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Does Boechler Change Tax Court Refund Jurisdiction in CDP?

Posted on Apr. 21, 2023

I’ve written quite a bit (posts here, here and here) about how I think you should be able to get some “refunds” in CDP cases, despite the holding of Greene-Thapedi and its progeny. One thing I didn’t touch on in those posts was whether the Supreme Court decision in Boechler changed the jurisdictional equation.

Fortunately, that argument was recently raised. Unfortunately, it was effectively ignored by the 9th Circuit. More unfortunate still, it was raised in the Brown v. Commissioner saga, which has yielded a well-spring of taxpayer adverse decisions. And the hits keep coming…


They say bad facts make bad law, and I’d say something similar about “bad taxpayers.” I don’t know who exactly this particular Michael D. Brown is but owing approximately $50 million in back taxes usually doesn’t play well. I can’t help but see that as a backdrop to some of the opinions that have been rendered in his line of cases… but more on that later.

As a brief refresher, Mr. Brown submitted an Offer in Compromise (Offer) to settle his back taxes for a lump-sum payment of $400,000. Because he is over 250% of the Federal Poverty Line, his Offer had to be accompanied with a 20% payment -commonly referred to as a “TIPRA” payment, after the bill that enacted it.

The IRS “rejected” (or “returned,” his Offer… maybe the distinction matters?) but pocketed the 20% TIPRA payment. Now Mr. Brown wants his $80K back. The Tax Court had already found that the return/rejection of the Offer was not an abuse of discretion, and the 9th Circuit agreed. But there was still an open question as to whether the Tax Court had jurisdiction to order a refund of the TIPRA payment. The 9th Circuit remanded to the Tax Court on exactly that issue.

Of course, on that question the Tax Court found that it is “a court of limited jurisdiction.” (T.C. Memo. 2021-112.) Hence, no jurisdiction over refunding the TIPRA payment. Everyone can mark that off on their bingo sheet.

As an aside, I’d note that the Tax Court also makes a determination about the character of the TIPRA payment (i.e. “not a deposit”) and whether on the merits it should be refunded. The 9th Circuit blesses that determination as well, which I take issue with and will go into more detail on in my next post.

For now, let’s focus on how heavily Boechler, a decision explicitly covering jurisdictional statutes issued five months prior to the Tax Court ruling in Brown figured into the equation. How did the Tax Court address this monumental Supreme Court decision explicitly dealing with the Tax Court’s CDP jurisdiction in its opinion regarding the Tax Court’s CDP jurisdiction?

[Alec Trebek Voice]: “Answer: Not at all.”

Well, you might say, maybe the issue wasn’t raised. And indeed it wasn’t. The brief for Brown had already been submitted prior to Boechler. You can’t fault the Tax Court for not considering an issue that wasn’t raised.

But what about with the 9th Circuit on appeal?

Brown explicitly did raise the Boechler issue in its briefing with the 9th Circuit via FRAP Rule 28j and also as part of oral arguments. How much did the 9th Circuit address this monumental Supreme Court decision explicitly dealing with the Tax Court’s CDP jurisdiction in its opinion regarding the Tax Court’s CDP jurisdiction?

[Alec Trebek Voice]: “Answer: Not at all.” Daily double!

Thus, the request for an en banc hearing to revisit the issue. And the rather terse shut-down of that request: a one-page denial noting that of the entire bench “no judge has requested a vote on whether to rehear the matter en banc.”

So we don’t really know how the 9th Circuit thinks Boechler applies to the question of the Tax Court’s refund jurisdiction. Though I suppose we can infer that the 9th Circuit simply thinks that Boechler doesn’t apply at all. Is that the correct reading of Boechler?

Read narrowly, Boechler looks at the distinction between claims processing rules and jurisdictional rules. It deals with procedural questions of jurisdiction: when you can get into court, not what powers a court can exercise once you’re there. On this reading, it is fair to say that Boechler is wholly irrelevant to the issues in Brown.

That is my Cliff’s Notes version of Boechler and jurisdiction. It would likely get you a D- on any law school exam. You’d be better off reading the actual opinion (it isn’t that long), or better yet Carl’s multiple posts on the topic.

Counsel for Brown urges a broader reading. Per the motion for rehearing, Brown argues that Boechler “changed the jurisdictional inquiry. The old platitude stated that Tax Court lacked jurisdiction over a matter unless some statute expressly granted it. Boechler establishes the new standard that Tax Court has jurisdiction if a predicate notice has been issued unless some statute eliminates that jurisdiction.”

Maybe. I’m not sure I agree that Boechler goes that far. But I do think that the Tax Court genuinely needs to wrestle with Boechler in ways it does not yet appear ready to. At the very least, I’d ask the Tax Court to look at jurisdictional issues with fresh eyes and retire the opening sentence of so many opinions: “We are a court of limited jurisdiction.” This favorite refrain of the Tax Court has never really done any legwork because, as Judge Posner aptly remarked in Flight Attendants v. Commissioner, 165 F.3d 572, 578 (7th Cir. 1999) “All federal courts are courts of limited jurisdiction.” (Hat tip to Bryan Camp’s article for highlighting that quote.) The inquiry is to the scope of that jurisdiction.

On that note, it genuinely confounds me that that Tax Court continues to interpret the scope of its CDP jurisdiction as if Congress placed it in a straitjacket. CDP was created by Congress precisely as a judicial check against IRS abuse. Thus, it rings a bit hollow when the petitioner demonstrates in a CDP case that the IRS did something abusive (like keep money it shouldn’t) and the Tax Court retorts, “We’re an Article I Court. If only Congress gave us power to remedy such abuses… alas.”

But the Tax Court decision in Brown (upheld by the 9th Circuit) is even worse than being just one more notch on the Thapedi-Thumper’s belt. As I’ll discuss in my next posts, Brown potentially represents the Tax Court tightening the straitjacket even further.

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