Final answer:
The statement asking about tax deficiencies and litigation options regarding the IRS is true. Taxpayers can dispute tax assessments in Tax Court without first paying, which is not the case for the US Court of Federal Claims or District Courts where upfront payment is required. The IRS collects taxes according to principles such as equity and the ability to pay.
Step-by-step explanation:
The question asks whether a taxpayer must pay any tax deficiency assessed by the IRS before they can sue for a refund in the US Court of Federal Claims and suggests that it is only in the Tax Court that jurisdiction can be obtained without first paying the assessed tax deficiency. The statement is true, as the Tax Court is a pre-payment forum where taxpayers can challenge an IRS determination before paying the assessed tax deficiency. In contrast, to bring a refund suit in the US Court of Federal Claims or a US District Court, the taxpayer must first pay the full amount of the tax assessed and then file a claim for a refund.
Federal income taxes are assessed based on declarations filed by taxpayers, reflecting their earned income over the year. The Internal Revenue Service (IRS) is the agency responsible for collecting taxes and plays a key role in the federal tax system. This system is designed with principles in mind such as the benefit principle of taxation and the ability to pay principle, aiming to make the tax collection process equitable, simple, and efficient.
Politics can influence tax laws and the rate at which taxes are levied as it is a legislative process where elected representatives make decisions on tax policies. This is evident in agreements such as the G-7 nations' coordinated global minimum corporate tax. Such political agreements aim to prevent tax evasion and ensure fair tax contributions from corporations around the world.