The US District Court is one of the four courts that handles disputes over federal taxes. Most contested tax issues are handled in the US Tax Court instead, since this allows people to defer payment until they’ve reached a settlement or ruling. But the district court has certain advantages that may make it ideal if you meet the right circumstances.
If you’ve received a bill from the IRS that you want to challenge, you should talk to a lawyer. Your attorney will be able to determine which court is the one most likely to give you an ideal outcome. They will also take you through the negotiation process with the IRS to try to help you reach a settlement without the need for a trial.
The process for approaching the situation is different depending on the court you choose. With the district court, you have to pay whatever amount is in dispute. After that, you can request a refund by starting civil proceedings with the IRS.
Because you have to pay the disputed taxes, this option isn’t favored by people who can’t afford to pay their tax bill. And the process can take a while. There are several avenues you and your attorney will pursue prior to opening official litigation. Some of these include:

• You’ll make a formal request. If it’s granted, then you’ll be given a refund. In the more likely scenario that it is denied, you will need to pursue the next steps.
• Your lawyer will need to go through each of the administrative processes that might provide some relief.
• If you are unsuccessful in this, or you’re unsatisfied by the administrative refund offered, then you can file your lawsuit with the court.

This might all seem like a hassle when you’ve already paid the back taxes. You might just want to close the case and be done with it. The sheer amount of time and energy that the process takes is part of why so few people choose it. Your lawyer can help to ease the burden by taking on the bulk of the paperwork, communication, and strategy for you. That way, you don’t have to put your entire life on hold.
One of the key advantages to district court proceedings is that you’re given the right to have a jury at your trial. That isn’t the case with the US Tax Court or the US Claims Court. With the tax court, every dispute that goes to trial is settled by one judge. There are nineteen presidentally-appointed judges that comprise the system.
You don’t need to meet any minimum dispute amount in order to bring your case to the district court. But because of how complex and costly a district court trial is, you probably won’t want to pursue it unless you have a massive case. Indeed, almost everyone who uses the district court for their tax disputes is asking for a refund of six to seven figures.
There are district courts strategically placed all throughout the US. The regulations regarding cases are complicated. Due to rules about the choice of this court for your litigation, you will need to have your case heard at a specific time. This means that you might be waiting a significant amount of time before you’re able to bring your case before a jury and get a judgment.
If you are suing for a refund on behalf of a corporation, then the involved court will be whichever district encompasses the corporate headquarters. That helps to simplify the issue if the corporation has multiple different offices or locations throughout the US.

Things to Know About Choosing District Court Litigation

District court proceedings have advantages and disadvantages over tax court ones.
The biggest advantage is that you get to have a jury trial. If you believe that you can reasonably convince a panel of everyday Americans that the IRS has cheated you, then you might prefer this option. You don’t have to worry about putting your fate in the hands of a single judge.
At the same time, it’s important to note that a jury is not as experienced with specific tax issues as a judge. In fact, most people on the jury won’t know anything about tax law at all. If your case involves making complicated technical arguments about the text of laws, you’ll want to present it to a judge.
Some courts have more laid-back evidence rules, which allows for faster proceedings and lets you enter extra information into evidence. Generally, the onus is on you to prove that you have been overbilled by the IRS. The default judgment is for the IRS’s ruling to stand.
In rare instances, the IRS might have the burden of proof instead. This only happens when the tax code specifically says so. Your attorney will be able to tell you whether your case includes one of these exceptions.
District court proceedings can be more formal. If you want to voluntarily negotiate a settlement with the IRS, the tax court is a better bet. It has more opportunities to settle before a trial.