“When the IRS declares that it no longer needs or intends to take the taxpayer’s property by levy, a pre-levy proceeding under Section 6330 becomes moot,” the IRS said.
Zuch, however, urged the justices last month to leave the ruling intact. In her brief, she argued the decision doesn’t conflict with any other rulings and pertains to a rare issue.
Zuch said she owed approximately $27,000 in taxes for 2010. She and her ex-husband had made $50,000 in prepayments to the IRS in 2010 and 2011, requesting the funds be applied to her balance. However, the IRS applied the $50,000 to her ex-husband’s separate tax debt and subsequently attempted to collect her $27,000 liability through a levy on her property.
Zuch challenged the proposed levy in Tax Court, but while the case was pending, she overpaid her taxes. The IRS retained the overpayment, applying it to what it deemed the unpaid $27,000 liability, Zuch said.
The IRS then asked the Tax Court to dismiss the proceeding, claiming it no longer needed to collect the debt and had halted the levy efforts.
