Brown v. Commissioner of Internal Revenue

Absent explicit authority through statute, the Tax Court does not have the jurisdiction to order a refund of any tax payment or payment towards an OIC. Greene-Thapedi v. Commissioner, 126 T.C. 1, 8 (2006).

Michael Brown made a payment of twenty percent of the value of his offer in compromise (“OIC”) to settle his tax liability. Payments under the Tax Increase Prevention and Reconciliation Act (“TIPRA”) to an OIC are non-refundable. Ultimately, the OIC was returned and not refunded because the actual amount of tax liability was uncertain. After receiving a Notice of Determination (“NOD”), Brown appealed the return of his OIC arguing the IRS abused its discretion. On appeal, the court held that the Commissioner validly rejected the OIC, but remanded the issue of whether the Tax Court had jurisdiction to approve a refund. On remand, the Tax Court held that it had no statutory authority to issue a refund. Brown appealed, arguing that 26 U.S.C. §§ 6320(c) and 6440(d)(1) granted the Tax Court the authority to issue refunds of TIPRA payments. The Court reasoned that because Greene-Thapedi v. Commissioner held that absent explicit authority through statute, the Tax Court does not have the jurisdiction to order a refund of any tax payment. 126 T.C. 1, 8 (2006). Therefore, the Tax Court lacked jurisdiction to return Brown’s TIPRA payment. AFFIRMED.