Question About Bonds on Appeals

[The Observer]

If a taxpayer files an appeal over a decision from Tax Court and wishes to protect their self from IRS collection on the owed liability, I believe that they have to submit a bond to cover the liability. Where is the bond recorded at? With Tax Court? Or the appellate court? And where could one find proof of a bond being properly submitted?

[Dr. Caligari]

The bond is filed with the Tax Court, so the Tax Court docket should reflect the filing.

[The Observer]

Thanks, Doctor, for the reply and information.

[operabuff]

It is an extremely rare procedure. I'd be surprised if the court on average received more than one appellate bond a year. Because they're so rare, bonded appeals are tricky for the IRS to handle. The IRS is prohibited from assessing and collecting tax while the bond is in place while the appeal is pending. If original notice of deficiency was sent near the end of the three year period of limitation on assessment, the IRS must then make an assessment very quickly upon termination of the appeal, which in turn depends on DOJ promptly notifying the IRS that the appeal has concluded.

This is in contrast to the normal procedure in appellate cases where the assessment is routinely made after the decision is entered in the Tax Court.