If tax liability is wrongly paid, the taxpayer file a refund lawsuit filed in federal district court. This lawsuit requests that the IRS pay back the tax that has been wrongly paid. A taxpayer must pay the contested liability to gain access to this relief. For low-income taxpayers, the tax may be paid by seizures of later refunds or with an installment plan. The rules for a refund lawsuit are complex. A client who has been denied a refund should be immediately referred to a tax lawyer.