Law Dictionary

tax court

noun, often cap T&C
Updated on: 26 Jul 2017

Legal Definition of tax court

  1. :  a court having jurisdiction over questions of law and fact arising under the tax laws of a government; specifically :  the federal court hearing tax cases


Financial Definition of TAX COURT

tax court

What It Is

Tax court is a court of law in which administrative law judges manage disputes between taxpayers and the IRS.

How It Works

The tax court handles a wide variety of tax matters but does not have a jury system. Article I of the U.S. Constitution established the court, which is composed of 19 presidentially appointed members. There are branches of U.S. tax court in many large cities.

Small cases are called S Cases, which usually begin with a taxpayer receiving a Notice of Deficiency from the IRS. This is also called a 90-Day Letter because the taxpayer generally has 90 days to either pay or petition for small tax court. Larger cases may move to "Regular Tax Court" or even the U.S. Court of Federal Claims. As is the case in the American court system, the person petitioning the court has the burden of proof. If that person is the taxpayer, this means that he or she must prove that the IRS is wrong.

Why It Matters

It is important for taxpayers to have some form of redress against taxing authorities, though taking a case through tax court is not a quick or easy process.


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