CIR v. Zuch (24-416)

argument 24-416

CIR v. Zuch

Supreme Court of the United States 47 min 7 speakers 8 chapters transcribed 1 month ago official recording ↗

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What is the core issue in Commissioner of Internal Revenue v. Zook?

John G. Roberts 0:00

We will hear argument next in case twenty four four four four four four four sixteen, Commissioner of Internal Revenue versus Zook. Ms. Ross?

Unknown 0:07

Mr Chief Justice, and may it please the court. Section sixty three thirty of the Internal Revenue Code is all about levies, using the word levy nearly thirty times. The statute provides a levy specific exception to the general rule that taxpayers must pay their taxes first and dispute them later in a refund suit. When the IRS proposes to collect a tax by levying on the taxpayers' property, That is, by seizing and selling it. Section sixty three thirty allows the taxpayer to dispute that particular method of collection before it occurs. A taxpayer cannot use Section sixty three thirty's prepayment mechanism. Unless the IRS seeks to levy on her property. The proposed levy is her ticket to the IRS's appeals office and later to the tax court.

Unknown 0:56

But the tax court is one of limited jurisdiction. Under section sixty three thirty, Congress has given the court only the power to review the appeals office's quote determination and quote whether a levy may proceed. Where, as here the IRS no longer has a basis to enforce its proposed levy, the tax court lacks jurisdiction. just as it would lack jurisdiction if the IRS had never proposed a levy at all. Respondent contends that even after the levy has dropped out of the case, the tax court may continue to consider arguments about the taxpayers' unpaid tax or underlying tax liability. But in this case, the IR IRS cannot levy on the taxpayer's property because she has already paid. So there is no unpaid tax or underlying tax liability.

Unknown 1:41

And more generally, the statute instructs the Appeals Office to consider those subsidiary issues only in service of making the ultimate determination whether a levy may proceed. They are not the determination itself. And nothing in the statute suggests those subsidiary questions are independent bases for tax court jurisdiction. Indeed, even if the tax court agreed with her respondent on those issues, it could afford her no relief in the absence of a threatened levy. The tax court therefore lacks jurisdiction, although respondent may pursue challenges to the taxes she has paid in a post refund suit, just like any other taxpayer subject to the general rule.

Clarence Thomas 2:18

Should we look at this uh case uh as uh statutory jurisdiction as opposed to uh mootness?

Unknown 2:26

So, Justice Thomas, I think you can look at this case in a variety of ways, but they sort of all get you to the same place. I think you can think about it sort of as statutory mootness. The statute requires something that's no longer present. It requires that the parties be fighting over a levy. As I mentioned earlier this morning, the entire statute is about levies. And I think we know this not only because the statute talks about levies 29 or 30 times, but also because there's no relief that can be given at this point to the taxpayer when there's no longer a levy proposed.

Clarence Thomas 2:55

Well, the taxpayer says that uh it still wants to uh litigate the liabil underlying liability. Um but why wouldn't uh uh the tax court or have jurisdiction um The since at the beginning of the litigation there was a levy in place.

Unknown 3:14

So I think, Your Honor, the tax court wouldn't have jurisdiction um when there's no longer a levy because again the the jurisdiction is very much tied to the levy. So the question here is whether the I d the determination that the appeals office has made, which is whether the levy can go forward, that's the language of D1. The question here is whether the um respondent can continue litigating questions that are subsidiary to that ultimate determination.

Clarence Thomas 3:38

I think my point is why is that so? Uh at the beginning of the litigation there was a levy uh involved. Why does it have to extend throughout the litigation? It's already in court.

Unknown 3:49

Sure, Your Honor. So two answers to that question. One, by analogy to this court's recent decision in Royal Canaan, I think there are some things that happen during the course of a litigation that so fundamentally alter the litigation that statutory jurisdiction is ousted.