A Collection Due Process hearing is one of the few places a taxpayer can fight the IRS about a tax before paying it. Commissioner v. Zuch is a 2025 Supreme Court decision about what happens to that fight when the reason for it, the levy, disappears.
The Facts
In the fall of 2012, Jennifer Zuch and her then-husband, Patrick Gennardo, filed separate, late 2010 federal income tax returns. Her return showed no balance due. His showed a substantial balance. Gennardo submitted an offer in compromise to resolve his liabilities, and that offer involved $50,000 in estimated tax payments the couple had sent to the IRS. The IRS applied the $50,000 to Gennardo's account.
A few weeks later, Zuch amended her 2010 return to report an additional $71,000 in income from a retirement distribution, generating almost $28,000 in tax. She argued that the $50,000 belonged to her account, which would have left her with a net refund of about $22,000.
The IRS disagreed and issued a notice of intent to levy. Zuch requested a Collection Due Process hearing and argued the payments should have been credited to her. Appeals rejected that argument and sustained the levy. She petitioned the Tax Court, which sent the case back to Appeals for more factual development. Appeals sustained the levy again.
The process took years. During that time Zuch filed returns showing overpayments. Each time, instead of refunding them, the IRS applied the overpayment to her disputed 2010 balance under its offset authority in IRC § 6402(a). When the balance reached zero, the IRS moved to dismiss the Tax Court case as moot. The Tax Court agreed. The Third Circuit vacated that dismissal, parting ways with the Fourth and D.C. Circuits.
The split the Court resolved
Before Zuch, the courts of appeals disagreed. The Fourth and D.C. Circuits had held that the Tax Court lacks jurisdiction over a CDP case once there is no longer an underlying levy. The Third Circuit took the opposite view in Zuch's own case. It reasoned that § 6330(c)(2)(B) let her challenge the existence or amount of her underlying liability, and that a Tax Court decision in her favor would not be a dead letter, because it might be preclusive in a later refund suit. The Supreme Court granted review to resolve that conflict.
The Issue
Does the Tax Court keep jurisdiction over a Collection Due Process appeal to decide the underlying tax dispute after the IRS is no longer pursuing a levy?
The Holding
No. Justice Barrett wrote for an 8-to-1 Court: "Because there was no longer a proposed levy, the Tax Court properly concluded that it lacked jurisdiction to resolve questions about Zuch's disputed tax liability." Justice Gorsuch dissented.
The Reasoning
What a "determination" is
Section 6330(d)(1) gives the Tax Court jurisdiction to review a "determination" by Appeals. The Court held: "The 'determination' in §6330(d)(1) refers to the binary decision whether a levy may proceed." Section 6330(c)(3) lists what Appeals must consider in making the determination: verification that the IRS followed the law, the issues the taxpayer raised, and whether the levy balances efficient collection against intrusiveness. Those are inputs. The determination is the output. Zuch's dispute about the $50,000 was an input.
The default rule is pay first, then sue
The Court emphasized that the normal way to dispute a tax is to pay and seek a refund. The Anti-Injunction Act in § 7421(a) bars most suits to restrain assessment or collection. A proposed levy is one of the exceptions where Congress allows prepayment review, and § 6330 is focused on the levy from its title onward. "Given §6330's unwavering focus on levies and the default rule requiring postpayment suits," it would be strange if a taxpayer could use a CDP appeal to resolve tax disputes "that no longer have any connection to an ongoing levy."
Limited remedies
The Court was also skeptical that the Tax Court can give any CDP remedy beyond enjoining a levy. Section 6330(e)(1) authorizes the Tax Court to enjoin a levy only in respect of the unpaid tax or proposed levy at issue. It does not authorize refunds or declaratory judgments about liability.
What Zuch can still do
The Court noted that Zuch was not without recourse. Like any taxpayer, she could file a refund suit, and she had already done so in federal district court in New Jersey.
The dissent
Justice Gorsuch saw it differently. Zuch still had a live claim, and if she had won it the IRS would have had no basis to keep her later overpayments. He warned that the decision "hands the IRS a powerful new tool to avoid accountability for its mistakes in future cases like this one."
What It Means for Taxpayers Today
A CDP case can disappear under you
If you are disputing a liability in a CDP case and the IRS stops pursuing the levy, whether because it applied your refunds, because you paid, or for any other reason, the Tax Court case may be dismissed without a ruling on the merits. You do not get a decision just because you have been litigating for years.
Watch your refunds while a CDP case is pending
In Zuch, the IRS applied later-year overpayments to the disputed year until nothing was left. The IRS has that offset authority under § 6402(a). If you are expecting refunds while you fight a balance, think through how offsets could affect the case, and preserve your refund rights.
Protect the refund route
Since the fallback after Zuch is a refund suit, the refund deadlines matter. A refund claim generally must be filed within the period in § 6511, and that deadline is strict, as United States v. Brockamp shows. If there is any chance the CDP case could become moot, consider filing a protective refund claim so the clock does not run out while you wait.
Where the refund suit goes
A refund suit is not filed in the Tax Court. The Court cited 28 U.S.C. §§ 1346(a)(1) and 1491(a)(1), which send refund suits to a federal district court or the Court of Federal Claims. That means a new case, a new court and, as the Tax Court told Zuch, effectively starting over. Factor that cost into any decision to litigate liability through CDP.
CDP is still powerful for collection issues
Zuch is about liability disputes that outlive the levy. It does not weaken the core of CDP: the right to propose an installment agreement, an offer in compromise or currently not collectible status, and to have the Tax Court review whether Appeals abused its discretion in rejecting them, as in Vinatieri v. Commissioner. It also does not change the filing deadline rule in Boechler v. Commissioner.
Pick the right forum at the start
If your real fight is over how much you owe, ask early whether CDP is the best place for it. Underlying liability can be raised at a CDP hearing only if you did not receive a notice of deficiency or otherwise have an opportunity to dispute it, under § 6330(c)(2)(B). And after Zuch, it can be raised there only as long as a levy remains on the table.
The Bottom Line
Zuch tells you what a CDP case is really about. It is about whether the IRS can levy. Everything else is just an input. When the levy goes away, so does the Tax Court's power to tell you whether you were right about the tax. Plan for that before it happens to you.