Commissioner v. McCoy

484 U. S. 3

October 19, 1987

After Robert McCoy’s father died, there was a tax form that Robert could fill out, which would result in his dad’s farm being taxed by over $20,000 less. Sadly, he missed the filing deadline by a few weeks. Because the higher amount of taxes was not paid, the IRS slapped the McCoy’s with a penalty tax (and accruing interest). There was legal wrangling, and an Appeals Court sided with the IRS on the farm tax, but unilaterally decreed that the penalty tax and interest would be forgiven. The IRS appealed, claiming the judges had no authority to make such a decree.

The Supreme Court agreed in a 7-1 per curiam ruling. The question of the penalty was not properly before the court, and the court had no jurisdiction or business independently ordering an agency to forgive a debt. Marshall wrote a dissenting opinion, which predictably focused on the Court’s summary disposition of the case. The ruling was legally correct. Morally, it was atrocious. What kind of douchey, heartless agency goes after a grieving child over $20,000 in taxes, and then takes it all the way to the Supreme Court? Of all the cases for the Court to summarily reverse, why this one? My guess is that the Appeals Court knew they were acting beyond their authority, and hoped the Court wouldn’t bother to overrule in the interest of greater moral justice. Too bad it didn’t work.

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