Tax Appeal Structure

The U.S. appeal structure offers structured pathways for reviewing adverse trial-court decisions. As a matter of right, appeals flow to the relevant U.S. Circuit Court of Appeals. Generally, the jurisdiction of the U.S. Circuit Court of Appeals is determined by the court in which the case was initially litigated and by where the taxpayer resided or was headquartered at the time the petition was filed.

Each trial forum has its own appellate route, which is as follows:

• U.S. Tax Court decisions are reviewed by the U.S. Court of Appeals for the circuit in which the taxpayer’s domicile/residence lies. For corporations, the venue is generally their principal place of business.
• U.S. District Court decisions are reviewed by the U.S. Court of Appeals for the district in which the decision was issued. For example, decisions from the U.S. District Court for the District of New Jersey are reviewed by the U.S. Court of Appeals for the Third Circuit.
• U.S. Court of Federal Claims decisions are reviewed exclusively by the U.S. Court of Appeals for the Federal Circuit located in Washington, D.C., regardless of the taxpayer’s location or domicile. For example, a tax refund suit filed by a New Jersey resident in the U.S. Court of Federal Claims would be appealed to the U.S. Court of Appeals for the Federal Circuit. The Federal Circuit is located in Washington, District of Columbia..

As discussed, generally, appeals flow from the trial courts to the U.S. Circuit Court of Appeals.

After Court of Appeals review, a losing party may file a petition in the Supreme Court.  However, the Supreme Court may hear the case under special situations. In rare cases involving significant legal issues, the U.S. Supreme Court may review the decision of the Court of Appeals.

We now understand that tax cases are generally appealed from lower to higher courts in the United States. These may also involve international tax cases. Next, let’s understand what kind of international tax cases are appealed in the United States.