Updated October 2025
Thinking about suing the IRS? Whether you’ve been denied a refund, been the victim of wrongful collection action, or misapplied credit, you may have legal grounds to file a lawsuit. However, it’s important to understand the process and what you can expect.
Common paths include refund lawsuits, challenging liens or levies, or taking the dispute to US Tax Court. In this comprehensive guide, we cover your legal rights, what suing the IRS entails, how you can get started, and any legal obstacles you need to be aware of.
Key Takeaways:
- Taxpayers have the right to challenge IRS decisions under the Taxpayer Bill of Rights. This includes the ability to appeal a decision or take it to court.
- You can sue the IRS in specific actions, including refund denials, improper collections of taxes, or other violations of tax rights.
- You must pay the disputed tax first when filing a refund lawsuit. Then, you can either wait six months with no response or respond to a refund denial within two years.
- The US Tax Court handles cases where taxes have not been paid. You typically have 90 days to file a case after receiving a notice of deficiency.
- Hiring a tax attorney is recommended, especially when dealing with cases involving large sums of money.
Who Can Sue the IRS?
The short answer is every US taxpayer has the legal right to sue the IRS, thanks to the Taxpayer Bill of Rights. Along with rights to quality service and paying no more than the correct amount of tax due, you also have the right to appeal an IRS decision in an independent forum.
This right gives taxpayers a “fair and impartial appeal” of most IRS decisions, and generally allows them to take their cases to court, but you need to meet specific criteria.
When Can You Sue the IRS?
You can’t sue the IRS because you’re frustrated or annoyed with its actions. However, there are specific legal scenarios when filing a lawsuit is appropriate. Let’s run through common scenarios:
Refund Lawsuits
If the IRS denies your refund claim after you’ve paid the tax or fails to respond to your request within six months, you may be able to file a refund lawsuit.
To make this type of claim, you should pay the full amount of tax first and file the refund suit within two years of the denial, or six months after filing with no response.
ERC Refund Lawsuits
During the pandemic, the government launched the Employee Retention Credit (ERC). Many businesses applied for the temporary tax credit and received refunds through the program.
The IRS is now delaying, denying, or auditing many of these claims. As a result, many business owners are suing the IRS to recover refunds they believe they’re owed.
The lawsuits tend to fall under the refund litigation (see above). That means the business has:
- Filed a valid ERC claim
- Received a denial or waited six months without payment
- Taken the IRS to court after paying the disputed amount
ERC claims can be substantial. Because of that, many businesses are choosing to challenge the IRS decisions through legal action.
Challenging IRS Audit Determinations
If the IRS has improperly adjusted your tax return through an audit, you may be able to take legal action to hold them accountable.
Challenging IRS Collections
If the IRS has improperly placed a lien on your property, levied your bank account, or garnished your wages without notice, or otherwise violated your rights, you may be able to take legal action.
Before you sue the IRS, you must go through any administrative appeals available or a Collection Due Process (CDP) hearing. You must be able to prove that the IRS acted “recklessly, intentionally, or negligently” when enforcing collection.
Violations of Taxpayer Rights
Additionally, you may also be able to sue if the IRS violates your due process rights, does not follow the legal steps before taking action against you, or discloses confidential information without authorization.
Where Should You File Your Case?
The answer depends on two things: whether you’ve already paid the tax in question, and how long you have waited to make a claim.
Each court has specific procedural and jurisdictional requirements when it comes to cases against the IRS. Here’s a quick breakdown of your options:
- US Tax Court: If you haven’t paid the tax in full and receive a notice of determination or deficiency from the IRS, you have the right to file a case in US Tax Court. You may also be able to file a suit if you don’t get a response to certain requests for a certain amount of time – for example, if you don’t hear back about an innocent spouse claim within six months.
- Federal Court: If you’ve already paid the tax and the IRS denies your refund (or doesn’t respond in six months), you can sue in a Federal Court. You have two years to file this type of claim if your refund is denied or six months if the IRS has taken no action.
- US Court of Federal Claims: This is another option if you’ve paid the tax in full and been denied or delayed a refund. The two-year period applies here, too. Cases are decided by judges, which means that there are no jury trials.
Who Can Represent You in US Tax Court?
If you take your case to U.S. Tax Court, you have representation options, but not everyone can appear on your behalf. The following individuals are allowed to represent you:
- Attorneys
- Certified Public Accountants (CPAs) or Enrolled Agents who have passed the US Tax Court Practitioner (USTCP) exam and been admitted before the court.
- Yourself – self-litigation is possible, but due to the strict procedural guidelines, it’s not recommended.
How Does the Legal Process Work?
Suing the IRS isn’t usually the first step you’ll take. It comes when you’ve exhausted all other options. In the following section, we break down how the legal process works.
1. You Receive an IRS Notice (for US Tax Court Cases)
If your dispute is eligible for a US Tax Court Case, you will typically receive one of the following notices from the IRS:
- Notice of deficiency – issued by the IRS when it either hasn’t received your tax return and calculated your tax on its own, or has proposed a change to the return you filed.
- Notice of determination – this is the final notice issued by the IRS in certain proceedings, such as requesting a ruling on worker classification, innocent spouse relief, whistleblower actions, or CDP hearings.
- Notice of certification – the IRS issues this notice when taxpayers have a seriously delinquent tax debt, and the IRS has notified the State Department to take away their passports.
These notices inform taxpayers of their right to file a petition with the US Tax Court and specify the timeframe—usually 90 days—within which one must be filed. Taxpayers generally do not have to pay their tax bill first. If your notice doesn’t say that you have the right to go to Tax Court, contact an attorney for guidance on your options.
Note that taxpayers requesting Innocent Spouse Relief can also file a US Tax Court petition if the IRS denies the request or fails to respond after six months.
2. Go Through the Administrative Channels
Before you can go to court, you will sometimes need to:
- File a response or appeal with the IRS
- Request a Collection Due Process (CDP) hearing (for collection disputes)
You also need to give the IRS a chance to resolve the matter internally. Often, you may wait up to six months to hear back from the IRS.
3. You File a Lawsuit
When you’ve followed those steps, you can file a lawsuit. If you haven’t paid the tax, you can file in the US Tax Court. If you’ve already paid, your case will likely go to the Federal District Court or Court of Federal Claims.
4. Your Case Moves Through these Stages
When you’ve filed your case, it will move through certain stages. Regardless of which court you’re applying in, these stages are likely to include:
- Discovery when you exchange documents and information
- Negotiations or settlement talks, where the case may be settled out of court
- A trial if no resolution is reached between you and the IRS
Many cases are settled before the trial stage; however, proper legal representation can significantly impact the outcome of the suit.
5. Clear Outcome of your Legal Action
Here are the possible outcomes of your legal action against the IRS:
- Win: You win the case, which means you receive a refund, a reduction in liability, or another form of financial relief.
- Loss: The IRS wins and the tax stands as previously assessed.
- Settlement: A partial settlement or agreement is reached, which resolves the case without a final ruling.
Fighting the IRS in court can get complicated and drawn out. It’s best to seek the advice of an experienced tax attorney, who can assess your case, help with filing the petition or lawsuit, and represent you in negotiations or settlements, as well as at trial if your case goes that far.
When Should You Talk to a Lawyer?
While not all disputes with the IRS require legal representation, in many situations, having a tax attorney can make a big difference. You should consider speaking with a lawyer if:
- The amount in the tax dispute is substantial
- You’re facing IRS action with serious consequences
- Your refund claim has been denied, and you want to sue
- You’re dealing with a complex issue, such as ERC refunds
- You’ve received a Notice of Deficiency and are considering Tax Court
Remember, court procedures follow strict rules that can be tricky to navigate without experience. Even minor issues, such as a missed deadline, can limit your options here.
If you’re unclear on the next step or whether legal action is necessary, a brief consultation will help you to understand your rights.
Suing the IRS Frequently Asked Questions
Can you sue the IRS for negligence?
You can technically sue the IRS for negligence, but it can be tricky to navigate this process. Since the IRS is a government agency, it’s immune to simple negligence lawsuits. Claims such as emotional hardship and financial hardship are generally not allowed.
However, there are certain negligence claims you can pursue, including:
- Wrongful Collection Actions. Under IRC §7433, you can sue the IRS if they recklessly, intentionally, or negligently violate IRS collection laws when collecting federal tax.
- Unauthorized Disclosure of Tax Information. IRC §7431 means you can file a claim if an IRS employee unlawfully discloses your tax return or personal information.
- Ignored Taxpayer Assistance Orders (TAOs). A Taxpayer Assistance Order (TAO) is a directive issued by the Taxpayer Advocate Service (TAS). It is issued when a taxpayer is experiencing significant hardship as a result of the IRS’s actions or inaction. In some cases, if the IRS refuses to follow the TAO, you may have grounds for a lawsuit.
Can I sue the IRS myself?
You can sue the IRS yourself in Tax Court or with refund lawsuits. However, this is often risky, especially if you don’t have any experience. If in doubt, it’s smart to work with a trusted attorney.
What is the deadline for suing the IRS for a refund?
You typically have two years from the date that the IRS denied your refund. Alternatively, you can request the refund six months after the IRS fails to respond.
Do I need to pay the tax first before suing?
For refund suits in federal District Court or the Court of Federal Claims, you must pay the full amount of tax before filing your suit. You can make a claim in U.S. Tax Court without paying the tax first.
How long do IRS lawsuits take?
Cases can take several months or more than a year. The length of your case depends on the court and the complexity of the case.
What if the IRS denies my ERC refund?
If the IRS has denied your refund lawsuit and you’ve waited six months, you may be able to file a refund lawsuit. You will need to have paid any disputed amounts first.
Call the Experienced Tax Attorneys at Wiggam Law
If you disagree with your Notice of Deficiency or Notice of Determination, or have filed for Innocent Spouse Relief and have not heard from the IRS, the experienced attorneys at Wiggam Law can help.
Our lawyers can evaluate your situation, recommend a course of action, and assist you in the process. Contact Metro Atlanta’s top tax attorneys by clicking here or giving us a call at (404) 233-9800.
