Tax litigation representation in Baltimore

When a federal or Maryland tax dispute won't settle, you can take it to court right here in Baltimore. The U.S. Tax Court holds trials in the city, and nowhere else in Maryland. Refund suits and summons disputes from the Baltimore area go to the federal courthouse on West Lombard Street, which also hears criminal tax cases. Appeals of Comptroller assessments go to the Maryland Tax Court, based on West Preston Street.

Whiteford Tax Defense handles tax litigation for Baltimore individuals, corporations, LLCs, partnerships, and nonprofits. We take on disputes over audits, assessments, penalties, and collection, from the first notice through trial and appeal. Our practice is limited to federal and state tax matters. A tax litigation attorney runs your case directly, instead of passing it from person to person.

Whatever the court, we aim to resolve your case as favorably and as quickly as we can. That may mean a settlement with the government's lawyers, or a trial. Our tax appeals and litigation page shows how IRS Appeals and the courts fit together.

Before you pay: a Tax Court case heard in Baltimore

A notice of deficiency, or 90-day letter, is the IRS's formal finding that you owe more tax. You have 90 days from the letter's date to file a petition, the document that opens a case in the U.S. Tax Court. Unlike a federal district court, which generally requires payment first, the Tax Court hears your case before you pay.

Don't let those 90 days slip. In the Tax Court's view, the deadline is jurisdictional, so a petition filed late is dismissed. Some federal appeals courts elsewhere, including the Second, Third, and Sixth Circuits, have ruled that a late petition can still be heard in rare cases. The Fourth Circuit, which hears Maryland appeals, has not decided the question, so don't count on an exception.

These cases follow formal rules, with written pleadings and an exchange of evidence called discovery. If yours goes to trial, a judge decides it without a jury, in Baltimore if you asked for that city as your place of trial. Many cases settle with the IRS's lawyers first. We prepare each case as though it will be tried, so you're ready whichever way it goes.

Collection disputes can reach the Tax Court too, after a Collection Due Process hearing with the IRS Independent Office of Appeals. When you get that hearing depends on what the IRS is doing. For a levy, it generally comes before the IRS seizes anything. For a lien, it comes only after the IRS has filed a notice of federal tax lien. Either way, the Tax Court can review the result.

After you pay: a refund suit in the District of Maryland

If you've already paid, or the IRS denied or reduced a refund you claimed, the court case is a refund suit. Before you can sue, you must file a refund claim with the IRS. Denied Employee Retention Credit claims are a frequent source of these suits.

In federal district court, a refund suit is filed in the district where you live, so a Baltimore resident sues in the District of Maryland. A corporation sues in the district where its principal place of business is. Baltimore City and the counties around it belong to the court's Northern Division, which sits at 101 West Lombard Street.

When the government moves first: summonses and prosecutions

Some cases start on the government's side. An IRS summons, authorized under 26 U.S.C. Section 7602, demands documents or testimony, and you can't ignore it. If it goes unanswered, the IRS can ask a federal court to enforce it, and continued refusal can lead to contempt.

That court is the District of Maryland when the person summoned lives in Maryland or can be found there. A challenge to a summons served on your Baltimore bank or accountant goes there too. The court also tries federal criminal tax cases, such as charges of willful evasion, false reporting, or fraud. Our Baltimore office represents clients there in civil disputes over unpaid taxes or penalties, and in criminal cases.

For a Maryland assessment: the Maryland Tax Court

A dispute over Maryland tax has its own venue: the Maryland Tax Court, which is based at 301 West Preston Street in Baltimore. You can appeal there once the Comptroller's office has finished its own review. The steps and deadlines for a Comptroller appeal are on our Baltimore office page.

On appeal: Fourth Circuit law from the start

Either side can appeal a District of Maryland decision to the Fourth Circuit, which hears cases in Richmond. Tax Court decisions generally follow the same path if you were a Maryland resident when you filed your petition. For a corporation, what counts is where its principal place of business was at that time.

Because of that route, we begin by checking how the Fourth Circuit has ruled on issues like yours. The District of Maryland must follow those rulings. The Tax Court follows them too when an appeal would go to the Fourth Circuit, a practice known as the Golsen rule.

What's at stake: IRS penalties

Penalties are often part of what a tax case decides. Unpaid tax draws a failure-to-pay penalty of 0.5% a month, up to 25% of the unpaid amount. Underreported income can bring a 20% accuracy-related penalty, and so can a large understatement of tax. For individuals, the substantial understatement penalty applies when tax is understated by more than 10% or $5,000, whichever is greater.

Even so, showing reasonable cause, such as a good-faith effort to comply, may get a penalty reduced or removed. Our overview of IRS penalties explains the others and how relief works.