The Supreme Court Ruled You Can Lose Your Tax Court Hearing Without Ever Getting an Answer: What Zuch Means for You

In June 2025, the Supreme Court handed down a ruling that quietly changed the rules for anyone fighting the IRS in Tax Court. The case is Commissioner v. Zuch, 605 U.S. 422, and it means you can spend years in a Collection Due Process proceeding, do everything the law requires, and still walk away without a single judge telling you whether you actually owe the money. If you have received an IRS levy notice or are already in a CDP hearing, you need to understand what changed and what to do about it.

What Is a Collection Due Process Hearing?

When the IRS decides to seize your property to collect an unpaid tax debt, it cannot simply take your bank account or wages without warning. The IRS must first inform you of its intent to levy certain assets and notify you of your right to a Collection Due Process hearing. The notices that trigger this right include Letter 1058, LT11, Notice CP90, and Notice CP297, all of which are notices of the IRS’s intent to levy and your right to a hearing.

Timing matters enormously. You must request the CDP hearing within 30 days from the date on the notice. To do that, you request a Collection Due Process hearing using Form 12153, Request for a Collection Due Process or Equivalent Hearing. Filing a timely CDP request suspends IRS levy action and preserves your right to petition the U.S. Tax Court if you disagree with the outcome.

Inside that hearing, you can do more than just say you cannot pay. A CDP hearing allows you to dispute the tax, request relief, or propose a resolution such as a payment plan or settlement. In certain situations, you can even argue that the IRS has the underlying tax amount wrong altogether. That is precisely the right that Zuch has now put at risk.

What Happened in Commissioner v. Zuch

The dispute originated in 2012 when Jennifer Zuch and her then-husband, Patrick Gennardo, each filed untimely federal tax returns for the 2010 tax year. Gennardo’s return showed a significant balance due, which he addressed by submitting an offer in compromise involving $50,000 in estimated tax payments. The IRS applied these payments to Gennardo’s account. Zuch later amended her return, reporting additional income resulting in $28,000 in taxes due. She argued that the $50,000 should be credited to her account, entitling her to a refund, but the IRS disagreed and placed a levy on her property.

Zuch requested a Collection Due Process hearing, which upheld the levy. She appealed to the Tax Court. During the multi-year proceedings before the agency and the Tax Court that followed, Zuch filed several annual tax returns showing overpayments. Each time, the IRS applied these overpayments to her outstanding 2010 tax liability rather than issuing refunds. Once Zuch’s liability reached zero, the IRS moved to dismiss the Tax Court proceeding as moot, arguing that the Tax Court lacked jurisdiction because the IRS no longer had a basis to levy on Zuch’s property. The Tax Court agreed.

Zuch appealed to the Third Circuit, which vacated the dismissal, holding that the IRS’s abandonment of the levy did not moot the proceedings, as the Tax Court could still address the underlying tax dispute. The Supreme Court then took the case.

What the Supreme Court Decided, and Why It Matters

The case involves the jurisdiction of the United States Tax Court over appeals from Collection Due Process hearings when there is no longer an ongoing levy. The Court ruled 8 to 1 against Zuch. The Tax Court lacks jurisdiction under Section 6330 to resolve disputes between a taxpayer and the IRS when the IRS is no longer pursuing a levy.

The reasoning matters for everyday taxpayers. The majority held that the only “determination” the Tax Court is empowered to review under Section 6330 is the ultimate decision of whether a levy may proceed. Other issues a taxpayer is statutorily entitled to raise at a CDP hearing, such as challenges to the underlying liability or spousal defenses, were described as mere “considerations” that inform the final levy decision. According to the Court, the statute distinguished between these “inputs” and the ultimate “output,” which is the decision on the levy itself.

The practical result is striking. The Tax Court can have jurisdiction over a case, only to lose it entirely if the IRS resolves the collection aspect of the case through other means, a departure from the general legal principle that a court, once it acquires jurisdiction, typically retains it. In other words, if the IRS drops or satisfies a levy while your Tax Court case is still open, the court’s power to rule on your case evaporates with it.

How This Plays Out in the Real World

The National Taxpayer Advocate’s February 2026 blog spells out the human cost plainly. Under Zuch, a taxpayer can do everything the statute requires and still leave court without a judicial determination as to what they owe. Such a result violates a taxpayer’s rights to pay no more than the correct amount of tax and to challenge the IRS’s position and be heard.

After Zuch, taxpayers can invest years in CDP and Tax Court proceedings and still never receive a merits decision on their underlying tax liabilities or their related credit and refund claims.

This is not a theoretical concern. On December 4, 2025, the Tax Court issued an order in All Is Well Homecare Services, LLC v. Commissioner that shows how Zuch can produce harsh results for taxpayers. In that case, the taxpayer was a small home health care business that requested a CDP hearing for employment tax liabilities and indicated it wanted an offer in compromise. Appeals initially sustained the proposed levy, and the taxpayer petitioned the Tax Court. On remand, the IRS applied credits from later periods, accepted the offer in compromise, and released the liens. Appeals then issued a supplemental notice of determination stating that the proposed levy “is no longer warranted.” The Tax Court, following Zuch, dismissed the case in its entirety, including the levy dispute, leaving the taxpayer with no merits ruling after years of proceedings.

Justice Gorsuch, the lone dissenter, warned that the ruling creates opportunities for the IRS to evade judicial review and leaves taxpayers without meaningful remedies for erroneous IRS actions. The National Taxpayer Advocate has called on Congress to fix the statute. With additional changes, CDP can once again function as Congress intended: as a fair and effective check on IRS collection actions and a reliable pathway to a timely, merits-based resolution of disputes in the Tax Court. As of now, however, that fix has not been enacted, and the Zuch rule stands.

What This Means If You Are Currently Facing IRS Collection Action

If you have received a CP90, CP297, LT11, or Letter 1058, the 30-day deadline to file Form 12153 is the most important date on your calendar. Missing this 30-day deadline means you lose your CDP hearing rights, though you may still request an Equivalent Hearing, which provides similar review but lacks certain legal protections. Specifically, missing the 30-day deadline means you can still request an Equivalent Hearing, but it will not stop collection or allow a Tax Court appeal.

Beyond the deadline, Zuch adds a new layer of urgency. Because the IRS can now effectively end your Tax Court case by withdrawing or resolving the levy on its own terms, you need a strategy that goes beyond simply requesting a hearing and waiting. Consider the following:

• Act before the levy is resolved, not after. Once the IRS satisfies or drops the levy, the Tax Court loses jurisdiction. If you want a judge to weigh in on whether you actually owe what the IRS says you owe, that argument must be pressed while the levy is still active.
• Raise every relevant issue at the CDP hearing itself. When a taxpayer requests a CDP hearing, they may want to argue that they do not owe the tax the IRS is trying to collect. Sometimes the law allows them to raise that issue, but it does not if the taxpayer has already received a notice of deficiency or otherwise had an opportunity to challenge the underlying liability. If you have not had that prior opportunity, raise the underlying liability dispute clearly and in writing at the CDP stage.
• Understand the refund claim deadline problem. Telling taxpayers to file a refund suit instead is often unrealistic, especially when strict refund claim deadlines have expired while CDP and Tax Court proceedings are still pending.
• Do not assume the process will protect you automatically. The Murrin and Zuch opinions reflect a reading of the relevant statutes that leaves taxpayers with a more complex, costly, and time-consuming process for prosecuting their rights under the law.

What to Do Next

The Zuch decision did not take away your right to fight the IRS. It did, however, make the process more fragile and more dependent on timing and strategy than most taxpayers realize. If you are in a CDP hearing, approaching a levy notice deadline, or are unsure whether you can still challenge what the IRS claims you owe, the stakes of getting it wrong are higher now than they were before June 2025.

Clear Start Tax works with individuals and businesses who are facing IRS collection action, and our team can review your situation to help you understand which options may still be available to you. Depending on your circumstances, you could be eligible for an installment agreement, an offer in compromise, currently-not-collectible status, or other forms of relief. The right path depends on the specifics of your case. Getting a professional review early, before deadlines close off your options, is the clearest way to protect yourself in a post-Zuch world.