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THE TAX LITIGATION DECISION: AN ANALYSIS OF THE SMALL CLAIMS DIVISION OF THE U.S. TAX COURT *
Author(s) -
Curatola Anthony P.,
Fields Kent T.,
Ringuest Jeffrey L.,
Samson William D.
Publication year - 1987
Publication title -
decision sciences
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.238
H-Index - 108
eISSN - 1540-5915
pISSN - 0011-7315
DOI - 10.1111/j.1540-5915.1987.tb01507.x
Subject(s) - taxpayer , tax court , internal revenue , settlement (finance) , business , tax basis , service (business) , economics , revenue , law and economics , tax revenue , law , tax reform , actuarial science , public economics , political science , finance , state income tax , marketing , gross income , payment
One of the more difficult but intriguing problems in the tax field is the decision of when (and how) to settle tax disputes with the Internal Revenue Service (IRS) and when (and how) to litigate. Research in this area of decision making is limited and has concentrated on the probability of winning in the judicial system. This paper examines the tax litigation decision for suits in the Small Claims Division of the U.S. Tax Court. Four examples are presented which involve varying degrees of information regarding the likelihood of a settlement and differing risk attitudes. The maximum amount the taxpayer should be willing to spend in pursuing litigation is derived for each case.