Hinck v. United States

John and Pamela Hinck (plaintiffs) filed a joint tax return with the Internal Revenue Service (IRS). In 1990, the IRS disallowed millions of dollars of general-partnership deductions by a partnership in which John was a partner. The IRS subsequently imposed an additional approximately $16,000 in tax and approximately $21,600 in interest on the Hincks. The Hincks asked the IRS to abate the interest pursuant to Internal Revenue Code (code) § 6404(e)(1). The IRS denied the Hincks’ request. The Hincks sued the United States (defendant) in federal district court, contending that the IRS abused its discretion by refusing to abate interest. The district court granted the United States’ motion to dismiss. The United States Court of Appeals for the Federal Circuit affirmed, ruling that under code § 6404(h)(1), the Tax Court had exclusive jurisdiction to decide whether the IRS abused its discretion. The United States Supreme Court granted the Hincks’ petition for a writ of certiorari. Per the Hincks, by specifying an abuse-of-discretion standard in § 6404(h)(1), Congress removed the primary impediment to district-court jurisdiction. The Hincks further argued that exclusive Tax Court jurisdiction (1) improperly removed district-court jurisdiction by implication; (2) conflicted with the code’s structure, under which the Tax Court generally heard prepayment challenges and district courts and the Court of Federal Claims heard postpayment challenges; and (3) meant that taxpayers who exceeded § 6404(h)(1)’s net-worth limits could not obtain judicial review of interest-abatement denials.