Supreme Court Decides Commissioner of Internal Revenue v. Zuch

On June 12, 2025, the U.S. Supreme Court decided Commissioner of Internal Revenue v. Zuch, No. 24-416, holding that the Tax Court loses jurisdiction over a proceeding to challenge a proposed tax levy once the possibility of a levy is off the table.

The typical way to dispute a tax liability is to pay first and then seek a refund. But when the Internal Revenue Service (IRS) wishes to collect on a tax liability by placing a levy on the taxpayer’s property, the taxpayer has an opportunity to request a hearing before the levy is made. At the hearing, an appeals officers makes a “determination” about whether the levy can proceed, taking into account various “consideration[s],” including disputes about the liability that prompted the levy. 26 U.S.C. § 6330(c)(3). If the appeals officer determines that the levy may proceed, the taxpayer can “petition the Tax Court for review of such determination (and the Tax Court shall have jurisdiction with respect to such matter).” Id. § 6330(d)(1).

In this case, the IRS sought to place a levy on Jennifer Zuch’s property to collect on a tax liability of $28,000. Zuch challenged the levy before an appeals officer, arguing that certain payments she and her then-husband had made to the IRS to settle his separate tax account should be credited to her account. The payments totaled $50,000, so Zuch believed she was entitled to a net refund of $22,000. The appeals officer rejected Zuch’s arguments and determined that the levy could proceed.

Zuch appealed that determination to the Tax Court. During the lengthy appeals process that followed, Zuch filed multiple tax returns reporting an overpayment that entitled her to a refund for those years. Instead of issuing any refunds, the IRS credited the overpayments to her account. Eventually, her $28,000 liability was reduced to zero, and the Tax Court dismissed her appeal as moot, because there was no longer any ground for the levy. So if Zuch wanted to continue disputing her $28,000 liability and recover her overpayments, she would have to file a refund action. Zuchs appealed to the Third Circuit, which held that the IRS’s decision not to pursue the levy did not moot the Tax Court proceedings.

The Supreme Court reversed. It held that the statute’s text limits the Tax Court’s jurisdiction to reviewing the appeals officer’s prepayment “determination” that a levy should proceed. 26 U.S.C. § 6330(d)(1). Once the IRS halts its pursuit of a levy, there is no longer an adverse “determination” of which the taxpayer may seek review in the Tax Court; and thus the Tax Court no longer has jurisdiction. The Court recognized that, in the course of reviewing a determination that a levy should proceed, the Tax Court may assess the “considerations” that went into that determination, including certain challenges to the underlying tax liability. But once the possibility of a levy is off the table, the Tax Court has no “freestanding” jurisdiction to review a dispute over a tax liability in prepayment appeal. Instead, the taxpayer must follow the typical route for disputing a tax liability: filing a postpayment lawsuit for a refund.

Justice Barrett delivered the opinion of the Court, in which Chief Justice Roberts and Justices Thomas, Alito, Sotomayor, Kagan, Kavanaugh, and Jackson joined in full. Justice Gorsuch filed a dissenting opinion.