Britney Spears Goes to Tax Court: How is a Tax Court Case Litigated and What Can Britney Spears Expect

Britney Spears recently petitioned the United States to contest a $721,000 IRS proposed assessment related to an S-corporation formed by her father for the 2021 tax year. The IRS proposed to disallow approximately $1.4 million in business expenses. The IRS also proposed to disallow a number of Britney Spears’ itemized deductions related to medical expenses. Finally, the IRS proposed to assess a 20% accuracy-related penalty. This article provides an overview of how a Tax Court case progresses and various stages of a Tax Court case.

Can Britney Spears file an Amended Tax Return for the 2021 Tax Year to Resolve Her Dispute with the IRS?

Britney Spears filed a petition with the Tax Court contesting the IRS’s proposed additional tax liability for the 2021 tax year. The Tax Court has jurisdiction over her dispute with the IRS. This means that Britney Spears cannot simply file an amended tax return with the IRS to resolve this dispute. Many individuals believe that filing an amended tax return in response to a notice of deficiency (discussed in more detail below) will resolve a misunderstanding or a dispute with the IRS. This is not correct. Once the IRS issued a notice of deficiency, the only way to contest a notice of deficiency is to petition the Tax Court. This is the case even if the notice of deficiency issued by the IRS is defective. The filing of an amended return generally has no effect on the assessment of tax stated on the notice of deficiency and the ultimate collection of the tax. As a matter of fact, in certain cases, the filing of an amended tax return may actually make matters worse. This is because if an individual files an amended tax return with a tax liability that is greater than the tax reflected on his or her original tax return, the IRS may actually increase the tax liability to an amount that is greater than reflected on the notice of deficiency. In addition, filing an incorrect amended return could result in additional penalties. Simply put, responding to a statutory notice of deficiency with an amended tax return is typically not a good idea.

What Should I Do If I Receive a Notice of Deficiency from the IRS

If you receive a notice of deficiency from the IRS and you do not agree with the proposed tax liability on the notice, you only have 90 days from the date of the notice to act. If you would like to contest the notice of deficiency and stop the IRS from collecting the tax reflected on the notice, ignoring a statutory notice of deficiency or filing an amended return in response to receiving a statutory notice of deficiency is not an option.

If you have received a notice of deficiency and wish to contest the liability indicated on the notice without paying in full, you must timely petition the Tax Court. Anyone who contests a notice of deficiency by petitioning the Tax Court must understand that they are suing the IRS and must act accordingly. This means understanding the issues in your case and timely gathering the necessary information and/or documents to convince either the IRS or the Tax Court that you are not guilty of owing the additional tax, penalties, and interest alleged by the IRS.

In Britney Spears’ case, she timely commenced litigation against the IRS in Tax Court by the filing of a petition for redetermination. Once the petition is received by the Tax Court, the court’s Clerk will enter the case on the court’s docket and assign a docket number to the case. The petition filed with the Tax Court is of extreme importance both jurisdictionally and substantively. The petition is the pleading which commences litigation and Britney Spears’ formal response to the notice of deficiency. Anyone going to litigate a case against the IRS in Tax Court, including Britney Spears should understand the basic language of the Tax Court pleadings and the court. In Britney Spears’ case, she is known as the petitioner. The IRS or the attorney representing the IRS is known as the respondent. Any pleadings filed with the Tax Court on behalf of Britney Spears such as the petition must address the parties in a case as “petitioner” or “respondent.”

As indicated above, the filing of a petition commences litigation with the IRS and as such, it is a critical pleading that must be correctly drafted. Failure to correctly draft a petition could result in part or all of Spears’ case being dismissed by the Tax Court. A petition requesting a redetermination of a tax liability or challenging a tax liability should have six categories. The first category must contain basic information such as the petitioner’s name and legal address. The second category must include in a separate paragraph two subsections. The first subsection should state the date of the IRS notice of deficiency; and if necessary, the second subsection should state the ability or jurisdiction of the Tax Court to hear the case. The third category of the petition should address: 1) the amount of the tax liability proposed to be assessed against the petitioner by the IRS; and 2) the tax period or periods that are in controversy. In the fourth category, the petitioner must assign error in a clear and concise manner by which the respondent determined a tax liability was determined. The fifth category of the petition must contain clear and concise lettering of statements that supports the petitioner’s position why the IRS erred in its determination of proposing to assess additional tax liability against you. Finally, the sixth category should include a paragraph of a prayer for relief which the petitioner seeks to obtain from the Tax Court. Sometimes, a petition must plead special defenses such as the statute of limitations on an assessment has expired. In these cases, the petition must carefully address these special defenses.

Below, please find an illustration of a sample Tax Court petition:

UNITED STATES TAX COURT

JOE TAXPAYER

Petitioner,

Docket No._______

COMMISSIONER OF INTERNAL

REVENUE

Respondent.

PETITION

The Petitioner hereby petitions for a redetermination of the deficiency in the tax and additional tax set forth by the Commissioner of Internal Revenue in his notice of deficiency dated April 13, 2026, and as the basis for his case alleges as follows:

1. The Petitioner is an individual with legal residence at 3909 North Ocean Blvd, Fort Lauderdale, Florida 33308. The return period involved was timely filed with the Internal Revenue Service Center Austin, Texas.

2. The notice of deficiency (a redacted copy, including all schedules is attached, and marked Exhibit A hereto) was mailed to the Petitioner on April 13, 2026, and was issued by the Office of the Internal Revenue Service at Atlanta, Georgia.

3. The deficiency as determined by the Commissioner is for income taxes and penalty for the calendar year 2021 as follows, both of which are in dispute:

4. The determination of tax and penalty set forth in the said notice of deficiency is based on the following errors:

a. The Commissioner erred in determining that the Petitioner failed to report income from the operation of his business activity of selling used automobiles.

b. The Commissioner erred in determining that the Petitioner is liable for the accuracy-related penalty under Internal Revenue Code Section 6662.

5. The facts on which the Petitioner relies on this case is as follows:

A. In 2021, the Petitioner reported all of his income earned from his business activity of selling used automobiles.

B. The Petitioner is not liable for any additional tax liability. Therefore, the petitioner is not liable for the accuracy-related penalty.

WHEREFORE, the Petitioner prays that this Court determine that there is no deficiency in Petitioner’s income tax or penalties for the 2021 calendar year and grant Petitioner any further relief to which he may be entitled.

________________________

Tax Attorney
Diosdi & Liu, LLP
505 Montgomery St. 11th Floor
San Francisco, CA 94111
Telephone: (415) 318-3990

The petition must be submitted to the Tax Court along with a copy of the Notice of Deficiency and the following forms which may be found on the Tax Court website: 1) Statement of Taxpayer Identification Number; 2) Request for Place of Trial; and 3) Entry of Appearance (to be completed by your counsel, if applicable).

The IRS Response to a Petition is Called an Answer

After a petition is filed with the Tax Court, counsel representing the IRS must respond to the petition. The IRS response to a petition is known as an answer. Attorneys representing the IRS will typically have 60 days to file an answer to the petition. The answer contains the IRS’s defenses to each claim alleged in the petition. The language of an answer will be in the form of an admission or a denial to each material averment stated in the petition. At this point, it is uncertain if the counsel representing the IRS has filed an answer in Britney Spears’ case.

An answer is not some form of pleading that can be ignored. Counsel representing the IRS may allege that Britney Spears owes additional taxes and/or penalties in their answer. If the IRS claims that Britney Spears owes additional taxes, penalties, or fraudulently omitted taxable income, Britney Spears’ counsel may need to respond to the IRS answer. If Britney Spears’ counsel responds to the IRS’s answer, the pleading is known as a reply. The reply in the context of a Tax Court case will be discussed in more detail below.

Reply

In concept, a reply is similar to an answer in that the reply is responsive to certain allegations in the answer just as the answer is responsive to averments in the petition for redetermination. A reply does not always need to be filed with the court. A reply should only be filed with the Tax Court when the IRS alleges new matters which were not in dispute when your petition was filed. A reply should also be filed in cases of affirmative defense to an allegation of fraud or if the statute of limitations is being used as a defense to some or all of a proposed assessment.

Utilizing the IRS Appeals Office to Settle a Tax Court Case

Once the initial pleadings have been filed with the Tax Court, the case will likely be transferred to the IRS Appeals Division. The Appeals Division of the IRS has authority to settle tax disputes pending before the Tax Court. In Britney Spears’ case, if she or her counsel believed that the IRS got it wrong during the audit of Britney Spears’ 2021 tax returns, this will be Britney Spears’ chance for a do-over of the audit. Appeals Conferences are informal in nature. With that said, just because the Appeals Conference is informal in nature, does not mean Spears’ attorney should take the conference lightly. Even in an Appeals Conference, the burden of proof will be on Britney Spears that the IRS’s proposed assessment is incorrect.

In part, Britney Spears’ case involves the IRS disallowing business deductions. This means that Britney Spears’ counsel  should prepare to tell the Appeals Officer the business purpose of the deductions disallowed. Britney Spears’ counsel should also be prepared to provide documents to substantiate expenses her business expenses paid. The more organized and detailed your Britney Spears’ documents are, the better her chances of obtaining a favorable outcome in appeals.

The Discovery Process Should Never be Overlooked

Similar to most courts, the Tax Court has comprehensive rules governing discovery. Use these rules in your favor. Thus, if Britney Spears believes a third party such as a credit card company or financial institution has records that can substantiate a deduction, she should use the Tax Court’s discovery rules to subpoena records or subpoena a witness to come to trial. She can also use the Tax Court’s discovery rules to serve the IRS with interrogatories or requests for production of documents that may assist in building her case.

Preparing for Trial

Although the vast majority of cases brought before the Tax Court are settled, some cases proceed to trial. If Britney Spears’ counsel is considering bringing her case to trial before the Tax Court, it is important for her counsel to be familiar with the order in which a trial proceeds. Although no rigid format applies in every case, a basic framework has evolved within which a trial will be conducted. This framework is subject to change depending on the preference of the presiding judge. It should be understood by any Tax Court litigant that there is no rule forcing the IRS counsel to settle cases. By statute and case law, the proposed assessment in a notice of deficiency is presumed to be correct, and it will be upheld unless it is proven wrong. This is the exact opposite of “innocent until proven guilty” – in a Tax Court case, a Tax Court litigant is effectively considered guilty of owing the tax unless and until sufficient, and sufficiently convincing evidence is offered to the Tax Court to demonstrate that the IRS’ assessment is wrong.

Calendar Call

The first order of business (in a Tax Court trial) will be the call of the trial calendar at which time each case listed on the trial calendar by the clerk of the court will be called by the judge. When a case is called, Britney Spears’ could will announce whether her case is ready for trial and be prepared to estimate the anticipated trial time. If specific days or times are preferred, such preferences should be made known to the judge when the calendar is called. During the calendar call, the judge will usually demand stipulations of settled issues be lodged with the court. The judge may quiz the parties regarding pretrial memorandums that should have been filed with the Tax Court two weeks prior to the calendar call. The Tax Court will expect both Britney Spears and counsel representing the IRS to file a pretrial memorandum prior to the calendar call. A well drafted pretrial memorandum will discuss the legal theory of the case. The pretrial memorandum must also identify any witnesses that will be called to testify at trial. In addition to the filing of a pretrial memorandum, any documents or exhibits that will be used at trial by Spears’ counsel should be disclosed to IRS counsel well before the calendar call.

The Trial

After the calendar call, Britney Spears’ case will proceed to trial. On the day of trial, unless otherwise instructed by the judge, the court will usually ask the parties to provide an opening statement. The opening statement should tell the court what Spears’ counsel intends to prove at trial. The IRS will also provide an opening statement to the court.

At the conclusion of the opening statements, the trial commences. The party with the burden of proof, typically, Britney Spears, as the petitioner will start first. Britney Spears’ counsel may be expected to call witnesses at trial to prove her case. Spears’ witnesses will be called to present direct testimony. During the course of such direct testimony, documentary evidence may also be introduced. Normally, this will require having the document pre-marked for identification, submitting it to the trial clerk for formal identification, displaying it to the witness for identification and, on establishing a proper foundation, offering it to the court as evidence. The Federal Rules of Evidence govern Tax Court trials. This means that they may have to overcome objections based on hearsay or procedural matters. During the presentation of Spears’ case, counsel representing the IRS will have the ability to interpose objections, and Britney Spears’ counsel should anticipate these potential objections and be prepared accordingly.

During trial, Britney Spears’ counsel must be cognizant at all times that he or she has the burden of proof. This means Britney Spears’ counsel will need to satisfy each element of her case, such as whether or not Britney Spears is entitled to a deduction disallowed by the IRS. Britney Spears’ counsel’s evidentiary presentation should be organized both to create a complete record for the Tax Court (and for any potential appellate review) and to tell a compelling and comprehensive factual story. Failing to do so may result in the dismissal of part or all of her case.

After presentation of all evidence, counsel for Britney Spears will rest his or her case. After he or she rests, counsel representing the IRS will present his or her case. Many times, the IRS will have no evidence, having relied on the direct and cross examination of your witnesses. If counsel representing the IRS elects to present a case, Britney Spears’ counsel should be watchful of the evidence being presented by the IRS. The IRS may attempt to offer evidence at trial regarding matters that are not before the court pursuant to their pleadings. If this takes place and an objection is not timely made, the Tax Court can permit the IRS to amend its pleadings after the trial to conform to the evidence. This may permit the IRS to introduce new issues not stated on the original notice of deficiency. If timely objections are not made, the IRS will be permitted to ask the court to claim Britney Spears is liable for taxes and/or penalties not stated on the notice of deficiency.

After all testimony is concluded and both parties have rested their cases, the judge may allow closing oral arguments at his or her discretion. Even if allowed, closing oral arguments may not always be desirable. This is because post-trial briefs will be filed in almost all instances. Thus, it may be preferable to forego oral arguments unless specific matters have occurred at trial that should be addressed before the case is concluded.

Tax Court Briefs

After a trial is concluded, the presiding judge usually will direct the parties to file briefs with the court. As the petitioner, you will typically need to file an opening and answering brief. These briefs are extremely important in assisting the judge to resolve a tax controversy. The failure to file a brief in the manner described below can result in the dismissal of all issues on which you have the burden of proof. Typically, the opening brief must be filed 75 days after the trial has concluded and the answering brief must be filed 45 days thereafter.

The Tax Court Rules state that briefs must contain the following

1. Table of Contents- the first page, after the cover page, must include a table of contents with page references, followed by a list of citations in alphabetical order stating the page within the brief where each citation is referred.
2. Statement of the Case- the brief must next include a summary statement of the nature of the case. The statement should include a description of the tax involved, the issues involved.
3. Proposed Finding of Fact- the opening brief of a party must contain proposed findings of fact in numerical paragraphs. Each paragraph must contain a concise statement of essential fact and not a mere recitation of testimony or any argument with respect to the evidence. It is important that each paragraph should include a specific reference to the transcript by page number or to an exhibit.
4. Objection of Proposed Findings- In an answer or reply brief, any objection to the proposed findings of an opposing party must be set forth. These objections must refer to specific proposed findings and include a statement of the underlying reasons. A party also is permitted to, and should, submit alternative proposed findings that eliminate the objectionable material.
5. Points Relied On- the brief must contain a concise statement of the points on which the party relies. This should be a very brief overview of the party’s position that presents the position in as simple a manner as possible.
6. Argument- the brief must include an argument that sets forth in detail the points of authority and any disputed question of fact. The argument should be persuasive and complete. A failure to address an issue in an opening brief may be considered a concession of the issue. In an answering brief, each point or authority raised by the opposing party should be responded to, without being repetitious.
7. Conclusion- a brief should contain a conclusion.
8. Signature- the brief must be signed by the party or counsel for the party.

Conclusion

Succeeding in a Tax Court case is all about organization and early preparation. Undoubtedly Britney Spears counsel will be well organized and prepared. If you are considering taking a case to Tax Court, like Britney Spears’ counsel, you must be prepared to litigate your case with the IRS. You must understand the reason why the IRS is proposing to assess additional tax liability against you. Only by understanding the IRS’ position, can you adequately prepare your case. Even if you believe that you are prepared to litigate your case before the Tax Court, litigating a tax controversy before the Tax Court is no simple task. If you are involved in a tax controversy with the IRS, you should consider retaining the services of a tax attorney who can guide you through this complicated process.

Anthony Diosdi is a tax attorney at Diosdi & Liu, LLP. He has significant experience defending private clients before the IRS in difficult and complex tax disputes. Anthony counsels clients through examinations and liability disputes and, when necessary, takes disputed issues to court. Anthony is a member of the California and Florida bars. He can be reached at 415-318-3990 or adiosdi@sftaxcounsel.com.

This article is not legal or tax advice. If you are in need of legal or tax advice, you should immediately consult a licensed attorney.