Problem
ABC Corp is one of your clients. The company just received the Statutory Notice of Deficiency (90-day letter), and the IRS is contending the the store owes $100,000 for its 2018 tax year. The IRS contends that ABC Corp overstated its cost of goods sold, exaggerated its salary expenses for employees, and had unreported income from its contracts. The company thinks it does not owe this amount, and wants to litigate. ABC Corp has enough money on hand to pay the tax now, but wants your advice on whether it should do so and whether it should file suit in Tax Court or the U.S. District Court. What factors do you think the company should consider? What's your advice for corporation's board?