When the Government Appeals Your Tax Court Win

Can I recover court fees if I successfully defend against the government’s appeal?

Appeals can work both ways.  If you have been hit with an audit, subject to IRS collections, or had your offer in compromise rejected, you may be forced to file an action in tax court either with the IRS or your state tax department.  Should you lose, you often have the right to appeal this negative decision. In an appeal, you will contest a specific aspect of the tax court’s decision, which could be an evidentiary error, inconsistency with existing tax laws, or other errors as to fact or law.  While appeals can prove vital for taxpayers who have lost in court, appeals can also be taken by the government. Your win in tax court could be subjected to a challenge by the government, which you will need to defend against to maintain your positive outcome.  

What Will Be Considered on Appeal

If you are facing a government appeal from your tax court win, it is important to understand that the appeal will focus on limited matters.  The appellate court will not reconsider all aspects of the case. Rather, the appeal will be limited to the record built by the trial court. Generally, new evidence will not be admitted during an appeal and the appeal is limited to the evidence considered by the trial court.  Further, the appeal will focus on those issues with merit raised by the government to the appellate court.

It will be vital for you to have the representation of a strong tax appeals attorney.  If the government’s appeal is successful, you risk reversal of the tax court’s decision, which could result in institution of the initial tax penalties.  You will not only lose out on your gains in tax court, but you will have also incurred considerable expense bringing the matter to court in the first place. You can potentially avoid such an outcome by retaining the assistance of an experienced tax appeals attorney who will diligently review the record, file a strong brief, and fight to uphold your tax court win.  

Defending against the government’s appeal will require that you incur some expense.  However, if you are successful and the appellate court upholds the tax court’s decision, then you may be able to recoup some of your costs reasonably incurred in defending against the action.  Contact a tax appeals attorney at the first sign of trouble to protect your legal rights today.