Taxpayers often ask how long a Tax Court case will take. The Court does not follow a fixed timetable, and the answer depends on whether the case settles, how complex it is, and when it is set for trial. The stages of a case, and the time periods the Court’s rules set for some of them, are predictable. This article walks through them.
From Petition to Answer
Once a petition is filed, the Court assigns a docket number. Under Tax Court Rule 36, the IRS generally has 60 days from service of the petition to file an answer. If a reply is required, the taxpayer has 45 days from service of the answer to file it (Rule 37).
Settlement Discussions
After the answer is filed, an IRS employee typically contacts the taxpayer to schedule a conference. One purpose of the conference is to try to settle some or all of the issues and to agree on facts. Docketed cases are often referred to the IRS Independent Office of Appeals for settlement consideration.
If the parties settle, the IRS prepares a stipulated decision for both sides to sign. The case ends when the Court enters the decision, and if that happens before trial, no court appearance is needed. A case that settles early can therefore conclude well before any trial date.
Setting the Case for Trial
According to the Court’s guidance for petitioners, a case may be scheduled for trial as soon as six months after the answer is filed, but it may take longer. The Court generally issues a notice setting the case for trial about five months before the trial date, together with a standing pretrial order.
Several deadlines run from the trial calendar. Formal discovery must be completed no later than 45 days before the calendar call (Rule 70), expert reports must be served no later than 30 days before it (Rule 143(g)), and the standing pretrial order sets dates for exchanging documents and, in regular cases, filing a pretrial memorandum. A party who cannot proceed may file a motion for a continuance, which the judge may or may not grant.
Trial and Post-Trial Briefing
A trial session begins with a calendar call, after which the judge schedules specific times for trial.
After trial, the judge may direct the parties to file post-trial briefs or may allow oral argument or memoranda instead. When simultaneous briefs are ordered, Rule 151 provides that opening briefs are due within 75 days after the trial concludes and answering briefs 45 days after that, unless the judge sets a different schedule. In small tax cases, briefs are not required unless the Court directs otherwise.
The Opinion and Decision
The Court’s guidance states that there is no fixed time within which a judge will decide a case. A judge may deliver an oral bench opinion during the trial session. Otherwise, the judge issues a written opinion as quickly as practicable, and the Court then enters a decision consistent with the opinion. When the opinion leaves calculations to be done, the parties may be directed to submit computations under Rule 155 before the decision is entered.
A motion for reconsideration of an opinion is due within 30 days after the opinion is served (Rule 161), and a motion to vacate or revise a decision within 30 days after the decision is entered (Rule 162).
Appeals
In a regular case, a notice of appeal must be filed with the Tax Court within 90 days after the decision is entered, or within 120 days if the IRS appeals first. The appeal goes to a U.S. Court of Appeals, which follows its own schedule. A small tax case decision cannot be appealed, so the case ends when the decision becomes final.
Taxpayers generally do not need to pay the disputed tax while a Tax Court case is pending, but interest runs on any tax ultimately owed from its original due date. A taxpayer may pay some or all of the disputed amount during the case to stop interest from accruing on that amount.
What Affects Timing
Settlement. Resolving some or all issues by agreement can shorten a case considerably.
Complexity. Multiple years, multiple issues, valuation questions, and expert testimony all add preparation time.
Discovery and motions. Disputes over information, or motions such as a motion for summary judgment, can add steps.
Continuances. A case that is continued is set for a later trial session.
Trial location and calendar. Trial sessions are held in many cities, and scheduling depends on the session calendar for the requested location. A party may also ask to proceed remotely, which the judge may allow.
Because these factors vary, any estimate of duration for a particular case is just that, an estimate.
Planning for a Tax Court case?
Tax attorney Cassra Minai, Esq. can explain the stages of your case and the deadlines that apply in a confidential consultation.