RESPONDENT: United States
LOCATION: Carhart's Residence
DOCKET NO.: 06-376
DECIDED BY: Roberts Court (2006-2009)
LOWER COURT: United States Court of Appeals for the Federal Circuit
CITATION: 550 US 501 (2007)
GRANTED: Jan 12, 2007
ARGUED: Apr 23, 2007
DECIDED: May 21, 2007
Jonathan L. Marcus -
Thomas E. Redding - on behalf of Petitioner
Facts of the case
The Internal Revenue Service (IRS) assessed over $20,000 in interest fees for outstanding taxes against John and Pamela Hinck. The Hincks claimed that the interest accrued because of IRS delays and errors. Section 6404(e)(1) of the Internal Revenue Code authorizes the abatement of interest fees that are caused by IRS delays. The IRS rejected the Hincks' interest abatement claim in 2000. In 2003, the United States Court of Federal Claims determined that it had no jurisdiction to hear the case because Section 6404(h) of the Internal Revenue Code granted the United States Tax Court jurisdiction over interest abatement disputes.
The Hincks appealed to the United States Court of Appeals for the Federal Circuit, arguing that the Tucker Act granted subject matter jurisdiction to the Federal Claims Court. The Federal Circuit held that Section 6404(h) grants the Tax Court exclusive jurisdiction over interest abatement disputes. The U.S. Court of Appeals for the Fifth Circuit had previously ruled to the contrary.
Does Section 6404(h) of the Internal Revenue Code grant the United States Tax Court exclusive jurisdiction to review interest abatement claims made against the Internal Revenue Service?
Media for Hinck v. United StatesAudio Transcription for Oral Argument - April 23, 2007 in Hinck v. United States
Audio Transcription for Opinion Announcement - May 21, 2007 in Hinck v. United States
John G. Roberts, Jr.:
I have our opinion this morning in case 06-376 Hinck v. United States.
If you fail to pay your Federal Taxes when they are due, you will end up being liable not only for the taxes but for interest as well.
Occasionally though, you don’t find out that you should have paid taxes until some time has passed because of error or delays by the internal revenue service, in such cases the Tax Court says you can ask the IRS to abate the interest to forgive it in whole or in part.
Now, allowing tax payers to appeal to the kindness of the IRS worked out as you might expect.
In 1996 Congress passed the provision at issuing this case, Section 6404(h) of the tax code, which allows the tax payer to obtain judicial review of an IRS decision not to abate interest.
Section 6404(h) provides that the tax court has jurisdiction over such actions.
The Fifth Circuit reasoned that District Courts and the Court Of Federal Claims have jurisdiction as well because they have general jurisdiction over tax refund claims and Section 6404(h) makes it clear that this type of claim is subject to judicial review.
The federal circuit in this case disagreed ruling that interest abatement claims could be brought only in the Tax Court.
In an opinion filed with the Clerk today we agree with the Federal Circuit.
We have held that a precisely drawn detailed statute preempts more general remedies and Section 6404(h) does not simply say that interest abatement claims are subject to judicial review.
It specified where such claims shall be brought and adds other features to the new remedy, such as a 180 days statute of limitations and the net worth sealing for eligible plaintiffs.
You cannot isolate one element of the statute the provision allowing review and use it to circumvent the other limitations included in the same statute.
Congress plainly envisions Section 6404(h) as a package deal and one part of that package was the provision specifying that the Tax Court has jurisdiction over these actions.
We therefore affirm the judgment of the Court of Appeals, our opinion is unanimous.