GOING INTO TAX COURT (T/G 505) covers the jurisdictional and procedural matters (pretrial, at trial, post-trial) for disputing a Notice of Deficiency (or other Notice) formally issued by the IRS when it assesses additional tax and penalties, tries to impeach a taxpayer under oath, and objects incessantly to his/her offerings of evidence. Also covered:

• Petition for hearing: contents & examples
• How IRS "shuffles" your documents
• Burden of proof: persuasion & preponderance
• Rules of evidence & basis for objections
• Taste of adversarialness at trial
• Transcript, Briefs, Rule 155, & Decision

Going Into Tax Court
Book:  505

Table of Content

1.  JURISDICTIONAL MATTERS                      1-1

    The Constitutional Origin                   1-2
    A One Defendant Court                       1-3
    Not a Jury Court                            1-5
    Entombed in Tax Code                        1-6
    Simple Organizational Structure             1-8
    TC Rules of Procedure                       1-10
    Decisions Rendered:  Not Judgments          1-12
    IRS Rarely Disciplined                      1-13
    TC Records Are Public                       1-15
    Self-Representation Acceptable              1-16

2.  BONA FIDE DISPUTES ONLY                     2-1

    Return(s) Must Be Filed                     2-2
    What If No Return?                          2-3
    IRS Computer Errors                         2-6
    Must “Go Through” Audit                     2-7
    Request Audit Review                        2-8
    Must Appeal “Within IRS”                    2-10
    Prepare Written Protest                     2-12
    Specific Protest Example                    2-14
    Acknowledgment by Appeals                   2-16
    Anticipate Form 872                         2-17

3.  YOUR “90-DAY” NOTICE                        3-1

    Meaning of “90 Days”                        3-2
    What a Petition Does                        3-3
    Address for Notice                          3-6
    General Contents of Notice                  3-7
    The Rescissions Process                     3-10
    Restrictions on Second Notices              3-12
    Beware: The “Fraud Surprise”                3-13
    IRS’s Presumption of Correctness            3-14

4.  PETITION, ANSWER, & REPLY                   4-1

    Procedural Overview                         4-2
    Postpone Getting Attorney                   4-4
    TC Form 2 vs. Form 1                        4-5
    Form 1 Petition & Contents                  4-7
    Rules for Paragraphs 4 and 5                4-9
    Multiple Issues: Same Petition              4-11
    When Burden is on IRS                       4-13
    Specific Petition Example                   4-14
    Answer Format & Contents                    4-16
    Example of IRS Answer                       4-18
    Now, the “Further” Answer                   4-21
    When to “Reply”                             4-23
    Joinder of Issue(s)                         4-24

5.  DISCOVERY & PRETRIAL                        5-1

    The Pretrial Order                          5-2
    Discovery:  General Provisions              5-4
    Privileged Communications                   5-5
    Written Interrogatories                     5-7
    Production of Documents, Etc.               5-9
    IRS “Shuffles” Your Documents               5-11
    Rule 90 Re Admissions                       5-12
    Rule 91 Re Stipulations                     5-14
    Beware of Joint Stipulations                5-15
    Special Loophole for IRS                    5-17
    Authenticity versus Admissibility           5-19

6.  BURDEN OF PROOF                             6-1

    Duty to Keep Records                        6-2
    Why the “Presumption of Correctness”        6-4
    Overcoming the Presumption                  6-5
    Meaning of “Burden of Proof”                6-6
    Example Court Rulings                       6-9
    Burden Shifting: IRC Sec. 7491              6-11
    When Penalties Asserted                     6-12
    The Proving of Fraud                        6-13
    
7.  RULES OF EVIDENCE                           7-1

    Marking of Exhibits                         7-2
    Photocopies are O.K.                        7-4
    Relevancy and Its Limits                    7-6
    Objections to Admissibility                 7-7
    Statements Which Are Not Hearsay            7-10
    Many Exceptions to Hearsay                  7-12
    Example Rulings on Evidence                 7-14
    Expert Witness Reports                      7-15

8.  TRIAL PROCEDURE                             8-1
    
    Trial Memorandums                           8-2
    Overview of Trial Court Setting             8-5
    Entry of Stipulations                       8-7
    Objection to Joint Exhibits                 8-8
    Opening Statements                          8-9
    Examination of Witnesses                    8-11
    Scope of Questioning                        8-12
    Use of Memory Refreshers                    8-15
    Role of Demonstrative Exhibits              8-16

9.  TASTE OF ADVERSARIALNESS                    9-1

    Early-on Objections                         9-2
    The “Opening Bang” on Cross                 9-4
    Speculative Questioning & Switching         9-5
    Saber Rattling a $25 Penalty                9-7
    Disclosure Pounding                         9-9
    Pummeling & Grinding                        9-11
    Impeachment: The “Coup de Grace”            9-13

10. TRANSCRIPT & BRIEFS                         10-1

    Requirement of Transcript                   10-2
    Transcript Format & Style                   10-4
    Difficulty Extracting Facts                 10-6
    TC Rule on Briefs                           10-7
    Form & Content of Briefs                    10-9
    Table of Contents & Comments                10-10
    List of Authorities                         10-12
    Proposed Findings of Fact                   10-13
    Law and Argument                            10-14
    IRS’s Counter Argument                      10-16

11. RULE 155, DECISION, & ENTRY                 11-1

    Rule 155(a): Agreed Computations            11-2
    Decision Format & Contents                  11-4
    Head Summary Features                       11-7
    Example Issue Pages                         11-8
    Where the Decisions Start                   11-10
    Decision I: R & E (Prototype) Expenses      11-12
    Decision II: Fraud Penalty                  11-14
    Decision III: Alternative Penalties         11-16
    How Decision Entered                        11-17

12. WHEN TAXPAYER PREVAILS                      12-1
    
    Narrowing Section 7430                      12-2
    When IRS “Substantially Justified”          12-4
    How “Prevailing Party” Defined              12-5
    Example Court Case Rulings                  12-8
    Tax Court Jurisdiction                      12-9
    Content of Motion for Costs                 12-12
    Sensitivity re Net Worth                    12-14
    Disposition of Award Claims                 12-16
    Fee on Fees                                 12-17