Supreme Court Limits Tax Court Jurisdiction, Gorsuch Warns IRS Accountability Risk

The U.S. Supreme Court ruled 8-1 in Commissioner of Internal Revenue v. Zuch that the Tax Court lacked jurisdiction to resolve a dispute involving IRS levies when the IRS declared it was no longer enforcing a levy on a taxpayer's property. The case involved Jennifer Zuch, who argued the IRS erroneously credited a $50,000 payment to her then-husband's account rather than hers, leading to an IRS levy threat on her home. Justice Neil Gorsuch dissented strongly, warning that the Court's decision hands the IRS a "powerful new tool" to avoid accountability for its mistakes, potentially harming everyday Americans. The majority opinion, written by Justice Amy Coney Barrett, upheld the IRS's position, effectively blocking Zuch from recouping alleged overpayments. Gorsuch expressed concern that the ruling sets a precedent allowing the IRS to evade responsibility by withdrawing levy actions before Tax Court jurisdiction can be established. This decision could limit taxpayers' ability to challenge IRS errors and seek refunds when levies are removed prematurely.