Tax Litigation

You pushed your case through Appeals and could not settle it. Or you missed the Appeals deadline. Or the IRS has filed suit against you. When administrative remedies fail, you need a courtroom and a lawyer admitted to fight there.

North Star Law represents individuals, businesses, trusts, and estates in federal tax litigation before the United States Tax Court, the United States District Court for the Southern District of Texas, the United States Court of Federal Claims, and the United States Court of Appeals for the Fifth Circuit. Whether your dispute involves a proposed deficiency, a refund claim, a collection action, a responsible-person assessment, or a partnership audit adjustment, we take the case from petition through final judgment and, when necessary, through appeal.

How It Works: Four Steps From Petition to Judgment

Step 1: Case Evaluation

You bring us your Notice of Deficiency, Notice of Final Partnership Adjustment, Notice of Determination from Appeals, refund claim denial, or collection suit complaint. We review the procedural posture, identify every deadline that applies to your case, evaluate the legal and factual strengths and weaknesses of the government's position, analyze the available forums, and give you an honest assessment of what litigation is likely to achieve. No charge. No obligation.

Step 2: Forum Selection & Filing

Tax disputes can be litigated in different courts, and the choice of forum affects everything from payment requirements to the availability of a jury to the governing precedent. We recommend the forum most likely to produce a favorable result, draft the petition or complaint, file it before the jurisdictional deadline, and put the IRS on notice that the dispute is now in court. From that moment forward, the government deals with your lawyer.

Step 3: Litigation & Negotiation

We handle the full scope of pretrial work — drafting answers, conducting written and oral discovery, negotiating stipulations of fact, preparing expert reports, filing motions, and participating in pretrial conferences. Most tax cases settle before trial, and the quality of the settlement depends directly on the credibility of the threat to litigate. We build cases that make the government want to settle on your terms.

Step 4: Trial & Resolution

When settlement fails, we try the case. We prepare witnesses, draft pretrial memoranda, present evidence, cross-examine government witnesses, and deliver closing argument. After trial, we handle post-trial briefing and, if necessary, pursue the appeal. We see the case through to final resolution — a favorable judgment, a settlement that reflects the strength of your position, or an appellate decision that fixes a bad trial-court ruling.

Flat Fees. Payment Plans Available.

Tax litigation is high-stakes work, and surprise hourly bills are the last thing you need while you're fighting the IRS. We quote a fixed fee for your representation before we start, broken into phases so you can budget with certainty. Payment plans are available. The only upfront cost is the court filing fee and the initial engagement payment.

What Is Tax Litigation?

Tax litigation is the judicial resolution of a dispute between a taxpayer and a federal taxing authority. Most disputes begin at the administrative level — an examination, an Appeals conference, a collection action — and get resolved before they reach court. But some cases cannot be settled administratively because the IRS's position is legally indefensible, because the amount in dispute is too large to compromise, because a favorable ruling would create binding precedent, or simply because the taxpayer missed the administrative deadline and the only remaining option is a refund suit.

The most common forum is the United States Tax Court, which has nationwide jurisdiction over deficiency cases, collection due process appeals, innocent spouse determinations, worker classification disputes, whistleblower cases, and declaratory judgment actions. The Tax Court is unique in that a taxpayer can petition the court without first paying the disputed tax, making it the forum of choice for most deficiency litigation. Refund litigation, by contrast, requires the taxpayer to pay the tax in full and then sue for refund in federal District Court or the Court of Federal Claims. Each forum has strategic advantages, and the choice of forum is often one of the most consequential decisions in the case.

United States Tax Court Representation

The Tax Court is where most federal tax disputes are resolved. If you have received a Notice of Deficiency, commonly called a 90-day letter — you have ninety days from the date of the notice (150 days if you are outside the United States) to file a petition with the Tax Court. That deadline is jurisdictional. Missing it eliminates your ability to challenge the deficiency in Tax Court and leaves you with the far more expensive alternative of paying the tax and suing for refund.

North Star attorneys are admitted to practice before the United States Tax Court and handle the full scope of Tax Court practice. We draft and file petitions, respond to IRS answers, participate in pretrial conferences with Appeals or Chief Counsel, conduct written and oral discovery, prepare stipulations of fact, file pretrial memoranda, try cases at regular and small case sessions, and handle post-trial briefing. For disputes involving $50,000 or less per tax year, we also represent taxpayers under the Tax Court's small case procedure under IRC § 7463 — a streamlined, less formal process that results in a final, non-appealable decision but offers meaningful cost savings for smaller matters.

Refund Litigation in Federal District Court and the Court of Federal Claims

Some cases are best litigated after the tax has been paid. Refund suits are available for any tax the taxpayer has paid in full, including income tax deficiencies where the Tax Court deadline was missed, employment tax assessments, trust fund recovery penalty assessments under IRC § 6672, excise tax liabilities, and most penalty assessments outside the deficiency procedures. The taxpayer files Form 843 or an amended return claiming the refund, waits for the claim to be formally denied or for six months to elapse, and then files suit in federal court.

The choice between the District Court and the Court of Federal Claims is strategic. The United States District Court for the Southern District of Texas offers the possibility of a jury trial, applies Fifth Circuit precedent, and conducts discovery under the Federal Rules of Civil Procedure. The Court of Federal Claims applies its own procedural rules, hears cases without juries, and follows its own precedent and that of the Court of Appeals for the Federal Circuit. For Houston-based taxpayers, the Southern District of Texas is often the better choice because the forum is local, the judges are familiar with federal tax issues, and the Fifth Circuit precedent that governs the case is already well-developed.

Collection Due Process Appeals to Tax Court

If the IRS has filed a Notice of Federal Tax Lien or issued a Final Notice of Intent to Levy, you have the right to request a Collection Due Process hearing under IRC §§ 6320 and 6330. If the Appeals officer issues a Notice of Determination you disagree with, you have thirty days to petition the Tax Court for review. CDP review is a narrow proceeding, the court generally reviews the Appeals officer's determination for abuse of discretion, and the underlying tax liability can be raised only in limited circumstances — but it is often the last opportunity to challenge a collection action, obtain an installment agreement or offer in compromise, or raise spousal defenses. The petition must be filed on time or the right is permanently lost.

Trust Fund Recovery Penalty Litigation

When the IRS assesses a Trust Fund Recovery Penalty under IRC § 6672 against a person it considers responsible for a business's unpaid employment taxes, the assessed person has the right to pay a divisible portion of the penalty, file a refund claim, and sue for refund. Alternatively, the government may file a collection suit against the responsible person in federal court. Either way, the litigation turns on two questions: whether the taxpayer was a responsible person within the meaning of Slodov v. United States, 436 U.S. 238 (1978), and whether the failure to pay was willful. These are fact-intensive inquiries that often turn on documentary evidence, deposition testimony, and the credibility of the responsible person's account of what they knew and when they knew it. Our practice combines the legal framework with forensic accounting analysis to build the strongest possible defense.

BBA Partnership Litigation

The Bipartisan Budget Act of 2015 fundamentally changed how partnership tax adjustments are litigated. Under the BBA's centralized partnership audit regime, adjustments are determined at the partnership level, and the partnership representative has exclusive authority to act on behalf of the partnership. Challenges to a Notice of Final Partnership Adjustment must be brought in the United States Tax Court, the United States District Court for the District where the partnership has its principal place of business, or the United States Court of Federal Claims within ninety days of the notice. The Tax Court's recent decision in Jones Bluff, LLC v. Commissioner, 166 T.C. No. 6 (2026), confirmed that due process challenges by individual partners cannot be raised in the partnership-level proceeding. We represent partnerships, partnership representatives, and reviewed-year partners in BBA audits, petitions for review, and push-out election implementation under IRC § 6226.

When to Litigate and When to Settle

Litigation is not the right answer for every case. Most tax disputes are better resolved through examination, Appeals, or administrative settlement, and we handle those stages aggressively before considering litigation. But some cases present legal issues that can only be resolved by a court, involve amounts large enough to justify the expense of litigation, or require a judicial decision to create binding precedent for future matters. And some cases land in litigation because the taxpayer missed a deadline, received an unfavorable Appeals determination, or faces a government collection suit that demands a defense.

The strategic decision whether to litigate involves more than the legal merits. It involves evaluating the expected settlement value of the case at each stage, the costs of litigation, the hazards of an adverse decision, the timing impact on the taxpayer's other affairs, and the precedential value of a favorable ruling. We walk clients through that analysis at each stage of the dispute and make recommendations based on what will produce the best overall outcome.

Why North Star Law for Tax Litigation

Most Houston tax controversy firms take cases and then refer out when litigation begins. That referral creates a handoff, a new learning curve, and new billable hours. At North Star, the same attorney who handles your examination and your Appeals conference is the attorney who files your petition, conducts discovery, and tries your case. The IRS knows it, and the credibility of your litigation threat is reflected in the settlement offers you receive.

Phillip Zagotti, JD, CPA, is admitted to practice before the United States Tax Court and the United States District Court for the Southern District of Texas. He is a licensed attorney and CPA, and brings to every case the combination of legal advocacy and tax technical depth that complex tax litigation demands.