The Taxpayer Advocate recently issued her 2015 Report to Congress. As part of that report, the TAS is required to identify the ten tax issues most litigated in federal courts. See IRC § 7803(c)(2)(B)(ii)(X).
Perhaps not surprisingly, there was not a significant change from last year’s list of the most litigated tax issues. (Note: For these purposes, “litigated” means cases in which an actual court opinion was issued. Many, many tax cases are resolved short of a formal court opinion, whether through settlement or other disposition, so the list may be more reflective of the categories of cases that are more likely to proceed to trial than the categories of cases giving rise to disputes.)
The list includes the following issues, from first to last:
• Accuracy-Related Penalty Under IRC § 6662(b)(1) and (2);
• Trade or Business Expenses Under IRC § 162 and Related Sections;
• Summons Enforcement Under IRC §§ 7602, 7604, and 7609;
• Gross Income Under IRC § 61 and Related Sections;
• Appeals from Collection Due Process (CDP) Hearings Under IRC §§ 6320 and 6330;
• Failure to File Penalty Under IRC § 6651(a)(1), Failure to Pay an Amount Shown as Tax on Return Penalty Under IRC § 6651(a)(2), and Failure to Pay Estimated Tax Penalty Under IRC § 6654;
• Civil Actions to Enforce Federal Tax Liens or to Subject Property to Payment of Tax Under IRC § 7403;
• Charitable Deductions Under IRC § 170;
• Frivolous Issues Penalty Under IRC § 6673 and Related Appellate-Level Sanctions; and
• Relief from Joint and Several Liability Under IRC § 6015.
Notably, each one of these issues appeared on last year’s list, with the exception of relief from joint and several liability for spouses. Also notably, the overall number of cases within these categories had a year-over-year drop of about 12 percent and a 27 percent decrease from the 2013 tax year.