• Monte Silver, Tax lawyer

Will our two cases be one of the very few that gets around the Anti-Injunction Act (AIA)?

Hi All:

Our cases raise many serious precedent-setting issues, such as procedural standing, AIA, RFA, PRA. And this is before we even get to the remedy after the merits stage.

This Law360 article looks at one more. I have abbreviated and edited it.

The U.S. Supreme Court's allowing CIC's case to proceed despite the Anti Injunction Act (AIA) likely won't lead to a barrage of pre-enforcement suits challenging complicated international tax rules, tax specialists said. (A pre-enforcement suit is one that challenges an IRS act before it is violated).

The Supreme court's judgment in May that the AIA didn't preclude CIC Services' pre-enforcement suit and would not "open the floodgates" to pre-enforcement actions.

The Court’s opinion in the case shouldn't be interpreted as a "wholesale endorsement" of pre-enforcement litigation that challenges tax rules, S. Starling Marshall of Crowell & Moring...

Monte Silver has mounted his own pre-enforcement challenges against the IRS for what he argues was a failure to include final regulatory flexibility analysis in final guidance. Silver has filed two suits challenging finalized regulations to administer (i) the one-time transition tax, and (ii) GILTI.

Silver sued the IRS in 2019 over the transition tax rules in D.C. federal court, challenging the regulations issued under Internal Revenue Code Section 965, and his case is now pending before the D.C. Appeals Court.

The D.C. federal court ruled in March that the Anti-Injunction Act didn't prevent Silver's suit, but that he lacked standing to bring such a challenge in court (Monte – Correct) because he could not show with facts that his burden to comply with the new regulations would change if the government granted the relief he requested (Monte: not accurate),

Silver also filed a GILTI suit arguing that the GILTI regulations also violated the Regulatory Flexibility Act. That case is stayed while Silver appeals his challenge in the D.C. Appeals court to the Section 965 regulations, according to court documents.

In the GILTI case, the IRS has argued Silver's suit should be barred by the AIA because the rules he is challenging relate to the self-reporting of GILTI and are "tightly intertwined with tax assessment." Silver argued in June that the Supreme Court's ruling in CIC Services should support his GILTI suit because his challenge deals with procedures and it is not seeking to enjoin the assessment or collection of tax.

Silver told Law360 that there may be additional areas of tax law where legal challenges could be brought, such as (i) informal IRS rules/notices that impose significant penalties for noncompliance (such as in CIC), or (ii) finalized international tax regulations involving US attribution rules or PFICs.

For full unedited story, see https://www.law360.com/tax-authority/international/articles/1406135/narrow-path-paved-for-tax-rule-challenges-after-cic-services?nl_pk=3560c92a-1bea-45d9-9031-755103ceea2f&utm_source=newsletter&utm_medium=email&utm_campaign=tax-authority/international&read_more=1

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