Friday, January 15, 2010

Taxpayers Win 14% of Tax Cases

The odds of winning against the IRS in Tax Court appear dismal:
Your chances of winning a fight with the IRS are about as great as your chances when fighting City Hall. National Taxpayer Advocate Nina Olson, in her recently-released annual report to Congress, listed the 10 tax issues most litigated in the federal courts. Of the 923 cases involving those issues, taxpayers prevailed in whole, or in part, in 132, or roughly 14%. Taxpayers who were represented by counsel did somewhat better when the numbers were broken down—they won 20%, or 54 of 265 cases; pro se taxpayers prevailed in 12%, or 78 of 658 cases. ...

But it's important to remember, these are the cases that actually make it to court. Some are frivolous - sorry, tax protesters, but taxes are legal and you have to pay 'em - while others may have had no hope of winning in the first place. These statistics don't show how many disputes were actually resolved in the administrative stage or just prior to going to court. You can be sure the IRS doesn't litigate every matter, just those they think they can win. So, assuming the IRS thinks they'll win 100% of the cases they litigate, a 14% success rate on behalf of the taxpayers isn't bad.

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