Ruesch v. Commissioner of Internal Revenue, No. 20-3493 (2d Cir. 2022)
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Under 26 U.S.C. 7345, if a court determines that a "seriously delinquent" certification was erroneous, it may order the Secretary of the Treasury to notify the Secretary of State of that fact. No other relief is authorized. The Second Circuit affirmed the tax court's dismissal in part insofar as it dismissed certain of petitioner's claims as moot, and vacated and remanded in part with instructions to the tax court court to dismiss all the remaining claims as moot insofar as it dismissed those claims for lack of statutory jurisdiction.
In 2019, petitioner filed a petition with the tax court challenging the Commissioner's certification that she had a "seriously delinquent tax debt" under 26 U.S.C. 7345. While her challenge was pending, the Commissioner reversed the certification as erroneous and so notified the Secretary of State. In 2020, the tax court dismissed the petition, holding that it lacked jurisdiction to assess the validity of her underlying liability for the penalties the IRS had assessed against her, which formed the basis for her debt, and that her challenge to her certification was moot in light of the IRS's reversal. In this case, petitioner has received all the relief to which she is entitled by statute and, to the extent that the voluntary cessation doctrine exists primarily to keep parties from acting strategically to avoid judicial review, that is not a concern here. Finally, petitioner's challenge, under section 7345, to the underlying penalties assessed against her was moot at the time the tax court issued its order.
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