In January 2025, the US Supreme Court granted certiorari to review a tax case that provides the Court with an opportunity to rule on the narrow, yet contested, question of due process regarding mootness of Tax Court challenges. Commissioner v. Zuch, No. 24-416, 2025 WL 65915, at *1 (U.S. Jan. 10, 2025). Zuch reached the Supreme Court after the Internal Revenue Service (“IRS”) petitioned to reverse a Third Circuit opinion regarding I.R.C. § 6330 due process claims. The ruling disagreed with the IRS’s argument that underlying tax liability becomes moot upon fulfilled payment of unpaid taxes by any means. Zuch v. Commissioner, 97 F.4th 81, 94 (3d Cir. 2024), cert. granted sub nom. Commissioner v. Zuch, No. 24-416, 2025 WL 65915 (U.S. Jan. 10, 2025). This Third Circuit opinion conflicts with the D.C. and Fourth Circuits, which ruled that § 6330 claims are moot once the IRS abandons its levy and concedes that no tax liability remains. (Tristan Navera & John Woolley, Bloomberg); McLane v. Commissioner, 24 F.4th 316 (4th Cir. 2022); Willson v. Commissioner, 805 F.3d 316 (D.C. Cir. 2015) (affirming Tax Court's dismissal of claims as moot after the IRS abated taxpayer’s underlying tax liability upon which a levy could be placed). If the Supreme Court returns a ruling for Zuch, US taxpayers would gain confidence in disputing IRS levies under § 6330 and face less obstacles to obtaining jurisdiction in US Tax Court. This article recounts the details and events leading to Commissioner v. Zuch and analyses how a Supreme Court verdict could change how due process is weighed in US Tax Court cases.
Read MoreOver the past decade, the Internal Revenue Service’s (“IRS”) budget has been cut, its workforce has been reduced, and audit rates for high-income taxpayers have nosedived. (Center on Budget and Policy Priorities). This has resulted in a large and consistently increasing tax gap (the difference between taxes paid and taxes owed). Id. After years of being underfunded, the IRS was allocated billions of dollars in federal funding via the Inflation Reduction Act of 2022 (“IRA”). (Alan Rappeport, The New York Times). This article reviews the impact of the IRA’s historic funding provided to the IRS, how the IRS is implementing the funding across its operations, and opposition that has arisen in response to the positive impact efforts, specifically surrounding the implementation of artificial intelligence (“AI”) as an enforcement mechanism.
Read MoreThe year 2021 proved to be a significant year for cryptocurrency (“crypto”). (Nikita Prasad, NDTV). With El Salvador becoming the first country to use Bitcoin as their legal currency and Tesla, Inc.––one of the world’s most valuable companies––accepting Bitcoin as payment, public interest and the potential for general mainstream acceptance have grown exponentially. Id. This increase in popularity has unsurprisingly exposed crypto to the focus of the Internal Revenue Service (“IRS”) because of the present need for tax dollars and governmental spending. (Alex Gailey & Kendall Little, Time; Robert W. Wood, Forbes). . .
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