CDP Jurisdiction After Zuch

Tax Court Jurisdiction Over Collection Due Process Cases After Commissioner v. Zuch

The Supreme Court held that "[t]he Tax Court lacks jurisdiction under §6330 to resolve disputes between a taxpayer and the IRS when the IRS is no longer pursuing a levy" Commissioner v. Zuch, 605 U.S. 422 (2025). The "determination" made reviewable by section 6330(d)(1) "refers to the binary decision whether a levy may proceed"; the matters an appeals officer must take into consideration under section 6330(c)(3) — verification, the issues the taxpayer raised, and the intrusiveness balance — are "inputs" to that determination rather than independently reviewable rulings. Applying that reading, the Court concluded that "once Zuch no longer owed unpaid taxes, there was no basis for a levy and thus no relevant ‘determination’ to review. The Tax Court lacked jurisdiction to opine on disputed tax liability independent of any ongoing collection effort." The remedial provision of 26 U.S.C. § 6330 points the same way: section 6330(e)(1) permits the Tax Court to enjoin a levy "only in respect of the unpaid tax or proposed levy to which the determination being appealed relates," and the provision "does not authorize the Tax Court to order a refund or to issue a declaratory judgment that resolves disputes about tax liability."

The Tax Court has applied that holding to dismiss collection due process cases, or discrete tax years within them, whenever abatements, payments, or credits eliminate the balance on which the proposed levy rested. Tooke v. Commissioner, No. 398-21 (T.C. June 23, 2026) observed that in Zuch "the Supreme Court held that this Court lacks jurisdiction to resolve a dispute between a taxpayer and the Commissioner under section 6330 when the Commissioner is no longer pursuing a levy." Because the record established that "following a series of payments, credits, and assessments, Mr. Tooke’s account for taxable year 2012 reached a zero balance and was subsequently overpaid," the court concluded that "[o]n this record, there can no longer be a proposed levy for taxable year 2012," granted the Commissioner’s motion to dismiss that year on the ground of mootness, and proceeded to review — and sustain — the rejection of the taxpayer’s offer-in-compromise for the years on which the levy remained proposed.

A concession of full payment produces the same result, and the dismissal reaches only the satisfied years while the levy dispute continues as to the rest. In White v. Commissioner, No. 7838-25 (T.C. June 29, 2026), the Commissioner "concede[d] that petitioner ha[d] paid in full his liabilities for tax years 2001–2006" and, citing Zuch, moved to dismiss those years "because there is no remaining case or controversy as to those tax years," a motion the court stated it would grant. For the years the levy still covered, the court adjudicated the merits and held that the settlement officer abused his discretion: because a Department of Justice settlement entitled the taxpayer to pay the same underlying liabilities in installments, "the SO’s determination was fundamentally inconsistent with the DOJ settlement and with petitioner’s contract rights thereunder," and the immediate collection the officer sanctioned was "more intrusive than necessary." The jurisdictional consequence of Zuch thus attaches period by period, and the abandonment of collection for some years neither expands nor contracts review of the determination for the others.

Claims that rest on an independent statutory grant survive the loss of the levy, while bare overpayment claims do not. Sample v. Commissioner, No. 11655-23 (T.C. Nov. 17, 2025) described a section 6330 determination, quoting Zuch, as "simply a decision as to whether a levy may go forward," yet reaffirmed that "a taxpayer who raises an innocent-spouse defense in a CDP hearing is seeking not just a determination under section 6330, but a determination under section 6015 as well," so that notwithstanding "the general rule of Greene-Thapedi v. Commissioner, 126 T.C. 1, 8 (2006) (that we can’t grant refunds in appeals of CDP determinations)," a petition filed under section 6330 "can be viewed as giving independent jurisdiction under another provision that may provide us with the authority to consider overpayment claims," including section 6015(g). For overpayments with no such independent anchor, Commissioner v. Zuch, 605 U.S. 422 (2025) identifies the remaining channel: "Zuch’s recourse for alleged tax overpayments is to file a refund suit, see 28 U. S. C. §§1346(a)(1), 1491(a)(1), which she has already done." That channel carries its own precondition — under 26 U.S.C. § 7422, "[n]o suit or proceeding shall be maintained in any court for the recovery of any internal revenue tax alleged to have been erroneously or illegally assessed or collected ... until a claim for refund or credit has been duly filed with the Secretary, according to the provisions of law in that regard, and the regulations of the Secretary established in pursuance thereof."

Under these decisions, jurisdiction in a levy-based collection due process case depends on the continued existence of a proposed levy, assessed period by period and at every stage of the proceeding. An abatement, a full payment, an offsetting credit, or the Commissioner’s concession that nothing remains collectible ends the Tax Court’s authority as to that tax year, and any underlying-liability dispute for that year falls with it, however far the litigation has progressed; the same event has no effect on tax years for which the levy is still proposed, where review of the notice of determination — including abuse-of-discretion review of collection alternatives and the balancing required by section 6330(c)(3) — proceeds unchanged. A taxpayer who raised innocent-spouse relief or another claim carrying its own jurisdictional grant at the collection due process hearing retains a forum for that claim notwithstanding the mootness of the levy. A taxpayer whose only remaining grievance is an overpayment must present it through an administrative refund claim under section 7422(a) and, if necessary, a refund suit against the United States under 28 U.S.C. § 1346(a)(1) or § 1491(a)(1), because the collection due process appeal supplies neither refund authority nor declaratory relief once no levy is on the table.