“When the Levy Vanishes, So Does Jurisdiction” –
Commissioner v. Zuch and the New Limits on Tax Court Review under 26 U.S.C. § 6330

I. Introduction

Commissioner of Internal Revenue v. Zuch, 605 U.S. ___ (2025), is the Supreme Court’s latest pronouncement on the jurisdictional boundaries of the United States Tax Court in Collection Due Process (CDP) cases. The dispute began with a marital tax filing mishap dating back to 2010 but blossomed into a procedural clash: may the Tax Court continue to adjudicate a taxpayer’s substantive liability once the Internal Revenue Service (IRS) abandons the levy that originally triggered CDP review? The Court, in an 8-1 opinion by Justice Barrett, answered “No,” holding that when the levy disappears, so too does the Tax Court’s jurisdiction under § 6330(d)(1). Justice Gorsuch’s lone dissent warns that the holding arms the IRS with a playbook for evading judicial scrutiny, leaving taxpayers like Jennifer Zuch with no remedy other than “starting over” in refund litigation.

II. Summary of the Judgment

• Holding: The Tax Court lacks jurisdiction under 26 U.S.C. § 6330 once an ongoing or proposed levy is no longer at issue; its review is confined to the binary determination of whether a levy may proceed.
• Disposition: The Third Circuit’s decision—allowing CDP litigation to continue despite levy withdrawal—was reversed and the case remanded with instructions to dismiss for lack of jurisdiction.
• Vote: 8-1. Justice Barrett wrote for the Court; Justice Gorsuch dissented.

III. Analysis

A. Precedents Cited and Their Influence

• Commissioner v. McCoy, 484 U.S. 3 (1987): Re-affirmed that the Tax Court is a court of limited jurisdiction; used to anchor the majority’s textual approach.
• Boechler v. Commissioner, 596 U.S. 199 (2022): Interpreted § 6330(d)(1)’s 30-day filing deadline flexibly; Barrett invoked Boechler for textual method but distinguished the jurisdictional question here.
• Circuit split cases
  • McLane v. Commissioner, 24 F.4th 316 (4th Cir. 2022) and Willson v. Commissioner, 805 F.3d 316 (D.C. Cir. 2015): Held that levy withdrawal moots CDP jurisdiction—positions adopted by the Court.
  • Zuch v. Commissioner, 97 F.4th 81 (3d Cir. 2024): Allowed jurisdiction to persist; now overruled.
• Other aids: Chafin v. Chafin (mootness doctrine), Encino Motorcars, Epic Systems, and Feliciano (textual interpretation principles) appeared mainly in the dissent.

B. The Court’s Legal Reasoning

1. Statutory Text Focuses on the Levy
   • Section title: “Notice and opportunity for hearing before levy.”
   • § 6330(c)(3) distinguishes “considerations” (inputs) from the “determination” (output). Majority reads the determination as the yes/no levy decision.
   • Once the levy evaporates, there is “no relevant ‘determination’ to review.”
2. Default Rule of Pay-First Sue-Later

   Because § 7421(a) ordinarily bars pre-payment challenges, allowing a levy-less CDP suit would create an unintended loophole, undermining Congress’s chosen refund framework.

3. Remedial Boundaries

   § 6330(e) authorizes the Tax Court only to “enjoin a levy” during its pendency; it cannot issue declaratory judgments or refunds once the levy is gone.

4. Mootness vs. Jurisdiction

   Although mootness principles hover in the background, the majority grounds dismissal on statutory jurisdiction, not Article III limits (the Tax Court being an Article I tribunal).

C. The Dissent’s Counter-Analysis (Justice Gorsuch)

• Text Cuts the Other Way:
  • “Determination” embraces all issues explicitly listed in § 6330(c)(2), including the “existence or amount of underlying tax liability.”
  • Nothing in § 6330(d)(1) conditions jurisdiction on a continuing levy; Congress used the word “levy” elsewhere nearly 30 times but omitted it here.
• Remedies Are Broad Enough: § 6330(e)(1) permits injunctions against “any action” relating to the unpaid tax, so the Tax Court could restrain the IRS from retaining later over-payments.
• Practical Consequences: The IRS can now moot an adverse Tax Court case by aborting the levy at the eleventh hour, forcing taxpayers into untimely refund suits and potentially losing statutory deadlines (e.g., § 6511).

D. Potential Impact on Future Litigation and Tax Administration

1. Narrower Tax Court Jurisdiction. Practitioners must ensure an actual, pending levy continues throughout Tax Court litigation. If the levy is satisfied, released, or withdrawn, counsel should expect an immediate government motion to dismiss.
2. Strategic Behavior by the IRS. The decision arguably incentivizes the IRS to “pull the plug” on levies when litigation seems unfavorable, relying on credits/offsets instead of seizures. Whether the agency will exercise this power routinely bears monitoring.
3. Increased Reliance on Refund Suits. Taxpayers contesting liability disputes intertwined with levy challenges may need to file protective refund claims within the § 6511 window while CDP litigation is pending—adding cost and complexity.
4. Legislative Response Possible. Congress could react by amending § 6330 to clarify that determinations encompass liability questions independent of levy status, or extend § 6511 deadlines when CDP hearings are timely invoked.
5. Unsettled Questions. The Court expressed skepticism, not a definitive holding, about Tax Court authority to issue declaratory or refund-type relief. Future cases may test the outer bounds of § 6330(e) injunctions when some collection action other than a levy survives.

IV. Complex Concepts Simplified

Levy

The legal seizure and sale of a taxpayer’s property by the IRS to satisfy a tax debt. Think of it as the IRS’s version of a sheriff’s sale.

Collection Due Process (CDP) Hearing

An administrative hearing offered before a levy is executed, allowing the taxpayer to raise objections (procedural or substantive) to collection.

Determination

In § 6330 parlance, the Appeals officer’s formal decision after a CDP hearing. The Court now restricts this term to the up-or-down levy decision.

Refund Suit vs. Deficiency Action

Refund suits (file first, pay later) are brought in district court or the Court of Federal Claims after payment. Deficiency actions (pay later, litigate first) typically involve the Tax Court before payment is due.

§ 6511 Limitation Period

A strict deadline (typically 2 years from payment or 3 years from filing) for submitting an administrative claim to recover overpaid tax—prerequisite to a refund suit.

V. Conclusion

Commissioner v. Zuch cements a bright-line rule: the Tax Court’s CDP jurisdiction vanishes alongside the levy. Textually grounded or not, the majority’s interpretation narrows a venue that many taxpayers relied upon to resolve underlying liability disputes without pre-payment. The dissent’s alarm—that the decision affords the IRS a new lever to avoid adverse rulings—highlights practical challenges practitioners must now anticipate. Until Congress acts, taxpayers embroiled in CDP hearings should protect themselves with parallel refund claims and watch vigilantly for any IRS withdrawal of levy notices. In the ever-complex dance of tax procedure, Zuch shifts the choreography, and both the Bar and the Service will have to learn the new steps quickly.