRS, appeals to and discussions with the Appeals Office, and, as a last resort, litigation in a United States court. A similar process applies for state and local tax controversies.

After receiving notice of a deficiency from the IRS that you want to dispute, you’ll want to gather your tax records and financial information. Once you’ve done this, you’ll want to find an experienced tax litigation lawyer to avoid the potential loss of your right to petition for relief from a tax court.

When Is Litigating a Tax Controversy Appropriate?

Litigation becomes necessary in two cases: when you go through an audit and the IRS relies on the wrong facts or the wrong law and reaches a wrong legal conclusion that leads to additional tax liability, or when you initiate a claim for a refund. As such, initiating a lawsuit against the IRS is appropriate when additional leverage is needed.

What Types of Tax Controversies Can be Litigated?

Not every tax controversy can be litigated. The most common types of issues litigated are deficiency actions and refund actions:

  • A deficiency action is a lawsuit filed in the U.S. Tax Court to contest a tax deficiency sent to you by the IRS. For a taxpayer to bring a deficiency suit, he or she must have already received a letter from the IRS. There are strict deadlines after receiving IRS correspondence, so you should contact someone immediately.
  • A refund action is a lawsuit in which the taxpayer asserts that he or she has overpaid his or her taxes and is seeking a refund.

Dysart Willis Can Help — Contact Us Today

Litigating a tax action is a process full of technicalities and pitfalls. Working with an experienced tax controversy or tax litigation attorney can help you take a strategic approach to the litigation. Before deciding on a strategy, consult with a knowledgeable tax litigation lawyer to ensure that you’re not forfeiting important legal rights by oversight. Contact Dysart Willis today if you need help with a tax controversy or litigation issue.