Supreme Court Holds that Tax Court Levy CDP Jurisdiction is Mooted by Satisfaction of Underlying Assessment (6/13/25)

I previously blogged on the

• Third Circuit's opinion in Zuch v. Commissioner, 97 F.4th 81 (3rd Cir. 2024). 3rd Circuit Holds Tax Court Has Jurisdiction to Determine Overpayments in CDP Proceedings (Federal Tax Procedure Blog 3/29/24; 3/30/24), here; and
• The Supreme Court's granting of the Government's petition for writ of certiorari. Supreme Court Accepts Cert in Zuch as to Mootness in CDP where IRS Collected by Offset the Tax Subject to Levy (Federal Tax Procedure Blog 1/13/25), here.

Yesterday, the Supreme Court decided Zuch, holding that the Tax Court loses jurisdiction over a CDP case when the assessment supporting the original proposed levy has been paid so that there is nothing behind the levy. See Opinion of the Court by Justice Barrett, joined by all other Justices except Gorsuch who dissented (SC here and GS here [to come]). The Opinion of the Court is a short (at least for Opinions of the Court) and relatively straightforward opinion. I therefore will not belabor readers with a scholarly (perhaps pseudo-scholarly) discussion of the opinion. My off-hand summary is that what is in issue in a levy CDP case is the levy and once the proposed levy is mooted by satisfaction of the underlying assessment, there is nothing left for the Tax Court to do.

So, I get back to the questions I considered in the blog entry reporting the granting of cert. The relevant ones are:

2. Why would the Supreme Court grant the petition in Zuch? Perhaps one reason is that the Solicitor General requested the writ. Given the historic internal selection process for cases, particularly tax cases, the Solicitor General's petition or acquiescence in the petition is a good signal to the Court that, after careful vetting, the issue may be important. I say, "may be important." I'll leave it at that until later in the comments.

 3. My more cynical thought is that, perhaps, Zuch is an example where the Solicitor General (or even the Court) selects tax cases to limit the damage the Supreme Court can do if it moves to merits decisions in tax cases. The Supreme Court in each term hears on the merits only a limited number of tax cases, perhaps around four. Given the Supreme Court's propensity to screw up tax cases, I suppose Zuch is a good case to grant the petition, because there does not seem to be much collateral damage that can come out of Zuch in the hands of the Supreme Court. See Some Justices' Aversions to Tax Cases (Federal Tax Procedure Blog 8/4/23; 9/6/23), here.

In short, paragraph 3 quoted above asks whether the Government just wanted the Supreme Court to fire one of its limited annual tax bullets in a case with limited potential for collateral systemic damage. The opinion does no collateral systemic damage.