TP MUST PAY ASSERTED DEFICIENCY US Court of Federal Claims Located in DC, hears claims against the US gov't Claims court follows precedent of the Court of Appeals for the Federal Circuit, not the court of appeals where the TP resides (like dx ct) TP MUST PAY ASSERTED DEFICIENCY SOL Generally 3 years from the date return was filed or the due date of the return If TP omits a substantial amount of income, then 6 years If TP files fraudulent return or fails to file, then open SOL If agreement and waiver, then assessment is made and is collection or possible refund If decision adverse to TP, then Appeal If in US tax or has filed a refund suit in the dx, then appeal lies in the appellate area where the TP resides (ex. 9th circuit) If TP loses the court case in a court and loses in the appellate circuit, then in federal appeals court in dc, then writ to supreme court Assessment and collection If decision favorable to TP, then no further action Collection Interest accrues on any tax deficiency owed starting from the original due date of the return If the TP is owed tax, then the gov't pays the TP interest on the amount of the overpayment If TP has no money, then it goes to collections (ex. Garnish wages, take money from bank accounts, attachment) Possible Refund and Refund Suit TP may be owed refund by IRS - can assert a refund claim If TP pays asserted deficiency, TP can bring a refund suit for the tax in federal district court where the TP resides or US fed claims court (Wash DC) How returns are selected for an audit: 1-2% of returns are audited IRS has algorithm to select TP for audit and some are random audits to get compliance information Most cases get settled before litigation Sources of Tax Law Primary Authority Legislative Judicial Administrative IRC Tax Court Treasury Regs Legislative Hx Reg. Decisions Interpretive v. Legislative Pending Memo Decisions Temporary, and Proposed Legislation (BTA) Revenue Rulings U.S.D.C. Revenue Procedures U.S. Court of Fed. Claims Private Letter Rulings U.S. Court of Appeals Technical Advice Memoranda U.S. Supreme Court General Counsel Memoranda Actions on Decision Acquiescence or Nonacquiescence Notices Announcements IRS Manual Publications Legislative Generation of tax legislation
TP MUST PAY ASSERTED DEFICIENCY US Court of Federal Claims Located in DC, hears claims against the US gov't Claims court follows precedent of the Court of Appeals for the Federal Circuit, not the court of appeals where the TP resides (like dx ct) TP MUST PAY ASSERTED DEFICIENCY SOL Generally 3 years from the date return was filed or the due date of the return If TP omits a substantial amount of income, then 6 years If TP files fraudulent return or fails to file, then open SOL If agreement and waiver, then assessment is made and is collection or possible refund If decision adverse to TP, then Appeal If in US tax or has filed a refund suit in the dx, then appeal lies in the appellate area where the TP resides (ex. 9th circuit) If TP loses the court case in a court and loses in the appellate circuit, then in federal appeals court in dc, then writ to supreme court Assessment and collection If decision favorable to TP, then no further action Collection Interest accrues on any tax deficiency owed starting from the original due date of the return If the TP is owed tax, then the gov't pays the TP interest on the amount of the overpayment If TP has no money, then it goes to collections (ex. Garnish wages, take money from bank accounts, attachment) Possible Refund and Refund Suit TP may be owed refund by IRS - can assert a refund claim If TP pays asserted deficiency, TP can bring a refund suit for the tax in federal district court where the TP resides or US fed claims court (Wash DC) How returns are selected for an audit: 1-2% of returns are audited IRS has algorithm to select TP for audit and some are random audits to get compliance information Most cases get settled before litigation Sources of Tax Law Primary Authority Legislative Judicial Administrative IRC Legislative Hx Pending Legislation Tax Court Reg. Decisions Memo Decisions (BTA) U.S.D.C. U.S. Court of Fed. Claims U.S. Court of Appeals U.S. Supreme Court Treasury Regs Interpretive v. Legislative Temporary, and Proposed Revenue Rulings Revenue Procedures Private Letter Rulings Technical Advice Memoranda General Counsel Memoranda Actions on Decision Acquiescence or Nonacquiescence Notices Announcements IRS Manual Publications Legislative Generation of tax legislation
Income-Tax-Pratt-Fall-2010.docx