Court Opinion

ID: 9953683
Source: CourtListenerOpinion
Date Created: 2024-03-22 17:00:27.585466+00
Date Added: 2024-06-11T07:54:28.023919
License: Public Domain

PRECEDENTIAL

       UNITED STATES COURT OF APPEALS
            FOR THE THIRD CIRCUIT
                _______________

                   No. 22-2244
                 _______________

                 JENNIFER ZUCH,
                                         Appellant

                         v.

    COMMISSIONER OF INTERNAL REVENUE
             _______________

     On Appeal from the United States Tax Court
                  (IRS 1:14-25125)
    Tax Court Judge: Honorable Lewis R. Carluzzo
                 _______________

                      Argued
                   April 26, 2023

Before: JORDAN, KRAUSE, and BIBAS*, Circuit Judges

               (Filed: March 22, 2024)
                  _______________
Frank Agostino
Agostino & Associates
14 Washington Place
Hackensack, NJ 07601

Jeffrey M. Dirmann [ARGUED]
4th Floor, Suite 17
55 Madison Avenue
Morristown, NJ 07960
      Counsel for Appellant

Julie C. Avetta [ARGUED]
Jennifer M. Rubin
United States Department of Justice
  Tax Division
950 Pennsylvania Avenue NW
P.O. Box 502
Washington, DC 20044
       Counsel for Appellee

Audrey Patten
Legal Services Center of Harvard Law School
122 Boylston Street
Jamaica Plain, MA 02130
      Court-Appointed Amicus Curiae*
                     _______________

      *
        We requested briefing on certain issues from Audrey
Patten, Esquire, of the Harvard Law Tax Litigation Clinic,
whom we appointed as Amicus Curiae. We are grateful for the
thoughtful insights provided by Ms. Patten and the Clinic.

                             2
                      OPINION OF THE COURT1
                          _______________

JORDAN, Circuit Judge.

       When Congress grants taxpayers the right to challenge
what the Internal Revenue Service says is owed to the
government, Congress’s will prevails. The IRS cannot say that
such a right exists only under the circumstances it prescribes.
That ought to go without saying, but this case requires us to say
it.

        The IRS sent Jennifer Zuch a notice informing her that
it intended to levy on her property to collect unpaid tax. She
challenged the levy, arguing that she had prepaid the tax. The
IRS Independent Office of Appeals (the “IRS Office of
Appeals”) sustained the levy, and Zuch petitioned the United
States Tax Court for review of that decision. While the issue
was being litigated in that Court over several years, the IRS
withheld tax refunds owed to Zuch and applied them to what it
said was her unpaid balance, satisfying it in full. When,
according to the IRS’s accounting, there was no more tax to be
paid, the IRS filed a motion to dismiss the Tax Court
proceeding for mootness, and the Court granted the motion.

      Because Zuch’s claim is not moot, we will vacate the
dismissal and remand this matter to the Tax Court to determine
whether Zuch’s petition is meritorious.

          1
              Judge Bibas joins the opinion in full except for Section
II.C.3.

                                     3
I.     BACKGROUND

       A.     Overview of Tax Court Proceedings

        Some understanding of tax procedure is essential to the
consideration of this case, so we begin with a brief summary
of the two basic pathways by which taxpayers can dispute what
they owe the government before the IRS collects: deficiency
proceedings and collection due process hearings.2 After
addressing a key question related to these pathways – the
distinction between unpaid tax and tax liability – we turn to the
factual and procedural background that led to this appeal.

              1.     Deficiency Proceedings

      When the IRS decides that a taxpayer owes more than
the amount reported on her tax return, it mails the taxpayer a

       2
         If a taxpayer wishes to dispute what he owes after the
IRS collects, he must file a refund action in a federal district
court or the Court of Federal Claims. 26 U.S.C. § 7422.

                               4
“notice of … deficiency.”3 26 U.S.C. § 6212(a).4 The taxpayer
may challenge the IRS’s tax determination before collection by
filing a petition in the Tax Court within ninety days after the
mailing of the notice of deficiency. § 6213(a). Such a petition
commences a “deficiency proceeding[].” Cooper v. Comm’r,
718 F.3d 216, 223 (3d Cir. 2013). Deficiency proceedings are
“[t]he Tax Court’s principal basis for jurisdiction[.]” Sunoco
Inc. v. Comm’r, 663 F.3d 181, 187 (3d Cir. 2011). In a
deficiency proceeding, the Tax Court has jurisdiction to
determine the correct amount of tax owed, § 6214(a), and to
order that any overpayments be refunded to a taxpayer,
§ 6512(b)(1). The Tax Court’s final order in a deficiency
proceeding is subject to review by an Article III court.
§ 7482(a)(1).

              2.      Collection Due Process Proceedings

       If a taxpayer does not pay the amount the IRS says is
due, the IRS can levy – that is, seize and sell – a taxpayer’s
property to satisfy the tax liability. § 6331(a). But, before it
does so, it must provide the taxpayer notice and an opportunity

       3
          A notice of deficiency is a “jurisdictional prerequisite”
to litigate the merits of the IRS’s deficiency determination in
the Tax Court. Laing v. United States, 423 U.S. 161, 165 n.4
(1976). We have called the notice of deficiency the taxpayer’s
“ticket to the Tax Court[.]” Robinson v. United States, 920
F.2d 1157, 1158 (3d Cir. 1990) (internal quotation marks
omitted).
       4
         Unless otherwise indicated, all section references in
the remainder of this opinion are to the Internal Revenue Code
of 1986, as amended, 26 U.S.C. § 1 et seq.

                                5
for a hearing to contest the levy. § 6330(a)(1). After the IRS
sends notice to the taxpayer of its intent to levy, the taxpayer
has thirty days to request a hearing. § 6330(a)(3)(B). That
hearing, known as a Collection Due Process (“CDP”) hearing,
is “an administrative proceeding before an appeals officer with
the [IRS Office of Appeals] in which a taxpayer may raise ‘any
relevant issue relating to the unpaid tax or the proposed levy.’”
United States v. Weiss, 52 F.4th 546, 548 (3d Cir. 2022)
(quoting § 6330(c)(2)(A)).        Under § 6330(c)(2)(B), the
taxpayer

       may also raise at the [CDP] hearing challenges
       to the existence or amount of [his or her]
       underlying tax liability for any tax period if [he
       or she] did not receive any statutory notice of
       deficiency for such tax liability or did not
       otherwise have an opportunity to dispute such
       tax liability.

        This scheme makes good sense in light of potential due
process concerns. “[S]ome form of hearing is required before
an individual is finally deprived of a property interest[,]”
Mathews v. Eldridge, 424 U.S. 319, 333 (1976), and a taxpayer
who cannot challenge a levy before seizure and sale may
wrongfully lose property without notice or the opportunity to
be heard, see § 6330(c)(2)(A). Similarly, and particularly
relevant here, a taxpayer who cannot challenge her underlying
liability before collection may wrongfully lose money without
notice or a hearing. § 6330(c)(2)(B); see generally S. Rep. No.
105-174, at 67 (1998) (“[T]he IRS should afford taxpayers
adequate notice of collection activity and a meaningful hearing
before the IRS deprives them of their property.”).

                               6
        So, to recap: If the taxpayer could have commenced a
deficiency proceeding before the CDP hearing, the hearing
provides a forum to challenge the unpaid tax and proposed levy
only. But if the taxpayer had no opportunity to commence a
deficiency proceeding, the CDP hearing provides a forum to
challenge the unpaid tax, the proposed levy, and the underlying
tax liability.

       Once the IRS Office of Appeals makes a determination
on the taxpayer’s challenges, the taxpayer has thirty days to
petition the Tax Court to review any issues that were properly
raised at the CDP hearing. § 6330(d)(1). Again, the Tax
Court’s final order is subject to review by an Article III court.
§ 7482(a)(1).

              3.     Unpaid Tax Versus Tax Liability

        Section 6330(c)(2)(B) of the Internal Revenue Code
raises an important question: What is the difference between
unpaid tax and tax liability? There must be some distinction,
or else the language in § 6330(c)(2)(B) allowing a challenge to
liability would be superfluous.5 Congress confined the right to
raise a liability challenge to taxpayers who did not have a
previous opportunity to do so, while at the same time granting
all taxpayers in a CDP hearing the ability to raise issues
relating to the unpaid tax or proposed levy. Hence, it is evident

       5
        Section 6330(c)(2)(A) authorizes a taxpayer to raise
“any relevant issue relating to the unpaid tax or the proposed
levy,” while § 6330(c)(2)(B) grants qualifying taxpayers an
opportunity to raise “challenges to the existence or amount of
the underlying tax liability.”

                               7
that Congress intended to grant to qualifying taxpayers some
right in addition to the rights given to all taxpayers in a CDP
hearing. See infra section II.C.3. On that basis, “unpaid tax”
cannot be synonymous with “tax liability.” See also United
States v. Yung, 37 F.4th 70, 79 (3d Cir. 2022) (“Normally,
where Congress uses different words, we read those words to
have different meanings.”).

        There is indeed a distinction: West’s Tax Law
Dictionary defines “tax liability” as the “[t]otal amount of tax
owed to the I.R.S. after the allowance of any proper credits.”
Tax Liability, West’s Tax Law Dictionary § T830 (emphasis
added). And it defines credit as “an allowance against the tax
itself [including] [i]ncome tax withheld on wages, prepaid
estimated taxes, [etc.]” Credit, West’s Tax Law Dictionary
§ C4530 (emphasis added). Tax liability is therefore the net
amount owed to the IRS: If you owe $20 to the IRS and have
prepaid that $20, your tax liability – at least on these simple
facts – is $0. Understanding “tax liability” in this way accords
with the plain meaning of “liability.” To say, “I have no
liability” is to say, in effect, “I owe nothing.” A “challenge”
to liability under § 6330(c)(2)(B) means the taxpayer disputes
what the IRS says he owes.

        In contrast, “issue[s] relating to the unpaid tax” under
§ 6330(c)(2)(A) do not directly concern the amount and
existence of the liability. Instead, such issues concern the
IRS’s proposed collection activity, as illustrated by the three
examples Congress provides in the statute: “(i) appropriate
spousal defenses [for a spouse who filed a joint tax return]; (ii)
challenges to the appropriateness of collection actions; and (iii)
offers of collection alternatives.” § 6330(c)(2)(A). In each
case, the focus is not on the liability itself, but is rather on the

                                 8
method the IRS will use to collect what it says is due to the
government. See Treas. Reg. § 301.6330-1(e)(3), Q&A (E)(3)
(2006) (“When a taxpayer asserts a spousal defense, the
taxpayer is not disputing the amount or existence of the
liability itself[.]”).

       Strictly speaking, then, unpaid tax means something
different than tax liability. For example, assuming that the IRS
has assessed $20 in taxes, your unpaid tax is just that: the $20
the IRS says you owe. But further proceedings can change that
number. If a deficiency proceeding or a challenge under
§ 6330(c)(2)(B) in a CDP hearing establishes that the IRS
should have credited $5 toward the $20 balance, your liability
is $15, and, once fixed by those further proceedings, that sum
also becomes your unpaid tax.

       B.       Factual Background6

       Zuch and Patrick Gennardo7 were married from 1993 to
2014. On September 12, 2012, they filed separate, untimely
tax returns for the 2010 tax year, each electing married-filing-
separately status.8 Zuch’s tax return showed adjusted gross

       6
        Unless otherwise noted, the facts are undisputed. They
are taken primarily from the stipulated factual record submitted
to the Tax Court.
       7
           Gennardo is not a party in this proceeding.
       8
         A taxpayer must elect one of several filing statuses
when submitting an individual income tax return. See IRS,
1040     (and    1040-SR):      Instructions  13      (2023),
https://www.irs.gov/pub/irs-pdf/i1040gi.pdf

                                 9
income of $74,493 and an overpayment of tax of $731.9
Gennardo’s tax return showed adjusted gross income of
$1,077,213 and tax due of $385,393. On that same day,
Gennardo filed an offer-in-compromise to settle his tax debts
for the 2007 to 2011 tax years.10

       All of this had been preceded in 2010 and 2011 by two
prepayments of the couple’s estimated tax liability for 2010.
More specifically, in June of 2010, the couple submitted an
estimated tax payment of $20,000 to the IRS for the 2010 tax
year.11 Gennardo then, in January of 2011, sent an estimated

[https://perma.cc/X76A-GVKC]. Unmarried taxpayers who
do not have a qualifying dependent must elect “Single” status.
Id. Unmarried taxpayers who have a qualifying dependent
may elect “Head of Household” status. Id. at 14-15. Married
taxpayers have the option to elect either “Married Filing
Jointly” or “Married Filing Separately” status. Id. at 13-14.
Unmarried persons whose spouse died during the previous two
tax years and who have a qualifying dependent may elect
“Qualifying Surviving Spouse” status. Id. at 15.
      9
        The IRS applied that overpayment to the couple’s
2008 unpaid tax liability.
      10
           An offer-in-compromise allows a taxpayer to settle
tax debts for less than the total amount of the outstanding
liability. § 7122(a).
      11
        The check was drawn from a bank account that listed
both Zuch’s and Gennardo’s names. The accompanying Form
1040-ES also listed both of their names.

                             10
tax payment of $30,000 for the 2010 tax year.12 When they
made the payments, Zuch and Gennardo did not specify how
they wanted to have the IRS allocate those payments to their
respective tax liabilities, and Zuch’s late-filed 2010 tax return
did not mention the estimated payments. After processing
Gennardo’s return, the IRS sent him a notice, in October of
2012, that showed it had applied the full $50,000 in estimated
payments to offset the tax due on his individual 2010 return.

       Later, in November of 2012, Zuch filed an amended
2010 tax return to report additional income of $71,000 from a
retirement account distribution, causing additional tax due of
$27,682. On that return, she claimed the benefit of the same
$50,000 in estimated payments and requested a refund of
$21,918. The IRS assessed Zuch the additional tax she
reported, but it did not refund or otherwise credit her for the
$50,000 in estimated payments that she claimed. It also
allegedly sent her a notice and demand for payment of her
additional tax due, but she disputes ever having been sent such
a notice.13

       12
         The check Gennardo used to make the payment listed
only his name. The cover letter accompanying the check,
however, listed both Zuch’s and Gennardo’s names.
       13
          Before the Tax Court, the IRS and Zuch jointly
stipulated that the IRS had sent her a notice of tax due and
demand for payment. In her briefing, Zuch now asserts that
the IRS never notified her. A notice of tax due and demand for
payment is not to be confused with a notice of deficiency; the
IRS uses the former to notify the taxpayer of an unpaid tax and
to demand payment, Notice CP14, Taxpayer Advoc. Serv.

                               11
        Soon after, in March of 2013, Gennardo filed an
amended tax return for the 2010 tax year. He included a
statement that he was amending his return in part to notify the
IRS that there were estimated payments of $50,000 that should
be allocated to Zuch,14 apparently showing his approval of
Zuch’s previously filed amended return in which she claimed
the benefit of the estimated payments.15 But the IRS did not
adjust the allocation of the $50,000 from Gennardo to Zuch. In
June of 2013, Gennardo submitted an amended offer-in-
compromise to increase the amount of his offer, which the IRS
accepted the next month. Despite his earlier direction that the
estimated payments should be allocated to Zuch, the IRS gave
him a document showing it had credited the $50,000 in
estimated payments to his outstanding tax liability.

(updated              July              11,             2023),
https://www.taxpayeradvocate.irs.gov/notices/notice-cp14/
[https://perma.cc/H92Z-M9QM], while the IRS uses the latter
to notify a taxpayer that it is proposing to increase the total
amount of tax due for a particular tax year, 90 Day Notice of
Deficiency, Taxpayer Advoc. Serv. (updated Dec. 6, 2023),
https://www.taxpayeradvocate.irs.gov/notices/exam-90-day-
notice-of-deficiency/ [https://perma.cc/VZX2-84JZ]. It is
undisputed that Zuch never received a notice of deficiency.
       14
         Gennardo did not mention on his tax return that the
IRS had already allocated the $50,000 in estimated payments
to him or that he had an offer-in-compromise pending.
       15
         Zuch’s and Gennardo’s amended tax returns were
prepared by the same tax preparer.

                              12
       C.     Procedural Background

              1.     Zuch’s CDP Hearing

        On August 31, 2013, the IRS sent Zuch a “Final Notice
of Intent to Levy and Notice of your Right to a Hearing.” (App.
at 563.) That notice informed her that the IRS intended to levy
on her property for failing to pay her remaining 2010 tax
liability of approximately $36,000 and that she had thirty days
to appeal the levy by requesting a CDP hearing with the IRS
Office of Appeals. Zuch timely requested a CDP hearing, and
because she did not receive a notice of deficiency or “otherwise
have an opportunity to dispute [her] tax liability,” she
exercised her right to challenge “the existence or amount of the
underlying tax liability” in the CDP proceedings.
§ 6330(c)(2)(B). Specifically, Zuch alleged that the $50,000
of estimated tax payments credited to Gennardo should have
been credited to her, making her underlying tax liability $0.16
Prior to the hearing, Zuch’s counsel submitted a signed
declaration from Gennardo directing the IRS to apply the
$50,000 to Zuch’s personal tax liability.17

       16
          Zuch also requested that the IRS abate any
underpayment penalties against her because she was going
through a divorce with Gennardo and collection would create
an undue hardship for her. The IRS denied that request.
       17
         The IRS notes in its briefing that the declaration was
signed in March 2014, nearly eight months after Gennardo had
received credit for the estimated payments pursuant to his
amended offer-in-compromise.

                              13
       The CDP hearing was held via telephone on July 29,
2014. During the hearing, an IRS officer told Zuch’s counsel
that he did not believe that the IRS could credit any of the
estimated payments to Zuch’s liability because they had
already been credited to Gennardo’s account, which had been
subject to an offer-in-compromise. On September 25, 2014,
the IRS Office of Appeals sent Zuch a Notice of Determination
sustaining the IRS’s proposed levy and stating it was “not in a
position” to move credits from Gennardo’s account to hers.
(App. at 294.) That notice also informed Zuch that she had
thirty days to dispute the IRS’s determination by filing a
petition with the Tax Court.

              2.      Zuch’s Tax Court Proceedings

         Zuch did petition the Tax Court for relief. She asked
the Court to conduct a de novo review of her underlying tax
liability and conclude that the $50,000 in estimated tax
payments should be applied to her individual account. The IRS
moved for summary judgment, which the Tax Court denied in
December 2016. It made three observations at that time. First,
it stated that the initial $20,000 estimated payment appeared to
be a joint estimated tax payment and that it was unclear why
the IRS had applied the payment to Mr. Gennardo’s tax
liabilities. Second, the Court explained that it was “unclear
whether the [later] $30,000 payment was a separate payment
or a joint payment.” (App. at 264.) And third, it noted that the
“circumstances surrounding Mr. Gennardo’s [offer-in-
compromise were] not clear[,]” including whether that offer-
in-compromise satisfied Zuch and Gennardo’s joint tax
liabilities for any years they filed a joint tax return and, if so,
whether Zuch was involved in the offer-in-compromise
process. (App. at 264.)

                                14
       The Tax Court then granted the IRS’s unopposed
motion to remand the case to the IRS Office of Appeals. In
June 2017, the IRS issued a Supplemental Notice of
Determination, confirming its prior determination to sustain
the levy and stating that it received no new information that
would compel it to change its prior decision. The case returned
to the Tax Court and was initially set for trial. Instead, the
parties agreed to forgo trial and proceed on a stipulated factual
record.18

              3.     Credit Setoffs

       Throughout the several years Zuch was arguing with the
IRS about her 2010 tax liability, including in the CDP hearing
and in the Tax Court, the IRS was taking tax refunds that Zuch
was owed in later tax years and applying them to what it
calculated to be her 2010 tax liability. It did this six times –
once each in 2013, 2014, 2015, and 2019, and twice in 2016.19
On April 15, 2019, the IRS used a refund to set off the
remainder of Zuch’s 2010 unpaid tax, reducing the balance due
to $0.

       18
          Tax Court Rule 122(a) provides, “Any case not
requiring a trial for the submission of evidence (as, for
example, where sufficient facts have been admitted [or]
stipulated …) may be submitted … by motion of the parties
filed with the Court.”
       19
         In its briefing and at oral argument, the IRS alleged
that Zuch should have received notice of the setoffs. But it
provided no evidentiary support that notice was sent to her.

                               15
       With no remaining unpaid tax on which to execute a
levy, the IRS moved to dismiss the Tax Court proceeding as
moot. Zuch opposed the motion, but the Tax Court granted it
and dismissed the petition. In a short order, the Court held that
the case was moot. Without acknowledging § 6330(c)(2)’s
distinction between unpaid tax and underlying tax liability, the
Court found there was no longer a live controversy because
there was “no unpaid liability … upon which a levy could be
based” and the IRS was “no longer pursuing the proposed
collection action[.]” (App. at 7-8.) It also explained that the
Tax Court was not the proper forum to determine whether Zuch
had overpaid because it lacked “jurisdiction to determine an
overpayment or to order a refund or credit of tax paid in a
[CDP] proceeding[.]” (App. at 7.)

       Zuch timely appealed the Tax Court’s order.

II.    DISCUSSION20

        The dispute comes down to this: whether, in the midst
of litigation over a contested tax liability, the IRS is free to
deprive the Tax Court of jurisdiction by the expedient of taking
the taxpayer’s tax refunds and applying them to that liability.
The answer is no. The IRS’s arrogation to itself of the power
to eliminate pre-deprivation judicial review of liability by
seizing a taxpayer’s money to cover a disputed debt is not

       20
          The Tax Court had jurisdiction under §§ 6330(d)(1)
and 7442. We have jurisdiction pursuant to § 7482(a)(1). We
exercise “de novo review over the Tax Court’s findings of law,
including its construction and application of the Internal
Revenue Code.” DeNaples v. Comm’r, 674 F.3d 172, 176 (3d
Cir. 2012). We review factual findings for clear error. Id.

                               16
supported by relevant statute, common law (incorporated into
statute), or mootness principles.

       A.     The Tax Court Originally Had Jurisdiction to
              Hear Zuch’s Claim.

       The Tax Court is a tribunal of limited jurisdiction.
Sunoco, 663 F.3d at 187. Being organized under Article I of
the Constitution, it possesses only the power “expressly
conferred by Congress.” Id. Congress has granted the Tax
Court jurisdiction to review decisions made by the IRS Office
of Appeals in CDP hearings. § 6330(d)(1). Specifically, the
Tax Court is to consider “any relevant issue [raised by the
taxpayer] relating to the unpaid tax or the proposed levy[.]”
§ 6330(c)(2)(A). If the taxpayer “did not receive any statutory
notice of deficiency for [his or her] tax liability or did not
otherwise have an opportunity to dispute such tax liability[,]”
the Court must, in addition, consider any challenge “to the
existence or amount of the underlying tax liability[.]”
§ 6330(c)(2)(B).

        Zuch fell into the latter category, disputing her 2010 tax
liability at the CDP hearing by arguing that the $50,000
provided by her and Gennardo as estimated tax payments
should have been applied to satisfy her tax liability instead of
Gennardo’s. Because Zuch had neither received a notice of
deficiency nor had an opportunity to contest the allocation of
the tax payments prior to her CDP hearing,21 the IRS was

       21
        Zuch did not receive a notice of deficiency because
the amount of tax due that she reported, without taking any
payments into account, is not in dispute. See supra note 13.

                               17
required to consider her challenge. The IRS did so, finding that
the $50,000 could not be credited to Zuch and sustaining the
levy. Accordingly, the Tax Court had jurisdiction to review
that determination, including whether the estimated payments
were allocated correctly.22

       B.     The Tax Court Applies Article III Case or
              Controversy Principles to Determine
              Mootness.

        “Article III of the Constitution restricts the power of
federal courts to ‘Cases’ and ‘Controversies.’” Chafin v.
Chafin, 568 U.S. 165, 171 (2013). As an Article I tribunal,
however, the Tax Court “is not fully constrained by Article
III’s case or controversy limitation.” Baranowicz v. Comm’r,
432 F.3d 972, 975 (9th Cir. 2005). Nevertheless, the Tax Court
wisely applies that constraint to itself, Battat v. Comm’r, 148
T.C. 32, 46 (2017) (“The case or controversy requirement
under Article III presumptively applies in the Tax Court.”),
and, of course, is free to do so for prudential reasons, cf.
Zevalkink v. Brown, 102 F.3d 1236, 1243 (Fed. Cir. 1996) (“As
a court established under Article I of the U.S. Constitution, the
Court of Veterans Appeals … has decided, based on the same
prudential considerations behind the ‘case or controversy’
requirement, … that it would refrain from deciding cases that

       22
         The IRS does not dispute that the Tax Court originally
had jurisdiction to review the proper allocation of the estimated
tax payments. (Supp. Br. at 15 (“If Zuch’s tax liability for 2010
had not been fully satisfied by the credit offsets, we agree that
the case would not be moot and that the Tax Court could review
the proper allocation of the estimated tax payments.”).)

                               18
do not present an actual case or controversy.”). Zuch and the
IRS agree that the Tax Court need not hear a moot case.
Accordingly, for purposes of this matter, we discuss and apply
Article III mootness principles to determine whether Zuch’s
claim is moot.

        Article III permits federal courts to “entertain actions
only if [those actions] present live disputes, ones in which both
sides have a personal stake.” Hartnett v. Pa. State Educ. Ass’n,
963 F.3d 301, 305 (3d Cir. 2020). That “case or controversy”
requirement remains “through all stages of federal judicial
proceedings, trial and appellate.” Chafin, 568 U.S. at 172
(internal quotation marks omitted). Thus, a case becomes
moot, and a federal court is deprived of jurisdiction to hear that
case, when there is no longer a live case or controversy
between the litigants. Id. “As long as the parties have a
concrete interest, however small, in the outcome of the
litigation, the case is not moot.” Id. (internal quotation marks
omitted). Therefore, a case “becomes moot only when it is
impossible for a court to grant any effectual relief whatever to
the prevailing party.” Knox v. Serv. Emps. Int’l Union, Loc.
1000, 567 U.S. 298, 307 (2012) (cleaned up). A defendant
faces a “heavy burden” when trying to persuade a court that
there is no longer a live controversy. Hartnett, 963 F.3d at 305-
06 (internal quotation marks omitted).

       C.     Zuch’s Claim Is Not Moot.

       The parties dispute whether Zuch’s claim falls under
§ 6330(c)(2)(A) or § 6330(c)(2)(B). We therefore first address
how Zuch’s claim should be characterized, before turning to
the question of mootness.

                               19
              1.      The Characterization of Zuch’s Claim.

       In the Notice of Determination that Zuch received, the
IRS listed her challenge to the allocation of the estimated
payments under the heading “Challenges to the Liability.”
(App. at 298.) Now, however, it argues that a challenge to the
allocation of estimated tax payments is not a challenge to the
“underlying liability,” which involves § 6330(c)(2)(B), but is
rather a challenge “relating to the unpaid tax” under
§ 6330(c)(2)(A).23 See supra section I.A.3. It says that Zuch’s
claim should be understood not as involving the net amount
she owes to the IRS, but rather the amount of tax she self-
reported on her amended return, separate from any payments
she reported or paid to satisfy that tax. Thus, the IRS asserts
that once there is no levy and no unpaid tax, the challenge to
the proper allocation of the payments is extinguished because
Zuch’s underlying tax liability, as the IRS defines it, is not
disputed.

       This is, to be frank, nothing but self-serving word play.
The IRS says an “underlying tax liability” must be understood
by looking only at the “total tax” line on a return, while turning
a blind eye to estimated tax payments listed on the very same
return. But Zuch’s “tax liability” did not exist in a vacuum,

       23
           See also I.R.S. Notice CC-2014-002 (May 5, 2014),
2014 WL 2003048 (explaining the IRS’s view that a challenge
to whether the IRS properly applied a payment is a challenge
to the unpaid tax under § 6330(c)(2)(A), subject to abuse-of-
discretion review, rather than a challenge to the underlying tax
liability under § 6330(c)(2)(B), subject to de novo review).

                               20
separate from payments she made on that liability.24 She
would only have an underlying liability if the tax was unpaid
after she filed her amended return.

       Perhaps because its meaning is clear, the term
“underlying tax liability” is not defined by statute, nor is there
any reference to its meaning in the relevant legislative history.
Montgomery v. Comm’r, 122 T.C. 1, 7 (2004). Yet, the Tax

       24
           Even the Greene-Thapedi court, see infra section
II.C.3, acknowledged that the Tax Court may need to consider
tax payments in reviewing a challenge to the underlying tax
liability:
       We do not mean to suggest that this Court is
       foreclosed from considering whether the
       taxpayer has paid more than was owed, where
       such a determination is necessary for a correct
       and complete determination of whether the
       proposed collection action should proceed.
       Conceivably, there could be a collection action
       review proceeding where … the proposed
       collection action is not moot and where pursuant
       to sec. 6330(c)(2)(B), the taxpayer is entitled to
       challenge “the existence or amount of the
       underlying tax liability.” In such a case, the
       validity of the proposed collection action might
       depend upon whether the taxpayer has any
       unpaid balance, which might implicate the
       question of whether the taxpayer has paid more
       than was owed.

Greene-Thapedi v. Comm’r, 126 T.C. 1, 11 n.19 (2006).

                               21
Court has been inconsistent in treating challenges to the IRS’s
application of payments and credits toward tax as, in some
instances, falling under § 6330(c)(2)(A), and in others as under
§ 6330(c)(2)(B). Compare Landry v. Comm’r, 116 T.C. 60, 62
(2001) (“[T]he validity of the underlying tax liability, i.e., the
amount unpaid after application of credits to which petitioner
is entitled, is properly at issue[.]” (emphasis added)), Boyd v.
Comm’r, 117 T.C. 127, 131 (2001) (same), and Dysle v.
Comm’r, T.C.M. (RIA) 2004-285, at 3 (same), with Melasky v.
Comm’r, 151 T.C. 89, 92 (2018) (“A question about whether
the IRS properly credited a payment is not a challenge to a tax
liability; i.e., the amount of tax imposed by the Code for a
particular year. It is instead a question of whether the liability
remains unpaid.” (emphases omitted)).

        The inconsistency is puzzling since it seems obvious
that a taxpayer’s “challenge[] to the existence or amount of the
underlying tax liability” involves whether and how much the
taxpayer has paid on that liability. § 6330(c)(2)(B). A dispute
over whether the IRS appropriately credited a taxpayer’s
account with estimated tax payments is, at bottom, a dispute
over the taxpayer’s underlying tax liability. The point is one
of plain English. Therefore, Zuch’s argument that her
estimated tax payments were erroneously allocated to her ex-
husband is a challenge to her underlying tax liability under
§ 6330(c)(2)(B).

       Nonetheless, even if the IRS is correct that Zuch’s claim
is properly characterized as a challenge to unpaid tax under
§ 6330(c)(2)(A), the IRS still loses.

                               22
              2.     Zuch’s Claim Is Not Moot Because the
                     IRS’s Setoffs Were Invalid.

        Because, as explained below, the Tax Court retains
jurisdiction to review setoffs, and the IRS cannot satisfy a tax
dispute by means of unlawful credit setoffs, Zuch’s tax
obligation was not properly set off, and she can challenge the
IRS’s application of the estimated payments.25

                      a)     The Tax Court has jurisdiction to
                             review setoffs.

        Under § 6402(a) of the Internal Revenue Code, the IRS
normally must refund to taxpayers any tax payments in excess
of their liability for that taxable year. But § 6402(a) allows the
IRS to apply any refund amount as a setoff against a taxpayer’s
unpaid tax debts, thus lowering or eliminating the amount of
the refund.

        The IRS contends that, in § 6512(b)(4), Congress
affirmatively stripped the Tax Court of its jurisdiction to
review setoffs. That provision says the “Tax Court shall have
no jurisdiction under this subsection to restrain or review any
credit or reduction made by the Secretary under section 6402.”
§ 6512(b)(4) (emphasis added). But, by its terms, subsection
6512(b) is limited to describing the Tax Court’s overpayment
and refund jurisdiction in a deficiency proceeding. See supra
Section I.A.1. It does not refer to CDP proceedings, so that

       25
         As noted previously, the IRS does not dispute that the
Tax Court had jurisdiction to hear Zuch’s claim regarding the
estimated tax payments at issue prior to the IRS’s credit setoffs,
see supra note 22, albeit under § 6330(c)(2)(A).

                               23
jurisdiction stripping provision is plainly inapplicable. It does
not affect Zuch’s case.26

       The IRS also asserts that Congress did not affirmatively
grant the Tax Court the power to review setoffs in a CDP case.
It may be that Congress has not explicitly granted the Tax Court
such power, but an implicit grant allows the Court to review
setoffs in any event.

        As the Tax Court has recognized, “[s]ection 6402(a)
contains a statutory counterpart” to the common law right of
offset. Boyd v. Comm’r, 124 T.C. 296, 300 (2005). And the
common law of setoffs “calls for judicial review of the merits
of the claim being invoked as an offset of a government debt.”
Agility Pub. Warehousing Co. K.S.C.P. v. United States, 969
F.3d 1355, 1365 (Fed. Cir. 2020). For example, the Federal
Circuit has “emphasized that the Debt Collection Act [of 1982,
Pub. L. No. 97-365, 96 Stat. 1749,27] was intended to

       26
          In its opening brief and at oral argument, the IRS
argued that § 6402(g) also barred judicial review of tax setoffs
under § 6402 “in the Tax Court or anywhere else.” (Answering
Br. at 22; Oral Arg. Trans. at 85-87.) It retreated from that
position in its supplemental briefing.
       27
         Akin to § 6402(a), the Debt Collection Act provides,
in relevant part, that the government may collect an
outstanding debt owed to the United States “by [means of]
administrative offset,” 31 U.S.C. § 3716(a), which means to
“withhold[] funds payable by the United States … to … a
person to satisfy” a debt that the person owes the government,
id. § 3701(a)(1).

                               24
supplement, and not displace, the government’s pre-existing
offset rights under the common law.” McCall Stock Farms,
Inc. v. United States, 14 F.3d 1562, 1566 (Fed. Cir. 1993).
“Congress understood that to trigger the [Debt Collection
Act’s] offset provision, a pre-existing, valid debt must first be
owed to the United States.” Agility, 969 F.3d at 1364.
Accordingly, the court reasoned that the Act “cannot be
reasonably interpreted as shielding from judicial review the
United States’ determination that a pre-[existing] debt is
owed.” Id.

        Because § 6402 carries forward the common law of
setoffs, and because that section says nothing about
disallowing Tax Court offset review (as Congress has
expressly and specifically stated elsewhere in the Tax Code),
it follows that the Court has the power to review setoffs in a
CDP proceeding to determine whether there was a pre-existing,
valid debt that was owed to the IRS.

                      b)     The IRS setoffs violated setoff
                             common law and Article III
                             mootness principles and are thus
                             invalid.

       The “right of setoff (also called ‘offset’) allows [parties]
that owe each other money to apply their mutual debts against
each other, thereby avoiding ‘the absurdity of making A pay B
when B owes A.’” Citizens Bank of Md. v. Strumpf, 516 U.S.
16, 18 (1995) (quoting Studley v. Boylston Nat’l Bank of Bos.,
229 U.S. 523, 528 (1913)). The right to apply mutual debts to
offset each other does not apply when the debts are disputed.
Accordingly, a creditor cannot set off a disputed debt with an
undisputed one. That is a matter of black letter law. Setoff,

                                25
Black’s Law Dictionary (11th ed. 2019) (“Set off is a mode of
defence by which the defendant acknowledges the justice of the
plaintiff’s demand, but sets up a demand of his own against the
plaintiff, to counter-balance it either in whole or in part.”
(emphasis added) (quoting Oliver L. Barbour, A Treatise on
the Law of Set Off 3 (1841))); 15 Williston on Contracts
§ 44:34 (West 2023) (explaining that “mutual debts do not
extinguish one another … either automatically or by an
election or other action by one party; rather, the agreement of
the parties or judicial action is required”). As the Seventh
Circuit has noted:

       Courts regularly require the payment of
       undisputed debts while the parties litigate their
       genuine disputes. This reflects the limits of the
       common law right of set-off between debts.
       Setoffs are permitted only when the debts are
       “mutual”, and debts arising at different times out
       of different circumstances are not mutual.

Soo Line R.R. Co. v. Escanaba & Lake Superior R.R. Co., 840
F.2d 546, 551 (7th Cir. 1988) (internal citation omitted)
(Easterbrook, J.).

        To the extent that the IRS’s argument is that § 6402(a)
rescinds the common law governing setoffs, the answer is no,
it does not. Nowhere in the text is there any indication of that,
and even the IRS did not seem to think it so until the middle of
this appeal. It explained in its initial brief that § 6402(a) “is a
tax-specific codification of the common-law right of
setoff[.]” (Answering Br. at 21.) Perhaps, as a result of being
pressed on that issue at oral argument, the IRS now professes
a different view – that “setoffs authorized by § 6402(a) do not

                                26
need to follow any common-law principles regarding
setoffs[.]” (Supp. Br. at 13.) The change in position may be
convenient but it is ill-considered and unpersuasive.

       A “longstanding [rule] is … that statutes which invade
the common law are to be read with a presumption favoring the
retention of long-established and familiar principles, except
when a statutory purpose to the contrary is evident.”28 United
States v. Texas, 507 U.S. 529, 534 (1993) (cleaned up). And
to “abrogate a common-law principle, the statute must speak
directly to the question addressed by the common
law.” Id. (internal quotation marks omitted). Section 6402(a)
does not do that.

       Although § 6402(a) allows the IRS to credit
overpayments to “any liability” of the taxpayer, reading that
provision to allow a disputed debt to be set off has the infirmity
of presupposing that the taxpayer in fact has some liability. In
other words, the reading that the IRS pushes is an exercise in

       28
           Although it is not essential to our holding, nothing in
the legislative history of § 6402(a) suggests that its purpose
was to overrule the common law. Section 252 of the Revenue
Act of 1918 appears to be the earliest forerunner of the setoff
provision that is now in § 6402(a), and only a single sentence,
buried in a House Ways and Means Committee Report for that
old act, suggests the purpose for the provision: “It is believed
that this provision will materially assist in the settlement of
transactions between the taxpayer and the Government.” H.R.
Rep. No. 65-767, at 15 (1918). If anything, allowing the
government to set off disputed debts hinders, rather than
assists, settlements, as this case demonstrates.

                               27
pure bootstrapping. Zuch alleges that she does not have any
liability, and it does nothing to advance the analysis of this case
for the IRS to simply declare that she does and then say it is
accordingly allowed to effect a setoff. The law is exactly to
the contrary. The whole point of Congress’s authorization of
CDP hearings is to give taxpayers “protections in dealing with
the IRS that are similar to those they would have in dealing
with any other creditor.” S. Rep. No. 105-174, at 67. Allowing
offsets such as the ones here would be an affront to the entire
purpose of CDP hearings. We instead “take it as given that
Congress has legislated with an expectation that the [common
law] principle[s] [of setoff] will apply[.]”29 Astoria Fed. Sav.
& Loan Ass’n v. Solimino, 501 U.S. 104, 108 (1991) (cleaned
up).

        Beyond violating the common law and the clear
legislative intent to preserve taxpayer rights in CDP hearings,
the setoffs here violate Article III mootness principles. “One
scenario in which we are reluctant to declare a case moot is
when the defendant argues mootness because of some action it
took unilaterally after the litigation began.” Hartnett, 963 F.3d

       29
          Treas. Reg. § 301.6330-1(g)(2), Q&A (G)(3) (2006)
provides that the IRS may offset overpayments against the
unpaid tax in a CDP proceeding during the pendency of the
CDP hearing and appeals process. To the extent that regulation
provides that the IRS can take an undisputed debt (i.e., an
overpayment of taxes, giving rise to an obligation by the
government to provide a refund) and apply it against a disputed
one (like the alleged tax liability here), such an interpretation
of the statute is untenable. Nothing in the plain text of
§ 6402(a) allows for such a meaning.

                                28
at 306; see also Vigon v. Comm’r, 149 T.C. 97, 104 n.3 (2017)
(the IRS “may not unilaterally oust the Tax Court from
jurisdiction – neither in a deficiency case nor in a CDP case”
(internal quotation marks omitted)). That is what we are faced
with here. It is well established that “a defendant’s voluntary
cessation of a challenged practice does not deprive [us] of [our]
power to determine the legality of the practice.” Friends of the
Earth, Inc. v. Laidlaw Env’t Servs. (TOC), Inc., 528 U.S. 167,
189 (2000) (internal quotation marks omitted) (emphasis
added). It is no stretch to likewise conclude that, as a general
matter, and when an avenue of relief remains, a defendant
cannot unilaterally complete a challenged practice to moot a
case either.

      In short, because the IRS’s setoffs were invalid and
without legal effect, Zuch’s claims are not moot, although
Zuch’s money is, at least for the time being, in the
government’s pocket.

              3.     Zuch’s Claim Is Also Live Under
                     § 6330(c)(2)(B) Because the Tax Court
                     Retained Jurisdiction to Review Her
                     Liability.

       If we view Zuch’s claim as a challenge to liability under
§ 6330(c)(2)(B), we reach the same conclusion. Zuch’s
underlying tax liability was very much in dispute when the IRS
withdrew its levy because it had already taken her money
without her consent, and it remained a live issue based on (1)
a plain reading of the statute, (2) properly read (and non-
erroneous) Tax Court precedent, (3) the Tax Court’s
independent jurisdiction over liability, (4) the Tax Court’s

                               29
ability to declare Zuch’s rights, and (5) the potential preclusive
effect of such a declaration. We address each issue in turn.30

                      a)     Nothing in the plain text of § 6330
                             suggests a taxpayer’s challenge to
                             tax liability under § 6330(c)(2)(B)
                             can be rendered moot by the
                             unilateral action of the IRS.

        Section 6330 allows a taxpayer to raise two categories
of issues at a CDP hearing. First, § 6330(c)(2)(A) permits a
taxpayer to raise “any relevant issue relating to the unpaid tax
or the proposed levy[.]” Issues under that provision,
accordingly, must relate to a tax that is currently unpaid or a
levy that is still being proposed. But § 6330(c)(2)(B), the
provision under which Zuch brought her challenge, permits a
taxpayer to “also raise at the hearing challenges to the
existence or amount of the underlying tax liability … if the
person did not receive any statutory notice of deficiency for
such tax liability or did not otherwise have an opportunity to
dispute such tax liability.” (emphasis added). Zuch meets
those prerequisites, as the IRS has admitted. Unlike challenges
under § 6330(c)(2)(A), the rights provided under
§ 6330(c)(2)(B) are not restricted by any requirement that they
relate to an unpaid tax or proposed levy. Consequently, there
is nothing in § 6330(c)(2)(B) to suggest that a taxpayer’s right
to challenge the existence or amount of her underlying tax

       30
         This discussion is only applicable to taxpayers who
did not receive a notice of deficiency or otherwise have a
previous opportunity to challenge their underlying tax liability.

                               30
becomes moot once the levy is no longer being enforced or the
tax is satisfied.

        We part ways here with the Fourth and D.C. Circuits.
The Fourth Circuit has held that the phrase “underlying tax
liability” in § 6330(c)(2)(B) must be read in the “specific
context [of] the IRS’s attempt to collect via lien or levy.”
McLane v. Comm’r, 24 F.4th 316, 319 (4th Cir. 2022) (internal
quotation marks omitted). With that limitation in mind, it
reasoned that the Tax Court does not have jurisdiction “over
independent overpayment claims when the collection action no
longer exists.” Id. Similarly, the D.C. Circuit reasoned that
“all the relief that section 6330 authorizes the tax court to
grant” is relief from levy and that, consequently, there is “no
appropriate course of action for the Tax Court to take but to
dismiss [a case] as moot” when the IRS withdraws its proposed
levy. Willson v. Comm’r, 805 F.3d 316, 321 (D.C. Cir. 2015)
(internal quotation marks omitted).31

       While it is true that the “plainness or ambiguity of
statutory language is determined by reference to … the specific
context in which that language is used, and the broader context

       31
           In addition to McLane and Willson, the IRS also relies
on Ruesch v. Commissioner, 805 F. App’x 12, 14 (2d Cir.
2020), to argue that a taxpayer can challenge her underlying
tax liability only when the IRS is actively seeking to levy. But
in Ruesch, the issue before us was never in play. The Tax
Court there held that it lacked jurisdiction over the dispute
because the IRS had not issued the taxpayer a valid notice of
determination, not because of its interpretation of
§ 6330(c)(2)(B). Id.

                               31
of the statute as a whole[,]” Robinson v. Shell Oil Co., 519
U.S. 337, 341 (1997), we do not read “underlying tax liability”
so narrowly. Section 6330 is not directed toward helping the
IRS collect taxes via lien or levy. On the contrary, by its terms
it provides taxpayers a forum to challenge a lien or levy and
accounts for different circumstances in which that need may
arise – including the circumstance in which the taxpayer had
no opportunity to challenge her underlying liability.

        As the Tax Court has explained, the broader purpose of
§ 6330 in the overall statutory scheme is rather straightforward
– to “collect the correct amount of tax.” Montgomery, 122
T.C. at 10 (emphasis added) (“In view of the statutory scheme
as a whole, we think the substantive and procedural protections
contained in sections 6320 and 6330 reflect congressional
intent that the Commissioner should collect the correct amount
of tax, and do so by observing all applicable laws and
administrative procedures.”); see also S. Rep. No. 105-174, at
67 (“[F]ollowing procedures designed to afford taxpayers due
process in collections will increase fairness to taxpayers.”).
Allowing a taxpayer to challenge her underlying tax liability in
a context like the present case, even after the IRS ceases
collection, not only comports with the text of § 6330 but
supports that objective. It also comports with fundamental
notions of due process, as the taxpayer in that scenario
necessarily has an independent right to challenge her tax
liability in a CDP hearing.32 See supra section I.A.2.

       32
           If the IRS could impose liability without sending a
notice of deficiency, and could both offset the purported
liability so as to cease collection and moot any CDP challenge
based on its cessation, that taxpayer would be denied any pre-

                               32
       After the IRS Office of Appeals considers the
taxpayer’s challenges at the CDP hearing and issues its
determinations as to the levy and the taxpayer’s liability, the
Tax Court obtains jurisdiction to review those determinations.
§ 6330(d)(1) (“The person may … petition the Tax Court for
review of such determination (and the Tax Court shall have
jurisdiction with respect to such matter).” (emphasis added)).
Accordingly, the Tax Court’s “jurisdiction is not limited to the
notice of [the proposed collection action] that triggered th[e]
collection proceeding but rather comprehends all the issues
that Congress allowed to be included in ‘such matter.’” Vigon,
149 T.C. at 107. “[S]uch matter” includes a challenge to what
the IRS asserts to be the underlying tax liability.33 Id.

      In short, there is nothing in the plain text of § 6330 that
suggests a taxpayer’s challenge to the tax liability at issue in

deprivation opportunity to contest what the IRS says she owes.
Because that taxpayer may not be able to initiate a deficiency
proceeding or carry forward her CDP action, she also could be
denied any Article III forum in which to contest her liability.
This is true before collection, and it may also be true as a
general matter. Here, for example, it is not clear whether Zuch
would be able to challenge her tax liability at all (outside of a
live CDP proceeding) because her post-collection claim might
be time-barred. See infra note 41.
       33
         When “the validity of the underlying tax liability is
properly at issue, the Court will review the matter on a de novo
basis.” Sego v. Comm’r, 114 T.C. 604, 610 (2000).

                               33
an action under § 6330(c)(2)(B) can be rendered moot by the
unilateral action of the IRS.

                     b)     Greene-Thapedi’s reasoning was
                            faulty.

       Nevertheless, the Tax Court here held otherwise. It
dismissed Zuch’s case as moot “[b]ecause there [was] no
unpaid liability for the determination year upon which a levy
could be based, and [the IRS was] no longer pursuing the
proposed collection action[.]” (App. at 7-8.) That dismissal
followed the reasoning of an earlier case called Greene-
Thapedi v. Commissioner, 126 T.C. 1 (2006), with facts very
similar to the case before us now. There, the IRS notified a
taxpayer that it intended to levy on her property to collect a
disputed tax liability. Id. at 2-3. The taxpayer then challenged
the tax liability in a CDP hearing. Id. at 3. The IRS Office of
Appeals sustained the levy, and the taxpayer petitioned the Tax
Court for review. Id. After she filed her petition, the IRS used
the taxpayer’s overpayment in a later year to fully satisfy the
disputed tax liability. Id. at 4. The Tax Court then dismissed
the taxpayer’s proceeding as moot, holding that “whatever
right petitioner may have to challenge the existence and
amount of her underlying tax liability in this proceeding arises
only in connection with her challenge to the proposed
collection action.” Id. at 8. And if “the proposed levy is moot,”
then the taxpayer “has no independent basis to challenge the
existence or amount of her underlying tax liability” in her
proceeding at the Tax Court.34 Id.

       34
         The Tax Court also denied a refund to the taxpayer
because “section 6330 does not expressly give [the Tax Court]

                               34
        To arrive at that conclusion, the Greene-Thapedi Court
relied on two inapposite and non-precedential Tax Court cases,
Chocallo v. Commissioner, T.C.M. (RIA) 2004-152, and
Gerakios v. Commissioner, T.C.M. (RIA) 2004-203.35 See id.
at 7-8. In both of those cases, the taxpayer was not asserting
any ongoing challenge to the tax liability underlying the CDP
proceeding when the Tax Court declared the matter moot. In
Chocallo, the IRS discovered during the CDP hearing that it
had incorrectly assessed the taxpayer’s liability and so it
refunded the amount already collected. Chocallo at 2. At that
point, the IRS moved to dismiss the case as moot. Id. The
taxpayer then filed a “Supplemental Motion for Sanctions,
Contempt and For Other Relief[,]” requesting that the IRS
employees who handled her case be criminally prosecuted and
claiming damages for alleged wrongs committed by IRS
employees. Id. Thus, the taxpayer was seeking damages; she
was no longer contesting the underlying tax liability that gave
rise to the suit. In Gerakios, the taxpayer voluntarily paid his
tax liabilities after a CDP hearing. Gerakios at 1. He “did not
dispute his underlying liabilities.” Id. at 1 n.1. He paid the tax
because the tax lien was hindering his ability to refinance his
home. Id. at 1. He sought review in the Tax Court claiming

jurisdiction to determine an overpayment or to order a refund
or credit of taxes paid.” Greene-Thapedi, 126 T.C. at 8.
       35
         The Tax Court issues memorandum opinions, like
Chocallo and Gerakios, which are considered non-binding
precedent. See Dunaway v. Comm’r, 124 T.C. 80, 87 (2005)
(“[M]emorandum opinions of this Court are not regarded as
binding precedent.”).

                               35
only that IRS “employees mistreated him [and] violated his
civil rights, and that his credit rating was adversely affected by
the filing of the lien.” Id. Since neither case involved a
taxpayer who was then challenging an underlying tax liability,
as is the case here and was in Greene-Thapedi, the Greene-
Thapedi court’s reliance on Chocallo and Gerakios was
misplaced.

        The Tax Court’s own precedent since Greene-Thapedi
suggests that the case was wrongly decided. In Vigon v.
Commissioner, decided in 2017, the Tax Court held that the
IRS cannot unilaterally moot a case by withdrawing its
proposed collection activity if the Tax Court has already
“obtained jurisdiction of a liability challenge when the petition
was filed.” 149 T.C. at 107. That’s because the “liability issue
may remain even after the collection issues have been resolved
or become moot.” Id. at 105. To be sure, a footnote in Vigon
distinguished it from Greene-Thapedi because Greene-
Thapedi “involved a liability that had been satisfied” and “not
merely abated,” as in Vigon. Id. at 105 n.4. But there is
nothing in § 6330 to suggest that distinction. Once the Tax
Court has jurisdiction to resolve a disputed tax liability, it does
not lose that jurisdiction simply because the IRS decides to
satisfy the asserted liability with the taxpayer’s own funds.

         Indeed, even the IRS used to recognize that. In a notice
to its attorneys in 2003, it explained that “[a] motion to dismiss
for mootness is inappropriate if petitioner is disputing the
existence or amount of the liability .… Even if the liability has
been paid, petitioner may still dispute the liability[.]” I.R.S.
Notice CC-2003-016 (May 29, 2003), 2003 WL 24016801

                                36
(emphasis added).36 That is the correct view, and the IRS
should have stuck with it. Greene-Thapedi’s holding that a
taxpayer may only challenge her underlying tax liability if
there remains an unpaid tax or a proposed levy is erroneous.37

       36
          The IRS “Chief Counsel is appointed by the President
of the United States” and is the “chief legal advisor to the IRS
Commissioner on all matters pertaining to the interpretation,
administration and enforcement of the Internal Revenue
Laws[.]”     Office of Chief Counsel At-a-Glance, IRS,
https://www.irs.gov/about-irs/office-of-chief-counsel-at-a-
glance [https://perma.cc/63NC-KGG9].            Chief Counsel
Notices “are directives [to IRS attorneys and staff] that provide
interim guidance, furnish temporary procedures, describe
changes in litigating positions, or announce administrative
information.”        Chief Counsel (CC) Notices, IRS,
https://www.irs.gov/chief-counsel-notices
[https://perma.cc/S68G-5MA8].
        The IRS updated its position with another notice in
2005, stating, “[a] motion to dismiss on ground of mootness …
should be filed if the tax liability has been paid fully and the
taxpayer raises no other relevant issues.” I.R.S. Notice CC-
2005-008 (May 19, 2005), 2005 WL 1259554. Zuch’s claim
that the estimated tax payments were applied incorrectly is
certainly a relevant issue to whether the Tax Court CDP
proceeding should remain open.
       37
          In a footnote in Ahmed v. Commissioner, 64 F.4th
477, 487 n.10 (3d Cir. 2023), we stated that a petitioner’s lien-
withdrawal request was moot because the IRS had already
released its liens once the taxpayer remitted a deposit to the
IRS. But the taxpayer in Ahmed never challenged his

                               37
                     c)     The Tax Court need not have
                            repayment or refund jurisdiction
                            for there to be a live dispute.

       In Greene-Thapedi, the Tax Court said that, once a levy
was removed and the tax was paid, it could not provide any
other relief to the taxpayer because “section 6330 does not
expressly give [the] Court jurisdiction to determine an
overpayment or to order a refund or credit of taxes paid.” 126
T.C. at 8. It reasoned that full payment rendered any
conclusion it might make as to liability “at best, … an advisory
opinion.” Id. at 13.

       A leading tax-procedure treatise, noting that “[m]any
scholars and practitioners believe that Greene-Thapedi reached
an incorrect conclusion[,]” explains how the Tax Court got it
wrong:

       [A] [t]axpayer’s full payment of the previously
       unpaid tax liability should not render the entire
       case “moot” if the Tax Court otherwise has
       jurisdiction over the underlying liability. Full
       payment does not necessarily resolve the dispute
       as the Tax Court held. The question of whether
       a dispute remains is separate from the question
       of whether the Tax Court can grant a refund.
       Even if granting a refund is barred, the Tax Court

underlying tax liability in the CDP hearing, so that case has no
bearing here.

                              38
       could still determine the correct liability as part
       of its CDP determination.

Michael I. Saltzman & Leslie Book, IRS Practice &
Procedure ¶ 14B.16[4][a] (West 2023).

        We agree. Notwithstanding any overpayment or refund
jurisdiction, a live dispute as to underlying liability does not
become moot based upon payment of the “unpaid” tax. Section
6330 grants the Tax Court jurisdiction to review a CDP
determination regarding a taxpayer’s properly raised challenge
to the existence or amount of her underlying tax liability, full
stop. That jurisdiction does not change until the dispute is
resolved. See Naftel v. Comm’r, 85 T.C. 527, 530 (1985)
(“[G]enerally, once a petitioner invokes the jurisdiction of the
Court, jurisdiction lies with the Court and remains unimpaired
until the Court has decided the controversy.”). Therefore,
overpayment or refund jurisdiction is not essential to having a
live controversy.38

                     d)     A Tax Court determination of
                            Zuch’s right to the estimated
                            payments would not be an
                            impermissible      declaratory
                            judgment.

      Despite all of the foregoing, the IRS argues that a Tax
Court determination of the proper allocation of the tax
payments in a CDP hearing would be an improper declaratory

       38
          Accordingly, we need not, and do not, reach any
conclusion about whether the Tax Court has overpayment or
refund jurisdiction in a context like this.

                               39
judgment. (Supp. Br. at 15 (“Nothing in the Code or Section
6330 authorizes the Tax Court to issue advisory opinions or
declaratory judgments in CDP cases.”).) The Declaratory
Judgment Act allows any United States court to render a
declaratory judgment when there is a case or controversy,
“except with respect to Federal taxes[.]”39 28 U.S.C.
§ 2201(a). If that were all that one knew of the Act, the IRS’s
argument would be more persuasive. But, although the Act is
broadly worded, courts have traditionally construed it to be
coterminous with the Tax Anti-Injunction Act, and that
undermines the agency’s position.40

       The Tax Anti-Injunction Act generally provides that
there can be “no suit for the purpose of restraining the
assessment or collection of any tax[.]” § 7421(a). But it also
provides an exception for a request under § 6330(e)(1) to
enjoin a levy via a CDP hearing and any appeals. Id.
(prohibiting suits to restrain assessment or collection of a tax
“[e]xcept as provided in section[] … 6330(e)(1),” among
others). Consequently, the Tax Anti-Injunction Act is not
violated when a levy is stayed during the pendency of a CDP
hearing. Furthermore, because the Tax Anti-Injunction Act
and the Declaratory Judgment Act are coterminous, the phrase
“‘with respect to Federal taxes’ [in the Declaratory Judgment
Act] means ‘with respect to the assessment or collection of

       39
         The Declaratory Judgment Act carves out some tax
exceptions that are not relevant here.
       40
         See Z St., Inc. v. Koskinen, 44 F. Supp. 3d 48, 56
(D.D.C. 2014) (collecting cases from the Fourth, Sixth,
Seventh, Ninth, Tenth, and D.C. Circuits).

                              40
taxes.’” Cohen v. United States, 650 F.3d 717, 727 (D.C. Cir.
2011).

       Thus, when a court has the power to enjoin a levy under
the Tax Anti-Injunction Act, it also has the power to declare
the rights of the parties in that proceeding without violating the
Declaratory Judgment Act. As the D.C. Circuit has explained,

       a functional concern exists with construing the
       [Declaratory Judgment Act]’s exception to bar
       relief otherwise allowed under the [Tax Anti-
       Injunction Act].        The court would have
       jurisdiction to enjoin the parties appearing before
       it, but not to declare their rights. This defies
       common sense, however, “since an injunction of
       a tax and a judicial declaration that a tax is illegal
       have the same prohibitory effect on the federal
       government’s ability to assess and collect taxes.”

Id. at 730 (quoting Wyoming Trucking Ass’n, Inc. v. Bentsen,
82 F.3d 930, 933 (10th Cir. 1996)); see also Tomlinson v.
Smith, 128 F.2d 808, 811 (7th Cir. 1942) (“[T]he jurisdiction
of the court to issue a restraining order is … determinative of
its jurisdiction to declare the rights of the parties relative
thereto. It is unreasonable to think that a court with authority
to issue a restraining order is without power to declare the
rights of the parties in connection therewith.”).

       Because the Declaratory Judgment Act does not bar the
Tax Court from declaring the rights to estimated payments at
issue in a CDP hearing, there is a live case and controversy,
and a Tax Court determination of Zuch’s tax liability would
not be an improper declaratory judgment.

                                41
                     e)     The IRS has not met its burden to
                            show that no relief would be
                            available to Zuch if the Tax Court
                            declared she had a right to the
                            estimated payments.

        To show mootness, the IRS must prove that Zuch could
have no relief whatsoever if the Tax Court were to declare that
she had a right to the estimated payments. Given what we have
already said here, to carry its heavy burden, the IRS must prove
that a declaration by the Tax Court of Zuch’s rights in her CDP
case would not have preclusive effect on a future refund claim.
In a supplemental brief, the IRS has taken the position that such
a determination would not have any preclusive effect, but it
cites no relevant authority to support that proposition. And,
indeed, the IRS Office of Chief Counsel has at least twice
issued notices indicating the opposite. See I.R.S. Notice CC-
2006-005 (Nov. 21, 2005), 2005 WL 3272051 (“A judicial
determination in a CDP case of a taxpayer’s underlying tax
liability for a taxable year (which may be less than the
taxpayer’s payments for that year) may be subject to estoppel
principles in a subsequent refund action[.]”); I.R.S. Notice CC-
2009-010 (Feb. 13, 2009), 2009 WL 497736 (“A judicial
determination of the amount of the underlying tax liability in a
CDP case may, however, estop both parties from contesting the
amount of that same liability in a subsequent refund
action[.]”).41 Accordingly, the IRS has not met its heavy

       41
         At argument, the IRS asserted that any refund claim
Zuch had is barred by the statute of limitations in § 6511. But
in its supplemental brief, the IRS now says that it “has

                               42
determined that she may still be able to file a refund suit in the
district court or Court of Federal Claims.” (Supp. Br. at 3.) It
explains that Zuch did not receive the required two-year notice
of disallowance that would have triggered the two-year
limitations period for filing a refund suit under § 6532(a)(1).
Because of the Tucker Act, however, it is unclear whether a
court will hear Zuch’s refund claim. That Act bars any suit
against the United States “unless the complaint is filed within
six years after the right of action first accrues.” 28 U.S.C.
§ 2401(a). The Court of Federal Claims has longstanding
precedent that § 6532 preempts the Tucker Act’s general
statute of limitations. Detroit Tr. Co. v. United States, 130 F.
Supp. 815, 818 (Ct. Cl. 1955). And the IRS has repeatedly
opined that the Tucker Act does not apply to tax refund claims.
Rev. Rul. 56-381, 1956-2 C.B. 953; I.R.S. CCA 201044006
(Nov. 5, 2010), 2010 WL 4384169; I.R.S. Notice CC-2012-
012 (Jun. 1, 2012), 2012 WL 2029785; I.R.S. IRM 34.5.2.2(5)
(Apr. 22, 2021), https://www.irs.gov/irm/part34/irm_34-005-
002 [https://perma.cc/46FG-E3TE]. If that were true, Zuch
may not be barred from filing a refund claim because the two-
year limitations period under § 6532 has not been triggered.
But three district courts have held that the six-year limitations
period is the outer limit for any claims against the government.
See Breland v. United States, No. 10-cv-00007, 2011 WL
4345300, at *6-7 (N.D.N.Y Sept. 15, 2011); Wagenet v. United
States, No. 8-cv-00142, 2009 WL 4895363, at *3 (C.D. Cal.
Sept. 14, 2009); Finkelstein v. United States, 943 F. Supp. 425,
432 (D.N.J. 1996). Under that view, Zuch’s refund suit would
be time-barred because six years have passed since her right
accrued to file a refund claim. We do not reach any conclusion

                               43
burden to show that Zuch would have no relief whatsoever if
the Tax Court were to declare she has a right to the estimated
tax payments. And, of course, an agency of the United States,
having received a court order declaring a citizen’s rights, is
expected to either appeal it or abide by it.42

III.   CONCLUSION

      For the foregoing reasons, we will vacate the Tax
Court’s order of dismissal and remand for that tribunal to
determine whether Zuch is entitled to receive credit for any
amount of the estimated tax payments at issue.

today concerning the viability of a refund claim. She may have
a viable claim, and that is enough for today’s purposes.
       42
          If enforcement were needed, requiring a taxpayer to
go to a different court to enforce a right judicially determined
in the Tax Court is consistent with historical practice. In fact,
for over sixty years, the Tax Court had jurisdiction to
determine a taxpayer’s overpayment in a deficiency
proceeding but did not have authority to order a refund
consistent with that determination. See Greene-Thapedi, 126
T.C. at 9 (explaining that the Tax Court had overpayment, but
no refund, jurisdiction from 1926 until the enactment of
§ 6512(b) in 1988).

                               44