Federal tax litigation is a broad area. It can mean anything from fighting to keep the IRS from locking you away in prison to getting your money back from the IRS. Below are the different courts where federal tax litigation occurs:
Most civil tax cases are litigated in the United States Tax Court because it can be done without having first paid the IRS. Read more about Tax Court.
The United States District Court handles criminal and civil tax cases. The criminal cases are usually over your freedom. Read more on Criminal Tax. The civil cases are for tax refunds (i.e. the taxes were already paid by the taxpayer) after the taxpayer has exhausted the IRS administrative remedies. Jury trials are available in federal court.
The United States Bankruptcy Court often handles civil tax issues when taxpayers are in bankruptcy. Other than the Tax Court, this is the only court in which a taxpayer can contest the allegedly owed taxes before paying them. These cases are not jury trials (i.e. they are decided by a federal judge).
The United States Court of Claims can hear civil tax refund cases. This court usually handles issues for national and multi-national companies rather than for individual taxpayers. These cases are decided by a federal judge.