Tax Court Jurisdiction and Interest Determinations, a Trap for the Unwary, Part 2

In Part 1, I provided some of the context for the Third Circuit’s decision in Sunoco Inc. v. Commissioner, No. 09-2423 (3d Cir. Oct. 7, 2011), and outlined the Court’s basic reasoning that supported its conclusion that the Tax Court lacked jurisdiction over the determination of overpayment interest. In this segment, I will endeavor to evaluate the Court’s reasoning and to assess its implications.

The Third Circuit’s reasoning has some weaknesses. While suggesting that district courts and the Court of Federal Claims have jurisdiction over claims for overpayment interest, acceptance of the Court’s logic indicates that the jurisdiction of district courts will actually be quite limited: since the Third Circuit holds (slip op.Read More

Tax Court Jurisdiction and Interest Determinations, a Trap for the Unwary, Part 1

On October 7th, the Third Circuit issued its opinion in Sunoco Inc. v. Commissioner, No. 09-2423 (3d Cir. Oct. 7, 2011), which required it to assess the jurisdiction of the Tax Court to decide whether the IRS has credited a taxpayer with sufficient interest on overpayments. As the Court of Appeals ruled that the Tax Court lacks the authority to rule on overpayment interest, the opinion in Sunoco highlights a potential problem that arises due to the limited scope of the Tax Court’s jurisdiction.

The Tax Court has a unique role in the federal system: it provides a forum for a taxpayer to contest a determination that additional taxes are due without paying the tax in advance.Read More