Before 1996, the circuits held that district courts and the Court of Federal Claims
had 28 U.S.C. section 1346(a)(1) and 1491(a)(1) refund jurisdiction over claims to abate
interest under 26 U.S.C. section 6404(e)(1), but were barred from exercising that
jurisdiction because abatement was discretionary and there was no articulated
standard for reviewing denials of those requests. The Tax Court held it had no
prepayment jurisdiction over section 6404(e)(1) at all and followed the circuit courts'
discretionary analysis in the exceptional cases where it had overpayment
In 1996, Congress amended section 6404, giving the Tax Court prepayment jurisdiction to
review IRS denials of some taxpayer section 6404(e)(1) abatement requests using an
abuse of discretion standard.
The IRS now asserts the Tax Court has exclusive jurisdiction over both section 6404(e)(1)
prepayment and refund cases. In Beall v. U.S., 336 F.3d 419 (5th Cir. 2003), the Fifth Circuit held that the
1996 amendments resolved the lack of a justiciable standard issue that precluded
exercise of district court refund jurisdiction and resulted in exclusive but limited Tax
Court prepayment jurisdiction and limited concurrent refund jurisdiction. The
Federal Circuit acknowledged it created a conflict with the Fifth Circuit. The Federal
Circuit's exclusivity holding precludes any judicial review of many claims.
The question presented here is:
Did the grant of selective, limited jurisdiction in the 1996 amendments give the Tax
Court exclusive jurisdiction over all section 6404(e)(1) claims, deny all relief for many
taxpayers, and repeal by implication the existing 28 U.S.C. section 1346(a)(1) and 1491
(a)(1) refund jurisdiction of the district courts and the Court of Federal Claims?