The Internal Revenue Service has petitioned the US Supreme Court to address a potential widening of the US Tax Court’s jurisdiction through a decision by the US Court of Appeals for the Third Circuit. The case in question involves Jennifer Zuch, who argued that the IRS had improperly leveraged a future credit against her, prompting a levy redetermination suit that was revived by the appeals court.
The IRS maintains that the decision lacks a statutory basis under IRC Section 6330, which grants specific procedural rights to taxpayers, including a predeprivation levy hearing and the right of review before the Tax Court. In its petition, docketed earlier this week, the IRS highlighted the potential ramifications of the Third Circuit’s decision on tax levy cases, reasoning that it could “transform” the jurisdictional landscape of the tax court.
The agency argues that allowing the circuit split to remain unaddressed could result in a significant expansion of the Tax Court’s authority even in situations where no unpaid tax or proposed levy is present in the dispute. As such, the IRS is urging for a review to ensure clarity and consistency in the application of tax levy proceedings across different jurisdictions. More information can be found in the Bloomberg Tax report.