Note: The following is an excerpt from the introduction to the article as published in The Tax Lawyer. Author citations have been omitted for brevity. Tax Section members may read the article in its entirety in Adobe Acrobat format.
Choice of Forum in Federal Civil Tax Litigation
Thomas D. Greenaway*
Four different trial-level courts hear federal civil tax cases in the United States: the U.S. Tax Court, U.S. district courts, the U.S. Court of Federal Claims, and U.S. bankruptcy courts. By a large margin, most tax cases are filed in the Tax Court, but the thoughtful advocate planning tax litigation carefully considers all available options.
The Tax Court is a court of nationwide jurisdiction based in Washington, D.C. The Tax Court conducts trials and hearings in 74 cities around the nation. All the cases before the Tax Court have a tax nexus. The Court of Federal Claims is also based in Washington, D.C. and also may hear trials in cities around the nation. All the cases before the Court of Federal Claims involve a monetary dispute between the plaintiff and the United States; tax cases make up a substantial subset of those cases. The Tax Court and the Court of Federal Claims are sometimes called “Article I” courts because their judicial power is derived solely from acts of Congress. Judges on the Tax Court and Court of Federal Claims serve limited terms.
District courts are located throughout the nation. There are 94 judicial districts, including at least one in each state. District courts are called “Article III” courts, since their judicial power is derived from Article III of the Constitution, together with acts of Congress. District courts have jurisdiction,
in law and equity, over cases under the laws of the United States—including most tax cases. District court judges enjoy lifetime appointments. Bankruptcy courts are separate units of district courts; bankruptcy court judges serve limited terms.
*This paper was first presented at the ALI-ABA 2008 Tax Controversy course. I am indebted to Steven Salch for his earlier paper on this subject.