International tax litigation in the United States refers to legal disputes between taxpayers and the Internal Revenue Service (IRS) arising from cross-border transactions and international tax matters. These conflicts typically occur when the IRS challenges a taxpayer’s reporting on international issues such as transfer pricing, foreign tax credits, tax treaty interpretations, or compliance with FATCA and FBAR requirements.

The following information explains how international tax disputes with the IRS progress to formal litigation in the United States. An international tax dispute generally follows a typical path, starting with an IRS audit, moving through the Appeals process, and finally reaching litigation in court. The following information primarily addresses the international tax litigation process at the court level.

Understanding this process is important because international tax cases often involve significant amounts, complex regulations, and the risk of double taxation.

First, let’s understand the forums available to a taxpayer for litigating a tax matter with the Internal Revenue Service (IRS).