Gorsuch issues warning about SCOTUS ruling in IRS case
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Left: Associate Justice Neil Gorsuch of the U.S. Supreme Court speaks at the Ronald Reagan Presidential Library Foundation in Simi Valley, California, on August 8, 2024 (AP Photo/Damian Dovarganes). Right: A notice outside the Internal Revenue Service headquarters in Washington, D.C., United States, on May 28, 2025 (Photo by STR/NurPhoto via AP).

Justice Neil Gorsuch stood alone in dissent on Thursday, expressing concern over an 8-1 Supreme Court ruling that he feels effectively offers a “roadmap” and a “powerful new tool” for avoiding responsibility in U.S. Tax Court when the IRS errors impact ordinary citizens.

The majority opinion, penned by Justice Amy Coney Barrett, determined that a lengthy legal dispute involving a New Jersey woman indeed faced a barrier when the IRS stated it was no longer aiming to enforce a levy to confiscate her home for her alleged tax debts.

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As Barrett recounted, Jennifer Zuch’s clash with the IRS began in 2012 when she and her husband at the time belatedly filed a tax return for 2010. What came next was a legal morass, wherein Zuch’s attempt to resolve what she allegedly owed only led to the levy threat from the IRS.

The court’s syllabus recounted the early events of the case, noting that Zuch’s then-husband made a payment specifically to “resolve her liability” and that this payment was instead applied to his bill:

The dispute here began in 2012, when Jennifer Zuch and her then-husband Patrick Gennardo each filed an untimely 2010 federal tax return. Gennardo subsequently submitted an offer in compromise to resolve outstanding tax liabilities. This offer implicated $50,000 in estimated tax payments that the couple had previously sent to the IRS; following the offer, the IRS applied these payments to Gennardo’s account. For her part, Zuch later amended her 2010 tax return to report additional income, which resulted in an additional $28,000 in taxes due. But Zuch maintained that the IRS should have credited the couple’s $50,000 payment to her account, entitling her to a $22,000 refund. The IRS disagreed and sought to collect her unpaid taxes by placing a levy on her property pursuant to its authority under 26 U.S.C. §6331(a).

In Barrett’s words, a “procedural twist” followed. While Zuch was appealing the threatened levy in Tax Court, she overpaid her taxes in years that followed, leading the IRS to drop the balance owed to $0 and leading the agency to stop pursuing the levy.

The Tax Court then declared the case moot and moved to dismiss Zuch’s case for lack of jurisdiction, even though she “still disputed the debt that prompted the levy” and even though “she hoped that a victory before the Tax Court would force the IRS to refund her overpayments,” the Supreme Court summarized.

On Thursday, the majority decided that Zuch was out of luck when it came to pursuing a refund through the Tax Court for a simple reason: Because there was no more levy threat, there was no more jurisdiction. As such, Zuch must continue wrangling in the courts for a refund through a separate “postdeprivation suit,” adding even more time and expense to a decade-long dispute.

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