3 ways to fight the IRS in court

The District Court hears all kinds of litigation involving federal laws and any kind of law, state or federal, if the litigants are citizens of different states. The District Court judges are rarely tax experts. If your position is technical, go to Tax Court. You can represent yourself in the U.S. District Court, but judges frown on it.

District Court decisions can be appealed to the U.S. Courts of Appeals, and then to the U.S. Supreme Court.

U.S. Court of Federal Claims

This is your third choice of forums, and, in my opinion, the least desirable, unless you have a lawyer who successfully "shops" for the right venue. (I'll explain that in a moment.)

The U.S. Claims Court is a special court that hears all sorts of claims against the United States, including your claim of overpaying your taxes and wanting your money back. Claims Court judges hear case arguments only in Washington, D.C.

However, before the arguments, there is a fact-finding hearing before a trial judge in a city near where you live. The trial judge will file the findings and the recommended decision. If either you or the IRS disagrees, the case will come up for arguments before the full court in Washington.

Decisions can be appealed to the federal Circuit Court of Appeals, and then to the U.S. Supreme Court.

But why go here if you don't get a jury, don't get a tax expert as a judge, and still have to pay the tax first? In addition, the litigation is complex and you most certainly will need an attorney.

The answer lies in the quirky nature of our legal system. Our federal judiciary divides the country geographically into different circuits. Unless the U.S. Supreme Court has ruled on the specific issue, judges in different circuits are free to decide a case based on the legal precedent in that specific circuit's Court of Appeals. So one circuit's decision could be completely opposed to what another circuit's Court of Appeals has ruled in the past.

In the legal world, this is called “forum shopping.” A sharp lawyer will pick the circuit in which the past rulings have been most sympathetic to your cause. The U.S. Claims Court may be able to follow a legal precedent in your favor that the other courts have ruled against.

Updated Jan. 9, 2009

< previous |  1 | 2 |