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U S Supreme Court Decision May Pave Way for Future IRS Lawsuits | Holland & Knight LLP

Supreme Court Opens Door to APA Challenge of Overreaching IRS Information Reporting Regime | McDermott Will & Emery

US Supreme Court Unanimously Holds IRS Notice Seeking Information Can Be Enjoined | Dentons

Unanimous Supreme Court Allows APA Claim Against IRS

, a unanimous US Supreme Court allowed CIC, a tax advisor, to proceed with a pre-enforcement challenge to the Internal Revenue Service’s (IRS) “reportable transaction” regime. CIC alleged that the IRS violated the Administrative Procedure Act (APA) when it issued Notice 2016-66 (Notice), deeming certain micro-captive insurance transactions as “reportable transactions” and sought an order enjoining enforcement of the Notice. The IRS sought to avoid judicial review by hiding behind the Anti-Injunction Act’s (AIA) bar on suits brought “for the purpose of restraining the assessment or collection of any tax.” Disagreeing with the trial and appellate courts, the Supreme Court allowed CIC’s suit to proceed, finding that CIC was challenging a regulatory mandate separate from any tax. As the Court explained, “The tax appears on the scene – as criminal penalties do too – only to sanction that mandate’s violation.” By choosing to address their concerns about micro-c

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