Tax News & Views Chevron Doctrine of Gummi Worms

Chevron

The Ripple Effect of Chevron Doctrine: Tax Fallout, Explained – Erin Slowey, Bloomberg ($):

The US Supreme Court abandonment of a legal doctrine empowering federal regulators is triggering many in the tax industry to rethink how they advise clients.

The high court overturned the Chevron doctrine, which said that federal courts should defer to reasonable agency interpretations of vague laws, in Loper Bright Enterprises v. Raimondo on June 28.

Big Companies Get Boost in Tax Disputes – Richard Rubin, The Wall Street Journal:

The Supreme Court’s new limits on federal agencies’ regulatory powers are rippling through the tax system, and they are poised to tilt some disputes against the government and toward large companies.

Judges or lawyers in at least five pending tax lawsuits—including cases involving FedEx and 3M—have already raised the June ruling in Loper Bright Enterprises v. Raimondo, which overturned a 40-year-old framework known as the Chevron precedent for how courts evaluate regulations.

Chevron's End Doesn't Bear On 3M's Case, IRS Tells 8th Circ. – David Hansen, Law360 ($):

The U.S. Supreme Court's recent overturning of Chevron deference doesn't warrant a reversal of a U.S. Tax Court ruling in 3M Co.'s transfer pricing case, the Internal Revenue Service told the Eighth Circuit on Friday.

The agency's letter to the Eighth Circuit came in response to a letter from the company dated July 3 arguing that the recent Loper Bright Enterprises v. Raimondo ruling should reverse the Tax Court's decision siding with the IRS against 3M. According to the IRS, the Eighth Circuit need not consider that argument.

Post-Chevron Senate Group Deluging 101 Agencies with Letters – Doug Sword, Tax Notes ($):

Nineteen Republican senators have written to a wide swath of federal departments and agencies asking how the Supreme Court’s overturn of Chevron deference will affect rulemaking, enforcement actions, and adjudications.

Eighteen of those senators are also establishing a working group focusing on the impacts of the Supreme Court’s Loper Bright Enterprises Inc. v. Raimondo decision, handed down June 28, according to a July 12 release from Sen. Rand Paul, R-Ky.

Conservation Easement Deductions

IRS Hit With $148 Million Conservation Easement Deduction Suit – John Woolley, Bloomberg ($):

Natural Rock LLC donated a conservation easement over its 226-acre property in Edmonson County, Ky., to the nonprofit corporation Barn Group Land Trust Inc. in order to claim a deduction for its alleged $148 million fair market value.

The partnership sued the IRS on July 9 for denying the deduction, accusing the agency of proffering an arbitrary and invalid tax adjustment.

The IRS asserted an imputed $54.9 million underpayment against Natural Rock, plus $21.9 million in penalties for its alleged gross valuation misstatement. Natural Rock denied in its petition that it owes any tax or that its donation was overvalued on its return.

ERC lawsuit

Missouri Sues IRS to Acquire Delayed Covid Tax Credit Documents – John Woolley, Bloomberg ($):

The IRS failed to comply with the state attorney general’s request for records about a pandemic tax relief program for businesses, the state of Missouri said in a Friday lawsuit.

Missouri Attorney General Andrew Bailey requested in May that the IRS produce communications about its September 2023 decision to stop processing new Employee Retention Credit claims. The IRS unlawfully failed to comply with those requests, his office told the US District Court for the Eastern District of Missouri.

What day is it?

For all you tax nerds out there, it’s finally National be a Dork Day, come celebrate with me! If you prefer something sweet, it’s also National Gummi Worm Day. I will be celebrating both!

Tax News & Views Chevron Doctrine of Gummi Worms

We're Here to Help

Trina Pinneau