Tax disputes are conflicts or controversies between taxpayers and tax authorities on the interpretation and application of tax laws. Tax disputes usually arise when taxpayers and tax authorities disagree on the administration of tax laws usually with respect to tax assessments and liability. Tax disputes are essentially legal disputes over taxation. “To the extent that tax disputes relate to contentions over rights and liabilities concerning taxation, they … essentially are legal disputes.”
Resolving tax disputes usually starts within the tax authority’s domestic regime before escalating to tribunals or courts. The internal-agency process involves a series of correspondence and meetings between the tax authorities and the taxpayer; it is aimed at reconciling positions. If the dispute cannot be resolved internally, either of the parties may approach the tax tribunal.