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Tax Law Research : Federal and Ohio: Court Jurisdiction of Tax Issues and Appellate Structure

Tax Trial Courts

1. United States Tax Court

A specialized court that hears only federal tax cases.  The cases are heard by a single judge initially, who submits their opinion to the Tax Court Chief Judge, who can either allow the decision to stand or refer it to the full Tax Court for review.  Must follow precedent of the Circuit Court of the taxpayer's residence.  (Historical Note:  Its predecessor court was called the Board of Tax Appeals.) 

  • Pros to Bringing Suit Here:
    • Tax Court judges have greater expertise in the area of tax
    • The taxpayer does not have to pay the disputed amount until after the case is decided and all appeals are exhausted
  • Cons to Bringing Suit Here:
    • No right to a jury trial
  • Types of Opinions Issued by United States Tax Court:
    • Regular Opinions
      • These opinions deal with substantive legal tax issues, such as interpretation of a Code provision
      • They are decided by the Court as a whole
    • Memorandum Opinions
      • These opinions deal with factual issues between the taxpayer and the IRS
      • They may be decided by the trial judge only
    • Summary Opinions
      • Involve disputes with a value of $50,000 or less
      • Not authoritative except for the taxpayer involved

2. United States District Court

  • Pros to Bringing Suit Here:
    • Right to a jury trial
  • Cons to Bringing Suit Here:
    • Must pay amount in question to IRS prior to litigating
    • Potentially less expertise with regard to tax matters

3.  United States Bankruptcy Court

  • Bankruptcy cases may involve substantive tax rulings, that can be appealed to the District Court.

4.  U.S. Court of Federal Claims

A court of original jurisdiction for a wide variety of areas including tax disputes, government contracts, civilian and military pay claims, and other various statutory claims against the United States.  (Historical Note:  This court was formerly called the United States Court of Claims.)

  • Pros to Bringing Suit Here:
    • Hears a greater percentage of tax cases than the average District Court
    • May be advantageous to bring suit here if rulings in home Circuit are adverse to taxpayer
  • Cons to Bringing Suit Here:
    • No right to jury trial
    • Taxpayer must pay contested amount prior to filing suit


Court Hierarchy in Federal Tax Cases