IRS Insights

September 2024

Here are the latest tax rulings in our September edition:

• Supreme Court upholds section 965 tax in Moore v. United States
  
  • The Supreme Court has ruled the section 965 transition tax is constitutional. Last year, many taxpayers and practitioners were surprised when the Supreme Court agreed to hear a challenge to the section 965 transition tax on the grounds that it was an unconstitutional, unapportioned direct tax.

• Tax Court upholds early election into BBA
  • To elect in early to the centralized partnership audit regime created by the Bipartisan Budget Act of 2015 (BBA), a partnership had to represent that it had sufficient assets to pay any imputed underpayment that may result from an audit. In SN Worthington Holdings LLC v. Commissioner, the partnership made that representation, but the IRS determined it did not have sufficient assets.  The Tax Court upheld the election because the regulation required the partnership only to represent it had sufficient assets (rather than establish or prove it had sufficient assets).

• IRS Summons Issued on Behalf of Argentina is Valid
  • In a recent decision, a District Court dismissed a petition to quash an IRS summons issued at the request of the Argentinian tax authorities.
• Letters from IRS didn’t extend the limitations period within which taxpayer was required to file refund suit
  • In June 2023, Michelle Moy, the taxpayer, filed a complaint in federal district court seeking a refund of 2008 federal income tax overpayments related to the alleged omission by the IRS of certain foreign tax credits.        
• Ninth Circuit weighs in on start of statute of limitations for government to bring suit to recover erroneous refund
  • In United States v. Page, No. 21-17083 (9th Cir. Jun. 26, 2024), the Ninth Circuit reversed a district court’s dismissal of the government’s complaint to recover an erroneous refund issued to a taxpayer.
• Supreme Court overrules Chevron deference
  • On June 28, 2024, the Supreme Court issued its decision in Loper Bright Enterprises v. Raimondo, overruling the Chevron deference standard. The Supreme Court held that, under the Administrative Procedure Act (APA), courts are required to exercise their independent judgment and may not defer to an administrative agency’s interpretation of the law simply because a statute is ambiguous.
• Ninth Circuit: Taxpayers’ refund claim was timely, but no refund allowed under “lookback” rule
  • A recent case reminds taxpayers that the section 6511(b) lookback rule may limit the amount of refund allowable even if your refund claim is timely under section 6511(a).

Archive

May 2024
Court Rules Wrong Form Doesn’t Start IRS’s SOL

March 2024
IRS indefinitely authorizes electronic signatures for select forms and documents

September 2023
Supreme Court to Hear Challenge to Section 965 transition tax