Blog

We previously posted on July 2, 2024 The Demise of Chevron Will Result In Increased Treasury Regulation Challenges, which discussed the demise of Chevron deference as "misguided because agencies have no special competence in resolving statutory ambiguities. Courts do," the Supreme Court's majority opinion said in  Loper Bright case and a similar one called Relentless v. Department of Commer.

Now the US Supreme Court decided Corner Post, Inc. v. Board of Governors of the Federal Reserve System which further exposes regulations to challenge.

This case involved a challenge by Corner Post, Inc., a North Dakota truck stop, to a 2011 regulation issued by the Federal Reserve. This regulation set a cap on the fees that large banks could charge merchants for debit-card transactions. The key issue before the Supreme Court was whether the six-year statute of limitations under 28 U.S.C. § 2401(a) began at the time the regulation was enacted or when the plaintiff was first injured by it.

Background

• In 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act, specifically through the Durbin Amendment, required the Federal Reserve to set limits on debit-card interchange fees. The final rule was published in 2011.
• Corner Post, Inc. was founded in 2018 and challenged the regulation in 2021, arguing that their claim was timely since they were first affected by the regulation upon their establishment.
• The Federal Reserve contended that the statute of limitations began when the rule was enacted in 2011, not when Corner Post was injured in 2018. Both the district court and the Eighth Circuit sided with the Federal Reserve, leading to an appeal to the Supreme Court.

Supreme Court Decision

• The Supreme Court ruled in a 6-3 decision, holding that a claim under the Administrative Procedure Act accrues when the plaintiff is first injured by the final agency action, not when the rule was first promulgated. Justice Barrett authored the majority opinion, reversing the lower court's dismissal and remanding the case for further proceedings.
• The ruling clarifies that for the purposes of the statute of limitations, the clock starts ticking when a plaintiff suffers a legal wrong due to the agency's action, thus allowing challenges to older regulations if the plaintiff is newly affected.

Implications

• This decision potentially opens the door for other businesses and individuals to challenge older federal regulations, provided they can show they were first injured within the six-year window prior to filing suit, as part of their legal strategy during deficiency or refund proceedings.

Have an IRS Tax Problem?

     Contact the Tax Lawyers at

Marini & Associates, P.A. 

 

for a FREE Tax HELP Contact us at:
www.TaxAid.com or www.OVDPLaw.com
or Toll Free at 888 8TAXAID (888-882-9243)

 

Read more at: Tax Times blog

On October 20, 2023 we posted IRS Using Inflation Reduction Act Funding To Ensure Large Corporations & High Income Earners Pay Taxes Owed where we discussed that the IRS announced new initiatives to ensure large corporations pay taxes owed. This is in addition to the initiatives to improve compliance among high-income individuals and complex partnerships.

Now according to IR-2024-185 dated July 11, 2024, as part of continuing compliance efforts under the Inflation Reduction Act, the Internal Revenue Service announced the agency has surpassed the $1 billion mark in collections from high-wealth taxpayers with past-due taxes.

As part of larger efforts taking place, the IRS has stepped up activity specifically on 1,600 individuals whose incomes were more than $1 million per year and who each owed the IRS more than $250,000 in recognized tax debt. Since last fall, this IRS compliance effort has generated more than $1 billion in collections from this group, with work continuing in this area.

“With this collection activity, the IRS passed an important milestone in our effort to improve compliance and ensure fairness in the tax system,” said IRS Commissioner Danny Werfel. 

“Our Increased Work In This Area Means These Past-Due 
Tax Bills From High-End Taxpayers Are No Longer Being
Left On The Table, Like They Were Too Often In The Past.”

"The Collection Results Achieved In Less Than A Year Reveal The Magnitude Of What Can Be Achieved Over The Long
Run As Our Inflation Reduction Enforcement Continues
To Ramp Up In The Months Ahead.”

“We continue working to add staff and technology to ensure that the taxpayers with the highest income, including partnerships, large corporations and millionaires and billionaires, pay what is legally owed under federal law,” Werfel said. “The additional resources the IRS received under the Inflation Reduction Act are making a difference, both for taxpayers who play by the rules and those who don’t.”

Prior to the Inflation Reduction Act, more than a decade of budget cuts prevented the IRS from keeping pace with the increasingly complicated maneuvers that the wealthiest taxpayers use to hide their income and evade paying their share. The IRS is continuing to take action to close this gap.

Out of a total of 1,600 of these cases, the IRS has assigned 1,500 to revenue officers, with over $1 billion collected so far. The $1 billion collected through spring represents payments from over 1,200 individuals, with the IRS anticipating the figure to grow in the months ahead.

Have an IRS Tax Problem?

for a FREE Tax HELP Contact us at:
www.TaxAid.com or www.OVDPLaw.com
or Toll Free at 888 8TAXAID (888-882-9243)

Read more at: Tax Times blog

According to the DoJ, a Connecticut man pleaded guilty today to evading taxes on income he earned as a commercial fisherman.

According to court documents and statements made in court, Brian Kobus, of Durham, Connecticut, worked as a commercial fisherman and deckhand for fishing companies in Massachusetts. 

After each fishing trip, the companies paid him by check. Despite receiving over $1.4 million in fishing income between 2011 through 2013, and 2017 through 2021, Kobus did not file federal income tax returns or pay the taxes that he owed. 

To conceal the source and disposition of his income from the IRS, Kobus regularly cashed his paychecks from the fishing companies and used the cash to fund his lifestyle. In total, he caused a tax loss to the IRS of approximately $377,839.90.

Korbus is scheduled to be sentenced on October 16, 2024 and faces a maximum penalty of five (5) years in prison. He also faces a period of supervised release, restitution and monetary penalties. 

Have an IRS Tax Problem?

for a FREE Tax HELP Contact us at:
www.TaxAid.com or www.OVDPLaw.com
or Toll Free at 888 8TAXAID (888-882-9243)

Read more at: Tax Times blog

According to Law360, many tax practitioners had been eagerly awaiting the decision in the Loper Bright case because the IRS has long relied on the Chevron doctrine, established in a 1984 opinion to defend tax regulations in litigation.

The Supreme Court decided to weigh in on the fate of Chevron last year after fishing industry plaintiffs in the Loper Bright case and a similar one called Relentless v. Department of Commerce asked the justices to overturn Chevron to undermine a 2018 National Marine Fisheries Service rule that required fishers to pay part of the cost of having federal compliance monitors aboard their ships.

Chevron deference was "misguided because agencies have no special competence in resolving statutory ambiguities. Courts do," the Supreme Court's majority opinion said.

In response to the opinion, U.S. Tax Court Judge Elizabeth Ann Copeland, speaking On June 28, 2024 at New York University School of Professional Studies' tax controversy forum in New York said Treasury and the IRS do have special competence in tax law. 

Considerable Credence To The Agencies' Rules.

JUST IN: The U.S. Supreme Court vacated and remanded on July 2, 2024 a decision denying a whistleblower award to a tipster who reported an improper $60 million tax deduction to the IRS, saying the D.C. Circuit should reconsider its decision following the high court's ruling that overturned the Chevron doctrine.

Have an IRS Tax Problem?

     Contact the Tax Lawyers at

Marini & Associates, P.A. 

for a FREE Tax HELP Contact us at:
www.TaxAid.com or www.OVDPLaw.com
or Toll Free at 888 8TAXAID (888-882-9243)

 

Read more at: Tax Times blog