The Commissioner v. Zuch ruling from the U.S. Supreme Court is sending a clear message to taxpayers and estate administrators: timing is imperative when responding to IRS collection efforts. For individuals working with an estate tax planning lawyer, understanding the impact of this decision is paramount to avoid losing valuable appeal rights.
On June 12, 2025, the Supreme Court ruled that the U.S. Tax Court no longer has jurisdiction to hear collection due process (CDP) appeals once the IRS halts levy actions. This decision has significant consequences for trusts, estates, and high-net-worth individuals facing IRS assessments or audits. Many taxpayers assume that if the IRS withdraws or pauses collection efforts, they still have time to challenge the liability. However, the Court’s decision clarifies that once the levy stops, so does the opportunity to pursue a CDP appeal.
What The Court Ruled In Commissioner V. Zuch
The facts of the case center on procedural timing. In Commissioner v. Zuch, the taxpayer received a notice of intent to levy from the IRS for outstanding tax liabilities. In response, the taxpayer requested a CDP hearing to contest the collection. But before the hearing took place, the IRS voluntarily stopped pursuing the levy. Despite this, the taxpayer continued with the appeal, believing they retained the right to challenge the liability through the Tax Court.
The Supreme Court ruled otherwise. The majority opinion made it clear that the Tax Court loses jurisdiction to hear a CDP appeal once the levy is no longer active. Whether the IRS halts collection voluntarily or through other means, the taxpayer’s opportunity for judicial review ends with the cessation of enforcement action. This creates a narrow window for taxpayers to act, particularly for those involved in estate administration, trust management, or large asset transfers where IRS disputes are common.
Why This Matters For Estate Planning And Tax Disputes
Trustees, executors, and high-net-worth individuals often find themselves managing difficult tax issues during estate administration. IRS assessments, audits, or levy actions can arise unexpectedly, and the legal process can be intimidating for those unfamiliar with strict procedural deadlines. The Zuch decision adds an additional layer of urgency. Taxpayers who delay responding to levy notices or who believe they can negotiate informally before requesting a hearing risk losing their ability to challenge the IRS entirely. Once the levy ends, so does the legal avenue to dispute the collection, even if the underlying tax assessment remains unresolved.
For families dealing with estate taxes, trusts, or asset transfers, working closely with an estate tax planning lawyer is imperative to protect financial interests and minimize exposure to IRS enforcement.
How To Protect Rights And Respond Effectively
Given this new precedent, proactive planning is the best defense. Taxpayers and estate representatives should:
- Respond immediately to IRS notices regarding levies or collections
- Engage legal counsel before communicating with the IRS
- Document all correspondence and deadlines carefully
- Understand that informal agreements may not preserve appeal rights
- Seek strategic tax planning early in the estate process to reduce risk
Failing to act promptly can result in lost opportunities to resolve disputes, higher tax burdens, and unnecessary legal complications.
Our professionals believe staying informed about legal developments is an integral aspect of effective estate planning. If your law firm advises clients on tax strategies, trusts, or estate administration, consider listing your practice with Estate Planning Pros to stay connected with others in the field and provide trusted guidance during IRS disputes.