Seeking a remedy from the Tax Court for settlement with the IRS does not require an attorney. But having an adviser with tax expertise from enrolled agent training is certainly a sound consideration for taxpayers who choose to represent themselves in court.
Many individuals unable to reach a settlement with the IRS appeal to the Tax Court. This is the only legal forum that doesn’t require paying anything in advance other than a small filing fee. Some Tax Court cases operate with informal rules so that self-representation is permissible. However, a taxpayer must prepare to logically present relevant facts. Consequently, conducting an enrolled agent lookup will locate a tax expert to help arrange the presentation.
A tax professional with an EA license can help in another way. That is, most Tax Court cases are settled before trial. The IRS knows that the taxpayer means business. As long as the person’s challenge is sound, the IRS prefers to reach an agreement. By having passed the enrolled agent examination, a tax adviser can negotiate an IRS settlement for a taxpayer.
Another consideration of people contemplating Tax Court resolution is that using the IRS appeals process first is highly recommended. An enrolled agent job helping someone prepare a case for Tax Court therefore also entails attempting resolution with the IRS appeals office. An IRS appeal is not mandatory before petitioning the Tax Court, but it’s a sensible course of action.
Enrolled agents should explain to taxpayers the reasonable outcome of Tax Court filing. That permits clear expectations so that settlement before trial appears attractive. Only about 5 percent of all court cases result in total victory for taxpayers. However, partial reduction in taxpayer liability occurs quite frequently. In small cases – where the contested amount is less than $50,000 – around 47 percent of taxpayers come out ahead. For regular cases – involving more than $50,000 – taxpayers have partial victories about 60 percent of the time.
Merely filing a petition for Tax Court allows time for a taxpayer to raise cash for an IRS settlement. Cases are normally not heard for at least a year by the Court. The S-case election is available for small tax amounts. This is less than $50,000 owed for any single tax year. S-cases operate like small claims court, where the petitioner simply presents a reason why the IRS is making an incorrect assessment.
Tax Court does not have jury trials. A judge makes the final ruling. No appeal is available for the decision in an S-case. Attorneys are generally needed for regular cases involving more than $50,000 per tax year. These trials follow the rules of evidence for customary court proceedings.
Taxpayer filing with the Tax Court must occur within 90 days of an IRS Notice of Deficiency. Enrolled agents should help taxpayers by knowing that forms and instructions for Tax Court filing are available online at ustaxcourt.gov. Taxpayers must sign the court papers. An enrolled agent tax adviser cannot sign documents or make presentations with the Tax Court. But EA representation during trial preparation and attempted IRS settlement is quite valuable – and generally welcomed by the IRS.
IRS Circular 230 Disclosure
Pursuant to the requirements of the Internal Revenue Service Circular 230, we inform you that, to the extent any advice relating to a Federal tax issue is contained in this communication, including in any attachments, it was not written or intended to be used, and cannot be used, for the purpose of (a) avoiding any tax related penalties that may be imposed on you or any other person under the Internal Revenue Code, or (b) promoting, marketing or recommending to another person any transaction or matter addressed in this communication.
Tags: EA license, Enrolled Agent Examination, enrolled agent job, enrolled agent lookup, enrolled agent tax, enrolled agent training
