Rose Jenkins Joins Tax Court: Impact on Tax Litigation and Filings

Rose Jenkins has been appointed to the U.S. Tax Court, a move that could influence tax litigation and future filings. The court plays a key role in resolving disputes between taxpayers and the IRS, making judicial appointments significant for individuals and businesses navigating tax laws.

Jenkins’ legal background and approach to tax cases may shape how certain issues are interpreted and decided. With major tax provisions from the Tax Cuts and Jobs Act (TCJA) set to expire after 2025, her presence on the bench comes at a time when tax law is expected to undergo significant changes. Understanding how her rulings might impact tax disputes and compliance is important for those affected by shifts in legal interpretations.

Role of This Court in Modern Tax Litigation

The U.S. Tax Court handles disputes before taxpayers must pay the contested amount, distinguishing it from federal district courts, which generally require payment before litigation. This makes it a primary venue for individuals and businesses challenging IRS determinations.

Cases often involve complex tax code interpretations, including deductions, credits, and income classifications. Disputes over business expense deductions or qualified business income deductions frequently arise. The court’s rulings clarify tax law, influencing IRS enforcement and taxpayer compliance.

Judges serve 15-year terms and specialize in tax law, ensuring consistency in tax jurisprudence. Their decisions set precedents that shape future cases. Past rulings on the economic substance doctrine, for example, have affected corporate tax strategies by limiting aggressive tax avoidance schemes.

Court Authority in Tax Disputes

The U.S. Tax Court has jurisdiction over income, estate, and gift tax disputes under Title 26 of the U.S. Code. It operates under a distinct procedural framework to ensure efficient and fair resolution of tax controversies.

One of its primary functions is reviewing IRS deficiency notices, issued when the agency believes a taxpayer has underpaid. Taxpayers have 90 days (or 150 days if residing outside the U.S.) to challenge these assessments. Missing this deadline typically results in the deficiency becoming final.

Beyond deficiency disputes, the court handles cases involving IRS collection actions, such as levies and liens. Taxpayers can request a collection due process hearing before the IRS Office of Appeals, and if unresolved, seek judicial review. This provides a safeguard against aggressive collection measures.

The court also oversees whistleblower claims, allowing individuals to challenge IRS determinations on reward eligibility when reporting tax fraud. Additionally, it handles partnership-related disputes under the centralized partnership audit regime, which governs IRS examinations of large partnerships.

Significance for Post-2025 Tax Filings

With major tax provisions set to expire after 2025, the U.S. Tax Court’s interpretations will be increasingly important. Many TCJA provisions, including lower individual tax rates, the increased standard deduction, and the qualified business income deduction, are scheduled to sunset unless Congress extends or modifies them.

Disputes over expiring deductions and credits will likely increase. For example, the child tax credit is set to revert from $2,000 per child to $1,000, which could lead to audits and litigation over eligibility and phase-out thresholds. Similarly, the estate and gift tax exemption is expected to drop from over $13 million per individual to approximately $5 million, adjusted for inflation, potentially triggering disputes over valuation methods and transfer timing.

Corporate tax changes will also influence litigation trends. The reinstatement of pre-TCJA limits on interest deductibility could prompt challenges from businesses facing higher borrowing costs. The potential elimination of full expensing for capital investments will raise questions about depreciation schedules and cost recovery, leading to disputes over proper tax treatment. The court’s role in clarifying these provisions will be critical for financial planning.

Petitioners’ Rights and Court Procedures

Taxpayers challenging IRS determinations in the U.S. Tax Court must follow a structured legal process. Cases begin with a formal petition outlining the disputed IRS action. Petitions must clearly present factual allegations and legal arguments, as improper framing can weaken a case.

After filing, the IRS responds, admitting or denying the allegations. Many cases enter a pretrial phase where taxpayers can negotiate settlements with the IRS Office of Chief Counsel. The court encourages alternative dispute resolution to streamline proceedings and potentially avoid trial.

If a case goes to trial, petitioners must present evidence under the Tax Court’s rules. Trials are conducted without juries, with the judge as the sole fact-finder. The burden of proof generally falls on the petitioner, though in certain cases, such as disputes over IRS-imposed penalties, it may shift to the government if the taxpayer provides credible evidence and maintains proper records.

Enforcement of Court Decisions

Once the U.S. Tax Court issues a ruling, its decisions determine tax liabilities and compliance obligations. While the court lacks direct enforcement power, its rulings are binding unless overturned on appeal. If a taxpayer prevails, the IRS must adjust its assessment, potentially issuing refunds or eliminating penalties. If the IRS wins, the taxpayer must satisfy the determined liability, including any accrued interest and penalties.

Taxpayers may appeal to the U.S. Court of Appeals for their circuit within 90 days. The appellate court reviews legal errors rather than re-examining factual findings. If an appeal is unsuccessful or not pursued, the IRS can initiate collection actions such as wage garnishments, bank levies, or property liens. In cases involving substantial liabilities, the agency may negotiate installment agreements or offer in compromise settlements to resolve debts under structured terms.