CIC: Supreme Court Review?

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We have discussed CIC Services v IRS on the blog numerous times. As readers may recall, CIC involves an IRS Notice that imposes additional reporting obligations on captive insurance companies and their advisors. CIC, a manager of captives, and an individual who also managed captives and provides tax advice to them, sued. The suit claimed that the Notice imposed substantial costs and that the IRS in the Notice effectively promulgated legislative rules without complying with the APA’s mandatory notice and comment requirements. The plaintiffs sought an injunction prohibiting the IRS from enforcing the Notice and a declaratory judgment claiming that the notice was invalid. The Sixth Circuit, affirming the district court, held that the Anti-Injunction Act (AIA) barred an APA challenge to the Notice.

In August the Sixth Circuit denied a petition for rehearing (see here for my prior blog post discussing that denial). Judge Sutton in his concurring opinion accompanying the rehearing denial strongly encouraged that the Supreme Court grant cert to resolve open questions concerning the reach of the Anti-Injunction Act. 

Since that time CIC filed a cert petition. The Harvard Tax Clinic (through Keith, Carl and students Tyler Underwood, Lauren Hirsch and Oliver Roberts), Meagan Horn (at Thompson and Knight in Dallas serving as pro bono counsel to the clinic) and I have filed an amicus brief flagging the importance of the issue. In our amicus brief we emphasize that the implications of the case extend to low and moderate-income taxpayers. The amicus brief, as well as an amicus from the American College of Tax Counsel and the cert petition itself, can be found on the SCOTUSblog cite.  The government originally was supposed to respond by February 24th but it has asked the Court for a one- month extension.

As an aside, I, along with one of  my colleagues on the Saltzman/Book IRS Practice and Procedure treatise, Contributing Author Marilyn Ames, have posted on SSRN The Morass of the AIA: A Review of the Cases and Major Issues. The article will be published in the Summer 2020 issue of the Tax Lawyer and is based on the heavily rewritten Chapter 1.6 of the Saltzman Book treatise which likewise discusses and analyzes the AIA.  As the article is in draft form I encourage readers to offer comments. This, and other developments such as the Silver case Keith discussed here, suggest that the reach of the AIA is a very hot issue in tax procedure. Stay tuned.

Leslie Book About Leslie Book

Professor Book is a Professor of Law at the Villanova University Charles Widger School of Law.

Comments

  1. Today, the Court granted the SG’s motion, so the US response is now due by March 25.

    Also, Pat Smith (prolific author on APA and AIA issues) has submitted an amicus brief, which can be found on the Supreme Court’s website under the docket number 19-930.

  2. Monte Silver says

    I am suprised that our case, Silver v. IRS, has been citied in the Amicus brief of the American College of Tax Counsel. The judge’s ruling denying the government’s motion to dismiss is only 50 days old and already being cited in a Supreme Court brief.

    Te brief states:

    “The lack of clarity regarding the limits on preenforcement challenges continues to generate litigation in the district courts. For example, in Silver v. IRS, the plaintiffs are challenging regulations implementing a transition tax created under the TCJA. The plaintiffs have alleged that they were injured by the cost of complying with the transition tax regulations, which include certain obligations. Silver v. IRS, No. 19-cv-247 (APM), 2019 (D.C. Dec. 24, 2019). The district court rejected the governments arguments that the suit was barred by the AIA.”

  3. Americans for Prosperity Foundation has just submitted another amicus brief in CIC.

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