Hinck v. United States

(Slip Opinion) OCTOBER TERM, 2006 1

Syllabus

NOTE: Where it is feasible, a syllabus (headnote) will be released, as is

being done in connection with this case, at the time the opinion is issued.

The syllabus constitutes no part of the opinion of the Court but has been

prepared by the Reporter of Decisions for the convenience of the reader.

See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337.

SUPREME COURT OF THE UNITED STATES

Syllabus

HINCK ET UX. v. UNITED STATES

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR

THE FEDERAL CIRCUIT

No. 06–376. Argued April 23, 2007—Decided May 21, 2007

A 1986 amendment to the Internal Revenue Code permits the Treasury

Secretary to abate interest that accrues on unpaid federal income

taxes if the interest assessment is attributable to Internal Revenue

Service (IRS) error or delay. 26 U. S. C. §6404(e)(1). Subsequently,

the federal courts uniformly held that the Secretary’s decision not to

abate was not subject to judicial review. In 1996, Congress added

what is now §6404(h), which states that the Tax Court has “jurisdic

tion over any action brought by a taxpayer who meets the require

ments referred to in section 7430(c)(4)(A)(ii) to determine whether

the Secretary’s failure to abate . . . was an abuse of discretion, and

may order an abatement, if such action is brought within 180 days

after the date of the mailing of the Secretary’s final determination

not to abate . . . .” §6404(h)(1). Section 7430(c)(4)(A)(ii) in turn in

corporates 28 U. S. C. §2412(d)(2)(B), which refers to individuals with

a net worth not exceeding $2 million and businesses with a net worth

not exceeding $7 million. The IRS denied petitioner Hincks’ request

for abatement of interest assessed in 1999 for the period March 21,

1989, to April 1, 1993. The Hincks then filed suit in the Court of

Federal Claims seeking review of the refusal to abate. The court

granted the Government’s motion to dismiss, and the Federal Circuit

affirmed, holding that §6404(h) vests exclusive jurisdiction to review

interest abatement claims in the Tax Court.

Held: The Tax Court provides the exclusive forum for judicial review of

a failure to abate interest under §6404(e)(1). This Court’s analysis is

governed by the well-established principle that, in most contexts, “ ‘a

precisely drawn, detailed statute pre-empts more general remedies,’ ”

EC Term of Years Trust v. United States, 550 U. S. ___, ___; it is also

guided by the recognition that when Congress enacts a specific rem

2 HINCK v. UNITED STATES

Syllabus

edy when none was previously recognized, or when previous remedies

were “problematic,” the remedy provided is generally regarded as ex

clusive, Block v. North Dakota ex rel. Board of Univ. and School

Lands, 461 U. S. 273, 285. Section 6404(h) fits the bill on both

counts. In a single sentence, it provides a forum for adjudication, a

limited class of potential plaintiffs, a statute of limitations, a stan

dard of review, and authorization for judicial relief; it was also en

acted against a backdrop of decisions uniformly rejecting the possibil

ity of any review of the Secretary’s §6404(e)(1) determinations.

Though Congress failed explicitly to define the Tax Court’s jurisdic

tion as exclusive, it is quite plain that the terms of §6404(h)—a “pre

cisely drawn, detailed statute” filling a perceived hole in the law—

control all requests for review of §6404(e)(1) decisions, including the

forum for adjudication. The Hincks correctly argue that Congress’s

provision of an abuse of discretion standard removed one of the ob

stacles courts had held foreclosed judicial review of such determina

tions, but Congress did not simply supply this single missing ingredi

ent in enacting §6404(h). Rather, it set out a carefully circumscribed,

time-limited, plaintiff-specific provision, which also precisely defined

the appropriate forum. This Court will not isolate one feature of this

statute and use it to permit taxpayers to circumvent the other limit

ing features in the same statute, such as a shorter statute of limita

tions than in general refund suits or a net-worth ceiling for plaintiffs

eligible to bring suit. Taxpayers could “effortlessly evade” these spe

cific limitations by bringing interest abatement claims as tax refund

actions in the district courts or the Court of Federal Claims, disag

gregating a statute Congress plainly envisioned as a package deal.

EC Term of Years Trust, supra, at ___. Equally unavailing are the

Hincks’ contentions that reading §6404(h) to vest exclusive jurisdic

tion in the Tax Court impliedly repeals the pre-existing jurisdiction of

the district courts and Court of Federal Claims, runs contrary to the

structure of tax controversy jurisdiction, and would lead to the “un

reasonable” result that taxpayers with net worths exceeding the

specified ceilings would be foreclosed from seeking judicial review of

§6404(e)(1) refusals to abate. Pp. 6–9.

446 F. 3d 1307, affirmed.

ROBERTS, C. J., delivered the opinion for a unanimous Court.

Cite as: 550 U. S. ____ (2007) 1

Opinion of the Court

NOTICE: This opinion is subject to formal revision before publication in

the preliminary print of the United States Reports. Readers are requested

to notify the Reporter of Decisions, Supreme Court of the United States,

Washington, D. C. 20543, of any typographical or other formal errors, in

order that corrections may be made before the preliminary print goes to

press.

SUPREME COURT OF THE UNITED STATES

_________________

No. 06–376

_________________

JOHN F. HINCK, ET UX., PETITIONERS v.

UNITED STATES

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF

APPEALS FOR THE FEDERAL CIRCUIT

[May 21, 2007]

CHIEF JUSTICE ROBERTS delivered the opinion of the

Court.

Bad things happen if you fail to pay federal income

taxes when due. One of them is that interest accrues on

the unpaid amount. Sometimes it takes a while for the

Internal Revenue Service (IRS) to determine that taxes

should have been paid that were not. Section 6404(e)(1) of

the Internal Revenue Code permits the Secretary of the

Treasury to abate interest—to forgive it, partially or in

whole—if the assessment of interest on a deficiency is

attributable to unreasonable error or delay on the part of

the IRS. Section 6404(h) allows for judicial review of the

Secretary’s decision not to grant such relief. The question

presented in this case is whether this review may be

obtained only in the Tax Court, or may also be secured in

the district courts and the Court of Federal Claims. We

hold that the Tax Court provides the exclusive forum for

judicial review of a refusal to abate interest under

§6404(e)(1), and affirm.

2 HINCK v. UNITED STATES

Opinion of the Court

I

The Internal Revenue Code provides that if any amount

of assessed federal income tax is not paid “on or before the

last date prescribed for payment,” interest “shall be paid

for the period from such last date to the date paid.” 26

U. S. C. §6601(a). Section 6404 of the Code authorizes the

Secretary of the Treasury to abate any tax or related

liability in certain circumstances. As part of the Tax

Reform Act of 1986, Congress amended §6404 to add

subsection (e)(1), which, as enacted, provided in pertinent

part:

“In the case of any assessment of interest on . . . any

deficiency attributable in whole or in part to any error

or delay by an officer or employee of the Internal

Revenue Service (acting in his official capacity) in per

forming a ministerial act . . . the Secretary may abate

the assessment of all or any part of such interest for

any period.” 26 U. S. C. §6404(e)(1) (1994 ed.).

In the years following passage of §6404(e)(1), the federal

courts uniformly held that the Secretary’s decision not to

grant an abatement was not subject to judicial review.

See, e.g., Argabright v. United States, 35 F. 3d 472, 476

(CA9 1994); Selman v. United States, 941 F. 2d 1060, 1064

(CA10 1991); Horton Homes, Inc. v. United States, 936

F. 2d 548, 554 (CA11 1991); see also Bax v. Commissioner,

13 F. 3d 54, 58 (CA2 1993). These decisions recognized

that §6404(e)(1) gave the Secretary complete discretion to

determine whether to abate interest, “neither indicat[ing]

that such authority should be used universally nor

provid[ing] any basis for distinguishing between the in

stances in which abatement should and should not be

granted.” Selman, supra, at 1063. Any decision by the

Secretary was accordingly “committed to agency discretion

by law” under the Administrative Procedure Act, 5

U. S. C. §701(a)(2), and thereby insulated from judicial

Cite as: 550 U. S. ____ (2007) 3

Opinion of the Court

review. See, e.g., Webster v. Doe, 486 U. S. 592, 599

(1988); Heckler v. Chaney, 470 U. S. 821, 830 (1985).

In 1996, as part of the Taxpayer Bill of Rights 2, Con

gress again amended §6404, adding what is now subsec

tion (h). As relevant, that provision states:

“Review of denial of request for abatement of inter

est.—

“(1) In general.—The Tax Court shall have jurisdic

tion over any action brought by a taxpayer who meets

the requirements referred to in section

7430(c)(4)(A)(ii) to determine whether the Secretary’s

failure to abate interest under this section was an

abuse of discretion, and may order an abatement, if

such action is brought within 180 days after the date

of the mailing of the Secretary’s final determination

not to abate such interest.” 26 U. S. C. §6404(h)(1)

(2000 ed., Supp. IV).

Section 7430(c)(4)(A)(ii) in turn incorporates 28 U. S. C.

§2412(d)(2)(B), which refers to individuals with a net

worth not exceeding $2 million and businesses with a net

worth not exceeding $7 million. Congress made subsection

(h) effective for all requests for abatement submitted to

the IRS after July 30, 1996, regardless of the tax year

involved. §302(b), 110 Stat. 1458.1

II

In 1986, petitioner John Hinck was a limited partner in

an entity called Agri-Cal Venture Associates (ACVA).

Along with his wife, petitioner Pamela Hinck, Hinck filed

——————

1 The Taxpayer Bill of Rights 2 also modified 26 U. S. C.

§6404(e)(1)(A) to add the word “unreasonable” before the words “error

or delay” and to change “ministerial act” to “ministerial or managerial

act.” §301(a), 110 Stat. 1457. These changes, however, only apply to

interest accruing on deficiencies for tax years beginning after July 30,

1996, see §301(c), ibid., and thus are not implicated in this case.

4 HINCK v. UNITED STATES

Opinion of the Court

a joint return for 1986 reporting his share of losses from

the partnership. The IRS later examined the tax returns

for ACVA and proposed adjustments to deductions that

the partnership had claimed for 1984, 1985, and 1986. In

1990, the IRS issued a final notice regarding the partner

ship’s returns, disallowing tens of millions of dollars of

deductions. While the partnership sought administrative

review of this decision, the Hincks, in May 1996, made an

advance remittance of $93,890 to the IRS toward any

personal deficiency that might result from a final adjust

ment of ACVA’s returns. In March 1999, the Hincks

reached a settlement with the IRS concerning the ACVA

partnership adjustments, to the extent they affected the

Hincks’ return. Shortly thereafter, as a result of the

adjustments, the IRS imposed additional liability against

the Hincks: $16,409 in tax and $21,669.22 in interest. The

IRS applied the Hincks’ advance remittance to this

amount and refunded them the balance of $55,811.78.

The Hincks filed a claim with the IRS contending that,

because of IRS errors and delays, the interest assessed

against them for the period from March 21, 1989, to April

1, 1993, should be abated under §6404(e)(1). The IRS

denied the request. The Hincks then filed suit in the

United States Court of Federal Claims seeking review of

the refusal to abate. That court granted the Government’s

motion to dismiss, 64 Fed. Cl. 71, 81 (2005), and the

United States Court of Appeals for the Federal Circuit

affirmed, 446 F. 3d 1307, 1313–1314 (2006), holding that

§6404(h) vests exclusive jurisdiction to review interest

abatement claims under §6404(e)(1) in the Tax Court.

Because this decision conflicted with the Fifth Circuit’s

decision in Beall v. United States, 336 F. 3d 419, 430

(2003) (holding that §6404(h) grants concurrent rather

than exclusive jurisdiction to the Tax Court), we granted

certiorari, 549 U. S. ___ (2007).

Cite as: 550 U. S. ____ (2007) 5

Opinion of the Court

III

Our analysis is governed by the well-established princi

ple that, in most contexts, “ ‘a precisely drawn, detailed

statute pre-empts more general remedies.’ ” EC Term of

Years Trust v. United States, 550 U. S. ___, ___ (2007) (slip

op., at 4) (quoting Brown v. GSA, 425 U. S. 820, 834

(1976)); see also Block v. North Dakota ex rel. Board of

Univ. and School Lands, 461 U. S. 273, 284–286 (1983).

We are also guided by our past recognition that when

Congress enacts a specific remedy when no remedy was

previously recognized, or when previous remedies were

“problematic,” the remedy provided is generally regarded

as exclusive. Id., at 285; Brown, supra, at 826–829.

Section 6404(h) fits the bill on both counts. It is a “pre

cisely drawn, detailed statute” that, in a single sentence,

provides a forum for adjudication, a limited class of poten

tial plaintiffs, a statute of limitations, a standard of re

view, and authorization for judicial relief. And Congress

enacted this provision against a backdrop of decisions

uniformly rejecting the possibility of any review for tax

payers wishing to challenge the Secretary’s §6404(e)(1)

determination. Therefore, despite Congress’s failure

explicitly to define the Tax Court’s jurisdiction as exclu

sive, we think it quite plain that the terms of §6404(h)—a

“precisely drawn, detailed statute” filling a perceived hole

in the law—control all requests for review of §6404(e)(1)

determinations. Those terms include the forum for

adjudication.

The Hincks’ primary argument against exclusive Tax

Court jurisdiction is that by providing a standard of re

view—abuse of discretion—in §6404(h), Congress elimi

nated the primary barrier to judicial review that courts

had previously recognized; accordingly, they maintain,

taxpayers may seek review of §6404(e)(1) determinations

under statutes granting jurisdiction to the district courts

and the Court of Federal Claims to review tax refund

6 HINCK v. UNITED STATES

Opinion of the Court

actions. See 28 U. S. C. §§1346(a)(1), 1491(a)(1); 26

U. S. C. §7422(a). Or, as the Fifth Circuit reasoned: “[T]he

federal district courts have always possessed jurisdiction

over challenges brought to section 6404(e)(1) denials[;]

they simply determined that the taxpayers had no sub

stantive right whatever to a favorable exercise of the Sec

retary’s discretion . . . . [I]n enacting section 6404(h),

Congress indicated that such is no longer the case, and

thereby removed any impediment to district court review.”

Beall, supra, at 428 (emphasis in original).

It is true that by providing an abuse of discretion stan

dard, Congress removed one of the obstacles courts had

held foreclosed judicial review of §6404(e)(1) determina

tions. See, e.g., Argabright, 35 F. 3d, at 476 (noting an

absence of “ ‘judicially manageable standards’ ” (quoting

Heckler, 470 U. S., at 830)). But in enacting §6404(h),

Congress did not simply supply this single missing ingre

dient; rather, it set out a carefully circumscribed, time-

limited, plaintiff-specific provision, which also precisely

defined the appropriate forum. We cannot accept the

Hincks’ invitation to isolate one feature of this “precisely

drawn, detailed statute”—the portion specifying a stan

dard of review—and use it to permit taxpayers to circum

vent the other limiting features Congress placed in the

same statute—restrictions such as a shorter statute of

limitations than general refund suits, compare §6404(h)

(180-day limitations period) with §6532(a)(1) (2-year limi

tations period), or a net-worth ceiling for plaintiffs eligible

to bring suit. Taxpayers could “effortlessly evade” these

specific limitations by bringing interest abatement claims

as tax refund actions in the district courts or the Court of

Federal Claims, disaggregating a statute Congress plainly

envisioned as a package deal. EC Term of Years Trust,

supra, at ___ (slip op., at 5); see also Block, supra, at 284–

285; Brown, supra, 425 U. S., at 832–833.

The Hincks’ other contentions are equally unavailing.

Cite as: 550 U. S. ____ (2007) 7

Opinion of the Court

First, they claim that reading §6404(h) to vest exclusive

jurisdiction in the Tax Court impliedly repeals the pre

existing jurisdiction of the district courts and Court of

Federal Claims, despite our admonition that “repeals by

implication are not favored.” Morton v. Mancari, 417 U. S.

535, 549 (1974) (internal quotation marks omitted). But

the implied-repeal doctrine is not applicable here, for

when Congress passed §6404(h), §6404(e)(1) had been

interpreted not to provide any right of review for taxpay

ers. There is thus no indication of any “language on the

statute books that [Congress] wishe[d] to change,” United

States v. Fausto, 484 U. S. 439, 453 (1988), implicitly or

explicitly. Congress simply prescribed a limited form of

review where none had previously been found to exist.

Second, the Hincks assert that vesting jurisdiction over

§6404(e)(1) abatement decisions exclusively in the Tax

Court runs contrary to the “entire structure of tax contro

versy jurisdiction,” Brief for Petitioners 30, under which

the Tax Court generally hears prepayment challenges to

tax liability, see §6213(a), while postpayment actions are

brought in the district courts or Court of Federal Claims.

In a related vein, the Hincks point out that the Govern

ment’s position would force taxpayers seeking postpay

ment review of their tax liabilities to separate their

§6404(e)(1) abatement claims from their refund claims and

bring each in a different court. Even assuming, arguendo,

that we were inclined to depart from the face of the stat

ute, these arguments are undercut on two fronts. To begin

with, by expressly granting to the Tax Court some juris

diction over §6404(e)(1) decisions, Congress has already

broken with the general scheme the Hincks identify. No

one doubts that an action seeking review of a §6404(e)(1)

determination may be maintained in the Tax Court even if

the interest has already been paid, see, e.g., Dadian v.

Commissioner, 87 TCM 1344 (2004), ¶2004–121 RIA

Memo TC, p. 790–2004; Miller v. Commissioner, 79 TCM

8 HINCK v. UNITED STATES

Opinion of the Court

2213 (2000), ¶2000–195 RIA Memo TC, p. 1120–2000,

aff’d, 310 F. 3d 640 (CA9 2002), and the Hincks point to no

case where the Tax Court has refused to exercise jurisdic

tion under such circumstances.

In addition, an interest abatement claim under

§6404(e)(1) involves no questions of substantive tax law,

but rather is premised on issues of bureaucratic admini

stration (whether, for example, there was “error or delay”

in the performance of a “ministerial” act, §6404(e)(1)(A)).

Judicial review of decisions not to abate requires an

evaluation of the internal processes of the IRS, not the

underlying tax liability of the taxpayer. We find nothing

tellingly awkward about channeling such discrete and

specialized questions of administrative operations to one

particular court, even if in some respects it “may not

appear to be efficient” as a policy matter to separate re

fund and interest abatement claims. 446 F. 3d, at 1316.2

Last, the Hincks contend that Congress would not have

intended to vest jurisdiction exclusively in the Tax Court

because it would lead to the “unreasonable” result that

taxpayers with net worths greater than $2 million (for

individuals) or $7 million (for businesses) would be fore

closed from seeking judicial review of §6404(e)(1) refusals

to abate. Brief for Petitioners 46; see also Beall, 336 F. 3d,

at 430. But we agree with the Federal Circuit that this

outcome “was contemplated by Congress.” 446 F. 3d, at

1316. The net-worth limitation in §6404(h) reflects Con

gress’s judgment that wealthier taxpayers are more likely

to be able to pay a deficiency before contesting it, thereby

avoiding accrual of interest during their administrative

and legal challenges. In contrast, taxpayers with com

paratively fewer resources are more likely to contest their

——————

2 We note that the Hincks sought only interest abatement in the

Court of Federal Claims, thus failing to implicate the “claim-splitting”

and efficiency concerns they condemn. See Brief for Petitioners 49.

Cite as: 550 U. S. ____ (2007) 9

Opinion of the Court

assessed deficiency before first paying it, thus exposing

themselves to interest charges if their challenge is ulti

mately unsuccessful. There is nothing “unreasonable”

about Congress’s decision to grant the possibility of judi

cial relief only to those taxpayers most likely to be in need

of it.3

The judgment of the United States Court of Appeals for

the Federal Circuit is affirmed.

It is so ordered.

——————

3 The Hincks also argue that the net-worth limitations on §6404(h)

review violate the due process rights of those taxpayers who exceed

them. The court below did not pass upon this constitutional challenge,

nor do we, for as the Hincks concede, the record contains no findings

concerning their own net worth, Brief for Petitioners 44, and they offer

no reasons to deviate from our general rule that a party “must assert

his own legal rights and interests, and cannot rest his claim to relief on

the legal rights or interests of third parties,” Kowalski v. Tesmer, 543

U. S. 125, 129 (2004) (quoting Warth v. Seldin, 422 U. S. 490, 499

(1975); internal quotation marks omitted).