If the chances of settling your case with the IRS prior to trial have been exhausted, these are the basic steps which need to take place to prepare your case for trial before the Tax Court.
Stipulation of Facts
The stipulation of facts is a document drafted by both parties to the case stating the facts on which they both agree. If the parties can agree on the facts in the case, it greatly simplifies the trial and the amount of evidence and testimony that is needed and works to the benefit of the parties and the court to save time and money. The parties must agree to stipulate to all the facts which are not in question.
A witness is a person with first-hand knowledge of the facts in your case. By first hand, we mean that a witness should know something or have seen something with their own eyes. They cannot simply repeat something they have heard from someone else. That is called "hearsay" and will not be accepted as testimony in the Tax Court.
In conjunction with preparing the stipulation of facts, the parties must consider what witnesses are needed to prove their case. If the stipulation of facts includes an agreement by the parties to all the facts needed to prove the taxpayer's case, it might not be necessary to call any witnesses. If there are still facts which are not agreed, witnesses may be useful. Some facts can only be proven by witness testimony. However, it is always necessary to consider how "credible" or believable your witness is. It is best to have some documents to back up any witness testimony.
Some cases will have no witnesses. Some will have several. This is dependent on the facts that are in contention by the parties.
It is always best if your witness is cooperative and independently agrees to appear in Court on your behalf. However, if a witness has knowledge vital to your case and does not want to appear in court, you may need to subpoena the witness. The subpoena demands that the witness appear in court, and if they do not, the Tax Court might require them to appear in court. If you need the witness to bring documents to court with them, you will require a subpoena duces tecum. The subpoena form is available on the United States Tax Court website. You can click through to the form on the button below.
Documents needed for Trial
Before you go to trial, you must determine what documents you need to prove your case. Documents in tax court cases are often things like cancelled checks or receipts for expenditures. Documents can also be contracts, articles of incorporation or partnership agreements. These documents MUST be given to the IRS attorney two weeks before the trial calendar date set in the notice of trial pertaining to your case. If you do not exchange ALL documents with the government attorney at that time, there is a strong possibility that you will not be permitted to present those documents in court. Without all relevant documents, the likelihood of proving the facts in your case is greatly reduced, if not impossible.
The pretrial memo is a document where you set forth your arguments in your case, and the facts and witnesses that will be used to support those arguments. This must be sent to the Tax Court and the attorney for the IRS no later than two weeks before the court calendar on which your case is set for trial. The pretrial memo form is enclosed in the "Notice Setting Case for Trial" that you will receive from the Tax Court.